In our previous #BudgetWithBigPay, we talked about what, why, and how to budget. Remember the famous 50/30/20 rule?
Here’s another term for you: Daily Budgets
Okay, so by definition, the term is mostly used by digital marketers. A daily budget is usually used for ad campaigns, whereby an average amount is set for an ad campaign on a per-day basis.
But it can also be applied to matters of personal finance. If you are really serious about wanting to budget, we would strongly recommend setting up a daily budget for yourself.
Why Do I Need A Daily Budget?
Picture yourself at the end of the day. You sit back, relax, and go through your day and the stuff you spent on that day. You’re either going to say, "I can’t spend at all for the rest of the week!" or "Woo, I only spent 10 bucks today!"
10 points to you if you’ve been behaving!
The concept of a daily budget is more to develop an expense-monitoring habit as you go about your day.
It can be as simple as making a list of items you need in the kitchen before heading to the grocery store or stopping yourself from shopping for something you don’t really need, like another plain white tee or a new bottle of moisturiser.
Honestly, daily budgeting is there to give you an understanding of what you're spending each day and also to give you the sense of responsibility to stay within the daily budget.
The last thing you want is to have a budget to stick to in a month and have spent it all in the first 2 weeks and you are back to eating plain rice with soy sauce by the end of the month.
The goal is to have a sustainable amount of money for you to spend across the whole month so you can live comfortably!
The Road To Financial Discipline
By slowly but surely developing the habit of realising what you’re spending on, what you need, and what’s not necessary, you’re also instilling financial discipline within yourself.
What’s great is that you’ll eventually apply this new mindset to other aspects, as you also expand your financial knowledge. Aspects pertaining to your retirement fund, investments, and other major adult decisions such as purchasing your first home
You could even start daily budgeting today. If you’re going out with your friends, set a limit on how much to spend for the night, or if you’re into games, why not set an in-game budget? It’s all in the mind!
So how do you do it?
Well, creating a daily budget isn't all that scary. You just need to make sure that you are being intentional with the money you spend as well as being disciplined enough to write it down.
Always log your spending
By logging your spending, you will subconsciously be a lot more intentional with the money you spend.
Having your spend log will also give you a visual representation of the money you spend, allowing you to understand where your money is going to.
Understand your monthly spending
There will be days where you will spend more because it might be the day you need to pay your mortgage or refill your groceries.
Knowing when you need to pay for certain things will help you create that daily budget even better as those expenses will be classified as recurring payments.
By understanding your monthly spend, you can divide your daily spends a lot better too. Most times we have impulse purchases that will drive up your daily spend. Having a budget for those moments will further aid in your overall spending and savings.
Set a daily maximum
Calculate your daily needs like food, toll or even parking and set that as part of your daily budget. We also like to add in a small amount for emergency funds so that you take that into account as well.
This way you learn to be a lot more disciplined when it comes to spending money daily and you might even skip on that cheeky little second coffee from Starbucks!
What happens if you underspend?
With your daily budget, there will come a time that you might be under-budget. So what do you do with that money? Decide if you want to save it or put it into another bucket for entertainment.
This is up to you to decide. Whatever you decide is up to you but always remember your overall goals for budgeting in the first place.
Daily budgeting doesn't have to be scary. We believe that with budgeting you will have a much more conscious way of looking at your money that will allow your money to serve you more in the long run.