Day #2: Fine-tune Your Budget - Or Start One
by Celine on November 21, 2009
in 25 Days to Healthier Finances, Budgeting
Here’s today’s installment:
It’s always surprising to me when anyone with an income doesn’t have a budget. If you read my review of The Millionaire Next Door, you probably know that even millionaires budget. That’s how they stay millionaires.
Sometimes I even hear people say “I have a budget, I know it in my head, I just don’t write it down.” But if you don’t write it down, how do you compare it with your actual expenses? How do you stick to it? This brings us to today’s task…
Today’s Task: Plan Your Budget
If you don’t have a written monthly budget yet, you need to start one now. As in today, if you can. You may need more information regarding your expenses, but at least start with an estimation and tweak it in the next two months as you watch your spending habits. The important thing is to take at least the smallest step as soon as possible.
Some basic pointers for drafting a budget:
- If you’re unsure about estimating monthly expenses, especially with food, groceries, and other “fluid” items, track your expenses by writing them down in a small notebook as you spend or by collecting bills and receipts. Then, at the end of the month, use these to estimate what your expenses will be for the following month.
- Try zero-based budgeting. It’s easier to stick to because you’ve already committed each peso of your income to an expense - even if it’s only on paper. I wrote about zero-based budgeting in a previous post.
- Include savings in your budget. Because saying “I-save ko na lang kung ano ang matira” really, really doesn’t work.
Should you need any extra help, I’ve listed below some budgeting tips from other blogs. I chose the simplest and easiest tips I could find so that “It’s too hard!” or “I don’t have the time!” won’t be used as excuses.
- Budgeting 101: How a Simple Budget Helped Me - And Can Help You, Too and Make a Simple Budget - A First Timer’s Guide from TheSimpleDollar
- Budgeting for Non-budgeters from GetRichSlowly.org
- Envelope Budgeting System from FrugalDad
Also, feel free to use the budgeting spreadsheet I made for Frugal Pinoy readers. It allows you to compare your budget to your actual expenses, and your expected income to your actual income. Don’t forget to watch the video tutorial on how to use it (in Tagalog).
Alternative Task: Improving an Existing Budget
If you already have a monthly budget, try to fine-tune it and spot areas that need improvement. Here are some things you can consider:
What expenses do you have every other month? Every third month? Twice a year? When we budget our money, we usually watch for monthly patterns (rent, utilities, etc.) when there are other expenses that creep up on us less regularly. This may include gas for the stove (for my family it’s every three months or so), car maintenance, dental checkups, etc. Factor in these items in the appropriate months for a more realistic budget.
In what areas are you usually underbudgeting or overbudgeting? One of my early problems was that I allotted P2,000 worth of groceries per month for my “family” (not technically relatives, but they live with me). As my family grew and as the cost of commodities rose, I kept the budget at P2,000. Soon, it was obvious that it was not a realistic figure.
How do you spend windfalls? Unexpected income or windfalls such as bonuses or cash gifts (insert PGMA joke here) can be both a blessing and a problem. People spend them as soon as they receive them. They say things like “Marami naman akong natanggap, eh” or “Siyempre kailangan magcelebrate”. I hate pointing this out, but here goes: “Eh ano ngayon kung marami kang natanggap, nawala naman agad!”
While there’s nothing wrong with enjoying extra cash, just make sure you can afford it. It’s kind of silly for those who complain that they don’t have enough money, yet they manage to spend their windfalls in one go.
Parting words:
Now that you’ve either come up with a budget or improved an existing one, your work hasn’t finished. It’s only begun. The hard part is committing to it and tweaking it based on your needs as you go along. Then, when living within your means and saving your money becomes a habit, maybe you won’t need that budget anymore.
Free Download: Frugal Pinoy Budgeting Spreadsheet
I made something special for you, Frugal Pinoy readers. It’s a spreadsheet that allows you to budget your money, track daily expenses, and track your income as well. Here’s a screenshot of it:
I made it with Open Office Calc, the free alternative to Microsoft Excel. I’m not sure if the file will work with Excel, so you might have to download Open Office first if you don’t have it yet (click here for the website). I’m sorry that I don’t have a version in Excel, since I don’t have a copy of the program. You’re free to convert this spreadsheet into an Excel file, though, if you know how.
To get the spreadsheet, right click the link below and click “Save target as” or “Save link as”:
The spreadsheet may be a bit confusing, so I made a tutorial video (presented in Tagalog - thanks for pointing it out dyoonet!). It’s 16 minutes long. If I’m explaining things too fast in the video, you can pause it and play it back. To see it in detail, you can view it in full screen by clicking the 
button on the bottom right of the player below.
To make sure that the video plays smoothly, play it first with the sound off so that the video loads completely. Then, watch it with the sound on.
If you have any questions/feedback about the spreadsheet or the video, feel free to comment below.
Do you use a spreadsheet to track your income and expenses? If so, share your tips with us.
7 Ways to Save on Groceries
by Celine on March 16, 2009
in Budgeting, Frugal Tips
Don’t buy everything from one grocery. For my family, I usually buy from a nearby SaveMore supermarket, a Parco supermarket, and Makro. Since I visit these places regularly, I have an idea about which items are cheaper when bought at a specific grocery.
Of course, this only makes sense if all the supermarkets you buy from aren’t out of the way. Otherwise, transportation costs might make your overall grocery expenses the same, or even more expensive, than if you shopped at the grocery nearest your home.
Go on fewer grocery trips. Since I visit 3 groceries, it might sound like I do my grocery shopping too often. The truth is, I only make 2 major grocery trips each month, and probably an additional 2 trips if I want to cook something special that I didn’t plan for. But for these additional trips, I only buy the ingredients I need. Generally, though, I prefer to plan for everything ahead of time so I can visit the grocery less often.
How will this save you money? If you go to the grocery less, there’s less temptation for you to buy unnecessary items that you weren’t planning to buy in the first place. Also, your transportation costs will be lower.
Compare and test different brands. Since I want to choose the brands that give me the best value for my money, I test different brands until I find “the one”. Sometimes “the one” turns out to be the cheapest brand or a generic product (such as the Savepak dishwashing liquid), sometimes it’s the most expensive brand, and sometimes it’s somewhere in the middle. But you can never know which brands give you the best value unless you try them out.
Buy in bulk, if it makes sense. In a previous post, I wrote about how to buy in bulk wisely (click here to read it). Usually, if you buy items in bulk you can save a bit of money - but only if you maintain your usual consumption rate of the bulk products you buy. See, some people tend to overuse items that they bought in bulk because “Marami pa naman eh”. Know your own habits and do the math to ensure that bulk purchases really save you money.
Stick to your list. It helps to have a list of items to buy before you go to the grocery, and to stick to buying only the items that are on your list. This prevents you from buying unexpected items on a whim. But if you find yourself looking at an item that isn’t in your list…
…apply the 10-second rule. This means that before you buy an item that isn’t on your list, think about it for 10 solid seconds before deciding to put it in your shopping cart. This will allow you to evaluate your purchase more thoroughly, rather than automatically chucking items in your cart without thought.
Use a rewards card. This is for those groceries that you’re often visiting. Savemore, Parco, Shopwise, and Rustan’s all offer their own rewards cards to customers. The rewards card will allow you to earn points for your purchases, which you can redeem in the future.
Do you have any tips to share about saving money on groceries? Please share them to the other readers via the comments section.
Image by Davide Guglielmo
Frugal Pinoy is a personal finance website for the average Filipino. We discuss savings, frugality, and other money matters. To learn more about Frugal Pinoy and the author,