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Despite concerns about inflation and a possible recession, consumers are still spending — and even splurging on occasion.
But when it comes to discretionary spending, splurges look different in 2023: These days, adults would rather treat themselves to drinks or dinner out.
Spending on experiences is important, one advisor says, as long as it fits in your budget.

Consumers are sending mixed signals.
For the most part, people are concerned about inflation and the direction of the U.S. economy. Consumer spending sank in March, according to Morning Consult. “Sticker shock” has taken a toll, the report found, with consumers more likely to walk away from a purchase because the price is too high.

However, many are still spending — and even splurging on occasion, other reports also show.  
To that point, 75% of adults said they splurged over the past month, although fewer than half said they could afford those types of purchases, according to a recent paper by Deloitte based on consumers in 23 countries.

Lipstick index is now ‘bourbon barometer’

The “lipstick index” was initially coined by former Estee Lauder chairman Leonard Lauder after the bursting of the dot-com bubble in the early 2000s sent the economy reeling. Lauder noticed that women substituted costlier luxury items for practical indulgences like lipstick.
The theory stuck: Even in tough times, consumers might rein in their spending, but they will still buy small luxuries on occasion, like a lipstick.
However, lipstick may not be the economic indicator it once was.

Deloitte’s researchers found that consumers are treating themselves, but they are now indulging differently.
More from Personal Finance: How to set up a budgetWhy it’s important to talk about moneyA recession may be coming — here’s how long it could last
“The bourbon barometer may be a more accurate reflection of these splurge behaviors,” the researchers wrote.
For starters, men are statistically as likely to splurge as women. And when they do, men shell out more. While lipsticks cost about $10, on average, adults are now spending $32, on average, on their splurges, according to Deloitte.
Further, when it comes to discretionary spending, adults are more likely to treat themselves to dinner out or premium spirits rather than cosmetics.
Consumers in the U.S. are four times more likely to have said their latest splurge purchase was food and beverages over personal care, Deloitte found.

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In fact, premium spirit sales are booming.
“Despite the tough economy, consumers continued to enjoy premium spirits and fine cocktails,” Chris Swonger, president and CEO of the Distilled Spirits Council of the United States, said in a statement.
“Cocktail culture continues to thrive in the United States,” Swonger said.

How to budget for experiences

To better budget for such indulgences, “always make sure you understand where you spend your money and how much is going toward needs over wants,” said certified financial planner Carolyn McClanahan, founder of Life Planning Partners in Jacksonville, Florida.
Although spending on high-end cocktails should come only after necessary expenses are covered and savings are set aside, such experiences are important, she said. Determine how much you have left over at the end of the month and designate some of those funds for going out.
“Buying stuff only brings a short-term bump in happiness but experiences bring a lot more pleasure,” McClanahan said.
But “always look for deals, too,” McClanahan added. “Go to happy hour.”
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Retirement confidence among both workers and retirees is dropping due to a lack of savings and high inflation, new research finds.
If you’re approaching retirement, there are some key decisions to make that will affect how well you live. Here’s how to get started.

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1. Claiming Social Security benefits

• Key deadline to watch: By age 60, you should go to the Social Security Administration website and review your statement, recommends Craig Copeland, director of wealth benefits research at EBRI.
When to claim Social Security retirement benefits is one of the big questions retirees face.
Most experts generally recommend waiting beyond age 62, the earliest eligibility age. At full retirement age — 66 or 67, depending on your date of birth — you will receive 100% of the benefits you earned. But for every year you delay past full retirement age up to age 70, you will get an 8% boost — a guaranteed return that’s hard to beat in the markets or elsewhere.
It’s important to note that those benefits are also inflation-adjusted, unlike most other sources of income, explained David John, senior strategic policy advisor at the AARP Public Policy Institute.
“The later you can file for Social Security, the better it is as far as the amount you’re going to get,” John said.
By your early 60s, you should be reviewing your earnings record to make sure it’s correct, Copeland said, as that is what will be used to calculate your benefits.
At that time, you will also be able to get a sense of how large your monthly benefit check will be if you claim at ages 62, 67 (provided that’s your full retirement age) and 70.

