Saturday, May 08, 2010

budget 101... by sid

* It’s only middle of the month, but you already short of $$$
* You can’t really recall where you spent your $$$
* You short of $$$ to meet the Fixed Monthly Commitment (FMC)
* You can't even save $100 from the pay cheque

Not scary enough?

^ You only afford to pay the minimum amount as stated in the credit card statements
^ You have few credit card, most are reaching the maximum limit
^ Your simple calculation of next month income V expenditure left you only few bucks in the bank account.
^ Most of us are very lousy at managing our own $$$ and ($$$). We tend to incurred unnecessary expenses, go beyond budget and such.

Why? We never actually being teach how to do it. Neither nor we teach our self. It may look complicated but it is not. It always about $$$, budgeting, how much comes in, how much goes out, priority…

Let’s manage our $$$ right…

There’s always a rule. Ask any financial guru, wealth consultants or any person who talks $$$; there are simple rules to successfully manage your pockets…

Budget
Have a budget where you can keep track of your income (Y) and expenses. Before you said ‘it’s tedious and such, stop! Go to Microsoft's page and download free template of Family Monthly Budget to name one. Those templates are user friendly and editable. It’s FREE folks!

PRIORITY
Dining at Kenny Rogers is not a priority. Same goes to 70% mark down items in Bonia’s store. If need to, re-justify the meaning of PRIORITY which will eventually make your pockets look good.

The best priority sample should be: Saving – FMC – Leisure

SAVING
Always put aside some amount as saving. Any reasonable amount would be great for a start.

Tips: Try to save total of 5% to 10% of your net Y.

$$$ out
Again, priority. Know your expenses and group it under few different categories. So, you know what should come first. Follows are some example:
- Fixed Monthly Commitment (FMC) – Hire Purchase, Housing Loan, PTPTN, credit cards and etc. it should always come and settled first.
- PAMA – need I say more? No need right… it’s for KAP-BA-RO-KAP-TA-ALIF-NUN… sorry if I wrongly spelled it. LOL!
Monthly expenses – petrol, toll, personal care and such. Always keep in mind of what you can afford, what is needed and what is NOT.

Tips:
    * Me = Monthly expenses

Leisure
If you can afford to pamper yourself, why not right! Afford as if you really have extra $$$ and not by flashing those fancy and shining cards…

But, why pay if you can have it free? Free reading at Konikuniya; could hunting some more… lol! Window shopping is as great as shopping, free online games or pop corn with friends in your own living room…

Or at least, switch to a cheaper way or cut back. Buy books at discount; lots of bookstore offer good second hand book at a really good price, enjoy a good coffee at mamak stall and such.

Tips: gardening can ease your mind and swapping books with friends is fun though…

To be able to do all the above, you need to:

Reasonable: Your budgeted expenses must match to your budgeted Y. Otherwise, you really need help.

Discipline: Try to stick to you budget.
Tips: If you happen to overspend in groceries, try to cover it up from other expenses such as petrol.

Keep track of your expenses: Keep all receipts and if possible, record your daily expenses. So, it’ll be easier for you to update your budget at the end of the week.
Tips: use your hand phone to records those expenses. With tools like to-do-list or date book, it’s simple and easy.

Some advice:

Analyse; at the end of the month, do quick analysis of your expenses over income. Also, the actual result over budgeted figures. It will indicate if you are within the budget, over-spent or managed to save some. You’ll be surprise with the result and might have some idea on how you should spend then.

Coins; it wont grow if you keep them. Use them whenever need or have yourself a ‘tabung’.

Affordability; always keep in mind what you can really afford.

How I do it?

I set my daily expenses; if happen that I over-spent in any day of the month, I’ll try to cover it up from the days after. I’ll cut back my expenses.

I love good foods; what I did was, I would save as much as I could from my weekdays allowances. Thus, I managed to treat myself a good food once in a while.

I always try to keep my  Expenses <  Y. Thus, at the end of the month, I could save more… and more… and more…

here is sample of my budget;

 p/s: Roe & Chan, see baskin robbins there? haha...
($$$) refer to $$$ debts or $ owe to someone.
Y refer to income; an economic remark

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