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Plan Your Budget

Managing your budget is a crucial factor for a relaxed and prosperous life. We can help you allocate your spending accordingly while considering your lifestyle and personal expenditures.

Many people feel intimidated by creating a budget because they fear their spending may be restricted and they won't be able to splurge. However, if you look at budgeting through a different lens and use it to help you organise your monthly cash flow, you’ll find it easier to set saving and investment goals.

Budgets are essential for keeping track of expenses versus income, identifying spending patterns, developing savings, and avoiding debt over time. They act like a blueprint, a financial plan to ensure you don't overspend and stay on track. Even businesses and governments rely heavily on budget planning to estimate expenses for the following year. Currently, several online tools are available to help you manage your finances.

The past few years have been tough. Through the pandemic, we have all learned the importance of being prepared for the unexpected.

The first step in setting financial goals is to do them now and not put them off for later. Once that is done, break down your goals into short-term, mid-term, and long-term.

  • Short-term goals: 6 months to 5 years
  • Mid-term goals: 5 to 10 years
  • Long-term goals: More than 10 years

To start a budget:

    1. Add up all the monthly income you receive from all sources, individually or as a family.
    2. Categorise and add up the monthly expenses you expect to pay.
    3. Adjust, prioritise, and revise your budget as needed.
    4. Subtract the expenses from the income.

By the end of this exercise, you will be able to estimate how much of your income is left at your disposal. If you have money left, you have a surplus that can be saved or invested.

If your expenses exceed your income, you have a deficit. You need to look closer at your expenses and strategise how to save money. For example, you could consider moving to a more affordable location, reducing the number of times you dine out, or cutting down on unused subscriptions. Every cent counts, even if it's a small amount.

If your spending and income are equal, that's a balanced budget. However, you still need to review your expenses to ensure that some savings are being derived from your income.

Creating a budget is one thing. Sticking to it is another. To ensure that you stay within your budget, you can follow these actions on a simple Excel sheet:

  • Track your expenses regularly.
  • Pay with cash if you're tempted to use credit cards.
  • Try the 50/30/20 rule as a simple budgeting framework:
    - 50% of your income for needs
    - 30% of your income for wants
    - 20% of your income for savings and debt repayment
  • Cross-check your budget weekly to ensure that you're meeting your budget goals. You can have an accountability partner (such as a spouse, sibling, or friend) who will help you stay on track and offer timely encouragement and advice without judgment. You can also record your spending using online budgeting and saving tools.
  • Once a month, review your budget to see if your income or expenses have changed.
  • Reward yourself for sticking to your budget for the month.

Budgeting can help you understand where your money is going. Once you have set your budget, you can quickly identify areas where you can make savings and plan well for any future expenses.

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