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Budget — to some, this word almost likens to a taboo word. That’s because some of us might have this perception that when you’re on a budget, you lack financial freedom or you’re being restricted in your expenditure.
But that’s not quite true.
No matter if you have a financial goal you’re working towards or not, budgeting helps you better manage your money. And the purpose of budgeting is to put you on the road to a better life and, by extension, financial freedom.
Having a budget shows you exactly where your money is going, so you aren’t left wondering where you spent it last month. Don’t fret – there’s no need to fear budgeting. Here are 5 steps you can take to make your budget work for you for better work-life balance.
1. Allocate your money
It is crucial to allocate money – and time – to your personal activities and relationships. This allows you to regularly evaluate your work-life balance and adjust your budget and schedule where necessary. Budget-wise, we don’t mean just giving vague estimations of how much to spend and save – these need to be specific and quantifiable. Put aside an exact percentage of your monthly salary for your savings and your expenses. Christopher Tan, CEO of financial consultancy Providend, advised in an interview with ChannelNewsAsia to set up three bank accounts: One for crediting your salary, one for expenses, and one for savings. Remember to also have some flexibility to make room for changing circumstances.
Read Also: How to Save Money: Tips to Better Manage Your Expenditure
2. Set boundaries and decide what are your “non-negotiables”
Setting boundaries encourages you to identify and prioritise your personal life and decide on what are the non-negotiable aspects. These could include family time, hobbies or time for self-care. When you set clear boundaries between work and personal life, this further helps you to understand what is important in your life and how to also prioritise your income. When budgeting, you can adopt one method to ensure how much goes where. One popular method is the 50/20/30 rule that allocates 50% of income to essentials, 20% to savings or debt payment, and 30% to other expenses such as investments, holidays or activities to enhance your lifestyle.
3. Create a leisure budget
Adding on to the 50/20/30 rule, it’ll be useful to also set aside funds that are specifically for activities that contribute to enjoyment and relaxation outside of work. When you identify what are your life’s priorities, you’ll know how best to spend your money on the things that matter. If family time is your non-negotiable, set aside a set amount for family holidays, or weekend family activities. You can further move your budget by minimising work-related expenses and avoid overspending in this area. The savings can then be put into this leisure budget to maintain a healthier work-life balance.
4. Utilise flexible work arrangements
If you’re fortunate enough to work for a company that offers great flexible work arrangements, such as remote or hybrid work, or flexible hours, make use of them! Tapping on such arrangements can help you save on commuting costs and contribute to a healthier work-life balance.
5. Invest in the right things
Before you think about investing, ensure that you’ve paid off your debt first. This is paramount as it is important to be debt-free before you start investing. As a general guideline, Christopher advises to you should have between three to six months of your monthly expenses saved for a rainy day. In the event that something happens, you will have sufficient funds to tide yourself over. Anything more should be invested, he adds. Other than investing your finances to grow your wealth, it is equally important to invest in growing your health. Consider putting aside some money for health and wellness activities to support your overall well-being too.
Budgeting may feel like a chore, especially if it’s not something you’ve done before. Getting used to a budgeting routine may take several months before you see success. So, give yourself grace and be realistic about the goals you set. With practice, you’ll get better and start to develop better habits to achieve a better work-life balance to boost your health and wealth.
