Financial Planning for Babies

Babies here are not literally babies, bayi. What I meant is young executives who are new to the working life (like me…well, one year plus is still quite new) and just starting to lead a more stable life financially.

I started keeping track of my expenditure every month because, ONE, I’m a big spender. I spend a lot of money on unnecessary things like cheap clothes and accessories that will be worn out within a few months, TWO, it’s damn hard for me to save money. I go on a lot of holidays but instead of saving the money bit by bit every month, normally I’d just pool up my salary that particular month for a trip and just stop spending on anything. Which is just dumb.

So, I started doing my own financial planning. Because I don’t have a personal financial planner, obviously I have to do my own research. And I am not a professional financial planner. This is a baby guide for people who just started working just to have a view of how to control your own spending.

First, I divide my expenses into three. EXPENSES, SAVINGS and EXTRAS.

EXPENSES are the must-pay-every-month spending such as car / fuel / toll / phone bills / internet bills / parking etc.

SAVINGS would be obviously, my savings every month

EXTRAS are the extra expenses every month such as that beautiful skirt that I MUST have or getting that jacket in H&M that I love….Hmmmm

What I did was, I calculated all of the spending that I gotta do. Add up everything. For me, the EXPENSES category is the highest out of the three. So from there, my EXPENSES is about 60% of my salary (If you’re calculating yours, it’d could be less or more than the 60%). So this is how I divide.

60% + 20% + 20% = 100%

EXPENSES + SAVINGS + EXTRAS = SALARY

BTW, 60% IS A LOT FOR EXPENSES OK! I’m still upset about this. Haha. If you wanna try this, you can just divide according to your preference. If you wanna save 30% or 50% of your salary, good for you!

And after dividing all this, I’d update em in my excel spending sheet. The original excel sheet was downloaded from the internet but all the formatting and the expenses were prepared by me. Since working for a developer, excel is a very helpful friend. And he makes my life easier. Hehe. And seeing all the expenses on the sheet helps me to be more mindful of my spending. So nak tak nak I have to control my spending.

Before this I did my spending sheets manually but now it’s easier to use excel since I just learned how to use it :) I had to blank the numbers since I don’t wanna share everything online. Hehe.  And I have a slight obsession with organizing. Should take a look at my closet. It’s colour coded and organized according to frequency of wearing and type of clothing.

Ok, so the first column is BUDGET. Budget is the what I allocated for the expenses. Like I allocated RM150 for my weekly expenses. The second column is ACTUAL. Actual is what I actually withdrew/used, so I withdrew RM200 so I gotta fill up that column with RM200 (No cheating please!) And the last column is DIFFERENCE. So this is BUDGET – ACTUAL = DIFFERENCE. Easy right?

I don’t know about anyone else, but by having all this, it does make me more careful about my spending. I have to make a deal with myself to stop buying craps and before I spend any money on clothes, I’d have to :

1.  Stop

2. Breathe

3. Count to 10

4. Run away

5. Call boyfriend if he thinks what I’m buying is worth it

6. Think more before getting that item.

Before this, I’d just grab that item and go straight to the cashier. So now,no more! Ok ok. To be honest, it’s damn hard to do all this. So hard to control my spending when I used to just buy buy buy. But it’s a good training. Especially when I have plenty of holiday trips planned for the next few months, I really do need all the money I can get. Insya allah. Pray for the best. Gonna tell myself that I can do this. Good luck to me!