My Simple Budgeting Trick

One of the most important budgeting trick I learned this year is to live on last month’s income instead of the present month’s. When I first heard it I thought it was impossible to do. After all, most of the time it feels like we’ve been living from paycheck-to-paycheck and money runs out quicker than you can breathe. But when I had the opportunity to save enough a few months back, I quickly turned this advice into action.

But what does living on last month’s income mean? It’s really simple to explain. It means that what we have been using to buy our groceries and pay our bills for the month of July we got from our salary the previous month. Meaning our earnings for the current month of July remain untouched until the end of the month after which I will withdraw it in full so that we can use it for the next month which is August.

The idea is so simple but its benefits are tremendous.

1. I have a clear idea how much our monthly budget is. Although I wanted to track our expenses for the longest time, it was just too time consuming for me to write every expense down. Knowing at the start of the month how much we can spend for our needs made tracking down our expenses unecessary. As long as we stay within that month’s budget I know everything is alright.

2. We learned to tighten our belts. Before I never had a clear idea of how much we were spending every month. But one time I tried to add it all up, I was mortified at the figures that came up. It didn’t help that I was a freelancer and money can come in any time of the month and not on a twice-a-month basis. So whenever the need arises I just go to the atm and withdraw. Now that we know how much our limit for each month is it is easier to budget our money. After all the bills are paid, I just divide how much is left and budget that within the remaining days of the month. I can decide if I can really afford to buy those Rhyolite Beads I love or should I just wait for the next month. Since food is our utmost priority, it’s not hard to decide on which purchase we should spend our remaining budget for the month.

3. We saved on bank fees. We get paid through Paypal and it is not free to withdraw the money we have from Paypal to our local bank. For each withdrawal I get charged P150. Before, I withdraw a minimum of twice a month and a maximum of four times a month. The sum of P150 may sound small but this sure adds up in a year. Now, I only need to withdraw once a month which has saved us in banking fees.

If you have tried to budget your family’s money to no avail then why don’t you try my simple budgeting trick? It would be hard at first especially coming up for one month’s worth of extra money but I assure you the sacrifice is worth it. You won’t have that feeling of living from paycheck-to-paycheck anymore and you’ll be more relaxed since you know that you’re well covered until the end of the month.

24 thoughts on “My Simple Budgeting Trick

  1. Jen

    It’s really helpful once we get familiar on fees that our transactions cost us. In the long run, they amount to a considerable amount of money that we can definitely save up.

  2. yuuki

    i’m not good at budgeting or listing down every expenses. what i do is when i received my salary i divide it according to bills, savings and allowance. and if na over spend ako, i borrow from my savings but need to pay it on my next payday…

  3. Gene

    When I first started budgeting, I list down all the expenses that we usually have, nothing specific just the general idea of what it is, like groceries, water, electricity, phone plan bills etc, and then add an extra cash for extra needs or dining out. Then we try to stick to just that amount of money. It’s kind of hard especially we’re picky eaters so we can’t really just save on food expenses.

  4. Eds

    Budgeting has always been my problem… maybe because I’m just too lame when it comes to deciding and handling my finances considering I’m an accountant. lol! Maybe its all in the mindset of a person kung paano tlga hawakan ang pera nya.. pero thanks for sharing sis .. medyo nakapagisipsip ako ng konti sa post mo 🙂

    1. Bonz

      where on the same shoes, ms. eds. 🙂 and i’m an accountant too. Lols!
      i realized that when budgeting, we should really be firm in following what we budgeted and don’t go beyond it.
      thanks for sharing your tricks, ms. paula!

  5. Filman Santiago

    That was indeed a tricky trick Paula, but a truly doable one. 🙂 My wife and I are always finding ways on how to save effectively. The thing is, we already know what are those ways but most of the times we tend to overlook and ended up saving nothing.

    Thank you for posting this. All we need now is just a single step and walk the talk. 🙂

  6. Aileen

    It’s really important to know how much we earn and spend. It can be a headache if we spend beyond our means. I did keep a list of my expenses at some point and that list helped me to trim down the expenses. I could still tighten the belt some more hehe. I just wish I am very faithful to the listing of all expenses but I’m not much of an accountant lol!

  7. Pepper Tan

    That’s a really smart way to save money- living on last month’s income. I will definitely give that a try. With some discipline, I know we can all work it out 🙂


    Hi Paula! Thank you for sharing your simple tricks. I used to do it for years already but mine is a little different. I used the “envelope system”. I have a post on this on my main blog, Life’s Tips And tricks”. This really allows me to budget our expenses wisely and accurately. I’ve been doing it for years and it really works for me! 🙂

  9. Ethelyn Perlas

    Nice tip you got there! Maybe I could put this into practice also. But for the past months, I am able to live with only 70% of my salary every month. The remaining 10% is for my tithe and the other 20% for savings. 🙂

  10. jellybelly

    I used to list down all my daily expense but yes, it is tedious and I eventually stopped. I don’t have any budgeting strategy right now. If I have leftover cash from the previous month I’ll try your strategy. Sounds like a good one.

  11. Jhari

    Thanks God I still have young kids right now. They don’t understand as of the moment the financial problems that we’re dealing with. Writing the expenses for the month is really a good tip. I let my husband handle our money though. He’s much organized hehehe!

  12. Lady

    I try every budget tip I come across with to really stretch my budget. *lol* And this is one of the easiest I have read so far.

    Having at least 1 month floating money is better than none at all or relying on your savings to help you in emergencies :3

    Thanks! I’ll relay this to my bf as well.

  13. nelsonRN

    Thanks for the tips, Paula! I didn’t realize that, but I think looking at last month’s budget plan is a better way to live the current month. We’ve been trying to save money for the rainy day, and I hope we meet our monthly target 🙂

  14. Rosemarie- Pinay Singlemom

    I admit I am not good in budgeting, I always failed to stay on my budget and with those extra expenses that keep coming I sometimes don’t know where I’ll get the amount to save..Thanks for the tips I might consider trying it..

  15. Rochelle

    you’re like mom 🙂 however when there’s an opportunity to invest she always grab it regardless of money value which sometimes a little risky.

  16. Kristen

    Very helpful tips, Mommy Paula! My husband and I also tried a lot of things to be able to save up and spend less. We have allowances to cover all our expenses for the whole week, including the weekends. As much as possible, we don’t withdraw within the week unless it’s very important. I also keep track of our credit card transactions to make sure we are still within the budget! 😀

  17. Sumi

    I can’t imagine how hard budgeting is for moms. My mom doesn’t look too stressed, but I know managing the finances for our home is hard.. >.< I hope I do well in the future, or else wala na kaming maiipon.. XD


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