2. Coming up with a Medicare strategy

• Key deadline to watch: Your 65th birthday.
While you may start your Social Security retirement benefits at age 62, eligibility for Medicare generally does not start until age 65.
An initial enrollment period starts three months before you turn 65, includes your birth month and goes three months after the month you turn 65 — for a total of seven months.
That goes for Medicare Part A, which covers inpatient hospital care, skilled nursing facility care, nursing home care, hospice care and home health care, as well as Medicare Part B, which covers diagnostic and preventive care services.
A small portion of people may be automatically enrolled if they are already receiving Social Security benefits, noted Jane Sung, senior strategic policy advisor at AARP Public Policy Institute.

Halfpoint Images | Moment | Getty Images

For others, their 65th birthday, and the surrounding months that make up their initial enrollment period, are a key date to watch.
“Don’t wait until the last week of your initial enrolment period, because it is complex,” Sung said.
If you’re still working and have health-care coverage through an employer, you may decide not to sign up right away when you turn 65, she said.
Those who opt for traditional Medicare may also want to add Medigap plans, which can help cover out-of-pocket costs, or Medicare Part D, for prescription drug coverage.
Alternatively, people may opt for Medicare Part C, otherwise known as Advantage plans, which are offered through private insurance and include Medicare Parts A and B, and oftentimes other coverage areas.

Certainly, I think six months, four months before your 65th birthday is a great time to start thinking about learning more about Medicare and the different choices available out there.

senior strategic policy advisor at AARP Public Policy Institute

To help sort through the choices, the AARP offers a Medicare enrollment guide and other resources.
State Health Insurance Assistance Programs, also known as SHIP, also provide guidance to Medicare beneficiaries.
In addition, some people may qualify for financial help through Medicare savings programs if they have income or resources below certain limits.
The key is to be proactive and do your research.
“Certainly, I think six months, four months before your 65th birthday is a great time to start thinking about learning more about Medicare and the different choices available out there,” Sung said.

3. Deciding where you will live

• Key deadline to watch: The sooner, the better.
When it comes to lifestyle, many retirees would prefer to age in place. Yet it’s important to consider whether your current home will still suit you as you age, notes EBRI’s Copeland.
When it comes to preparing a strategy for where to live in retirement, the sooner, the better, he said.
“Once you have any mobility issues, you really need to be moving on it,” Copeland said.
If you plan to relocate, you may want to do it early before health issues set in, he said.
Alternatively, if you plan to age in place, making some upgrades now, like putting guardrails or handrails on stairs, may help smooth the transition if and when your health declines.

Image Source | Vetta | Getty Images

To be sure, finding a place to live in retirement won’t look the same for everyone, noted Susan Reinhard, senior vice president and director of the AARP Public Policy Institute.
Notably, there is no one-size-fits-all answer. While some people may downsize, others may want more room to accommodate grandchildren. “It’s called right sizing for you,” Reinhard said.
While deciding where to live, people would also be wise to make other provisions for their care, including establishing or updating advance directives, legal documents that express your wishes in the event you are no longer able to care for yourself.
It’s also helpful to create medical records, and to have conversations with family members who you would want to help in the event you need medical attention, Reinhard noted.

4. Saving more

• Key deadline to watch: Check in at least 10 years away from retirement.
For many people, the idea of retirement doesn’t become a reality until around age 45, according to David John of AARP Public Policy Institute.
By the time you’re about a decade away from retirement, it’s a good idea to give some serious thought to your retirement goals while you’re still working and have time to build up your savings and make other arrangements, he said.
Even so, no matter where you are in relation to retirement, you can still make progress.
“If you don’t have retirement savings at this point, it’s never too late to start,” John said. “Having any level of savings is better than having no savings at all.” More

Student loan payments are expected to resume soon after the Supreme Court makes its ruling on the Biden administration’s forgiveness plan.
Borrowers can take these steps to get ready, according to experts.

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Know your lender

During the Covid pandemic, a number of the largest companies that service federal student loans announced they’ll no longer be doing so, meaning many borrowers will have to adjust to a new servicer when payments resume.
Three companies that serviced federal student loans — Navient, the Pennsylvania Higher Education Assistance Agency (also known as FedLoan) and Granite State — all said they’d be ending their relationship with the government.

