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How to simplify your budgeting


Done right, budgeting lets you live comfortably, without having to rely on instant noodles for dinner. Following a budget keeps you from having to go to shady moneylenders, and it allows you to manage your income (the money that comes in) and expenses (the money that goes out).

Budgeting is important, but it doesn’t have to be complicated. Just figure out how much money you need to allocate across the things you absolutely need to pay for versus expenses that are “unnecessary” (those that you can eliminate or reduce from your budget).

Here are the four categories you should consider when creating your budget:

Food and drinks

These fall under the “needs” category. Set a certain amount for food and groceries (this should include eating out, too). If you can, go for home-cooked meals versus expensive restaurants or fast food joints. Keep dinner dates to special occasions.

Housing and utilities

Paying for rent, electricity, water, Internet and mobile services is unavoidable and necessary, so this is a “need” category as well. Include monthly association dues if you live in a condo, and parking (if it applies). Track these expenses, add up their average cost, and set that as your budget.


This “need” category covers the money you spend to get to and from work. Whether you commute or bring a car, set aside a bit more for when you want to go out on weekends. If you want to save on this category, budget just enough for a daily commute to discourage you from making unnecessary trips. You can also add your average monthly gas money here.

Leisure and entertainment

There’s nothing wrong with indulging yourself occasionally, as long as you do it in moderation. A budget can help you achieve that. This “want” category covers anything that adds to your quality of life but isn’t strictly “needed,” including things like hobbies, movie tickets and online subscriptions. These expenses should be the first to go if money is tight. Remember, needs before wants.

Personalize your budget

Start with these four expense categories but remember that they can change depending on your circumstances. For example, if you live with your parents and don’t need to share in the household expenses, you can set aside more money for categories like savings and investments.

On the other hand, if you have debt, make sure to budget for repayments to protect yourself from mounting interest and penalties that come from not paying them on time and in full.

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