This is more a question rather than a financial tip. I actually wanted to ask you all here, if you have any tips or budgeting/spending format that you have been following — and if yes, please do share! Even if you don’t have any, feel free to let me know why. Maybe, unconsciously, you have certain system that works.

So! Yeah, I guess it goes without saying that financial management is something that we learnt — and actually need to learn — since young age. Pocket money or maybe salary from part-time/summer break gigs; we learned how to ensure we don’t overspent. And when we did (stress eating and stress buying is real yo,) we can make sure that it’s still within manageable level.

I’ve been using spending tracker for years. I’m using Money Lover app on my phone to track my spending and… As much as I love and appreciate the app, I really am too lazy to track each transaction every single day!

I guess it goes down with the pros and cons of daily spending tracker:

Pros:

You are handling your financials in detailed manners. You know where goes which and which goes where.

Cons:

You need an immaculate set of discipline, something that I clearly lack of. And if are not super careful, you can go overboard with your spendings and overspend.

Now, I’m interested with budgeting. So I’m planning — well, I already planned — some “posts” for each costs/spendings. For some spendings that usually go into variable cost (constantly changing — for example, electricity bill. Quite contrary with Indonesia, we still have post-payment method (you got billed based on your consumption — whereas in Indonesia, you can purchase “electricity tokens/credits” with certain amount of fee. It’s to avoid overcharging issues) by the electricity company) I “force” it to be fixed cost. I’m checking the average billings and set certain amount of money that I will pay monthly. So far, I always have extra fees on my account, which helped alleviating the billings.

Of course, this kind of thing — forcing variable costs to turn into fixed cost — comes as I have privileges and means to do that.

It’s pretty eye-opening to see the amounts and the priorities. What I like about budget method is, you started to think how to save more or reduce the cost. I feel this will be super useful if you have future planning and you are foreseeing the possible costs.

Budget method calls for envelope method. So you use literal envelope and put the allocated money inside each envelope. You took it out for every spending that you have, and if the envelope is empty, then you stop.

Now, since we are using cashless method more frequently — and due to the pandemic, it’s encouraged to use cashless method to reduce contact — I’m currently thinking what kind of “envelope” method I can use. Money Lover app has this feature where you can create “wallets” on your account, and it looks neat to use it as envelope. I also planning to cross-check it with my spreadsheet.

Pros:

You can get bird-eye view of your expenses and your priorities. In some cases, it can even be a wake-up call to save more.

Cons:

If not done properly, it might lead to overspending — which beats the initial goal of budgeting. And on some cases, it can be really depressing. You need to look at your incomes, your expenses, and your cashflow. Some folks are fortunate enough to see how to get by. For some, it might be quite hard to do so.

Sooooo… What I’m thinking is, maybe I can combine those two (?) Every month, I create the monthly budget. Then, for specific “envelope”, I’m using spending tracker ? I’m thinking I can use spending tracker on my personal expenses since that can easily goes overboard.

I honestly don’t know how this (managing one’s budget) will work with some of us in sandwich generations. I have been hearing personal stories where it’s really really hard for my generations to have savings since they need to take care their family and they need to take care of their parents. There are also economical issues, workforce issues, and many external factors that makes people really reluctant to look at their financial conditions. Some folks even living paycheck to paycheck, and having savings is considered a luxury.

How about you? Do you have specific methods on handling your budget? Feel free to share!