As a result, around 16 million borrowers will have a different company to deal with by the time payments resume, or not long after, according to higher education expert Mark Kantrowitz.

Double-check that your servicer has your current contact information, so that you receive all the notices about the upcoming change, experts say.
Impacted borrowers should get multiple notices, said Scott Buchanan, executive director of the Student Loan Servicing Alliance, a trade group for federal student loan servicers.
If you mistakenly send a payment to your old servicer, the money should be forwarded by the former servicer to your new one, Buchanan said.

Find an affordable repayment option

Many people’s lives have been changed by the pandemic. If your circumstances look different than they did three years ago, it may make sense to review the payment plans available to you and find one that’s the best fit for your current situation.
In the meantime, the law has also changed.
Student loan forgiveness is now tax-free until at least 2025, thanks to a provision included in the $1.9 trillion federal coronavirus stimulus package that President Joe Biden signed into law in March 2021. That policy will likely become permanent.
That may make income-driven repayment plans more appealing, since they often come with lower monthly bills and borrowers will likely no longer be hit with a massive tax bill at the end of their 20 years or 25 years of payments.

But if you can afford it, the standard repayment plan is just 10 years.
To calculate how much your monthly bill would be under different plans, use one of the calculators at Studentaid.gov or Freestudentloanadvice.org, said Betsy Mayotte, president of The Institute of Student Loan Advisors, a nonprofit.
If you do decide to change your repayment plan, Mayotte recommends submitting that application with your servicer before payments turn back on.
“I have significant concerns that there will be some big servicing delays,” she said.

Have a plan if you can’t make payments

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If you’re unemployed or dealing with another financial hardship, you’ll have options when payments resume.
First, put in a request for the economic hardship or the unemployment deferment, experts say.
Those are the ideal ways to postpone your federal student loan payments because interest usually doesn’t accrue under them, as long as they’re subsidized undergraduate student loans.
If you don’t qualify for either, though, you can use a forbearance to continue suspending your bills. But keep in mind that interest will rack up and your balance will be larger – sometimes much larger – when you resume paying. More

It’s never too early to start thinking about retirement.
While the thought of funding your retirement adequately might be daunting, if you start planning now you’ll certainly be thankful later. It also might not be as difficult as you think.

Retirement usually entails replacing your annual salary from a workplace with other income sources to maintain your current lifestyle. While Social Security may cover part of your budget, the rest of your money will most likely need to come from your savings and investments.
CNBC crunched the numbers, and we can tell you how much you need to save now to get $60,000, $70,000 and $80,000 every year in retirement — without taking a bite out of your principal.

More from The New Road to Retirement:

Here’s a look at more retirement news.

First, there are some ground rules. The numbers assume you will retire at age 65 and that you currently have no money in savings.
Financial advisors typically recommend the mix of investments in your portfolio shift gradually to become more conservative as you approach retirement. But even in retirement, you’ll likely still have a mix of stocks and bonds, as well as cash. For investing, we assume a conservative annual 6% return when you are saving and an even more conservative 3% rate during your “interest-only” retirement.
We also do not factor in inflation, taxes or any additional income you may get from Social Security or your 401(k) investment plan.

We have a full breakdown of how much you need to save now if your goal is to get to $60,000, $70,000 or $80,000 every year in retirement.
Watch the video above to learn more. More

Overall, 60% of Americans now say they are living paycheck to paycheck, according to a recent report.
But between caring for children and caring for aging parents, millennials are much more likely to feel financially strained.

Some good news: Overall, fewer Americans are living paycheck to paycheck.
As of March, the share of adults feeling stretched too thin fell to 60% from 62% in the previous month, according to a new LendingClub report.

Many consumers have scaled back or picked up a side job to help make ends meet in the face of higher prices, other reports show.
More from Personal Finance:How to set up a budgetWhy it’s important to talk about moneyA recession may be coming — here’s how long it could last
But when broken down by age group, some Americans are still struggling, and millennials most of all.
Nearly three-quarters, or 73%, of adults ages 27 to 42 are living paycheck to paycheck, LendingClub found.

