That is most of us at the end of the month, that is even IF we manage to get there. Some of us are even THERE within 5 days after we get our salary. Where did our hard earned money gone??? I just got it, but now its....GONE!!!
Most of us have gone through this almost every month and it really sucks. No money = sucks. It's as simple as that. From what I can see, these penniless times can be avoided with a little bit of education and also a little bit of common sense. I'll try to share my wisdom and my two cents (well..i'll give you a penny, i'll keep the other penny if that's okay with you) on budgeting and savings based on my own practice and experiences.
1st Step: Write Down Your Expense
You need to know where your financial standing is on a monthly basis. Yup. Its a one step thing, man. So, keep your cool. Rome was not built in a day. Okay now, write down your monthly expenses based on these classes of expenses
Fixed Monthly Expenses
- average monthly petrol, toll and parking paid,
- average utility (water,electricity,phone),
- credit card bills,
- loan payments (house, car, study etc),
- average monthly total spent for food at work
- money given to parents,
- average monthly groceries purchases,
- ASTRO (IF you own one) and internet (again, IF you have it).
Entertainment & Luxury Items
- sports (futsal, bowling etc)
- dining out (teh tarik sessions, family outing)
- the amount depends after you calculate both the expenses above.
- the rule is, should be 10% of your income. the more, the better!!
2nd Step: How Much You Earn Monthly? Be honest, don't cheat!
- If you have a fixed income, then that's fine. But if you have an up and down income, take the average. Take into account each sen. Even part time jobs count!
3rd Step: Add up and Subtract
- Add up your expenses & savings, then deduct it from your income. Now you will have a real picture of your expenses.
- Here is where you can decide where you can cut down on or even take out all together. For example, rather than going to McD every week, make it once every 2 weeks. I myself go there ONCE a month (usually after month end accounts closing) but sometimes I don't even go there. Its true!
4th Step: Stick to the Game Plan & Stop Impulse (Mengikut kata hati) Buying
- After the 3rd step above, you know where you can cut down or take out. Now, you must stick to the plan,
- stop buying on impulse. Even buying a pack of Wrigleys chewing gum at the check out counter will throw you off your budget.
5th Step: Now you Have Your Budget
- Now you have a plan, a budget..so stick with it! Write down for a whole month your ACTUAL expenditure. See whether your budget is on the dot or adjustments need to be made. Then after a month, revised your budget to make it better for your savings side, NOT your spending side.
Ok. Now, I have shared the 1st step on how I manage my money. I will share with you later on how I make money through saving money. So far, I have managed to buy myself a car, paid for my wedding & honeymoon and bought a condo in Mutiara Damansara from this. See you later and keep on budgeting. Bye!
P/S: Let me know whether my ways work for you or if you have other ideas /suggestions on how you do your budgeting and savings. I am always eager to learn and apply.