Budgeting isn't as straightforward as it seems

[mirakal]

So, when you're budgeting, always look at both sides: how much you spend and how much you earn. The latter figure has a much greater impact than most people realize.

But for low income people, budgeting does not work like that. They budget so that their small amount of income will fit even on their basic needs, while saving can only happen if they earn extra amount but that's only rare to happen. That's the reality with poor people. Budgeting is really a kind of struggle, especially in times when the income isn't enough, or when sudden bills arise that are not included in the budget.

[Solodoski]

Budgeting is definitely very important for everyone, because it helps you monitor how you spend your income and also helps you plan for the future, but it's also very important to realize that your expenses increases as your income increase, so you have to take note of that too, so you don't miss it. Like OP mentioned your income is the most important thing when you are budgeting,  because you are budgeting on your income. So I think your budget is meant to change according to your income.  Your income decides how much you budget everything,  which includes your expenses,  emergency funds, investment etc. Mistake most people make is they don't budget on what they have at hand, which will definitely affect them.

[Antotena]

There's this one thing I learned: people will be willing to spend according to how they earn. If they earn less, their spending will be less. If they earn big, there is a whole lot of bills to be settled each time, from families. We can't escape that because life throws at us the expenditures we can handle "financial

I remember years back when I had no money; I could manage the little money I earned for a long time without issues. But now, that little money I can't manage it no matter how I try because there are many things to sort out with money

That's people that understand the mathematics of the economy, there are people that earn less and spend more than what they earn and when they earn more, they double on their expenses. We called them fake lifestyle. They don't know economics, as long as they are living up to what they want, they don't care to go broke the next day. The fun part is that, there are many economies that are like this, some are as a result of corruptions, they don't spend but they steal that's why they do have budget deficit.

An economy that is earning less shouldn't go out to borrow but that's what many countries do. They are guilty of this behavior. They pad budget and give priority to things that are not going to help the economy and leave the most important once. After they spend and later realize that much have not been done to help the economy, they go and borrow more from outside to make up for the rest. This leave the country with more and more debts, without anything to show people.

[Davidvictorson]

It turns out that our income dictates our expenses.  I realized that because I was earning well each month, I was indulging in more without really noticing it.
So, when you're budgeting, always look at both sides: how much you spend and how much you earn. The latter figure has a much greater impact than most people realize.

Budgeting used to be a nice concept many years ago and I thought it was just as straightforward as we were taught back in school until I became independent and had to cater for myself, immediate family and extended family.
It is not black or white.
And you do not have to play by the book, in budgeting I have created my own rule which I try to stick to.
It is not even about how much you spend because the economy doesn't not mind that when inflation or recession begins.

[uneng]

So, when you're budgeting, always look at both sides: how much you spend and how much you earn. The latter figure has a much greater impact than most people realize.

But for low income people, budgeting does not work like that. They budget so that their small amount of income will fit even on their basic needs, while saving can only happen if they earn extra amount but that's only rare to happen. That's the reality with poor people. Budgeting is really a kind of struggle, especially in times when the income isn't enough, or when sudden bills arise that are not included in the budget.

True. Moreover, prices of goods and services increase in a much faster ratio than wages. At some point, it's just not possible to equalize income with expenses, unless you consider decreasing life quality considerably by acquiring cheaper products and giving up on activities which gave you pleasure.

And the more people you have under your arms, like wife, sons, parents, more difficult it's going to be budgeting. There are constant extra expenses which weren't expected in a first moment, and you have to worry about extinguishing fire everywhere!

[#CapsLOck]

One thing that I know is that if you are budgeting for your lowest possible income, you don't base it on your average income. But when earnings are variable. A good month can give the false sense of security. Which can lead to gradual increases in spending. I believe that's the reason it's important to pay necessary bills first. Then add funds to your emergency savings in better times. In this way you have an extra income to buffer against instead of fueling lifestyle inflation. While it's beneficial to track spending. It's better to plan for fluctuations in income.

[Cgrexp]

One thing that I know is that if you are budgeting for your lowest possible income, you don't base it on your average income. But when earnings are variable. A good month can give the false sense of security. Which can lead to gradual increases in spending. I believe that's the reason it's important to pay necessary bills first. Then add funds to your emergency savings in better times. In this way you have an extra income to buffer against instead of fueling lifestyle inflation. While it's beneficial to track spending. It's better to plan for fluctuations in income.