A ‘sandwich generation’ struggle

Millennials, more than any other generation, may face financial obstacles others do not.

“The oldest millennials are in their 40s now and often managing expenses for not just their kids but also aging parents,” said Anuj Nayar, LendingClub’s financial health officer. “It’s no wonder that almost three quarters of them are living paycheck to paycheck.”

A growing number in this group, also referred to as the “sandwich generation,” must financially support both their aging parents and their children. 

Gen Z faces ‘financially life-altering events’

Meanwhile, younger adults, in Generation Z, are showing signs of strain.
As of March, 66% of Gen Zers were living paycheck to paycheck — up from 58% a year ago, according to LendingClub. Many in this group are earlier in their careers, which can mean less earning potential and a greater susceptibility to layoffs.
“Generation Z are more apt to face financially life-altering events such as job loss, making them more financially vulnerable than any other generation,” Nayar said.

The oldest millennials are in their 40s now and often managing expenses for not just their kids but also aging parents.

Anuj Nayar
financial health officer at LendingClub

That leaves them more likely to dip into their cash reserves or lean on credit just when interest rates rise at the fastest pace in decades. 
“That’s troublesome,” said Tomas Philipson, University of Chicago economist and the former chair of the White House Council of Economic Advisers.
Coming out of the pandemic, many Americans have depleted any extra cash reserves they once accumulated. “We had a long run,” Philipson said. “We are now at the end of that runway.”

Most experts recommend going back to a basic budget — even if that means using the envelope method, or “cash stuffing,” to stay disciplined.
This can help avoid overspending, said CFP Carolyn McClanahan, founder of Life Planning Partners in Jacksonville, Florida.
“Look at how much you have left over after expenses and savings,” she said. “If you have $200 left in the month, that’s the number you can spend, and stick to it.”
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The U.S. personal savings rate was hovering around 4.6% in February, which was below a decadeslong average of roughly 8.9%.
Economists note that this dip in the savings rate is occurring as inflation continues and wage growth slows.
Deposits at banks have crested but remain well elevated compared with pre-pandemic levels.

The U.S. personal savings rate remains below its historical average, according to the U.S. Bureau of Economic Analysis.
The seasonally adjusted annual rate of personal saving was 4.6% in February. That’s well below the average annual rate of more than 8%, according to the data, which traces back to 1959. In June 2022, the rate had dipped to 2.7%, a 15-year low.

This was a large fall from periods of the pandemic when households across the country were saving as much as 30% of their monthly income.
“Something like $2 [trillion] to $2.5 trillion above what we would have otherwise expected were saved by American households,” said Curt Long, chief economist at the National Association of Federally-Insured Credit Unions.
Collectively, Americans have trillions in excess savings compared with expectations leading up to the pandemic, according to Federal Reserve economists.
“That really has helped to buoy the economy,” said Shelley Stewart, a senior partner at McKinsey & Company, “particularly in a place like the U.S., where consumption is such a big part of GDP.”
Federal Reserve economists note that the lion’s share of excess savings is concentrated in the top half of households by income.

But the lower half built up savings in this time, too, according to the central bank’s October note. They noted at the time that the lower half of earners had roughly $5,500 in excess savings per household. Experts believe these stockpiles of cash will begin to dwindle in 2023.
In the months since, headline inflation stayed stubbornly high, at an annual rate of 5% in March. This weighs on consumer spending, while devaluing savings held in low return positions such as cash.
Watch the video above to learn about how the personal savings rate affects you and the wider economy. More

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This story is part of CNBC’s College Money Guide 2023, a series to help students and recent graduates understand their money and start their adult life off on a solid financial path.
A lot of students are unprepared for one major thing when they go off to college: how to manage their own money. But starting good money habits in college is crucial to setting yourself up for financial success in life. And that means setting up — and sticking to — a budget.

