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How to properly budget and still enjoy your money

You’re probably reading this, trying to crack the code to saving. But the number one tip to saving money always begins with creating a budget. It does get tiring and repetitive. Trust us, we know.

There’s a sense of dread to budgeting. If you’ve put off budgeting for so long, you’ve probably missed out on a lot of night outs with friends just because you really can’t afford it. Perhaps you’ve also felt guilty for treating yourself because you still haven’t paid that debt off.  People think of budgeting like it’s a weight loss program or going to the dentist. But it doesn’t have to be that way.

Budgeting is more like slicing a whole cake.

Imagine throwing a birthday party and you’re serving a whole chocolate cake. You wouldn’t eat most of the cake before your family and friends have any. There won’t be enough for everyone. That’s just the general rule of adulting.

You would ideally slice the cake to equal parts. But some will want bigger slices, while others will only want smaller ones. When everyone’s got enough, you get to have one yourself. Whatever is left, you get to eat another day.

The same goes with budgeting. Think of your payday as your birthday and that luscious, decadent chocolate cake as your income.

You can divide your income by the different things that have to be paid off each month. But don’t forget to have a slice of your cake too. You should be able to still enjoy the goodness of your hard earned money.

As humans, we have limited willpower. This is why it’s so easy to overspend. The idea behind budgeting is to cover all the things that have to be paid off while still enjoying the things we love. This is why setting goals before creating a budget is crucial. By keeping your goals in mind when you create your budget, the things that have to be paid off are prioritised.

Now, here are the things you should consider including in your budget list:

  • Rent/Mortgage
  • Phone & Internet Bill
  • Electricity, Water, Gas bills
  • Subscriptions (Netflix, FOXTEL, Stan, Spotify, etc.)
  • Transportation Allowance (public transport tickets or petrol for your car)
  • Debt repayments
  • Groceries
  • Emergency Funds
  • Savings
  • Entertainment & Eating Out

As you can see based on this list, budgeting doesn’t have to be completely square. We added savings, entertainment and eating out so you can still enjoy the money you’ve worked hard for. We also suggest including an emergency fund in your list for any unforeseeable events.

Consider your situation

The budget list, however, will be different for every person. For example, if you’re driving a car to work, you might want to consider including the amount for parking. If buying coffee every morning is your thing, then also consider including that in your list.

Treat yourself

Once you’ve created your budget, you will see how much money you’ll have left. The best part is you can do whatever you want with it since you’ve already budgeted for savings and entertainment. You can add it to your debt or loan repayments, savings for a holiday, or just treat yourself.

Play the “What-ifs”

What’s great about budgeting is that you can also play the “what if’s.” Like how much more would you have for eating out and entertainment if you decreased your coffee spending each week? Or how fast will you pay off your debt if you decreased your budget for eating lunch out? Having the numbers in front of you will help you easily see how you can enjoy your income.

Make the most out of budgeting tools

ASIC offers an online budget planner to help you create a budget within 20 minutes. If you want to create your budget within 5 minutes, you can also use Frollo.

One of Frollo’s most popular features is the bucket-based budgeting. Using Frollo, you can divide your income into 3 buckets: living expenses, lifestyle expenses, and savings. Living expenses include rent, groceries, and bills. Lifestyle expenses, on the other hand, consist of eating out, Uber rides, and your daily coffee purchase. You can also check how much of your budget you’ve got left or how much you’ve overspent using Frollo.

Starting to budget will be a tough journey. But it will be really gratifying. If you just take 10 to 15 minutes creating your budget list, you’ll be a step closer to becoming financially stress-free. A little inconvenience today can help you live a better life tomorrow. Just imagine how fun it would be to treat yourself again without feeling guilty.

Now, go and enjoy your slice of cake!

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