It's always time for tea

How I Manage My Budgeting

As you may or may not know, I live on quite a tight budget. It’s been getting better recently but for a few years, I’ve lived off of a couple hundred euros per month, and still managed to pay my rent & all my bills and live a decent life. When you look at me, I don’t think people can see how little money I actually have. In fact judging from comments on my YouTube videos, many people think I’m cashing in those YouTube moneyz. Comments like that always make me giggle a bit as they’re so far from the truth, but they make me feel a little proud as well, for apparently I don’t look like I’m struggling financially. Which I’m not. I have little, but I’m not struggling. I actually pride myself on being able to handle money well and stretch a little bit a long way. I don’t tend to feel proud of many things in my life but this is something I see as quite an achievement and a very usefull skill.

I have gotten quite a few requests to share my “secrets”, tips and tricks on how I budget and manage to live a relatively normal life on a low income. How do I do it? Well, first of all, I have a few things going for me which make it easier:

1. I’ve never had much more money than I do now. As a teen, I got an allowance from my parents, but it was just enough to buy some clothes or makeup or go out with friends once or twice a month. Not nearly enough to live a luxurious lifestyle, so I was used to denying myself things and being frugal. When I started making some more money through YouTube I moved out of my parents’ house and started renting a (very humble) place with a friend. I saved up most of what I earned as I just didn’t feel the need to spend it all, I was used to a more sober life and I was comfortable with it. In hindsight I’m very, very glad I saved up so much money then, because not long after, the big algorithm change of 2012 happened and my ad revenue crashed like you wouln’t believe it. I lost almost everything, so I had to rely on the student funding I was receiving from the government (every student was granted a fund at the time), and my savings. When I graduated and stopped receiving the student funding, I had to rely on my savings even more. They saved me big time. So yeah, I’ve always lived soberly since I became independent. Makes it easier, not really knowing what you’re missing.

2. It’s just me, myself and I. I don’t have any other people depending on me that I have to support, so I have full control over what I do with my money, and full access to all of my money. I also don’t have anybody living with me that I would lose money on unnoticed (by buying them food or small items regularly, or them using a lot of water/electricity/etc.).

3.  Most of my friends are students or just starting new jobs, and on tighter budgets themselves as well. If everybody was going out all the time and I couldn’t join them, it would be much harder, but that’s not the case for me. We usually pick low-cost activities to do, prefer to cook together over eating out, etc.

Alright, so with all of that in mind, what else do I do to keep a grip on my budget?
First of all and most importantly: I keep track of every single transaction I make. I have an excel sheet of every month, and each single euro I spend or make gets written down in it. Every Monday, I take some time to sit down and write down all my transactions of the past week.
I have one column for the date, one for a short description (groceries, AdSense…), one for money that’s coming in, and one for money that’s being spent. At the bottom of the last two columns I have a cell that calculates the total, so I always have an overview of how much is coming in and how much I’m spending. I also have a cell that subtracts the “total cells”, so that I know what my balance is that month.

On top of noting down every transaction, I also colour code the transactions in some “risk categories”. These are the areas of life I know I spend a lot of money on, or spend money on on a regular basis, but in less predictable amounts. For me these are groceries & food, and public transport. Every time I buy groceries or go out for lunch, the transaction gets marked down in blue so that I can easily see how much I’ve spent on food in the past month. My public transport payments are automatically written off of my account so I feel it’s important to keep a close watch of how much they’re taking. I also mark every expense that has to do with work and can be written off my tax report, in pink.
Whenever I go on holiday, I will mark every transaction to do with the holiday (including what I spent while there) in one colour as well so that I know exactly how much it cost all together. And yes, it is possible to go on holiday on a low budget. But that’s a different story.
Every category that gets a colour code, also gets a cell that calculates the total so that I can always see where I’m at, at a glance.

Given that I have a very good grip on exactly where my money is going, it’s easy for me to see what I’m spending too much money on and where I could start saving up. Food is a category that can easily be cut down by shopping from a cheaper grocery store or the market and cooking all meals at home, using inexpensive ingredients. There was a time where I pretty much lived off of dried lentils and carrot soup, haha! Food is also the first thing I started spending more money on as soon as I started earning a little more, as you can probably tell from my weekly photo diaries. I love my food. I have an entire post of tips for eating on a budget, if you’re interested.

