Receiving your first pay cheque or student loan instalment is often an exciting time. It might be tempting to spend everything at once without considering your financial obligations, but doing so could have significant consequences, including landing you in tremendous debt.

Instead of impulse spending, creating a monthly financial plan can help you prioritise your essential costs and decide how to utilise any spare money. You’ll thank yourself later for learning how to balance saving for your future with splurging on the occasional treat.

Ashley Tate, chief executive officer at online student bill-sharing tool Split The Bills, said: “Seeing your spending habits written down can be a wake-up call. If your budget amount outweighs your income, something needs to go.”

Organise your finances
Losing control of your finances is easy when you don’t keep track of your regular outgoings. Research by NatWest estimates 42% of students don’t use any budgeting methods, while 6% don’t consider what they’re spending at all.

Claire Roach, money-saving blogger and owner of Daily Deals UK, said: “Every student I know has blown most of their loan on holidays, nights out and new clothes. The best way to avoid this is to plan your budget in advance.”

Once you leave university and start earning an income, putting together a money management plan can help you keep track of where your money goes. This will make it easier to subtract costs such as rent, bills and student loan repayments from your salary and calculate a more accurate figure of how much is left for the rest of the month.

Dennis Harhalakis, founder of Cambridge Money Coaching, said: “Most of it is common sense and maths, but budgeting is also an emotional process which can be challenging. It’s also difficult if you’re flat-sharing with friends or a partner who might have different views and priorities.”

Be aware of your utility costs
If somebody else in your household handles bills, it’s easy to become oblivious to the exact cost of utilities. But by failing to budget for the correct amount, you’re likely to overspend.

To prevent this from happening, you could open a joint account so that everyone can check outgoings – but only do this with trusted and financially-secure people.

Ashley added: “If you share a joint account with someone who has bad credit, makes late payments or if the account goes overdrawn, it could impact your credit score. This could stop you from getting a mortgage or even a mobile phone contract in the future.”

Alternatively, you could use a bill-splitting service that puts all utilities into one monthly payment per person.

“If you find it difficult to keep on top of numerous different bills, only having one cost to consider makes budgeting much simpler,” Ashley continued.

Build towards saving goals
After organising your essential costs, decide whether you want to save for future events such as a holiday, house deposit or wedding.

Caroline Domanska, income strategist and founder of Money Mindset Coach, said: “I’d look at all the things that are important to you in the short-, medium- and long-term and allocate some money to each.

“Even if it feels impossible, if you start with something—even £25—it opens the door and allows you to work on a plan to increase these contributions over time.”

Last year, it was reported that more than half of 22-29-year-olds hadn’t set aside any money in a savings account or an ISA (individual savings account) from 2014 to 2016.

Caroline continued: “I think millennials do save but, in my experience, they don’t know what to do with the money and the housing market, so the money just sits in cash and then tempts spending.”

Dedicate some money to treats
Although saving is important, saving every spare penny you have may make you feel deprived, leading to reckless and impulsive spending. Instead, save a realistic amount each month for your social life, hobbies or the occasional small luxury.

Dennis added: “A good guide is to allocate 50% to needs, 30% to wants and 20% to saving. Automate the savings process and only spend what’s left over. If you want to control your spending, set a weekly allowance, take it out in cash and leave the cards at home.”

Becoming financially independent can be overwhelming but it doesn’t have to be. A monthly budget can help you make the most of your income and prevent you from living beyond your means.