It's been sometime since my last post in March. From then till now we have experienced a great deal of changes in our life as a couple...
It's been sometime since my last post in March. From then till now we have experienced a great deal of changes in our life as a couple.
We moved to a different town (with lesser rent yey!) and we got our very first vehicle! Living in a different and a much more provincial town has really made a huge difference on our expenses. Now, our expenses are more predictable and we can say that it would be easier to follow than to fall off the wagon.
I've been following the 50-30-20 rule to budget bi-monthly:
50% of the income for neccesities/non-negotiables
30% Wants and Negotiables
When I started learning how to budget, I read somewhere that one has to learn to identify the important ones that you can't negotiate or compromise on versus the ones that you can get more flexibility with. Here's my list:
Savings - 20% goes to this category: Divided between Emergency fund and Long-Term Savings
Rent - Php 3,000 monthly / Covered by the 50%
Utilities/Electricity + Internet - Both are paid end of month so half and half are set aside bi-monthly.
Monthly for vehicle - Covered by the 50%
Medication (I'm diabetic) - Covered by the 50%
Gasoline - Covered by the 50%
Payables -Covered by the 50%
Negotiable: (it doesn't mean that we don't set aside for these, I tag them under negotiable as these are more flexible as to how much we set aside for each category every month).
Please note that we don't put money every month to some of the negotiables as there are times that we don't need to (except for groceries and allowances).
Covered by the 30%
Food/Groceries - Budget for every 2 weeks
Eating Out - for times that we want to try out a new restaurant or for special occasions/dates
Clothing - Every couple or three months we save up to buy clothes
Travel - Long term plans
Vehicle (Emergency Fund) - for small repairs
House Money - For things we need to buy for the house e.g. lights, mops etc.,
Allowances - Daily spending money
So for each month this is what we spend on, for the negotiables the amounts we set aside does vary and that's where we have leg room to accomodate whatever would need add ons on our non-negotiable list. Our budget is updated and re-evaluated bi-monthly as categories need to be paid on specific dates each month or before other bills.
It does take a lot of getting used to and discipline to follow a plan. This has been by far the easiest plan to take for us more than our previous set-up. I'm still using the envelope method to set aside cash, I will write about that in a different blog post soon.
But, for now, this is how we budget our money every month for a household of two. Let me know your thoughts and please feel free to share how you manage your budget too!