Monday, May 28, 2012

Manage Your Money - Step# 2: Allocate Funds

"If you can measure your problem then you solve half of it already."

Lesson number two. Allocate fund to each regular monthly expense.

I hope you have your regular monthly expense list with you by now. If none yet, please go back to 'Step# 1: Identify Your Expenses' and finish it. Spend time on
it because it is the essential first step toward managing your money.

Pull out your regular monthly expense list and on the right side write the cost of each expense per month. But before you start working on your list, just a few of guidelines:

(1) Give your best estimate of the current monthly cost of each expense
(2) Modify your list over time

Below is an example of how it will look like once you're done.

(1) Rice - P2000
(2) Food - P4000
(3) Purified water for drinking - P200
(4) House expenses - P1000
(5) Vitamins - P2000
(6) Milk and diaper - P2000
(7) Tuition fees - P2000
(8) Gas - P3500
(9)  Electricity bill - P2000
(10) Water bill - P600
(11) Telephone and mobile phone bill - P1300
(12) Car/house amortization - P8000
And so on and so forth.

Don't worry if your figure is different from the sample above. Don't worry also whether you put the right amount because you can adjust later. In fact, this document should be updated from time to time.

Good! You are now ready for Step# 3.


  1. Setting a realistic budget is an important part of managing your money. It will help you to achieve your financial goals and determine where your money is going.

  2. I totally agree with you Daniel. This is step# 3. Thanks for your comment.

  3. Good post, Raoul. Being realistic is far better than being ideal, indeed. How can we make our budgets more effective if we are just fooling ourselves, right?

  4. Thank you Lianne. Exactly my point.