Write about your approach to budgeting.
My Approach to Budgeting: Don’t Let Money Fly Away, Give It Wings
Welcome to this special blog post, where we’ll talk about money, but from a completely fresh perspective. Often, just hearing the word “budget” makes us anxious. We think budgeting means cutting back, living in scarcity, and giving up on the things we love. But that’s not true at all.
Attention: Have you ever reached the end of the month and wondered, “I earned so much, but where did all the money go?” Or maybe you wanted to learn a new skill, travel, or surprise your family, but there was just no money left in your pocket? If yes, this problem isn’t just yours—it’s shared by everyone who earns money but doesn’t know how to manage it.
Reason: You should read this article because today I’m going to share the budgeting method I’ve developed over years of mistakes, learning, and experience. This isn’t some textbook formula; it’s a living process that has transformed my life. It’s a perspective that sees money not just as paper notes, but as energy.
Benefits: After reading this article:
· You’ll start seeing a budget as a “key to freedom” rather than a “prison.”
· You’ll learn how giving yourself a portion of your income first (Paying Yourself First) can boost your self-esteem.
· You’ll understand the difference between an “expense” and an “investment,” and how small daily habits can create big changes.
· Most importantly, you’ll be able to free yourself from money-related stress and focus on your work and life.
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Table of Contents
1. What is a Budget? – Common Belief vs. My Perspective
2. Where to Begin? – Assessing Your Current Situation
3. The Most Important Step: Pay Yourself First
4. Categorizing Expenses: Needs, Wants, and Luxuries
5. The “Joy Bucket” Concept: Budgeting for Happiness
6. Emergency Fund: Preparing to Face Tough Times
7. Review and Adjust: Keep Your Budget Alive
8. Conclusion: Money is a Means, Not an End
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1. What is a Budget? – Common Belief vs. My Perspective
Most people see a budget as a strict master. “You can’t buy this,” “You can’t go there”—that’s the voice they hear when they think of budgeting. But I believe a budget isn’t a jailer; it’s a gardener. Just as a gardener gives different amounts of water and sunlight to different plants so each one can bloom and grow, a budget helps direct your money to the right places.
Budgeting doesn’t mean you have to stop drinking tea or watching movies. Budgeting means asking your money, “Where are you going?” and then guiding it in the right direction. It’s about respecting the money you work hard for. When you take control of your money, your money stops controlling you.
2. Where to Begin? – Assessing Your Current Situation
Before starting any journey, it’s important to know where you’re standing right now. The journey of budgeting starts here. Grab a notebook or open the notes app on your phone. For the next 30 days, write down every single rupee you earn and spend, every single day.
· The 10 rupees for your morning tea,
· The 30 rupees for the auto-rickshaw,
· The 20 rupees for snacks at the office,
· Your monthly mobile recharge,
· Your electricity bill.
Write it all down without any censorship, exactly as it is. This is your financial checkup. Just like a doctor looks at reports to diagnose an illness, this record will show you where your money is flowing. You’ll be surprised to see how those small, everyday expenses add up to a big amount you never even realized was being spent.
3. The Most Important Step: Pay Yourself First
This step is the most crucial one, and most people keep it for last. We first pay everyone else—the grocery store owner, the milkman, the EMI company, and if anything is left at the end of the month, we think about saving it. But usually, nothing is left.
Change this approach. As soon as your salary arrives, pay yourself first. That means immediately setting aside at least 10% to 20% of your income. This money is your servant; it will work for your future.
· Put it in an account or fund that’s not too easy to withdraw from.
· Invest it in mutual funds or PPF.
· Buy gold or any asset whose value will grow over time.
This money is the foundation of your freedom. When you pay yourself first, you’ll feel mentally stronger and will manage your other expenses accordingly.
4. Categorizing Expenses: Needs, Wants, and Luxuries
Once you’ve set aside your savings, learn to divide the remaining money into three categories:
· Needs: These are expenses you cannot avoid in your daily life. Things like rent, electricity and water bills, groceries, travel costs, and children’s school fees. About 50% of your budget should ideally go here.
· Wants: These are things that make life easier or more enjoyable, but aren’t essential. Like eating at restaurants, buying new clothes, OTT subscriptions, traveling. Spending up to 30% on these is okay. But remember, learn to control your wants, otherwise they can drain you financially.
· Savings & Investments: This is the 20% we already gave to ourselves first. Forget that this money even exists in your account. Consider it your future’s money.
5. The “Joy Bucket” Concept: Budgeting for Happiness
Many people become so miserly in the name of saving that they make life miserable. They stop every small joy. Don’t do that at all. I always include a “Joy Bucket” in my budget.
From the “wants” portion (30%), set aside a little money. Spend this money only and only on things that bring you happiness. It could be:
· Eating pizza with your family once a month.
· Buying a book you really like.
· Enrolling in an online course.
· Enrolling in an online course.
· Helping someone in need.
When you spend this money joyfully, you’ll also enjoy saving. You won’t feel like you’re depriving yourself of life. Instead, you’re making money a source of your happiness, which is its true purpose.
6. Emergency Fund: Preparing to Face Tough Times
Life is unpredictable. You could lose your job, face an illness, or encounter an unexpected crisis. If you don’t have money saved up at that time, you’ll end up taking loans and getting trapped in a cycle of debt.
Therefore, use a part of your savings to build an Emergency Fund. This fund should be large enough to cover your family’s essential needs for at least six months, even if your income stops completely. Keep it somewhere accessible, like a savings bank account or a liquid fund. This fund keeps you stress-free and acts as your shield during difficult times.
7. Review and Adjust: Keep Your Budget Alive
The biggest mistake is creating a budget and then forgetting about it. The market changes, your needs change, inflation rises. So, make sure to review your budget at the end of every month or every three months.
· Did you pay yourself first?
· Are you spending too much on wants?
· Do you need to cut back somewhere?
· Is your emergency fund fully funded?
This review will keep you on track. If you fail to stick to your budget one month, don’t get disheartened. Improve it the next month. Treat your budget like a journey, not a destination. There will be ups and downs, but the direction must remain right.
Conclusion: Money is a Means, Not an End
The real purpose of budgeting isn’t just to accumulate money, but to gain the freedom that money can provide. It gives you the freedom to pursue your passions, spend time with your family, and live a meaningful life. It’s a discipline that makes you the master of your money, not its slave.
So, start today. Take a pen and paper. Befriend your money. Understand it, give it direction, and see how your life transforms. It’s not magic, just a little bit of understanding and consistent effort. Happy budgeting!
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Thank You!