In my attempt to get back on track regarding my finances, I mentioned in my previous blog that keeping an eye on my expenses helps me determine which categories to change to save money.
Making a budget is the next baby step. Since I've been managing my allowance since college, I've tried several different approaches. The envelope method, in which I split my money into several envelopes that correspond to my spending categories, has been replaced by the 50-20-30 system, in which I spend 50% of my income on necessities, 20% on savings, and 30% on wants.
There are several methods of tracking expenses and budgeting. My personal experience has shown me that the best way to discipline myself to save more money for investments that will eventually generate passive income is to set a limit on each category of my expenses.
In my last article, I also noted that I categorized my expenses into fixed and variable costs. My allowance is allocated depending on those categories.
Fixed expenses are the ones that have the same specific amount per month.
- Bills
I set aside ₱5000 to cover my life insurance and other subscriptions.
- Transportation
Because I often utilize a Grab car as my source of transportation, I budgeted ₱6000 for this. I simply hate waiting in queues for public transit. I put a high priority on both my time and my comfort.
Variable expenses vary - the amount changes from time to time.
- Food
I allotted ₱3000 for food. Due to Grab Food delivery, I have already spent more than ₱3,000 this month. I'll start sticking to this budget next month. Good luck to me!
- Fambam
₱6000 is set aside for the Fambam. As my contribution to our family bills, I send my parents 4000 monthly. Although my parents don't ask me to contribute, I still do it to say "thank you." The other ₱2000 is for random allowances that I give to my sisters whenever they need some.
- Personal
I only set aside ₱2,000 every month for personal stuff. This covers my spontaneous online shopping! Hello Shopee!
- Fun
I set aside ₱3000 for impromptu dates with my partner and friends. Dates involving bar and café hopping included!
- Travel
I mainly plan funds for scheduled travel, but I also set aside ₱3,000 each month for unanticipated trips with friends.
- Grocery
This budget does not cover the cost of groceries for our household. I just allocated ₱1500 since I go grocery shopping randomly whenever I feel like it.
Others:
- Savings
I set aside ₱2,000 every month for savings. When converted into fiat, the earnings I generate from my other blogging sites are sent directly into my savings account.
- Fund
Others refer to it as an emergency fund, but I just refer to it as a fund since I don't want to attract any emergency. I set aside ₱1500 every month for this.
I don't have as strict of a budget as some people. I don't follow a percentage (%) budget since I pay close attention to my spending and savings before actually making adjustments. I don't want to deprive myself in order to save money.
I admit that my way of living isn't cheap, but I love setting my own standards for what a meaningful life should be, and part of that isn't limiting myself to the possibilities that life offers.
That concludes my budget planning.
This is what I've found to be effective.
Cover image edited on Canva