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The year is almost over but we still have a few days to re-think about how we’re gonna deal with the incoming 2012.Christmas eve is done and you’ve probably given out all the gifts you shopped for all your family members, friends, officemates, acquaintances, boyfriend/girlfriend and the list goes on. You probably had a delightful holiday dinner with all the food you prepared and the festive decorations.

Did you wake up this morning and thought about all the preparation, shopping and work you’ve done for this holiday season?

Let’s not forget all the money you spent for all these things. As much as we want to avoid any expense at this time of year, we can’t really lock ourselves in our room and ignore the spirit of giving. We’ve gotten used to this yearly tradition and we don’t want to be the grinch on Christmas.

Do you feel like you’ve drained out all the cash you saved up this year? Are you also going to start “fresh” on your finances? This might be something that’ll help you recover. Well, I won’t promise to give back all the money you’ve spent but you probably have a good chance of spending LESS next year.


<moolah n. a slang word for money/cash>


1. Evaluate your Financial Activities

Know your income and spending history. Take note of all the income you receive per month (Let’s start with a monthly plan, shall we?)

Next, Jot down all your expenses per month.

Below is an example of the most common things people spend on:

– Rent
– Food/Groceries
– Transportation
– Electricity
– Water
– Leisure/ Recreation
– Shopping
– Internet
– Mobile/Telephone

2. Separate and Match

Separate fixed expenses from other expenses.

A fixed expense is a cost that does not change from period to period or that changes only very slightly.

This includes the rent, transportation ( if you follow a regular route every day), internet, electricity and/or water.

For students who doesn’t have a fixed income, you can use this on your daily/monthly allowance.

Now that you have identified your fixed expenses, match it with your income.

Let’s try a simple example.

Income: $2,000.00/ month
Fixed expenses:
Rent: $700
Transportation: $75
Internet: $50
Electricity: $100
Water: $30
Fixed expense total: $955

Rule#1: Never use your fixed expense budget for any other kind of expense. Fixed is fixed.

Next, Match the remaining cash to your other expenses.

Rule#2: Focus on what is available. Do not allocate an amount more than what you earn. In short, do not spend more than what you have.

3. Envelope

I’m talking about a literal letter envelope (or any other envelope of your preference) Divide your money in envelopes based on the expense list you made earlier.

This will surely work wonders if you have discipline.

Do not put all your cash in your wallet. For instance, if you want to go shopping, use the money from your “Shopping” envelope. Don’t try and “borrow” money from the “Rent” envelope.

If you have everything in one place, you’d risk taking cash allocated for another purpose.

4. Spread it out

You don’t want to write down your budget every month.

Start with a simple Excel spreadsheet and you just have to edit if you want to make changes.

(Stay tuned for the next post on “Save it: Spreadsheet”)

If you don’t have regular access to your computer or you want another option other than Excel, there are free apps available for download on your mobile phones, tablets, and/or portable computers. (e.g. MS Office for most smart phones, “Finance” apps on AppStore or Android Market)

5. Start now

Why wait until you get your January paycheck or allowance? Start organizing your moolah now and worry no-more.

Getting broke will soon be out of your dictionary. Enjoy!