Top 10 Frequently Asked Questions on How To Budget Your Money

April 28, 2020
Last week I created the Frequently Asked Questions on Saving Money post.questions-on-budgeting
I am happy with the positive response that post is receiving.
Today I wanted to created another collection of question and answer but this time focusing on Budgeting. The goal is to give you a closer look on how you should budget your money whether as a beginner or pro. 
Budget remains as the fundamental lesson in personal finance.
Everyone no matter what age, gender, living status, salary should and must learn how to budget. Let's take a look on the common questions people ask and the answers I've found.


1. What is a budget and why is it important?

A budget works as itemized overview of your income and expenses done for a certain period of time.


This is done mostly every end of the month in preparation to the coming month but can either be weekly, quarterly and/or yearly too.


A budget keep track of your spending patterns, record your income and determine whether you are spending more than you should be. 

Creating a budget is important for it ensures positive cash flow for you and your family's needs. Budget also makes you learn to live within your means keeping you out of debt.
Having a budget as a habit will enable you to understand your spending habits or how much you are making and spending.
It will also help you stop living from paycheck to paycheck because you have exact allocation of your money.
Lastly, a budget will help you big time in building your savings whether for an emergency fund or retirement fund. 


2. How do I create a budget?

All of us have created a budget once whether it'd be for a vacation or grocery shopping etc. Creating a budget is actually very easy…its committing to it that's hard. Budget involves tough choices to make all ends meet and it is your responsibility to make one. 

Step 1 is to choose your system
Are you more of a pen and paper kind of person or you love using apps for your budget? You need to identify which budget system applies to you. 
Step 2 is to know your net income 
If you're employed this will be your take home pay less government fees and taxes. This money will act as your baseline. 
Step 3 is to gather your budget categories 
Budget categories refer to the items where you'll allocate your money. This includes Tithe, bill, house rent, food grocery, etc. It is important to have a the budget category that works for you. Keep it as simple as possible so you won't go crazy budgeting every end of the month. 
Step 4 is to know your spending percentage
I recommend you use the 50-20-30 Rule of Budgeting to calculate how much of your income goes to each category. You can also use other budget allocation depending on your comfort level. If you are curious about the 50-20-30 Rule of Budgeting you can read it HERE .
Step 5 is to start budgeting
Put an amount dedicated to each category and stick to your budget. Don't forget to adjust your budget if needed. 

3. What are the most important items you should budget for?


There are categories in your budget that calls for special attention because failure to pay may cause you to be in a big financial trap. This includes your savings or money that will go on your emergency fund. Payment for your credit card debt is also important so you won't miss any billing and pay additional interest rate. READ: Budget Categories


4. What to do if your expenses are bigger than your income?


In case your budget revealed that you have more amount set for your expenses than your current income, then you need to harshly cut-off on items what can be cut-off.
From coffee dates, dining out, movie times, etc. you have to simply stop for awhile so you'll have money for more important items. You may also try a no-spend week or month rule where you can't buy anything and save a ton of money. 
This is a common scenario once you have successfully created your first budget, you see exactly where you're overspending. The reason why I highly suggest to apply the 50-20-30 Rule of Budgeting is for you to have an initial idea of how much money you can only spend on your budget categories. 


5. How to Effectively Budget Your Money

Again it takes a lot of financial discipline to effectively budget your money. But the few items that can help you are as follows:


1. Put your mind, heart and soul in your spending plan. You need this a lot to succeed in keeping a budget. If you are half-hearted from the start then you'll certainly fail big time. 


2. Create your financial goals. If you want to stay motivated to save or to invest or to keep your budget then don't forget to create simple goals daily, weekly or monthly. 


3. Track your expenses from smallest to largest. Once you've set up a budget on each category the next big step is to track your expenses up to the last penny. You can do this by a simple DIY Spending  Tracker Notebook


4. Don't give up. Succeeding in keeping a budget is total hard work. You need strong will and financial discipline to stick to the plan. If the budget for the current month failed then try again next month until you find out the perfect budget for your needs. 


6. How to Budget for grocery shopping?

Grocery shopping is one of the hardest category to budget. If you want to save money on grocery shopping then you need to budget effectively. 

1. First try to create a weekly meal plan. Write down ideas on what meal will be prepared on particular day from breakfast, lunch to dinner. 
2. Next is to prepare a list of the ingredients and items you need for each meal. 
3. Write your budget beside each ingredient based on your projection from last month's grocery shopping. 
4. When you do actual grocery shopping make sure to check for discount items. Try to buy in bulk so you can save for the next grocery shopping (as long as you have extra cash).
5. Maximize leftovers by doing a second meal with them. You can search a lot of meal hacks online for reference.  

