Things To Take Note When Planning Your Personal Budget 

Budgeting, budgeting, budgeting. It is an essential step for any financial plan, but how many of us know exactly how to go about doing it?

Having a budget can help with getting closer to your financial goals, be it a short-term one like saving up for a holiday, or a long-term one like saving up for retirement. In the long-run, having prudent budget management skills will also help you manage and grow your wealth.

When looking to plan your budget, here are some key things you shouldn’t overlook:

  • Know your net income

On paper, your salary may look pretty decent. But after deducting your taxes, CPF, bills, and other monthly essential costs, the amount may seem much slimmer than before.

That’s why it’s important to think of your income in terms of net income. This is what you are left with each month to spend and save. If you are paying off a loan like an instant cash loan, don’t forget to factor this in your monthly spending as well.

  • Get organised

As important as setting your budget is keeping track of it. It is easy to miss out on some bills or expenditure when it is swept away with a pile of other documents. Create a filing system for your bank statements, credit bills, and so on so that you can refer to them easily. Or if you prefer, you can go digital and keep track of it with an excel sheet, or using a financial tracking app.

If you are in the situation of having multiple debts, you can consider making things easier for yourself by applying at a licensed moneylender for a debt consolidation loan. This helps you consolidate your debts into one place, so you don’t need to keep track of multiple creditors and payments.

  • Identify your expenses

You can find plenty of budgeting guides online, but some might not work for you, because everyone’s spending needs and habits are different. Instead, it is vital to identify your own spending habits and priorities. For example, if you have children or elderly parents to take care of, you need to factor in costs to provide for them. Or, if you are a heavy shopper, you might want to break down your shopping budget into further categories, like clothes, cosmetics, gadgets, and so on.

  • Cut down on the ‘wants’

One golden rule for budgeting is to prioritise the ‘needs’, and cut back on the ‘wants’. Is it even called a budget if you don’t have to restrict your spending? Making adjustments is necessary, and this should begin with the luxuries you spend on. Identify what these unnecessary expenditures are, and consider how you can scale back on them.

For example, you could spend less on eating at fancy restaurants, buy fewer clothes and bags, and skip the latest phone upgrade.

How to stick to your budget

Planning a budget will be futile if you don’t stick to it. But as anyone who has tried budgeting will tell you – sticking to it is the hardest part! So, let us help you find ways to follow your budget with these tips!

  • Be realistic

In the first place, don’t set a budget you know you can’t follow. Take into account your current spending habits before you set your budget, and make sure it isn’t too drastic a change. If your ideal budget is too far off from your current spending situation, you can take small steps to change it, rather than expect yourself to transform within a week.

The danger of an unrealistic budget is that you will not follow it, and become even more unmotivated to take charge of your finances in future. Instead, setting achievable standards will encourage you and ease you into the habit of saving.

  • Focus on the goal

Most of us budget because we have something we want to achieve at the end of the day. So, motivate yourself with the thought of this goal! For example, if it is a holiday you are saving up for, you can picture yourself at your vacation spot whenever you need to make a spending decision. If you really want to reach your goal, that thought will quell your temptations to spend unnecessarily.

  • Review and reward

Following a budget isn’t easy, especially when it requires changes to our spending and lifestyle. But stick to it for a month or two, and you’ll be pleasantly surprised at the results! Reviewing your savings and budget every month will boost your motivation once you see that your efforts are paying off. Every once in a while, you can even afford to give yourself a little reward, like splurging on a little something you’ve been eyeing!


It isn’t enough to budget – you also need to budget right! Use the above tips to refine your budget plan, and you’ll hopefully be on your way to your financial goals sooner than you think!

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