Simple Guide To Budget Money, Everyone Should Aim To

Budget is a basic and effective skill in financial planning. A budget summarises the expenses of your money or the measurement of your finances.

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A good analogy of budget is like you?bake a cake. There are measurements for every ingredient, such as sugar, flour, butter, etc.?

If you put too little flour, the cake will not rise nicely. But if you put too much flour, the cake will become ‘bantat’ (too hard).

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The same goes for your finances. Below?I share:

A Simple Guide to Budget Money That Hugely Improves Your Finances

There are many ways to do budgeting, and it’s important to find the one that works best for you. My favourite budgeting method is Money Jar System. It is simple, clear, and easy to implement.

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This Money Jar System I learned during T Harv Eker seminar back in the year 2010. It was a simple yet effective money management method. I used the system and saw a good result in my life.?

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In this system, the money from your income will be divided into six jars, each jar representing. Ie;?

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60% – Necessities Jar

10% – Emergency / Pay in cash Jar

10% – Long-term / Investment Jar

10% – Wants Jar

5% – Education Jar

5% – Giving Jar

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A quick illustration is below;

Let’s get through each budget jar in detail;

First Jar: Necessities (60%)

The necessities jar is your living jar. The maximum shall be 60% of your net income. The expenses in this Necessities Jar are all the expenses or commitments that you need to pay every month.??

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It includes;

·??????Food

·??????Home payment – mortgage, home loan or home rental

·??????Loans – car loan, personal loan, cash reward loan

·??????Utilities – electrical, water, Indah Water, Astro

·??????Communication – telephone, mobile, data

·??????Transportation – petrol, tolls, public transport monthly pass

·??????Monthly kid’s fee – childcare, school fee, tuition fee

·??????Credit card payment

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Second Jar: Emergency / Pay in cash (10%)

The second jar is for?Emergency or Pay In Cash. The money you save in this jar will help you be prepared for the unexpected and get rid of the habit of getting into debt.

You can buy things without simply swiping the?credit and then worry about the bill.

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Besides, for emergencies, I used this jar before for my?Australia trip back in the year 2014. And it worked wonders.?

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Put aside 10% of your monthly income and build it up. The money that you save in this jar could be used for the below items;

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·??????Big purchase – furniture, home appliance

·??????Car maintenance – schedule service, tire maintenance, car breakdown

·??????Vacations – In-country or overseas

·??????Unexpected medical expenses

·??????Emergency needs such as household expenses when losing job, pay cuts, etc.

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Third Jar: Long-term Savings (10%)

The purpose of this jar is to be disciplined in savings and keep your money for future expenses. It’s about 10% of your monthly income. Since this is long-term, I would encourage you not to spend or withdraw the money. The savings that you build in this jar shall be kept until you achieve the goals that you set, such as;

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·??????Retirement

·??????Kid’s college

·??????Long-term needs

·??????Money to purchase?property investment

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Where should you save money in this jar:?

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·??????ASB (Amanah Saham Bumiputera)??/ ASW (Amanah Saham Wawasan)

·??????Principal funds?– at a proven and good track record funds

·??????Tabung Haji

·??????Real Estate Investing

·??????Medical Insurance

·??????Any other investment

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Forth Jar: Wants / Lifestyle (10%)

You work hard every day and every month. Hence, you need to enjoy, entertain and indulge yourself. This Wants Jar will motivate you to save money and have fun within your means or sometimes to do things a bit luxurious.

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Example includes:

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·??????Buy new clothing, shoes, bags

·??????Outings with family

·??????Family dining at good restaurants

·??????Spa, facial, or body massage

·??????Experience a helicopter ride

·??????Staycation or vacation at executive suite

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Fifth Jar: Education (5%)

The fifth jar is called Education Jar. This money is for your personal and professional growth. The knowledge and skills you acquire will make you more confident and improve your personality and quality of life.

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You can spend the money in Education Jar on items;

·??????Books

·??????Courses

·??????Learn new skills – swimming, sewing, baking

·??????Career skills – public speaking, coding, writing

·??????Passive Income seminars – Property, Entrepreneurship, etc

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Sixth Jar: Giving (5%)

The final jar is the Giving Jar. As you manage your finances better, having the money to help others is good. You can give money to parents, a donation to any charity that you like, Infaq, etc

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‘Tangan yang memberi lebih baik dari yang menerima’ (It’s better to give than to receive).

Conclusion:

When you start to budget, your life will change.?

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You might find it difficult in the first few months, but trust me, it gets easier over time.

Most importantly, start and have confidence in yourself and your decision.