5 Clever Budgeting Strategies

​Millennials seem to have a bad rep based on what we see in the media.

Not only do we kill traditional products. We face perpetual problems when it comes to establishing good financial habits.

Things as common as living within our means, saving money, or setting aside enough to fund our retirement.

We make a lot of mistakes with money it would appear.

But why is that? What is driving this? Allow me to share my perspective as a millennial on ways we can better manage our finances.

Budgeting Strategies

Failing the Marshmallow Test

Much like my peers, delaying my gratification and saving consistently to reach some eventual goal 30+ years in the future doesn’t excite me much.

Blame long-term unpredictability, social media, and our on-demand culture.

Regardless of the culprit(s), it doesn’t look as though we’d do well with a modern marshmallow test.

Instead, we desire a life of convenience and immediate fulfillment. Because we discount what the future will provide.

I don’t say this to shirk responsibility for being prudent or patient.

Rather, this writing intends to prove how we operate the best we can within our expectations for what life can deliver.

Understandably, our circumstances differ from those who came before us. What we have come to expect are convenience, low-costs, and choice.

We’d want these all wrapped up in an unforgettable experience, because they tend to make us happier.

In short, we want a life with fulfilling experiences at a reasonable price.

But we also want the freedom to make our own choices without financial consequence. We do not want us to be being fettered to an unsatisfying W-2 job.

Is Retirement Dead?

After seeing how the traditional demands of life have changed - Why would this not also extend to reshaping our definition of retirement?

What I have come to find is I do not enjoy feeling constrained in my decision-making. But then again, who does?

I think Millennials feel acutely annoyed by restrictions because we’ve grown up in a world where convenience is king.

We constantly seek methods to automate, scale, and reduce time commitments to traditional tasks. Even when more expedient solutions exist.

From a retirement perspective, this means not wanting to stick to a strict schedule. Why wait until our golden years to hit snooze each morning without consequence?

What Millennials Desire

  • Is to expedite our financial security and
  • thereby allowing us the independence to make decisions irrespective of financial concerns.

This would change our path and free us from a traditional retirement path.

Why do we want this?

The reasons should be self-evident: we want what we want when we want it.

That means cashing in those financial freedom chips sooner rather than later.

After all, because we don’t know what tomorrow will hold, we want to live more today.

This makes us more inclined to delay gratification a bit less than our predecessors. YOLO (you only live once), right?

Financial Independence Sooner Than Later

Millennials must confront unique frictions other generations didn’t have to face.


  • swelling student debt,
  • tepid wage growth,
  • inflated home prices, and
  • impediments in career advancement.

As a result, I’m not of the mindset traditional financial advice applies to our generation in the way it did to our predecessors.

Let's say that people advocate for

  • saving 10% of your salary in perpetuity and
  • relying on Social Security and Medicare

to cover the rest in retirement. Then I’m uncertain this will be enough for us to live comfortably.

Because we cannot afford to start saving for retirement as early as previous generations (see problems above).

And we have less certainty of having entitlement programs existing in their current forms. So we need to find another way to reach retirement.

As such, I advocate for pursuing financial independence rather than a traditional retirement.

4 Creative Budgeting Strategies for Reaching Financial Independence

At a high-level, financial independence requires the following to be successful:

  1. learn to live within our means,
  2. make investments in assets which provide passive income to cover our cost of living
  3. develop unique skills to take up side hustles, and
  4. discover how to build wealth through passive index investing

All of these should combine to cover our cost-of-living and leave room for growth. And because our efforts compound, I suggest seeking it sooner, rather than later.

Let’s look at each one of these to get a better feel for what each entails. Let's see how you can implement these budgeting strategies. It's time to make the most of your journey to financial independence.

Learning to Live Within Your Means

I chose this budgeting strategy first because it is the one most directly in your control.

  • There are no risks of failure, differentials between guaranteed and expected return, or any other concerns about the potential success of this strategy.
  • Learning to spend intentionally and on items which matter is the first step toward financial independence.
  • If you can control how you spend money, you can develop better financial sense for how to save money smarter and allow your funds to earn you a return.

