Frugal Tip No. 2: Budget Planning

BUDGET PLANNING is the key!

According to Asian Journal, budgeting is the systematic allocation of one's limited resources (income) to a potentially unlimited number of needs and wants (expenses).

Ever since I'm single, I'm trained by my father to do budget planning. Siguro plus factor na rin na CPA ang dad ko at natuturuan niya ako about financial planning. Kaya ayun, I apply it also to my married life. I have a per event, monthly and annual budget. Ang dami ano? I do that para I'll be prepared and hindi ako mabibigla pagdating ng actual na gastusan.

I'll define each category of budgeting that I'm doing ha...

Per Event Budget

Eto yung mga one time event or expenses for me. Like for example, child immunization, change oils, wedding, birthday parties, travel plans, etc. Believe it or not, may Excel file ako in every event. Nilalatag ko yung mga related na gastos for each event and my corresponding budget for it. May column din ako for actual expenses which is for my own monitoring if I'm working within my budget or if may sobra pa ako na pwede ko i-spend sa ibang bagay.

Example:

Birthday Party

                           Budget          Actual

Venue                   xxx               xxx
Food                     xxx               xxx
Sound System       xxx               xxx
Invitation              xxx               xxx
Giveaways           xxx               xxx
Cake                     xxx               xxx
Prizes                   xxx               xxx
Games                  xxx               xxx
Balloons               xxx               xxx
Decors                  xxx               xxx
Party Host             xxx               xxx
Outfit                    xxx               xxx
and so on...

Monthly Budget

These are our monthly expenses such as groceries, utilities (water, electricity, cable, phone), gasoline, laundry, clinic rentals, toll fees, association dues and so on.

Annual Budget

These are our annual expenses such as car registration, driver's license renewal, professional license renewal, annual business registration fee, annual membership fees for professional affiliations and so on.

Very toxic kung titignan ano? At first mahirap yan, pero kung sanay ka na at nasa system mo na, bale wala na lang. Very helpful ang budget planning for me because of the following reasons:

1. It makes me in control of my money and not the other way around. Since I already prepared a budget and allocated funds for it, ready and stress free na ako pagdating ng bayaran.
2. It makes me spend less. With a budget, I avoid spending on unnecessary items or services which are not part of my plans. In short, iwas sa mga impulse purchases.
3. It makes me aware on where my money went. Since everything is listed down, I can easily review where our money went.
4. It helps me communicate with my husband about our money. In case may tanong siya about our finances or may kakailanganin akong extra money from him, ilalatag ko lang sa kanya ang Excel file, gets na kaagad niya.
5. It alarms me in case we need to work extra effort for upcoming expenses. In case may big expense or potential money problems, I'm being aware. I'll inform kaagad my hubby and we'll make some necessary adjustments for it.
6. It helps me determine if we are ready to buy extras or invest on something.
7. It makes me save more. Knowing the budget, it can help me think of ways to save on something. Like for example, cutting costs on electricity and water or paying association dues for one year (in our village, if you pay for a year you'll only pay for 11 months). Aside from that, iwas din sa mga late fees, penalties and interests if you on time or in advance.
8. It makes me debt free! Meaning, I'm stress free of debts due to unnecessary spending. 

That's my piece guys in budget planning. How about you?