“Transitioning to college is a significant milestone for most young adults, as it marks the first time they are truly away from home and have the opportunity to make financial decisions on their own,” said Winnie Sun, managing director of Sun Group Wealth Partners in Irvine, California. “Hello, adulting!”
More from Personal Finance:Job hunting tips for the class of 2023This strategy could shave thousands off college costsHow to understand your financial aid offer
College students consistently cited money as the aspect of college life they felt least prepared to tackle, in a survey of more than 20,000 college students by Everfi. Just 33% answered that they felt prepared to manage their own money. And only about 40% said they had ever set up or used a budget.
Yet you need money for everything from buying your books to going out to eat. And if you took out student loans for thousands of dollars, those are contracts you signed, and many of those loans are going to start coming due about six months after graduation.
So, college is the time to set yourself up for success.

“It’s crucial to understand how money works and practice good financial habits,” said Sun, who is a member of CNBC’s Financial Advisor Council. “After all, money is the ‘tool’ that will help you move from where you are today to where you hope to be in the future, achieving your financial goals.”
Here are five key steps to setting up a budget.

1. Assess your numbers

The first step to getting a grip on your finances is to know your numbers.
Figure out:

How much money you have coming in every month.
What your fixed expenses (housing/rent, phone, tuition, books, etc.) are.
How much, on average, you spend extra per month (food, clothes, going out, etc.)
What’s left over (savings).

A lot of college students think — “Oh, I don’t have a lot of money, so I don’t need a budget.”
Not true!
That’s actually when you need a budget the most — so you can start building solid financial habits that will set you up for the rest of your life.
Whether you have a part-time job in college and are getting a regular paycheck, or you’re living off of a lump sum from financial aid, loans, gifts from birthdays or money you saved up from that summer job — you have money and you have to make sure it covers your living expenses, plus leaving a little padding for unexpected expenses like a flat tire, a busted laptop or an unexpected trip home for a family emergency.
You don’t think about these things because generally it was your parents’ responsibility to handle the budget and cover emergency expenses but now — that’s on you.

Saving money and having personal wealth isn’t just nice to have; it’s essential.

Winnie Sun
co-founder and managing director of Sun Group Wealth Partners

Certified financial planner Stacy Francis, founder of Francis Financial in New York and nonprofit financial literacy initiative Savvy Ladies, said one of things she sees college students get wrong about money all the time is that they behave like they have blinders on, focusing only on what’s in front of them — and not looking to the future.
Then, “when you do look up, you’re going to find yourself unable to pay your bills, your student loans, your credit-card debt and having to move back home with mom and dad until you do,” said Francis, who is also member of CNBC’s Financial Advisor Council. “I don’t know many college students that want to move back with Mom and Dad!”
So, bottom line: You need a budget.

2. Decide on a budget framework

Setting up a budget isn’t as hard or cumbersome as you think. It’s pretty easy — and it doesn’t have to take a long time.
I’m going to guess that most of us spend more time complaining about money than it would actually take to set up a budget to get more money.
We also spend a lot of time stressing about money and how we don’t have any (I see you, broke college student) but if you take a few minutes — say, the time it takes to watch a few TikTok videos — to set up your budget and learn a little bit about money, you can alleviate all that stress and instead, watch your money grow, which is very satisfying.
Satisfying or stressful? Seems like a no-brainer. But that is all up to you.
One popular formula for budgeting that Francis recommends is the 50-30-20 rule. That means 50% of your income goes to your basic living expenses, 30% goes to discretionary/fun stuff and the other 20% goes into savings or investments.
Generally, that means you start by putting the 20% away in a savings account like a high-yield savings account (right now, the top accounts are earning 4% to 5% interest, according to Bankrate) with the aim of not touching it unless you absolutely need it for an emergency expense. And, if you keep money in there and really try hard not to tap into it, you will be surprised at how it grows, thanks to something called compound interest.

Maybe $100 a month or 20% of your income sounds a little steep right now. Save whatever you can — $10, $20 a month. What’s important is that 1) you are saving money and 2) you are building a habit of saving money. Automate it, where it automatically comes out of your paycheck and into your savings account, and you will get to a point where you won’t even miss that money. But you will be pleasantly surprised when you see how it’s grown!
But you should always be working toward a goal of saving more. Up the amount you are automatically moving into savings whenever you can.
Most college students don’t have a lot of money, so you may wind up saving a little less than 20% some months or dipping into that account to pay an unexpected bill. But by having that money set aside, “it’s protecting you from having to dip into credit cards for those unexpected expenses,” Francis said.
Sun prefers more of a 50-25-25 rule — 50% for basic living expenses, 25% for fun stuff and 25% for savings.
“I think savings should be as much of a priority as wants,” Sun said. “Let’s face it, if the pandemic has taught us anything, it’s good to be prepared.”
And, she said she thinks it’s easier to think in quarters.
“And if it’s easier, we have a tendency to stick with it, making savings more sustainable,” Sun added. “When it comes to managing your money, the simpler you can make it, the better it’ll be for you.”

