A good budget is just as good as a pair of fit jeans. Too loose, you spend more than you have but too tight, you suffocate yourself and you won't follow it at all. So, the key is to set a realistic budget that you can stick to it.
Step 1: Identify your income
This should take into account the SOCSO, EPF and tax to get your net income that you can use every month. RM 3000 is not RM 3000 at all, you only have RM 2600 to use after all those little suckers.
Step 2: Identify your necessities
Necessities do not include Starbucks and movie tickets. Necessities refer to savings, funds for investment, monthly debt repayments such as car loan or mortgages, petrol, rental, bills and utilities.
Step 3: Backward calculate how much you have daily
The remaining is the money that you can spend without feeling guilty. Divide it by the number of day in a month, you shall get a picture of how much money you can use per day. This money should be able to cover your two meals and miscellaneous buying that you want. Having said that, if you really wanted to buy yourself something expensive or to indulge in luxuries, you will have to plan which days you will spend less.
Step 4: Track every spending
Tracking where your money go is important as it tells you which spending is not necessary and to prevent over spending. Tracking is not difficult with the help of apps in mobile phone or just a simple excel worksheet.
Be in control of your own finance is the first step to become rich.
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