It is reasonable to advise paying for essential bills and basic needs first. Neglecting essential expenses and unnecessary expenses can lead to financial problems. Therefore, it may be more effective to calculate the necessary expenses after receiving income and set aside a certain portion for savings. Building an emergency fund cannot be ignored. In case of sudden medical need, job loss, or temporary downturn in business, this money helps to meet daily needs. It is most reasonable to build a fund gradually according to one's reality. It may not be possible for everyone to meet all necessary expenses based on the lowest possible income. Make a realistic estimate of necessary expenses from one's income, find opportunities to reduce unnecessary expenses. And if the income is not sufficient, it may be necessary to find alternative jobs to increase income. The purpose of financial planning is to help make the most effective decisions in real situations. Many people's income may be uncertain but the impact of that uncertainty can be largely controlled through proper planning, moderate spending, and regular savings.

[Cryptoprincess101]

It turns out that our income dictates our expenses.  I realized that because I was earning well each month, I was indulging in more without really noticing it.
So, when you're budgeting, always look at both sides: how much you spend and how much you earn. The latter figure has a much greater impact than most people realize.

Of course budgeting varies depending on the changes that may happen from your income or your expenditure. For the fact that you made a budget monthly or annually doesn't implies that it is fixed, changes can happen even if you earn a fixed amount of money. That notwithstanding, budgeting is very good because it helps you to stay in check rather than spending randomly.
Income do dictate expenses but it happens when you earn lower in some months but if you earn higher in some months, it is needless for you to increase your budget just because you want to make more expenses. You have to stay on the budget and save any extra amount that you've made.

[Byebyebtc]

Budgeting is good, but that would never solve the problem, in cases of inflation your budget will be disorganized because of price flactiation,
But while people keep talking about budget I think it's best to work on increase your source of income instead, use that money to create more money, sacrifice clothes, expensive and unnecessary items for knowledge of skills and capital, and that's why the call it financial freedom, what does budget in this level have to do with someone that is wealthy

[eightdots]

It turns out that our income dictates our expenses.  I realized that because I was earning well each month, I was indulging in more without really noticing it.
So, when you're budgeting, always look at both sides: how much you spend and how much you earn. The latter figure has a much greater impact than most people realize.

Of course budgeting varies depending on the changes that may happen from your income or your expenditure. For the fact that you made a budget monthly or annually doesn't implies that it is fixed, changes can happen even if you earn a fixed amount of money. That notwithstanding, budgeting is very good because it helps you to stay in check rather than spending randomly.
Income do dictate expenses but it happens when you earn lower in some months but if you earn higher in some months, it is needless for you to increase your budget just because you want to make more expenses. You have to stay on the budget and save any extra amount that you've made.

Budgeting is important for making good use of your income and keeping your spending under control; without it, your financial balance can easily be disrupted. Those who wish to focus on saving must ensure they consistently set aside a portion of their income. It is essential to keep expenses in check and avoid unnecessary spending.

Since income and expenditures may fluctuate over time, your budget should be adjusted accordingly. Tailoring your budget to different circumstances helps maintain financial stability.

[savetheFORUM]

First, inflation doesn't affect your view of your income and expenses; both values rise. Moreover, you'll see true inflation based on average values, based on your own experience.
Second, if you have an unexpected expense, such as medical expenses, you'll always mark it separately in the app. This way, you can always ignore it when calculating your average monthly expenses. I have plenty of such expenses, and they don't interfere with my overall budget picture.
There is no such thing as too much information, especially when it directly concerns your life.

Inflation doesn't make your income go higher unless you are a company or something. As a salaried worker, you deal with one salary for the whole year, and only after the year ends may they give you a raise, and sometimes some companies do not even give that. So that means you are not really going to be profiting during the year.

So let's assume that in January you got a raise, and everything else went up the same, but by July, things are still going up and yet your salary is not, and by December, right before another raise should come, things are already way more expensive than when you started the year. So that means, unless you are getting a raise higher than inflation next year, you are going to end up in trouble. If you keep doing a budget, you will realise that, even if you spend money on the same things every single day, eventually January will be cheaper and December will be more expensive every single time, so you can't budget it carefully.

[Ummeettaa]

Budgeting is definitely very important for everyone, because it helps you monitor how you spend your income and also helps you plan for the future, but it's also very important to realize that your expenses increases as your income increase, so you have to take note of that too, so you don't miss it. Like OP mentioned your income is the most important thing when you are budgeting,  because you are budgeting on your income. So I think your budget is meant to change according to your income.  Your income decides how much you budget everything,  which includes your expenses,  emergency funds, investment etc. Mistake most people make is they don't budget on what they have at hand, which will definitely affect them.

Budgeting is very important to everyone no doubts but is only possible for a person that earns more than he/her needs, you can only thinks of budgeting some amounts only when your income is more than the amount needed to sort all expenses before the next income arrives.

The more one earns the more problem and the more the expenses increases, in the economy hardship all round the world right now, you will hardly finds someone that always don't have problems that are way more than their income.

