38. Finances 101: 10 Perspectives - From my point of view. 12. Budgeting... a start


Now that we have set our priorities, how do we begin to do what we need to do?

My recommendation is to start by tracking what we are currently doing… know what we are earning and spending on. Then what we are doing well, we do some more. What we are not doing right, we stop doing.

Let us start by keeping a tally of what we are currently spending on.

Daily / Weekly / Monthly Expenditure

From the 1st of the coming month, start keeping track, using a printed piece of paper:

  1. Food: Breakfast, Lunch, Dinner, Tea Breaks, Supper

  2. Travel: MRT/LRT/Bus tickets, Tolls, Parking, Petrol

  3. Perishables: Groceries, Toiletries

  4. Entertainment: Games, Toys, Shows, Books

  5. Bills: Electricity, Water, Phones, Internet/Wifi,

  6. Non perishables: Clothes

  7. Maintenance: Car, house

Religiously write everything down daily, for a week, then two, then a month, then two. In 3 months, you should be able to have enough data to let you know what you usually spend on.

Once you finish a month, you can plot the numbers into a more detailed budget that shows your income and your expenses. Some headers may be as follows:

Base Pay

Allowance

Total Income

Deductions

EPF (Employee) (11%)

SOCSO

Tax

Total Deductions

Net Takehome

EPF (Employer) (12%)

SOCSO (Employer)

Total EPF

Total SOCSO

Expenses

Fixed

Housing Loan Instalment 1

Housing Loan Instalment 2

Car Loan Instalment 1

Total Fixed

Committed Giving

Giving 1

Giving 2

Total Committed Giving

Insurance

Life Insurance

General Insurance

Total Insurance per month

Other Fixed Expenses

Charity 1

Total Other

Net Income before Variable Expenses

Variable

Electricity

Indah Water

Phone Bill

Water Bill

Condo Maintenance

House - Security Fees

Quit Rent

Land Assessment

Breakfasts

Lunches

Dinners

Other meals

Groceries

Children Expenses

Others

Toys

Books/Games

Clothes / Shoes / Supplements

Car Parking

Entertainment

Petrol

Car Maintenance

Home Maintenance

Misc

Total Variable Expenses

Net Income after Expenses

Conclusion:

Once you start monitoring, you can start tweaking your lifestyle, income and expenditure and be on your way to proactively managing your financial life.

RESOURCE

Next week I will give you a budget template that you can use based on the examples given above.

Tell me how you do…. Until we meet again, happy managing your finances.

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