It’s often said the easiest dollar earned is the dollar not spent.

I whole-heartedly agree with this sentiment. And I often strive to assess areas in my life where I can reduce unnecessary spending.

​It isn’t doing anything to aide my financial independence pursuit.

By slashing spending on unfruitful areas of your life, you can learn to increase your savings rate to a number far higher than the 10% mentioned.

Thats suitable for most seeking a retirement at 65.

Accelerating this savings rate and learning how to save money will be necessary to short-circuit the sleepy retirement preparation path.

Instead, turning over your budget in search of savings opportunities can put you all the closer to financial independence. Personally, my wife and I’s biggest spending weakness comes to travel.

We enjoy travelling frequently and knew it was important to get a handle on our travel spending.

We opted to learn how to travel hack with help from Reddit Churning where we learn about the best ideas for credit card churning.

We’ve managed to use a few cards to offset some major travel expenses in the past two years and have used the savings to get us closer to buying a home of our own.

Invest in Passive Income Activities

A key priority of financial independence is learning how to find new income streams to cover your cost of living.

Many options exist for this action, such as dividend stocks, limited partnerships, peer-to-peer lending platforms, real estate, and many more.

My personal favorite is the last item, real estate. When my wife and I got engaged, we decided to move in together.

Instead of choosing between a condo vs. apartment where we lived at the time, we chose to buy a multi-unit home and live in one unit.

We have rented out one of the units to graduate students and another as a short-term rental.

Between these two income sources, we have managed to live for free because the two payment streams cover our monthly mortgage and utilities.

Seeing the impact of this on our bottom lines, we have become adherent to the notion of building wealth through real estate investing.

We plan to acquire more property as a means to store our wealth and develop passive income streams to pay for an increasing share of our cost of living.

Learn to Hustle

Another budgeting strategy useful for reaching financial independence comes from increasing the overall pie. In other words, having more income to budget toward yor priorities.

To do this, it helps to have variable income opportunities to augment your existing job.

Personally, my wife and I use the passive income streams from real estate investing. And we hope someday to have a blog which provides some extra income for our needs as well.

Yet, many side hustles are available for anyone interested in developing unique skill sets ideal for the modern economy.

I drove for Uber and Lyft for a time, tutored K-12 students, and even took an online class on Python and SQL to learn the basics for potential freelance programming work.

The ubiquity of online resources makes many tasks accessible and easily profitable if you can find a niche.

Seeking these added income sources can help to put you on quicker path to financial independence.

See Also: 3 Proven Alternatives to Upwork That Will Skyrocket Your Freelancing Business

Putting it All Together and Building Wealth

The final components of your financial independence budgeting strategies involves learning to invest in diversified, low-cost index funds.

These funds provide long-term capital appreciation for the added income you’ll earn from side hustles and passive income and savings you’ll find in your budget.

These investment vehicles hold the majority of my wife and I’s wealth and will do so for years to com.

Holding these investments for long periods of time will allow for us to compound our returns and let us worry about other areas of our life.

We maintain a diversified portfolio of investments and hold assets for various purposes.

For example, we have most of our money held for a home down payment in short-term Treasuries, high-interest savings accounts, and some stocks.

We also contribute the maximum to our retirement accounts each year and still make an effort to save in other after-tax investments.

By finding money in creative ways, we’ve managed to put ourselves in a position for reaching financial independence in the coming decade.

All of these budgeting strategies should be useful for guiding you down the financial independence path.

They are also how I substitute a Millennial retirement for one typically espoused as a one-size-fits-all solution presented by current retirement advice. Learning these strategies will free millennials to pursue their passions and give them the lives they want.

​About the Author

Riley Adams, CPA, is a senior financial analyst working for a Fortune 500 company in New Orleans, Louisiana. He also runs the personal finance blog called Young and the Invested, a site dedicated to helping young professionals find financial independence and live their best lives.