In the society where I live, you will find someone complaining of not having money left, or trying to lend some money just few days after the previous income or salary was paid.

All that is because most of the financial problems most people have, are way more than the amount being paid as income. As such, those kind of people won't think even a little bit about budgeting their funds.

[DPHOR]

A few years ago, I noticed my money was going out incoherently. So, from that moment on, I decided to keep track of how much I was spending and on what. I downloaded a budgeting app.
I divided it into categories: public transportation, health, groceries, household items, taxis, cat, other expenses, entertainment, rent, and clothing.
And I started keeping track of it month after month. It seemed simple. But listen up. I calculated my average monthly expenses and decided that this would allow me to forecast my expenses and understand my remaining funds. But when my work and investing started to go south, I was horrified because I realized I wouldn't have enough money next month. I was very worried, because I'd been able to see how much I was spending for years (I tried to be frugal). Now I've lived through a month spending 20 percent less than usual, without restricting myself from basic needs.

Why?

It turns out that our income dictates our expenses.  I realized that because I was earning well each month, I was indulging in more without really noticing it.
So, when you're budgeting, always look at both sides: how much you spend and how much you earn. The latter figure has a much greater impact than most people realize.

In addition our expenditures are unlimited why mostly our income are fixed, budgeting help you to focus on the important things that are necessary are sometimes is inevitable.
Meaning, there are things that we should be placing priority over, that is why we need to have specific budget to help us control and regulate how much spends daily, weekly and otherwise monthly. For instance there are people who do allocates some specific amounts for accumulation of Bitcoin or any other important and resources item that may help In time to come.

[Misbah2002]

One thing that I know is that if you are budgeting for your lowest possible income, you don't base it on your average income. But when earnings are variable. A good month can give the false sense of security. Which can lead to gradual increases in spending. I believe that's the reason it's important to pay necessary bills first. Then add funds to your emergency savings in better times. In this way you have an extra income to buffer against instead of fueling lifestyle inflation. While it's beneficial to track spending. It's better to plan for fluctuations in income.

What I think is that a person who has an average income or below average, they can't really save money generally or for emergencies, because to be able to save money for these things, you first need to have enough funds that can cover everything else and then have some remaining that you can use for this purpose. It is not a viable solution to save some money while you compromise on other things that might not fall under very specific needs such as bills and groceries, but they might also be important, such as at least spending some money on your family, taking care of their needs and small demands because you can't live a life where you don't do these things at all.

Budgeting might become problematic when you earn less and have more expenses, which is why it is important to adjust accordingly. It is understandable that based on how inflation keeps increasing in certain parts of the world, it has become very difficult for people to manage everything because of the low monthly wages that they get for their work. This makes them take loans or borrow money from others so that they can at least fulfil the basic needs and requirements of their household, and then they spend all their lives getting out of those loans.

[Betwrong]

A few years ago, I noticed my money was going out incoherently. So, from that moment on, I decided to keep track of how much I was spending and on what. I downloaded a budgeting app.
I divided it into categories: public transportation, health, groceries, household items, taxis, cat, other expenses, entertainment, rent, and clothing.
And I started keeping track of it month after month. It seemed simple. But listen up. I calculated my average monthly expenses and decided that this would allow me to forecast my expenses and understand my remaining funds. But when my work and investing started to go south, I was horrified because I realized I wouldn't have enough money next month. I was very worried, because I'd been able to see how much I was spending for years (I tried to be frugal). Now I've lived through a month spending 20 percent less than usual, without restricting myself from basic needs.

Why?

It turns out that our income dictates our expenses.  I realized that because I was earning well each month, I was indulging in more without really noticing it.
So, when you're budgeting, always look at both sides: how much you spend and how much you earn. The latter figure has a much greater impact than most people realize.

Yes, of course. I would also suggest buying expensive things, like a good fridge, bed and computer when you earn more than average, because it would be impossible to do when you earn less. Also, do all plumbing and electricity when you have money. Do not save on that stuff, make it of the highest quality possible. But I wouldn't recommend buying food and clothes beforehand. Some people do it and their home looks like a ware house. You can always find cheap food and clothes; it shouldn't be of your concern when earn a lot.

[Bitcoin Maxi]

A few years ago, I noticed my money was going out incoherently. So, from that moment on, I decided to keep track of how much I was spending and on what. I downloaded a budgeting app.
I divided it into categories: public transportation, health, groceries, household items, taxis, cat, other expenses, entertainment, rent, and clothing.
And I started keeping track of it month after month. It seemed simple. But listen up. I calculated my average monthly expenses and decided that this would allow me to forecast my expenses and understand my remaining funds. But when my work and investing started to go south, I was horrified because I realized I wouldn't have enough money next month. I was very worried, because I'd been able to see how much I was spending for years (I tried to be frugal). Now I've lived through a month spending 20 percent less than usual, without restricting myself from basic needs.

