Three ways to shape up in budgeting

Everyone loves a good deal. That is why our parents trawled the newspapers for discount coupons and we check out our favourite shopping sites diligently for promotions.

As long as the good deal you are eyeing is a need rather than a want, it is actually one way to shape up in budgeting.

To recap, needs are things you cannot live without, like food or utilities; wants are things you desire, like a new pair of shoes, and yes, that Netflix subscription.

Save when you spend

So, if you are always keeping an eye out for discounts on essentials, you are shaving spending from your budget.

For example, you could choose the right supermarket to pick up your groceries or shop online when there are deals for certain products you buy regularly.

Now, there is a new way to save money on groceries like a pro (without exposing your inner Aunty.)

The Consumers Association of Singapore (CASE) has launched a mobile app called Price Kaki , which you can use to find your favourite washing detergent at the lowest price in your area! The app currently covers about 3,000 common household and grocery items, such as milk, rice, and eggs, being sold at most of the major supermarket chains. Hawker food prices will also be shown in the app.

Where is your money going?

You could be in a job of your dreams, drawing a handsome salary, but are you leaking money?

Sit down for an honest talk with yourself from time to time: Are you reading all the magazines you subscribe to, whether online or in hardcopy? Are you regularly busting your mobile data limit with abandon?

You may be too tired after work every day to read all the magazines you subscribe to. Perhaps you only have time to read one or two titles.

Are there available wireless Internet connections you are not tapping? Do you need to stream YouTube videos while you're having lunch or on the bus or train?

Not caring how you are spending, even if you can afford it, is not a smart way to handle your money. The key to being financially secure is not how much money we make, but how well we manage it.

Study your bills carefully every few months and you might find unnecessary spending you can cut without even noticing any difference in your lifestyle!

Challenge someone

Keeping to a budget can seem joyless at times. After all, you are delaying gratification.

But know that budgeting gets easier with time. The longer you keep to a budget, the less you'll notice you are giving things up. Rather, you may become happier with yourself, seeing your bigger financial goals getting closer to your grasp!

It is easier to keep going at your budgeting habit if you have someone to spur you on, be it to cheer you on when you struggle with giving up a want, or nudge you to loftier plans when you are coasting steadily to your financial goals.

Budgeting is about being smart with your money. That means it's a lifelong journey, regardless of how much your paycheck grows. It also means it's never too late to start!

How to prepare a budget

Here are a few tips to get you started:

1. Work out your total monthly income. Include income you can count on (basic salary, rental income). Do not include any money you are not sure you will earn (e.g. bonuses and commissions).

2. Set aside a fixed amount of savings every month. Save first: Aim to save at least 10% of your monthly take-home pay, or more if you can. Set aside 3 to 6 times of your monthly expenses as emergency funds. After you have built up emergency savings, save up for the other goals you have in life.

3. Make a list of all monthly expenses. Include taxes, debts (any credit facility, like loan repayments or credit card balances), transportation, utilities, shopping, food and necessities. If you have children and elderly parents who are dependent on you, include their allowance or financial help. Add in amounts set aside for insurance premiums, investments and savings.

4. Set up a budget and follow it in a disciplined manner. Expenses may be budgeted but we need not spend it if we don't need to.

5. Monitor your budget regularly to see if you are on track. Adjust your budget if, for example, you get a pay rise or get a pay cut or if you have another addition to the family.