3. Figure out what tools work for you

Everyone agrees you need a budget but, as you can see, even financial advisors vary in how they think it’s best to budget and manage your money. So, no one is telling you that you have to do something a certain way — figure out what works for you.
There are a variety of ways you can keep track of your budget — you can use a budgeting app, set up a spreadsheet yourself or write it in a simple note on your phone. You can even go old school and write it down in a notebook. Or, you might want to try cash-stuffing, an all-cash budgeting method that has become popular on TikTok. Essentially, you convert your paycheck into cash and have a physical set of envelopes that you “stuff” for different expenses like your phone bill, rent, groceries, spending money, etc.
Everyone processes things differently so it’s important to figure out which tools work best for you.

Apps will help you track exactly where each dollar you earn is going and help you earmark different savings goals — like a vacation — and how much you’ll need to save each month to reach your goal. The nice thing is that they do the calculations for you. So, you plug in the numbers and then it’s a minimal lift on your part. Some will even let you track other accounts, like your 401(k) when you get that first job, or sync up with your partner’s accounts to track your household finances.
A few of the budgeting apps Francis recommends are Monarch Money, Mint.com and YNAB (You Need a Budget).
Sun says it’s OK if you prefer to track your expenses in a Google spreadsheet. Her team has also created a simple college budget worksheet you can download — MyBudgetWorksheet.com. Or, if that’s not your style to have to track every detail yourself, use your debit or credit cards to track your expenses and set up an alert to let you know when an expense goes through.
The bottom line: You have to be tracking what money is coming in — and where you’re spending it.

4. Schedule regular money check-ins

Once you figure out your method for tracking your budget, it’s important to schedule regular check-ins with yourself to make sure your spending is in check and you’re not spending more than you’re making — or that you’re not saving any for emergencies.
Maybe that’s once a week or once a month. Again, you have to find what works for you. If you struggle with keeping your spending in check, maybe make it weekly (at least at first) to really put those numbers in front of you and make any adjustments you have to before it gets out of hand.
Francis likens money check-ins to stepping on the scale when you’re on a diet. “I have a love-hate relationship with my scale, but what I will tell you about the scale is that it doesn’t lie,” she said. “It tells me exactly where I’m at so I can make better decisions.”
At the end of the day, it’s about making sure you are on track.

The Good Brigade | Digitalvision | Getty Images

Sun recommends taking a look at what you have left in your savings and reviewing your expenses during these money check-ins. Then ask yourself:

Are you surprised by how much money you have left?
Do you have any spending regrets?
Would you like to set a new spending, savings or earning goal for next month?

“Commit to spending less and saving more,” Sun said. “Shop online and do curbside or in-store pickup rather than going into stores, as this can prevent impulse shopping that can really wreak havoc on a limited budget. Get in and get out, and save more of your money.”
And, if you do overspend — don’t beat yourself up.
“No one is perfect!” Francis said. Instead, “look to the next month to see if there are some areas you might be able to cut down a little bit.”
The value of that weekly or monthly check-in with yourself is to get real about what you’re spending.
“Our brains are not powerful enough to keep track of every dollar we spend,” Francis said. “They’re just not.

