Budgeting Basics: Creating a Budget That Works for You

Quick Take: How to Create a Budget?  ​
Here's a quick step-by-step! Start by calculating your net income. Afterwards, be diligent in tracking your spending. Then, set realistic goals so you don't get discouraged. Make a plan to reach these goals and adjust your spending if needed. Finally, don't forget to review your budget regularly!

Ever wonder why most budgeting advice feels like it’s written for someone living on another planet? You try to follow it to the letter, but somehow, you end up feeling more restricted than ever.

It's not you, luv. It's the advice. Too often, it misses the mark on what truly matters in our daily lives. So, what actually works? Stick around as we debunk common budgeting myths and introduce practical strategies that fit real life, not just an idealized version of it. 

Steps to Create a Budget

1. Understanding Your Income and Expenses: Start by tracking how much comes in and goes out. But here’s the twist – do it with a lens on your lifestyle. Consider remittances from your loved ones abroad, the daily commute costs, and even the occasional lunch outs.
2. Categorizing Expenses: Split your expenses into needs vs. wants, but let’s be real. In the Philippines, sometimes, needs include helping family and occasional treats for yourself to stay sane. Find a balance that feels right.
3. Setting Realistic Spending Limits: This isn’t about cutting corners so sharply you can shave with them. It’s about understanding where your money goes and finding smart ways to enjoy life without breaking the bank. 

Budgeting Methods That Work

The Envelope System

Old school? Yes. Effective? Absolutely. This method involves dividing your cash into envelopes, each labeled for a different spending category (groceries, utilities, savings, fun money, you name it). When the cash in one envelope runs out, that’s it for spending in that category until the next cycle. It’s a tangible, visual way to keep track of where your money is going, perfect for those who prefer a hands-on approach.  

Zero-Based Budget

Every peso has a mission with this approach. By assigning every bit of your income to expenses, savings, and investments, you’re ensuring there’s no money left unaccounted for. This method is a game-changer for those looking to get a clear picture of their financial health and prioritize where their money goes. It can be especially empowering for Filipinos who juggle various financial responsibilities, from supporting extended family to saving for the future.  

The 50/30/20 Rule – With a Twist

Traditionally, this rule suggests allocating 50% of your income to needs, 30% to wants, and 20% to savings or debt repayment.  

But life in the Philippines often requires flexibility. Perhaps you’re contributing more to family support or investing in a side business. The beauty of this method lies in its adaptability. Feel free to adjust the percentages to better suit your lifestyle and goals. It’s a simple framework that encourages balance between living for today and planning for tomorrow. 

Using Budgeting Tools

The digital age has brought a plethora of tools to make budgeting less of a headache. For Filipinos who are always on the go or juggling multiple jobs, these apps and software can be lifesavers. Here are just some of them:  

1. Money Lover

   Money Lover is an all-encompassing budgeting and expense tracking app that allows users to monitor their finances across different categories and wallets. It’s designed to help users manage their money more effectively, offering features like budget planning, expense tracking, and financial reporting.

2. CoinKeeper

   CoinKeeper offers a unique and intuitive way to track your income and expenses quickly. By dragging and dropping coins on the screen, users can easily allocate funds to different categories, making the process of managing money not just visual but also engaging.

3. YNAB (You Need A Budget)

   YNAB is built on the zero-based budgeting system, encouraging users to give every peso a job.  Its philosophy of proactive budgeting resonates with many Filipinos looking to break the paycheck-to-paycheck cycle. YNAB's method teaches users to be mindful of their spending and saving, making it easier to achieve specific financial goals. The community support and educational materials also make it a favorite for those who are serious about transforming their financial habits.

Adjusting Your Budget as Your Financial Situation Changes

but proactively planning for the future. Here's how you can stay ahead:

• Anticipate Changes: Keep a close eye on upcoming life events that might affect your budget, such as a planned move, career change, or family expansion. Adjust your budget in advance to accommodate these changes smoothly.
• Don’t Skimp on your Emergency Fund: An emergency fund is your financial safety net. If you haven't already, start funneling a small portion of your income into this fund. This way, when unexpected expenses arise, you can cover them without derailing your budget.
• Seasonal Adjustments: Recognize the flow of your expenses throughout the year. Perhaps your utility bills spike in certain months, or you have annual fees coming up. Adjust your monthly budget to account for these predictable changes, setting aside a little extra in anticipation.
• Review and Reflect: Regularly reviewing your budget allows you to reflect on what's working and what isn't. This doesn't mean you're failing; it means you're evolving. Adjust your budget to better fit your current reality, always aiming for a balance that promotes both financial health and personal happiness. 

Start Budgeting Now, Luv!

At the heart of budgeting lies its flexibility and adaptability to your life’s ever-changing melody. With the right strategies and tools, doing this becomes a whole lot easier.  

That’s where we, at Tonik, step in. Our array of features, from Stashes for your saving goals to Time Deposits for growing your funds, are designed to complement your financial lifestyle. Our BillsPay feature simplifies your transactions, and should you wish to build or improve your credit, we’re here with loan options tailored for you. By aligning our services with your budgeting strategy, we ensure your financial well-being is always in tune with your aspirations.  

So, what are you waiting for? Download the Tonik App now and start your neobanking romance with us today.