I experienced my twenties as a student, as an employee, and at present, back to being a student. My income fluctuated and on top of that, I have a lot of commitments despite being in at this age. It’s the time to learn to pay for the expenses such as fuel, phone bills, and sometimes food and drinks by myself.
To be honest, I very much dislike the idea of budgeting. I find budgeting as one of the most difficult tasks to do. It can be time-consuming to sit down and actually calculate the in and outs of my money. It can be tiring to keep the receipts of all of the transactions I’ve made. When the balance I should have does not match the balance I actually have gets frustrating. For a forgetful person such as myself, most of the times I would find it impossible to even recall every single transaction I have made during the day, especially when purchasing from stalls that don’t issue receipts. Imagine going to the Night Market and coming back with both hands full of food and/or drinks from different stalls. I always find myself wondering where my money went, sometimes overestimating the amount of cash I have left. I had to start budgeting and figure out a way for it to be successful. I tried numerous times before this, and have sadly failed. However, I am slowly learning the right way. Perhaps I’m not the only one experiencing this. Hence, I am sharing some budgeting tips which I hope you would find useful.
1. Needs vs. wants – your call.
First and foremost, distinguish between the needs and the wants. I learned this the hard way. I have always known the meaning of needs and wants – in brief, “needs” are the essentials while “wants” are the desired – yet I still often mix up the two. A few years ago, when I was an undergraduate student studying abroad. What happened was me doing budgeting the wrong way for the first month. My allowance was carefully divided to house rent, bills, daily essentials, and the balance are for my weekly groceries (£20 per week) and savings. Despite having a plan and savings, I was completely broke by the third week of the month.
“But I didn’t shop!” – Or so I thought.
Bills have included monthly gym membership that I went only three days a week, while savings were actually spent on eating out because “I don’t have the time to go home during lunchtime,” or otherwise because “I’m too tired to cook after spending the whole day on campus.” At the same time, my weekly grocery budget (£20 or sometimes more) were spent on loads of snacks and food that I couldn’t even finish before the expiry date. By the third week of the month, what’s left? Weekly groceries’ budget: £10. Savings: Nil.
I freaked out. I had to find a way to survive for two weeks with only £10. It was time to pull myself together. At that time, I had to go to the nearest grocery store; got myself a medium sized bottle of pasta sauce and a packet of the cheapest spaghetti pasta, both for a total of £1 – yes spaghetti for lunch and dinner for two weeks.
What I’m trying to point out here is that things such as the gym membership, snacks and eating out can be wants although they may seem like a need. I didn’t need a gym membership when I can jog around my neighbourhood. I needed snacks to do work but did I need a load of it? Eating out did save me some time and energy but I didn’t have classes to attend every day. eThese were the things I needed to realize back then and even have to keep on reminding myself even until now.
2. Strategic budgeting
Think, plan, implement
When it comes to budgeting, to have a plan is a must. Planning is the very basic step in budgeting but like what happened to me, to have a plan does not ultimately lead to success. We need to think it through, plan it carefully and actually implementing it strategically. Sounds tough? Bear with me.
What I mean by strategic budgeting is actually carrying it out in a way that it fits our lifestyle. This helps by making budgeting less time-consuming, hassle free and most importantly, we actually enjoy doing it. In my case, what I do first is to list down all of the essential things for me to purchase as well as two or three of the things I desire (at least there are some things to look forward to) for budget allocated.
Next is to design a logbook on a spreadsheet: include the days, date, money in and money out and straight away formulating the Excel workbook to automatically calculate the monthly balance after every transaction Simply input daily transactions and I would get the numbers right away. Last but not least, is for me to spend my money as I have allocated. For it to be more satisfying (because I often can’t stand not spending money after a while), I get rid of the essentials within the first week and afterward getting the things I desire whenever I feel the need to shop. This way, the spending is within budget and satisfactory.
3. “Little by little, it becomes a lot” – Tanzanian proverb
Apart from budgeting to not overspend, budgeting to help us create a saving fund is desirable as well. We’re always told that we need to have a saving in case of emergency or for the future later. However, I believe that because of this, we often pressure ourselves to restrict our expenses beyond our limit. I do it too though. For some time, every month I chose savings over important occasions such as a gathering with my friends or bringing my family out. After a while, I became a bit frustrated and that created a negative aura towards savings. I asked myself, what is the use of having savings if I’m not going to spend it on anything probably, ever? It’s important to create memories now too, while I can. Savings is still savings no matter the amount, no matter how long. Don’t force yourself to come up with a large amount of savings when it’s just for savings. Otherwise, target the budget for a goal (e.g. traveling) but allow some of the income for self-satisfaction as well, even things as simple as getting a ice cream with friends, rather than allocating the entire balance of income for savings.
All in all, budgeting can be one of the most difficult tasks especially in our 20s but perhaps it’s because it’s done in a way that we don’t like. Hence it often turned out to be an obstacle instead of a help. I hope the tips help or otherwise work around it and you’ll soon figure out how interesting and satisfying it is to do budgeting.