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24 Jan 2025
5 Min Read
Public Mutual (Partner Contributor)
Learn how to budget with Public Mutual to track your spending, set achievable savings goals, and build a solid financial foundation.
Chinese New Year is upon us, bringing vibrant traditions, joyful family reunions, mouth-watering treats—and, of course, the excitement of receiving Ang Paos! As students, these red packets probably feel like hitting the jackpot, giving you extra cash to splurge on something special. Will you refresh your wardrobe, upgrade to the latest tech, or treat yourself and your friends to a festive feast? While it's tempting to indulge, this season is also the perfect opportunity to reflect on (and refine) your financial habits.
So, why not kickstart the new year with a fresh financial plan? It's time to leave behind habits that no longer serve you and embrace smarter ways to manage your money. Balancing financial goals with daily needs and wants may seem overwhelming—especially when funds are tight—but don't worry! Finding that balance doesn't have to be a struggle. In this article, we'll explore a simple budgeting strategy that will help you manage your money confidently, setting you up for better financial decisions moving forward.
Budgeting is key to taking control of your finances and making mindful decisions about your spending. As a student, your funds might be limited, and without a budget, it's easy to fall into the trap of living from one allowance to the next—or worse, overspending and ending up with debt! But by creating a budget, you can prioritise your spending to meet your basic needs while also setting aside money for savings or investments that will pay off down the road. Plus, budgeting helps reduce the stress of financial uncertainty, giving you the peace of mind to focus on what matters most—like acing your exams, pursuing your passions, and working towards your long-term goals.
One of the simplest ways to start budgeting is by following the 50/30/20 rule. This rule is great for beginners because it's easy to understand and flexible, even if your income varies from month to month. Here's how you can apply it with a hypothetical monthly allowance of RM1,000:
While this rule provides a solid starting point, it's important to adjust the percentages based on your circumstances. For example, if you live with family and have lower living expenses, you could put more towards savings or investing. On the other hand, if tuition or rent takes up a significant portion of your allowance, you may need to cut back on those wants. The point is to tailor your budget to fit your financial priorities, making it practical and achievable.
Now that you understand the 50/30/20 rule, it's time to put it into action! Here's how you can use it to map out a financial game plan that works for you:
Identify all the money coming in each month—including allowance from parents, earnings from part-time jobs, and yes, those Ang Paos!
Break down your expenses into two categories: fixed costs ('Needs') and variable costs ('Wants'). Categorising your expenses helps you see where your money is going and pinpoint areas where you may be overspending.
Weigh your income against your expenses. Are you spending more than you have? For example, if your income is RM1,000 but your expenses total RM1,200, it's time to make some changes.
Use the 50/30/20 rule as a guideline, adjusting the percentages to fit your financial priorities while keeping your spending impulses in check.
Track your expenses regularly to stay aware of your spending habits. You can use budgeting apps like YNAB or Wally, or the good ol' spreadsheet method. Track everything—from your daily coffees to your weekend cafe-hopping adventures. At the end of each week, review your spending. Did you overspend? If so, consider switching to home-brewed coffee for next week instead.
Budgeting isn't a one-time thing; it's a routine that thrives on consistency. As the saying goes, 'practice makes perfect'—the more you stick with it, the easier it becomes. Here are four tips to help you turn budgeting into a regular habit:
Make the process more enjoyable by pairing it with something you love. Whether it's budgeting while listening to your favourite playlist, sipping a warm cup of tea, or turning it into a journaling session, these small joys make the task feel less like a chore and more like an act of self-care.
Saving doesn't have to be a hassle. Set up an automatic transfer from your checking account to your savings or investment account. Public Mutual's Direct Debit Authorisation (DDA) makes this process seamless. Check out how DDA can simplify your savings!
Stretch your money further by taking advantage of student discounts and special offers. Every little bit helps lower your expenses, freeing up more funds for savings or investments.
What are you saving for? A new laptop? A graduation trip? Financial independence? Having clear, tangible goals will keep you motivated and help you stay on track with your budget.
With the 50/30/20 rule now in your toolkit, you're ready to make budgeting a rewarding habit this new year. With consistent effort, what once felt like a daunting task will transform into a valuable life skill—an essential part of adulting that will serve you well. As you build a healthier relationship with money, you'll be more empowered to manage it, paving the way towards a brighter, more secure financial future.
So, when those Ang Paos come your way, ask yourself: splurge or stick to the budget?