Why?

It turns out that our income dictates our expenses.  I realized that because I was earning well each month, I was indulging in more without really noticing it.
So, when you're budgeting, always look at both sides: how much you spend and how much you earn. The latter figure has a much greater impact than most people realize.

In our economy today, sometimes you won't even realise how much you've spent till your funds finishes that's why sometimes it's best we  leave our wants and focus on the basic needs. Also including emergency funds in our budgeting plan is necessary because there are situations that we might not always expect and in this cases our emergency funds can cover up for us.

[Unknown Op]

I think in budgeting, the most important thing to do first is to put your savings out and that is part of budgeting. In economics, savings is important to diversification. So at least 20% should go to savings and for investment depending on how much you earn. The higher you earn, the higher the percentage of savings required. The next budget to look at is shelter because you need a roof over your head before anything. This should take like 10%. Feeding and other needs can take up to 30% percentage because you also need to feed well to avoid health issues or at least to reduce such challenge. The remaining 40% should be health and emergency and the unused can fall back to savings for that month and on like that in the next month. Budgeting is very good because it helps you live an organized live based on your income. If you don't plan based on your salary, you might run into debt without knowing you have eaten yourself up into debt.

It is true that budgeting is very important but I don't think that these percentage are going to work for everyone. It is good goal to put 20% of your income into saving and investment. But if person is not earning well, if they are earning low income, it is very difficult for them to just cover basic needs and saving is difficult for them. It is not realistic to put only 10% of your income into rent because it is very unrealistic as rent takes up most of a person's salary. Setting 40% for emergencies and health is also not safe as not everyone faces same expenses. A better way is to build your budget according to your income and living costs and it also depends on a person responsibilities rather than just putting fixed percentage.

[M47AK16]

So, when you're budgeting, always look at both sides: how much you spend and how much you earn. The latter figure has a much greater impact than most people realize.

But for low income people, budgeting does not work like that. They budget so that their small amount of income will fit even on their basic needs, while saving can only happen if they earn extra amount but that's only rare to happen. That's the reality with poor people. Budgeting is really a kind of struggle, especially in times when the income isn't enough, or when sudden bills arise that are not included in the budget.

This is what I have been living with for many years now. Back before COVID, I was doing alright, but after COVID, inflation has been so high that for many years I have had a situation where I could not afford anything. Normal life, just eating and being alive, was costing me as much as my monthly income and on top of that, we are talking about a situation where if anything goes wrong, that is extra, and there were many things that went wrong during that period.

This is why, when you are poor, budgeting is of course still something you need to do, but it is also ok for you to not be able to have any money and just be in debt. That is not your fault. I mean, earning a low amount of money "could" be your fault if you are not doing all you can, but if you are doing all you can and still earning only that much because of the situation you are in, then do not worry about it; it's not your fault.

[Emjay24]

Why?

It turns out that our income dictates our expenses.  I realized that because I was earning well each month, I was indulging in more without really noticing it.
So, when you're budgeting, always look at both sides: how much you spend and how much you earn. The latter figure has a much greater impact than most people realize.

This is always the case when you're not very meticulous about the expenses you fund, you'll be using money anyhow. Without planning your cashflow properly, money is never enough. There is always much unnecessary spending which we can avoid or merge with other spending to achieve a better financial efficiency. When I looked into my expenses and income earlier last year, I saw how much of a fool I've been, spending recklessly, even on people who naturally had more than I did, but saved theirs and used for investment while I spent a larger chunk of mine. I repented and started saving more of my income since I earned well enough to be comfortable and have good investments.

If I had known this when I was single, I would've saved more and had more investments before getting married, I could save more but women are lots of expenses themselves and if you take away some of their flashy lifestyle, you only took away your peace of mind .

[oll]

So, when you're budgeting, always look at both sides: how much you spend and how much you earn. The latter figure has a much greater impact than most people realize.

But for low income people, budgeting does not work like that. They budget so that their small amount of income will fit even on their basic needs, while saving can only happen if they earn extra amount but that's only rare to happen. That's the reality with poor people. Budgeting is really a kind of struggle, especially in times when the income isn't enough, or when sudden bills arise that are not included in the budget.

Friend, I understand this situation perfectly, and I wish everyone in this situation the fastest way to find additional income. This could be new ways to monetize their hobbies, for example. Gambling is definitely not an option. I simply believe that if we love doing something in life, we should be well paid for it. And unpaid hobbies should never consume our free time. It's always difficult to find the energy for this, but you can always find successful examples of those who have managed to earn money doing what they love. Support from loved ones is, of course, also important in this regard.