Setting up our September budget
Every one of my monthly budgets usually start the month before it, or even a whole year before, because the data I need for my monthly budgets are generated in the month/s preceding. September is no exception.
I have three credit cards where I charge our electricity, cellphone, internet, grocery, gas, insurance premiums and personal expenses. They have different due dates, but I monitor their balances either through an app or the bank's website so even before the statement arrives, I can already estimate how much my credit card bill will be. I really just wait for the credit card bill so I know when the due date is, because it sometimes changes by a day or two, and then I can log it in my journal in green ink for easy reference.
I also log in my journal the recurring monthly expenses like mortgage payments, condo dues, my son's therapy fees, and donations. However, I don't log my kasambahay's salary due because I pay her the same day I get my own salary, so that's already enough reminder for me.
Before the start of every month, I make a tally of our expenses and my projected income for that month. Being in the judiciary, my take home pay is very predictable but sometimes we get surprise bonuses, so I'm usually off in my predictions by Php5,000 to Php10,000. By making a running tally of my income and expenses as they will occur in the month, I get an idea of how much my surplus will be and that will get funneled into our car downpayment fund (or whatever it is I'm saving for at that time).
Here's what I consider as expenses when making my running tally:
- credit card bills
- parking fees (condo and work)
- grocery and food expenses not charged to my credit card
- kasambahay's salary
- insurance premiums not charged to credit card
- donation to Tapulanga Foundation
- condominium and water dues
- mortgage for 2 condo units
- stock investment(s)
- therapy fees for my son
- tuition fee (when due)
My expenses list looks short because a lot of our expenses are already charged to my credit cards (which I always pay in full), so there's no need for me to itemize them anymore.
For September, our expenses were a little on the high side because I paid for two insurance premiums. Thus, my running tally showed that I can only afford to put away "1 unit"** for our car downpayment savings fund. The plan is to replace our 14 year old starter car by early next year and I've only saved 19% of the downpayment, so I need to be on full on saving mode in the next few months to reach my target.
My budget is not the typical budget because I've tweaked it to suit my needs. Instead of "telling me" what I can and cannot buy or spend on, my budget lets me know how much I can sock away towards a sinking fund (car downpayment in this instance), extra mortgage payments etc. This works for me because I already have a gut feel for our monthly expenses and doing this running tally on a monthly basis helps to calibrate my instincts. When personal expenses take up the bulk of our credit card expenses, resulting in a dive in my surplus, then I know it's time to rein in the spending and maybe even go on a shopping ban. It's really all about balance and being self aware enough to know when things are starting to go off-kilter.
I don't think I'll ever achieve that perfect, zen like state in my finances though, but hey, where's the fun in that? Part of what draws me to personal finance is how you can always tweak it to suit your mood, current state in life, where you want to be, what you want to achieve etc. In short it's your very own "Choose Your Own Adventure" plot and I'm always down for that.
Here's to hoping September will be chill and that the world will be closer to normalcy or at least a new normal that will be infinitely kinder to everyone.
* Additional image from axnent.com
** The plan is to make a 50% downpayment towards a new car by the first quarter of next year and then take out a car loan payable in 2 years. I'm saving for the downpayment by dividing the 50% by Php15,500, thus, when I say I can only save 1 unit for September, that means I was only able to save Php15,500.