Where Does My Money Go? | 5 Tips for Personal Budgeting | Pigly.com

I am no expert, but as always, I am here to share things that work for me! Tips for personal budgeting is as subjective as it seems. While a few things are pretty ordinary and necessary, I might be sharing some practical ways which worked well for me. They might work for you or might give you a perspective so that you can customize it according to your needs!

Why am I talking about personal budgeting? I have been the most spendthrift person I know. No, maybe that is my husband. Anyhow, I wanted to make a point, and that is – budgeting was not my thing. I just put a certain percentage in my travel fund, a certain amount for investments, and rest is my liquid fund.

But thanks to COVID19, we are not travelling. And that has made me realize that we actually save more than just the travel fund! We went to a new place or just took a staycation every three weeks. Not only our travel fund has reached a figure it has never seen before, but other expenses like shopping during our trips have also stopped. Similarly, we have stopped going out on the weekends, clearly bringing down our weekly costs by $100-$150.

And this exact thing made me contemplate about the situation here. I decided to monitor my expenses in the COVID19 situation. It is an opportunity to save money, isn’t it? And for many people, unfortunately, saving money is the only option. My heart goes out to those who have lost their jobs. Trust your abilities and the universe, and I assure you, things will be back to normal soon.

So, here I am sharing some tips for personal budgeting which I practised for almost a quarter of a year now and have saved some extra bucks to spend on things I want!

Always work on your income after tax and retirement plan.

Before jumping into freelancing, I always worked for an organization where I received after-tax income. So, I never had to keep this aspect in mind. But as a freelancer, I make sure that you keep aside my taxes before spending my money. Tax calculations depend on your country and usually well defined for freelancers. Similarly, make sure to set your funds aside for your pension funds or 401.

Keep aside 50% of your income for needs and necessities. 

Go easy on yourself! I had colleagues who would keep aside 40% for their basic needs and thus every other thing – thanks to cravings and impulsive shopping fits – would seem like a luxury. And trust me, I know, more saved money means more spending!

Your basic needs include:

  • Rent/ Mortgage
  • Minimum loan
  • Insurance
  • Groceries
  • Fuel
  • Utility bills
  • Variable pays like entertainment, personal care etc

If 50% of your household income covers this, great.

What to do with the rest of the 50%? It’s entirely up to you. Set aside 20% for loan payments. Put a fixed amount into your emergency fund every month. Put some more for your savings. 

How do you do that? This is when this budget planner from pigly.com might come handy. Just enter your net-income and the range of desired expenses, and you have the numbers with you.

tips for personal budgeting
Sample from Pigly.com

Analyze your expenses and then evaluate where you can save some money

Now it might seem taxing, but it’s not. Just gather your few monthly statements of your bank, credit card, past few bills of your grocery shopping and just understand your expenses. Trust me, it’s not that difficult.

Now you know where you are spending. Evaluate what is right for your health first. Yes, you might need soda to function, but are you sure it’s not in excess? Or maybe you don’t need to smoke that extra box of cigarette. I won’t tell you what are bad habits or to give up your habits, that is your self-talk. But yes, you can always evaluate.

I found this dashboard pretty interesting. My husband and I are not chain smokers, but we do share a conversation over a cigarette twice or thrice a day. I am not very proud of it, nor do I endorse smoking. But, if you are looking to quit, this dashboard might motivate you to quit smoking!

tips for personal budgeting
Tips for personal budgeting | Savings on smoking

Not pretty big but I am sure there is a better use of the $600 you save in a year!

Or you might just realize that if you brew your own coffee, you can easily save a $100 per month. The opportunities are immense.

One of the best tips for personal budgeting: Don’t live off a credit card. Not at all! 

Credit scores are necessary. But that doesn’t mean you put yourself in unnecessary debt. I use credit cards for my absolute needs and necessities. I don’t buy anything and everything just because I have a credit card. And it’s a habit I have consciously taught myself. It’s super enticing to indulge when you have a rewarding credit card but trust me, you don’t want to see yourself in some bad debts in this unpredictable world!

Let your money talk! Set goals – immediate and long term 

Always have financial goals defined. They can be immediate ones as buying a car or some long term goals like buying a vacation home by the beach or travelling the world without worry! Calculate the number of deposits needed to achieve that based on your timeline. Or maybe determine the time to make your goal based on your income. But do have some goals in mind. This Pigly dashboard can help you do that! 

I really hope that these simple tips for personal budgeting helped you in giving a perspective!

 Featured Image: Photo by Michael Longmire on Unsplash

  1. Cigarettes are so cheap here in Manila. Recently stopped smoking last March, the lockdown made it easy because we weren’t allowed to go out lol

  2. These tips are pure gold. Thank you for sharing. My money management skills are so bad, but these tips will help me be more conscious.

  3. There are some great ideas here in your post. To be honest, the idea of budgeting kind of scares me, so I try to live simply and do the bare minimum. I can see that there may be an opportunity for me to be more strategic with my income, though.

  4. This is such a good idea and such a good site. Loved the concept of motivating oneself by showcasing how much one is saving. Your breakdown of how much to save (the ratios) also sounds about right though I am struggling to make it work presently.

    Lemme check out the site in detail.

  5. Working out your finances and budgeting yourself for the month is super important to make sure that you never are taken by surprise financially. Or at least, minimize the chances of that happening to you.

  6. i am trying my hardest to try and save , and always when i manage to save up something breaks on me and its out of warranty , i know tho i can do better at saving

  7. It’s nice to know where your budget goes. I usually list down my expenses and where it all goes so I can track it. I also try to save a small amount every month that serves as my emergency fund.

  8. money management is key to so much in our lives. i hope folks who are struggling with finances will tkae time to read your post about budgeting. your list is thorough for sure. and no to the credit cards. if you can’t pay it off completely each month cut them up.

  9. Those are all great tips for personal budgeting. I think the most important thing is to actually start a budget haha, and see where the money goes, then decide what you can cut down on if you want to save more. Or of course earn more, with side hustles, second jobs, etc.

  10. I love these tips. It can be difficult to know how to manage your money to the best level possible. The more information you have the better.

  11. There’s some great stuff here. Money management is so important in life. We need to be aware of everything we do financially.

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