Thanks for taking part in the last survey. I’ve received encouraging responses from you. The initial result shows that one in every two income-earning adults tracks their spending. Most of these people have a budget plan.
One of the emails I received today caught my attention and inspired this post. She told me that a budget planner doesn’t work for her. She can plan the budget at the beginning of the month but when approaching the end, she will be totally out of the budget.
And when I studied her budget plan compared to the actual spending, I spotted something strange.
“Other” is normally something not budgeted
She has spent quite a big chunk on “other” category in her budget. In May, she sponsored RM2,357 on her mother’s trip to China. In April, she replaced her broken laptop. Back in February, she spent RM1120 to replace all her tyres that the tread is almost worn off.
And all these expenses are categorized as “other”!
This is the solution: No more “other” spending (or keep it at minimum at least)
The simple solution that I suggested is – you should have a budget planned for all these expenses. Your mother’s trip should be included in your parent’s allowance. If you pay RM500 a month to her, set extra RM200 aside for her annual vacation. You should have a big purchase saving category budgeted to cater for your spending on gadgets or other big purchase. Car tyres replacement should be included in car maintenance (RM1120/24 months, assuming that you change tyres every two years).
If you have a budget planner, what goes into “other” category?
Tell us more about it in the comment section below.
Note: I will be discussing more details about budgeting in my new book. Just in case you are not informed about it, I am going to launch the book as a collaborative project. You will be able to read the book before the manuscript goes to my publisher. Your name may even appear in the book. Stay tuned!