You will build a monthly budget for your first year of work in a spreadsheet.
Hui Min has all the pieces now. A take-home figure and a tax set-aside from lesson 4.1. A parents' allowance she has agreed out loud. A target for her emergency fund. A study loan repayment she will work out properly in module 5. What she does not have is a plan that puts them in order and runs every month without her deciding each line again.
This exercise builds that plan in a spreadsheet, then makes part of it automatic. It takes about 30 minutes. The figures are made-up examples, using Hui Min's numbers from the rest of the module.
Open a new sheet. Put your monthly take-home pay at the top. Below it, list your budget lines in this order:
Tax set-aside Parents' allowance Loan repayment Emergency buffer Fixed costs, such as phone, transport and subscriptions Everyday spending, such as food, outings, clothes and small purchases
The order is the point of the exercise. The lines at the top are commitments: money you owe, money you have promised, money that protects the rest of the plan. They come out first, on payday. Everyday spending comes last, and it is whatever is left. That way, a month of heavy spending squeezes your lunches and outings, not your parents' allowance or your buffer.
Use the numbers you worked out earlier in this module.
Hui Min's take-home pay is S$3,198. Her lines, in example figures: tax set-aside S$50, parents' allowance S$400, loan repayment S$250, emergency buffer S$400. Those four come to S$1,100, which leaves S$2,098. Her fixed costs are S$30 for her phone, S$120 for transport and S$25 for subscriptions, S$175 in all. That leaves S$1,923 for everyday spending.
Put a formula in the everyday spending cell that takes take-home pay and subtracts every line above it. If you change any line later, everyday spending updates by itself, and you can see straight away what a higher allowance or a bigger buffer contribution costs you each month.
If the everyday figure comes out uncomfortably small, adjust in this order: the buffer contribution first, since a slower buffer is better than none, then fixed costs. Leave the tax set-aside and the allowance until last, because those are promises to someone else.
A plan that depends on willpower each month tends to slip by month three. So the commitments should move by themselves.
Set up standing transfers, through your bank's app, dated for the day after payday. Hui Min sets three: S$400 to her mother's account, S$400 to a separate savings account for her buffer, and S$50 to a second account for tax. The loan repayment is a separate arrangement, which module 5 covers. Her everyday account is left with what she can spend.
Even one automatic transfer makes a difference. If you only set up one, make it the buffer, because it is the line most likely to be skipped when it depends on you remembering.
For the first full month, record what you actually spend in each line. A banking app's spending view, a notes app or a simple column beside your plan will do. You are not judging yourself. You are checking whether the plan matches your real life.
Hui Min's first month: every committed line went out as planned, because it was automatic. Her everyday spending came to S$2,150 against a plan of S$1,923, S$227 over. Most of the difference was food delivery during a busy fortnight at work. She does not panic about it. She notes it, and decides whether to change the plan or her habits.
Weekly budget reviews sound disciplined and usually get abandoned. Pick a date three months from now instead, and put it in your calendar. On that date, compare three months of actual spending with the plan, check that each automatic transfer ran, and adjust the lines that were wrong.
A finished budget has every line filled, an everyday spending figure worked out by formula, at least one automatic transfer running, and a review date in your calendar. Your own version starts with a blank sheet and the take-home figure from your latest payslip.
Complete the first-year budget sheet, set up at least one automatic payday transfer, and note the date of your three-month review.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).