How to Make an Efficient Personal Budget Plan
12 October 2022
Few would admit they look forward to creating a budget, but it shouldn't diminish the significance of that effort. Creating a budget not only helps in preparing for costs, but it also sheds light on one's spending patterns, making it easier to rein in frivolous purchases.
As a result of the present climate of rising inflation not just in our country but in the world, many individuals may be finding it difficult to meet their monthly financial obligations while still putting money down for the future. Creating a budget can help you get by and relieve some of the stress of worrying about how to pay for impending bills, but it won't do anything to stop inflation.
If you're looking for some ways how to make efficient personal budgeting to beat inflation, here are some ideas to help you create a monthly budget for the first time, or to improve upon an existing one.
Fun Ways to Create Your Personal Budgeting Methods
In order to achieve financial security and make headway on prioritized goals, individuals and families might benefit from creating and adhering to budgets, or spending plans. And although the phrase "budgeting" conjures up images of restraint and sacrifice in the minds of many buyers, this does not change the reality that budgets are useful tools for ensuring that people have the resources they need to pursue their most important goals.
So, let's make the concept of personal budgeting more fun and approachable. Here are some handy acronyms to keep in mind that will make the idea of a personal budget less daunting and more enjoyable:
1. A.B.C. (Allocate, Budget, Cut)
Managing a household budget is as simple as counting to three. Learning the A.B.C. of budgeting will help you remember the basics of creating a budget even if you have to memorize them. It consists of the following three stages:
Allocate monthly expenses
Make a detailed budget and prioritize your spending including your debt repayment from your monthly income plus payroll deductions. When you've determined how much each category requires, you can start setting aside savings.
Review your Budget Template
Track spending and stick to your budget. This will make it easier to keep a regular log of how much money you've saved so far.
Cut your spendings
Reduce your living expenses to the very minimum or resort to fixed expenses when you don't have any emergency funds left. Go away with things that aren't absolutely vital to your day-to-day existence and focus more to save money from a percentage of your net income.
2. Baby, You Overspent Decades Ago (Baby, YODA)
You need just think about Baby YODA to be reminded of the importance of saving money. Baby YODA is not just a cute Star Wars figure, but also a sobering reminder of your opulent past. Will you always be doomed to make the same errors you did a decade ago? The moment has come to develop beyond the stage of just satisfying your current desires and prioritizing your own needs.
3. Bring Your Own Baon (BYOB)
Get ready to ditch the daily restaurant visits in favor of BYOB. Numerous benefits may be gained by bringing one's own baon to class or the office. One benefit is that the rest of your day's meals are up to your discretion. Because of this, you may accomplish two of your objectives at once by BYOB: losing weight and eating better. Bringing your own baon will, of course, save you from spending recklessly on meals.
4. Financial Independence, Retire Early (FIRE)
You may keep yourself motivated to save by thinking about your end objective, which is to become financially independent while having retirement savings. Combining minimalism with frugal living and wise investment as well as having an emergency fund yields savings more quickly. Since it represents the pinnacle of financial independence, FIRE is undeniably a key acronym in the realm of personal finance and financial freedom while having good debt management.
5. Focus on Investing Today (FIT)
Having health insurance to minimize medical bills is important, but so is maintaining a healthy financial portfolio through financial planning. To put it simply, it's a little prod to get moving on your savings and investing plans. You may do this by reading up on investing and knowing the fundamentals. Some are easier to learn than others, but you can find tutorials and guidelines to assist you to learn the basics. With the current innovations and technologies, there is no longer any justification for delaying investing in light of the wealth of information available online.
6. Lagay Agad Sa Savings (LASS)
If you come into some unexpected cash and don't have any immediate plans for its use, put it directly into a savings account and try the LASS method to cut down on the length. As easy as that!
Consequently, it makes sense to choose high-interest savings account if you want to start a separate savings plan. Online banks are a common source for these accounts because of how simple it is to create one through this.
7. Tipid, Tiis, Tiyaga (T3)
This comprises the three processes in constructing an effective and lucrative budget. With just one letter repeated three times, this one is impossible to forget.
Tipid
The measures you need to take to create a budget that will hold up in the long run are covered, as is the actual budgeting process.
Tiis
Here, you need self-control to avoid overspending on unnecessary items. The 30-day rule might help you determine whether or not to go through with the transaction. Put off your purchase for at least 30 days if you can. After that time frame, if you are still interested in purchasing it, then by all means do so. However, if you don't remember it, this only basically means that you don't really need it.
Tiyaga
The key is to find other means for your revenue streams outside your primary occupation or business. This will give you opportunity to earn more money and at the same time, the more savings you'll have.
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If you're looking for a great investment that you can do today, a house and lot in the Philippines is a wise investment choice at any time. In reality, the key to making a fortune is to buy low and sell high. Despite widespread fears of a downturn, the market has been healthy, with prices and activity both on the upswing.
While the value of your shares in the stock market might plummet overnight for various reasons beyond your control, the value of your investment in an affordable house and lot cannot suddenly decrease giving your much benefit in a bigger financial picture. As it happens, you can even benefit from high rates of return and favorable tax treatment as you amass money.
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