7. When is the best time to budget your money?

It is best to budget your money every pay day or every time you earn some money. The technique is to record the amount automatically and then do your budget before spending. If you follow the above routine every single time you have money in your "in flow" you'll be at ease to spend. 


8. How do I budget my money on an irregular income?

So how do you budget your money if your have irregular income? If you don't get paychecks every two weeks and have no fixed amount for a salary, can you still budget effectively? 


The answer is YES.


You can approach budgeting in two ways – budget as soon as your income comes or budget using your average or baseline income. 


Enter the money in your budget as it arrive to you then do the rest of the allocation process.


Another strategy is to calculate the average net income you receive in a year and use that amount as the baseline for your current monthly budget.


9. What are budget categories?

Budget categories are the items you allocate the money with. To further seal the deal with a budget one must first choose the right budget categories as a start.


The different budget categories that your present or your future spending plan should have:


Tithes. This consists of 10% of your total income. Other variants of this budget category will be Offerings, Missions (if you are supporting a missionary) and giving fund.

Bills. Bills refers to all the daily, weekly or monthly subscriptions that you need to pay with. Under Bills are the following:

  • Tuition Fee
  • Kid’s Allowance
  • Electricity
  • Telephone
  • Internet
  • Cable
  • Water


House. Though this could be included in the Bills category but I choose to separate this one to give you a much thorough breakdown on sub categories that you need to allocate money with when we talk about house.

  • Rental Fee
  • House Loans
  • House Repair Fund
  • Property Tax


Food. This category is of high importance for we need to eat in order to live. If you are someone like me who still is in the care of parents then the only item to budget is the daily breakfast and lunch. Dinner will sometimes be care your Mom same with how the weekend goes. (Thanks to the tight family culture of Filipinos) But for others who live independently and or are Moms below are much more specific allocation.

  • Groceries
  • Dine Out
  • Treats


Transportation. Personally, this is where most of my income goes since I choose to ride conveniently on an FX (Skyway) going to and from work. In short, I choose convenience over saving here. Below are other sub categories.

For those who commute will be a dedicated transportation allowance.

For those who own their car:

  • Fuel
  • Tires
  • Oil Changes
  • Maintenance
  • Parking Fees
  • Repairs

Investments. If you have different investment instruments then you need to allocate an amount for each.

  • Short term and Long term Healthcare plans
  • Insurance like Auto insurance and the like
  • Mutual Fund, Stocks and the like


Emergency Fund. This is something that you need to put emphasis –building your emergency. Put this as part of budget allocation so you won’t forget to put aside some money. You might also try the other funds I created that had renewed my financial life.

  • Fun Fund
  • Financial Goal Fund


Personal Expenses. This is anything that have to do with you or your family on a personal level.

  • Clothing Allowance
  • Load Allowance
  • Gym Memberships
  • Hair Cuts
  • Salon Services
  • Cosmetics
  • House Help
  • Subscriptions


Miscellaneous. There are expenses that just come along the way so its better to put aside some amount some reasonable amount.

10. How do I make my budget work for me?

Make it realistic

Always build a budget out of real and actual numbers. Put the real income you get in a payday, the real expenses you usually spend on your budget categories and the real magic numbers you have in your saving goals. Make your budget as close to your real life spending as possible.

Do it regularly

Setting regular budget from monthly, weekly to daily will definitely make you more knowledgeable in your own personal cash flow. Don’t stop with just a monthly budget but add a weekly spending plan to further breakdown your expenses. Also try tracking your expenses on a daily basis to see whether you live within your means.

Review it as often as you can

This is the part that can make or break any budget. Doing regular reviews of your budget is essential to keep yourself updated on your spending habits as well as whether you are acing your financial goals. Reflect on how your money went from the past month or past week and find out possible solutions to make it better.


Final Notes from SavingsPinay

The best time to take budget seriously is now. Do not wait for another end of the month or start of the month to create a spending plan. It is also important to note that you are technically living on last month's income every time you budget so you have to be able to control your spending wisely. 


I hope you enjoyed this post and learned a lot with the topic. I might do a part two of this in case I really need to update the post or I receive further questions regarding budgeting from others. 

Clariza Glino

Izza of SavingsPinay helps Filipinos bridge the financial literacy gap one content at a time by providing insights and tips on budgeting, saving, investing, side hustle and growing your net worth. Aside from this blog she also writes at, a beauty and lifestyle blog for frugal Pinays and manages,, a wedding and event business since 2011. For inquiries, topic suggestions or future collaborations email her at

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