Dilemma in Budgeting

Budgeting is something almost everybody does BUT also a lot NEVER did.  We all have that one friend of ours that keep saying, “I don’t have enough money”, don’t we?  So is this friend jobless, poor or maybe OVERSPENT?

When I was in my late 20s, I started working full time and part time studied at the same time.  Money was always THE issue.  I came from a family that is not financially strong and it also so happened that Malaysia was in the mid of financial crisis at that time.  I remembered my First Basic Salary was RM300 / Month, YES I didn’t typed it wrong, RM300 / Month and I started budgeting during those time.  I did not owned a computer as computers were considered an Luxury Item.  You imagine, a simple 486 will cost you not anything less than RM4000.  So, the only way I did my budgeting was using the leftover exercise books from my Secondary School.  I drew columns and stated down nicely what were things I needed to spend on for every month.  Today, we all owned at least ONE computer at home and that’s where life got easier with Microsoft Excel.  Up till today, I still do my monthly budgeting.  There are also various free apps available for smartphones users to aid them in their monthly budgeting.

So, what is budgeting?  In my opinion and at least what I’ve been practicing for decades, the MOST BASIC RULE in Budgeting is “NEVER SPEND MORE THAN WHAT WE ARE EARNING”.  If you earn RM1500 a month, make sure you don’t spend RM1800.  Simple Rule!

Most people that I met these days, especially the younger generations, never do a monthly budgeting.  I am not saying all but most.  With proper budgeting, one can easily control their spending and if lucky, one may even save some of it in the bank account.  Budgeting plays a vital role in our lives.  Whether we are Financially Fit or not, now or future, it all started with budgeting.

What really triggered me to start budgeting were COMMITMENTS.  Unlike most of my friends at my age during those days, I had a big burden on my shoulders.  Due to Malaysia’s financial crisis at that time, my parents were having hard time paying our house loan.  In order to aid my parents, I gave a big chunk of my earnings to them to make sure we do not loose our house.  I need to make use of whatever left to survive for the whole month.  It was a painful experience for me but I am glad I went through it.

Budgeting is an ACTION of WILL.  We need to be very Specific on what we should or should not spend on.  I once talked to one of my ex-staff about budgeting as he claimed that he overspent every single month.  I asked him HOW?  His answer was FOOD!  He just couldn’t resist good food.  He was constantly craving for them and those food were not available at any normal Kopitiam.  There were at cafe, restaurants or food outlets.  The worst month for him would be during Kuching Festival every single year.  What I am trying to say here is, if one wants to do budgeting, something has to be done instead of just planning.  In this case, my ex-staff needed to go less to places that can tempt him to spend more on food.  When we do budgeting, we know EXACTLY how much we have and how much we can spend or save.  To some point, we need to sacrifice some non-essential spending.

On the other hand, there are some people who overspent despite they did budgeting.  That’s where the dilemma kicks in.  Some of us may be able to relate to this, I know I can because I’ve faced that too.  We know exactly how much we have and how much we can afford to spend BUT still we argue within ourselves to spend on something that is non-essential (example: that irresistible smartphone offer).  This is normal but if this happens all the time, is no longer normal.  I cannot imagine asking myself every single time, to spend or not to spend.  The cure for dilemma is discipline.

My budgeting is very specific.  Beside the normal expenses I need to spend on every month, I even put a side a budget for future transactions or purchases.  Example, my car insurance and road tax.  We all pay our car insurance and road tax once a year but I rather do a monthly budgeting and put them aside so that when the time comes, I do not need to worry on where to get that money.  If my car insurance and road tax total amount is RM1000 / year, I would divide them by 12 months, and put aside a budget of RM84 / month.  I remembered I used to set aside a budget to change a new computer in 3 years to come.  Say I wanted a very good computer that might cost me RM6000.  Divided into 36 Months, I will make sure that I set aside RM167 / month for the next 36 months to get that computer.

I hope this would be able to help someone out there on budgeting and I believe that budgeting is crucial especially these days whereby our economy is not as good.  Do share with me also if you do have some awesome ideas on budgeting.