“It’s not until you see the numbers tallied that you actually realize what you’ve spent,” she added. “The vast majority of us underestimate what we spend and we forget those one-offs.”
During these check-ins is also a good time to see if you are able to increase the amount you are putting into savings. Make that a regular part of your check-in — can I go from saving $20 a month to $25? And, if you take on any side hustles or odd jobs like babysitting or walking someone’s dog, try not to blow all of that money. Put some — or all — of it into savings. It was money you weren’t expecting anyway, right? Why not squirrel it away and let it grow? Then, maybe one day, the thing you were going to buy with it, you can buy with the interest you made on that money. And you still have the initial amount for something else!
It’s really all how you frame it. You can look at money as boring and something that “isn’t your thing.” Or, you can look at it as a way to have money for all the fun stuff you want now — and in the future.
I mean, why didn’t anyone tell me money could be fun?!

5. Try the buddy system

It’s easy to get caught up in the peer pressure — if your friends are going out and spending a lot of money, you want to go, too. You have to remember that they may have a bigger budget than you do. Or, they are blowing their budget and either don’t know or don’t care. Never make assumptions about people and their money. And don’t concern yourself with their money! That’s wasted energy. It would be so easy to complain about how other people have more money than you — or, you could get in there and start figuring out how to make — and save — money yourself.
You have to make your own decisions. So, let’s say you can’t afford to go out. That doesn’t mean you have to sit home and feel sorry for yourself that you’re poor. Do something else (that doesn’t break the budget). You don’t have to be rich to have fun!
One way to make it a little easier, Sun suggests, is to try the buddy system — just like you might do when you’re dieting or exercising. Get a friend who agrees to track their money along with you and you can compare notes. You can cheer each other on when you’re crushing it, have a sympathetic ear to turn to when you’ve overspent or got stuck with an emergency expense, and just generally discuss your questions about money, seek out the answers — and share what you’ve learned.
And, you don’t have to make it a boring business meeting. This is your meeting — you set the rules! So, maybe you discuss money over ice cream or plan to watch a movie afterward. Make it something you’re looking forward to. And, if you find you’re both crushing it, why not celebrate by treating yourself to something fun?

Blackcat | E+ | Getty Images

“With the confidence to discuss it, you’ll have people to go to with your money questions, and you’ll start to see money as a ‘tool’ rather than a social or status identity. This will help you identify ‘needs’ versus ‘wants’ and make decisions that benefit you and your finances,” Sun said. “For example, if you’re invited to a dinner, concert, event, or shopping trip that you really shouldn’t splurge on, you want to be comfortable enough to speak up and advocate for your financial priorities.”
We’ve all been there, where we can’t afford something that we want. That’s a bummer. But it’s even worse when you can’t afford something you need.
“Saving money and having personal wealth isn’t just nice to have; it’s essential. You need to be able to afford the things you need in life, and money, as a tool, can help you buy a car to get to a better job, move you into a more practical or safer neighborhood, pay for more education, and more,” Sun said. “Getting into that money-saving mindset takes practice. The earlier you start saving and investing, the harder your money can work for you.”
That is perhaps one of the most important money lessons of all for college students and new grads: The decisions you make about money now will set the foundation — the building blocks — for everything else you want to do in your life. You might say — Oh, I’ll worry about that later when I’m older. If you get yourself into debt now, “older” you will actually have a lot more to worry about. Let’s say older you wants to buy an apartment, get married, have kids or go on a vacation. They may not be able to — or they might have to delay those things — if you’ve saddled them with debt. On the flip side, if you are smart with money now, you will build a strong foundation so that you can do the fun things you want now and older you can do any of those things whenever they’re ready. No regrets.
See why we keep telling you that you need a budget now? It’s because we want you — and older you — to have the life you want.

Darreonna Davis, a student at Howard University who wrote about budgeting while you’re in college for CNBC’s “College Voices” series, said that before writing the story, she didn’t have a budget because she wasn’t sure where to start — or if she even needed to because she didn’t have a lot of money.
I’ll bet a lot of college students can relate to that! I know that is exactly how I felt when I was in college and even into my 20s.
“I learned that budgeting is essential to saving and, eventually, building your money. I learned that all the things it takes to start a budget are already at my fingertips, and it isn’t as hard as I thought!,” Davis wrote. “Believing that just because my income was limited and I had few expenses was a mistake on my part in my financial journey. Now, while in college, is the best time to begin practicing money management.”
Yes, Darreonna! So well said. And, by starting while you’re in college, it gives you a strong foundation to build on so that your money — and what you can afford to do today, tomorrow, next week or five years from now, keeps growing.
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Data shows that investment portfolios with lower annual fees ultimately offer investors the best value.
Many individuals have moved toward lower-cost investment options that have popped up in recent years.
Experts say that investors can be mindful of their expenses by reducing the frequency of their trading activities, which would lower overall transaction costs.

