I had a budget even as a young kid. I would plan how I would spend or save my allowances. I always had a "fun" category in my budget. I still do.
When I read other blogs I see everyone has a different approach to budgets. Everyone also has a different way of dealing with gift expenses. For instance Gill from That British Woman posted "How far do you think ahead?" today which inspired me to write this post.
I am not good at depositing a certain amount in a jar or box. The part of the reason is, I grew up in a high inflation environment. Although it is not the case now, I still like to have my money earn some interest instead of sitting in a jar. The inflation is still high in this country when compared to developed nations. I can earn about 10.5-11.75 % on TL deposits and about 2.30-2.50 % on my USD accounts per year.
Here is how my budget works:
I use an Excel Sheet on which the top few rows are for my income. I have a regular salary, a retirement income and a rental income there.
Several rows are dedicated to monthly expenses and bills such as utilities, taxes, insurances, cleaning lady and etc. I have a general category for spending that includes all my grocery spending including personal hygiene items and clothing needs. This entry is not exactly the same for each month. I know when I usually shop for clothing so, I bump up the numbers a little bit for those months. I have never been ablo track every penny and make a zero-based budget. My budget guides me not to over-spend and save each month. My savings are also on my budget so I know exactly what I am saving and how.
I have an Emergency Fund, a TL savings account, a USD savings account, and a Retirement Fund in addition to a small stock portfolio in an investment account. Each month I allocate some money to all these accounts right when I get paid so, I do not overspend. If anything is left over at the end of the month, I put that sum into one of my savings accounts. For instance if the stock exchange is doing poorly, I buy stocks, if USD is comparatively lower, I buy US dollars, etc.
I also have a row for gifts and a row for charity. I know when I will be buying birthday and New Year gifts so, I plan ahead. I also give planned sums to charities every month. This is so much easier to manage.
So far, this approach has worked for me. My budget extends to several years ahead. I know things may change but, I like to be able to plan and project big expenses of the mid-and long-term.