Budgeting 101

Budgeting 101

Written by Agatha

May 7, 2020

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Since I post a lot of book recommendations on my WhatsApp statuses, somebody asked me this week;

“How did you develop an interest in books?”

I get asked this a lot.

“My mama. She loved reading and had many books.” I said.

Remember the finance lesson on the power of environmental design?

“My concentration span while reading a book is little.” She said.

“Little is better than not reading at all. Look for books that you enjoy reading. Topics that you’re interested in. Or funny stuff.”

I hope she keeps reading. It gives me joy when I imagine the benefits of compounding knowledge she’ll experience in a few years.


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I also got a reminder lesson this week on the importance of small consistent habits.

I stopped paying my student loan (HELB) a year ago. Before that, I had been consistent for a year. I used to pay $30 per month through automatic deductions from the employer.

When I changed jobs, I stopped paying because I told myself that since I owed a lot of money, $30 didn’t make any significant difference on my loan; I didn’t check my statement before making this vague conclusion.

When you default on your HELB loan, you get a $50 penalty every month. This is $600 per year. There’s also an additional $10 annual ledger fee.

For the one year that I haven’t been paying, I have been lowkey afraid of the damage that these charges would do to the total figure.

However, I had other reasons that made me halt the payments. At the time, I was stuck in personal and mobile loan debts, didn’t have an emergency fund, only had one little long term investment and knew very little about money and investments. I had a myriad of financial challenges.

It made sense to pause payments at the time, tackle the other challenges one at a time, then onboard it again on my budget.

It’s okay to ignore some financial obligations for some time (not the ones with highest interest rates though) if you feel you can’t handle it all. Tackle a few at a time, then keep making adjustments to your budget. Remember that budgets are not jail terms.

Since the pandemic started and having been in a 24-hour lockdown for a month before we finally resumed work last week, there have been a few changes on my expenditure. I haven’t incurred costs such as transport, salon visits and recreation costs. With this extra cash, I had to think about how to spend it going forward.

That’s when I remembered my big skeleton in the closet; student loan!

On Monday, I decided to face my fear of the figure head-on. I have been making wild guesses for a while now, the average estimate being $3,000.

Guessing how much I owed has been paralyzing, I had to stop avoiding the problem.

Since I teach the same concept when I talk about how to beat debt, I had to have a taste of my own medicine again.

I logged in to the HELB online portal and got the figure. I owe $2,186.37.

Surprisingly, after seeing this figure, I didn’t feel bad. In fact, I laughed at myself.

On my budget spreadsheet, I added HELB.

I had to adjust a few other categories so that I can make $100 payments every month starting this May. That will take me 1 year and 9 months to fully repay it. After coming up with this plan, I felt like the huge weight made up of fear and uninformed guesses was lifted off my shoulders.

I have to admit that when I first saw the figure, my initial plan was to pay $160 every month just so that I can get rid of the debt faster but when I shared this plan with my pal, she reminded me that it makes more sense to make $100 payments consistently and invest the extra $60. That adds up to $720 (interest not included) per year in investment while still ensuring that I pay my loan, and avoid the monthly penalties.

This is why you should openly have money conversations with your friends. They will point out your grey areas and play the accountability partner role.

This is the third article on budgeting. Please read the first here and the second here if you missed them. They’ll be more helpful if you read them in that order.

I shared on the first article that I started with writing my budget on a word document then moved to use spreadsheets when I got proficient in Excel.

Every end month, I record my spending on a spreadsheet titled ‘2020 Expenditure tracking’. These are real figures (no guesswork!) from the Notes app that I’ve been using to record my expenses on the go!

Here is a chart of how my budget looked like in Jan.


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In Feb…


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In April…


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Note: After filling the amounts spent on the budget categories list, these charts are generated automatically on Google sheets by clicking the bar chart icon found on the top right of the spreadsheet.

I will do a step by step guide of this process and provide an easy to use and downloadable spreadsheet.

It gets cleaner by the month. And just in case you’re wondering, it’s not that I made 0 investments in April. Was stuck in 24-hour lockdown, couldn’t go out to make the deposits. Plus this is a good time to keep your monies in cash just in case…

In the meantime, my friend introduced me to an epic expenses-tracking app called Toshl Finance. I have tried more than 10 such apps but never got one work that works so smoothly!

After creating your categories and filling your expenses, you can view your expenses by date and by category. You get detailed expenses graphs which display the actual figure, percentage, number of expenses in each category and how much you spend per day on each category.

On a daily basis, you can tell where your money is going. And, it has provisions for all currencies so no headaches with conversions!

With this app, I won’t be using the notes app going forward. Which will save me loads of time because transferring the expenses to excel then categorizing them was so much work! Talk of growth!

Lessons from my budgeting journey so far

1. When you succeed in one process, you get the psyche to succeed in another.

You communicate to your subconscious mind that you can win.

Since I have proved to myself that getting my finances in order is doable, I’m more confident in my learning capabilities. I can comfortably move to pursue improving a new area in my life such as my cooking skills.

You also gain a higher level of self-respect with time.

2. If you succeed with your money, you can win at anything!

This is because most of us start from a point of fear, with the wrong money lessons passed down from childhood, scarcity mentality and almost zero knowledge.

3. You can control your money.

Give yourself the gift of reduced financial anxiety.

4. The fear reduces with time.

With time, your face will brighten when big figures are mentioned, your brain will generate ideas instead of the default ‘I cannot afford that.’

Instead, ask yourself ‘How can I afford it?’

5. Be honest with yourself.

“Hiding from your money problems exacerbates them, but it’s impossible to stop hiding without first overcoming shame. When you start talking about money, whether that’s your bad spending decisions or growing up in poverty, only then can you get rid of the shame surrounding it.” — Ashley C.Ford

6. Learn to say No.

It will hurt especially if you’re saying it to family or people you love. But in the hierarchy of responsibilities, you come first.

7. Don’t rely on your memory

Record and track your expenses often!

8. Work towards a lifestyle where good financial habits is normal behaviour.

Your finances are not something you only think of once in a while when it’s convenient. Or when you’re deep in debt. It’s an everyday thing. Having the right friends plays a huge role in this one.

9. One size fits all budget doesn’t exist.

But learning the fundamentals is key to improving.

10. What you feed grows.

Learn, relearn, unlearn. Let’s secure this bag!

11. Once you realize the amount of work and time it takes to come up with a budget and stick to it, then you won’t let other people’s lack of planning disrupt yours.

No matter how much you love them. Unless it’s an emergency.

12. The lessons roll over to other aspects of your life.

For example, if your health figure takes up too much of your money, then you’ll want to scout for a job that provides health insurance…but you wouldn’t know this if you don’t have a budget, would you?

As James Clear says, financial wealth is the power to choose how to spend money. This will however not happen if you don’t budget, if you don’t take the steps towards learning how to control it.

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