Also take a look at anything you bought because you wanted it, even though you didn’t need it at all. Be honest with yourself about the “needing” part. You can definitely cut down on those purchases. They’re necessary every now and then to make you feel sane, normal and satisfied, but once a day is way too much, and once a week is still too much, to be honest.

Take a moment to think about your life the way it is now, and what aspects of it make it worth living for you. Figure out what’s absolutely necessary for you to feel happy, and see if you can find a way to keep doing that on a lower budget. Maybe do the thing less frequently, go to a less expensive theatre/restaurant/gym, or figure out a way to have a similar experience at home. Anything you don’t feel is essential for your happiness can be dropped or drastically reduced. For example, I love shopping. It makes me happy, it’s an activity that allows me to bond with friends, stay on top of trends and feel connected to the world. See how I didn’t mention buying stuff? The experience of shopping for me isn’t about arriving at home with bags full of new items. Once I realise this, I can continue going shopping and having the fun experience with friends, while spending very little or no money at all. Sometimes I’ll head out with a set budget that I may spend. If you’re afraid you’re going to get sucked in and go over budget, leave your debit and credit cards at home and just bring your shopping allowance in cash.

That is pretty much it: all I do to live a good life on a tight budget. Of course stuff like this is super personal and what works for me might not work for you, but I hope you’re still able to take something away from this.

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8 thoughts on “How I Manage My Budgeting”

  1. You’re my best financial management motivation! I’m pretty much like that, and I also try to only shop during sales. It’s a struggle. The “going out” part is extra difficult for me, so I only try to order something that’s not too expensive (simple wine or beer instead of fancy cocktails etc).

  2. I really REALLY need to be better at budget management. I used to be so good but these last months I just have an urge to buy more and more, I look ridiculous 🙁
    I can’t control it very well because I don’t use only my card because lots of places don’t accept it for payments under 5€, so I have to have some cash for my daily 65 cents expresso coffee, for example 😛
    I’ll look up that GoodBudget to see if it helps me.

  3. Great post! I particularly liked the part about being able to go out shopping and not actually have to go and bring home bags of stuff – it only means you have to spend money on the bus/train fare. 🙂
    I was wondering what you thought about credit cards? What would you use one for? (For example; a phone bill or something?) I’ve never used one before so I don’t know really :/

    1. I don’t own a credit card either. Only thing I’d use it for is booking flights and hotels, those often don’t accept other payment methods. Now I just borrow someone else’s. Credit cards are evil IMO!

    2. I find it reassuring to have a credit card on hand for emergencies. When I thought I had appendicitis (it was something else less fatal but still serious) it was nice to be able to pay them right away to avoid extra fees, but be able to wait a few days until my next paycheck came in. They have utility, you just need to not use them for anything fun. I use mine once a month for paying my health insurance, just to build the credit, but I pay off the bill that same day. Otherwise it is emergency-use only.

      I guess that wouldn’t matter in the rest of the developed world. You probably just get treatment and a much lower bill later.

  4. I love your excel system, it sounds very well thought out. Personally I prefer budget apps so I can put down all transactions asap – I noticed most of my money disappeared in the little things, 2 euros here, 4 euros there, and I’d forget about them by the end of the week or even the day. I use GoodBudget, which is super simple and uses the envelope system, that just works very well for me. I have several monthly budgets – food, entertainment, rent, etc, and a few yearly ones for things that are more infrequent or spread out, like transport, gifts, donations, yearly fees. At the beginning of the month I type in how much money I got and fill those “envelopes”. When I spend money the envelope empties, and I can always see how much money is still left in relation to the day of the month.

    1. I’ve never considered using an app before, sounds interesting! I guess it’s a lot more convenient when you use cash a lot and the transactions are hard to remember. I use my card pretty much exclusively so I just open my banking app at the end of the week and it’s all there, I just have to type it into the excel sheet 🙂 But I might look into an app in the future!

      1. Oh fair enough! If I would pay everything by card I’d lose all track of my spending 🙁

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