Budgeting is closely related to budget categories. For those of you who have just started budgeting to better manage finances and are still confused about what budget categories should be, you can start with these 5 basic ones.
Started Budgeting? Try These 5 Budget Categories
1. Bills
Paying bills, whatever they are, on time is very important. If you pay late, the service you use can be temporarily stopped, not to mention the fine that must be paid. If you are late paying credit card bills, several consequences await.
Everyone's bills may be different, depending on necessities. Examples of common bills are rental, internet, electricity and water bills.
2. Shopping for daily necessities
Shopping for daily necessities is an inseparable part of life. In addition to groceries, you also shop for daily necessities such as toilet paper, cooking gas and gallons of water, for example.
For shopping for daily needs, you can allocate a budget every week, every month or based on your shopping behavior.
3. Transportation
The next budget category that is no less important and needs to be separated is transportation. You may take public transportation to get to work and back home. If you use a private vehicle, you can estimate the cost of gasoline in a month and vehicle maintenance to be included in the transportation category.
4. Savings
Don't forget to set aside money for savings, Jagoans. It is important to have emergency savings because it can help you deal with unexpected situations right away. Saving for retirement is also a good thing to start as soon as you start earning money if you want to retire comfortably without burdening your family members.
In addition, you may have several financial goals that you want to achieve in the short and long term. If you do, then you need to list what your financial goals are and set aside money for each financial goal.
5. Entertainment and self-reward
Why work hard if you don't enjoy the results, right? So, of course, you can allocate a budget for entertainment and self-reward. But, you need to prioritize the budget for the four categories above. The rest of your money can be used for entertainment and self-reward.
Entertainment and self-reward cannot be equated with daily needs. Watching a movie at the cinema or having dinner at a fancy restaurant once a month can be categorized as entertainment. Buying a new pair of shoes that you've been wanting for a long time can be considered a self-reward.
You can also define the rules for using money for self-reward. For example, if the saving target is reached on time, you can reward yourself. This way you will become more disciplined and encouraged to save.
Practical Budgeting? Use the Jago Application to Manage Your Finances
So that budgeting is no longer manual, you can do it in the Jago application. You can create a Pocket for each budget category. The Jago application has the Spending Pocket and Saving Pocket features.
The cool thing is that you can further separate each budget category. For example, you have three kinds of monthly bills that need to be paid. You can create 3 Spending Pockets for these 3 bills, instead of just 1 Spending Pocket. Every Pocket created has a Pocket number (bank account number).
It's the same for the Saving Pocket. If you want to build an emergency fund, save for retirement and save for your wedding, for example, just create 3 Saving Pockets.
By having lots of Pockets for various needs, it will be easier for you to allocate a budget and monitor whether everything is going according to plan.
You can choose to set the budget automatically or manually according to your wishes in the Jago application
The good thing about having an account at Bank Jago, you can choose a budgeting method that suits your preferences in the Jago application. Some people prefer to move the budget manually, namely by moving money between Pockets. However, some others prefer automatic budget allocation. At the time and according to the amount you have specified, the money will move automatically from the source Pocket to the destination Pocket. The way to do this is by using the automatic budgeting feature available in every Spending Pocket and Saving Pocket.
Start budgeting by creating the 5 simple budget categories above to have more organized finances. Will you do budgeting automatically or manually?