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High fees can take a bite out of your portfolio returns, but the good news is that it’s becoming cheaper to invest.
Financial services firms charge clients a fee to invest their funds, typically withdrawn from their investment assets. When costs are high, they eat into returns over time.

Consider that over a 20-year period, an investment portfolio that’s generating a 4% annual return but assessed a 1% fee could lose nearly $30,000 more than a similar portfolio with a 0.25% annual fee, according to the U.S. Securities and Exchange Commission.
Indeed, costs are going down as asset management firms compete for clients’ dollars. Expense ratios on equity mutual funds averaged 1.04% in 1996, according to the Investment Company Institute. They tumbled to an average of 0.5% in 2020.
“In the retail fund market where products compete to be bought… costs have never been lower. Investors can get a globally diversified portfolio for less than 10 basis points, which is terrific,” Micah Hauptman, director of investor protection at the Consumer Federation of America, said. 
Why has it become cheaper to invest?
Some experts believe a major catalyst behind this trend is an increased awareness among individual investors, leading many to become more price conscious.
“Consumers have learned that costs are directly, or inversely, correlated to return,” Ron A. Rhoades, director of the personal financial planning program in Western Kentucky University, said. “Basically, higher fees and cost equals lower returns. A lot of academic evidence backs that up.”

Rhoades said the cost of investing has also fallen over time due to the rise of fiduciary investment advisors, who are required to act in their clients’ best interest and aim to keep expenses low, as well as online robo-advisors that offer financial services at a cheaper rate. 
“That’s put a lot of pressure on the asset management industry to come up with lower-cost solutions because that’s what investment advisors are requiring,” Rhoades said.
Increased competition, notably in the ETF market and between direct-sold mutual funds, has also contributed to lower investment costs, Hauptman said.
An additional catalyst toward the declining cost of investing, Rhodes added, are mandates from the Labor Department that went into effect more than a decade ago.
These rules require retirement plan service providers to disclose fees to plan sponsors and called for employers to issue fee disclosures to individuals participating in workplace retirement plans. This led savers to pay closer attention to costs, Rhoades said.
How investors can be mindful of their expenses 
Investors need to assess their fees in relation to the value they are receiving from their investments, Hauptman said. Most financial advisors charge clients based on how much money they manage for them, which is typically about 1% of assets. Some financial advisors may charge a flat fee or bill by the hour.
“It’s important for investors to not just look at one piece of the investing puzzle to the extent that they’re getting products and services,” Hauptman said. “They need to consider all of the costs that they’re paying, because all of the costs will ultimately erode their total returns over time.”
Sheryl Garrett, a certified financial planner and founder of the Garrett Planning Network, advised newer investors trading individual securities to do so minimally, and keep the rest of their investments “plain vanilla” in order to reduce the amount of recurring transaction costs.
Here are three steps to keep a lid on investment fees:
Check your expense ratios: Do some comparison shopping as you look through mutual funds and ETFs. Investment fees have come down considerably in the last couple of decades, but fund managers may charge more for eclectic offerings, such as strategies that focus on alternative investments.
Watch for other costs: If you’re investing through a brokerage account, keep an eye out for transaction fees, which can be very painful for the most active investors. Some firms also charge for broker-assisted trades. In a 401(k) plan, you could face costs in the form of administrative expenses – and those are in addition to the fund fees you pay.
Know how your financial advisor is paid: Ask up front whether your financial advisor is a fiduciary. Does your advisor charge based on assets under management, or does he offer a flat fee? Does he receive any commissions for products he recommends to you? Get these details in writing and be sure you understand them before you hire this professional.
Ultimately, the best investment is for individuals to become self-educated about their finances, Garrett said.

As part of its National Financial Literacy Month efforts, CNBC will be featuring stories throughout the month dedicated to helping people manage, grow and protect their money so they can truly live ambitiously. More