How to NOT “Break the Bank”


Photo by Pictures of Money on Flickr


In an earlier article, we talked about managing your finances, where we touched on budgeting and not over-spending. But how exactly do we start figuring out our budget for the month? Now for this situation, we’ll be thinking about your budget on a monthly basis.

Sometimes, Life just gets too Expensive.

We’ve all probably felt that feeling; that feeling of guilt and slight regret, as we realize that instead of buying a new pair of shoes, we probably should have saved it up to buy today’s lunch. But due to impulse and some poor decision-making, we’re left with an empty stomach (and some shiny new sneakers).

At this point, it feels like wherever we turn, there’s always another extra charge to be paid. From paying for food and transportation to utility and rental fees (if you’re living alone, that is), it feels like life is just one never-ending bill. Not to mention if you decide to go out and have some fun, that will turn out to be a whole other expense! So how are we supposed to keep our expenses in check, while still enjoying the many pleasures that life has to offer?


Photo by Images Money on Flickr


1. Start by Calculating your Monthly Income

First things first, your monthly income refers to how much money you earn or receive per month. From the monthly allowance you receive from your parents or the part-time job you have, knowing how much you receive per month is essential in figuring out your budget.

Or, if you’re currently working a full-time job with benefits, remember to calculate in the compulsory income deductions such as the Income Tax, EPF, and SOCSO, in order to figure out your net income, the amount of money which you can use for your expenditures.

2. Identify your Main Commitments

Next, you’ll need to identify your main commitments. These are your non-negotiable, must-be-paid, cannot-be-delayed payments like your utility bills, your student loan, insurance payments, and so on. Your monthly commitment payments usually differ according to your current living and occupational situation.

For example, if you’re a college student living alone in a dorm, your commitments will be your rental fees, your utility bills, and your monthly college fees if you’re not already taking out a loan.

3. Analyse your Primary Expenses and Divide them Accordingly

After you’ve already identified your main commitments, subtract the amount needed to pay off your commitments from your net income. You’ll be left with another amount which you may now use to figure out how much funds you would like to allocate for all of your expenses. For example: If you earn about RM3500/month, and if your commitments total up to around RM1500/month, you’ll be left with RM2000 for your other expenses.

Analyse your primary expenses first, such as food bills, petrol fees (if you drive), transportation fees (if you use public transportation), and so on. These are your essentials, even though the values for them haven’t been set. This is when you should think about your current circumstances: Are there affordable places to eat near where you work/study? How far is your workplace/university from where you live?

Come up with an estimated figure for these expenses, and compare it to how much you have to spend. Remember to put some extra money aside for saving purposes, and for other optional expenses like entertainment and shopping. If the figures you’ve set for your essential expenses leaves little room for your savings, or if you feel like the amount is far too much, you may need to start thinking about alternatives.

Instead of always eating at restaurants, you could opt to buy groceries and cook food at home, which would be significantly cheaper. Or maybe you could ask some of your co-workers or friends to carpool, which would greatly reduce the transportation cost for all of you! (while benefiting the environment in the process)



Photo by Pictures of Money on Flickr


4. Keep Track of your Budget

To help with keeping track of your budget, it is recommended that you create a proper document like a spreadsheet, where you’ve already listed down all of the necessary details and amounts. Refer to it often, keep it updated, and make sure that your expenses fit within the set budget. Any extra money left over can be put back into your savings, which would greatly benefit you in the future.

All it Takes is some Practice!


Finally, there’s no point in coming up with a proper budget if you don’t stick to it! This is where your own self-discipline and determination comes into play. Though it may be difficult to resist indulging yourself in luxury all the time, it’s good to only allow yourself to splurge every once in a while. Limiting yourself will also help to boost your satisfaction when you’re finally able to treat yourself after a long time! Always remember that if you fail to keep within your budget at first, it’s completely normal as you are still getting used to it. Practice makes perfect!

By: Ivory Anne

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