None of us are born with personal finance knowledge, so chances are all of us are going through different types of budgeting challenges.
In this article, I’ll list out the budgeting challenges you might have and how you might be able to overcome it.
(P/s- I intentionally omitted ‘not enough money’ from this list – you can’t budget yourself out of poverty, so if that’s your core problem, then learn income strategies in 3 Ways to Get High Salary in Malaysia and 25 Ways to Earn Side Income in Malaysia articles)
Let’s start with,
#1 – I don’t know where to start
The number 1 budgeting challenge I’ll address first is not knowing where to start. You’re simply overwhelmed. And you’re angry – maybe at yourself, maybe your situation, maybe the goverment – either way, you hate where you’re at right now.
What to do: Read Bergaji & Pokai (or any other beginner-friendly personal finance book)
The beginner-friendly part is important. I don’t know about you, but I personally spent a lot of time confused when I first started learning about personal finance. The materials I picked out were way too advanced for me – the equivalent of picking up Shakespeare when I just started learning ABCs.
On the other hand, Bergaji & Pokai is beginner-friendly, suitable for anyone who’s just starting out and even people who have been managing their finances for a while but wondering if they’re doing it right.
For Malaysians, I am biased here, but I highly suggest you pick up my book, Bergaji & Pokai instead of some book written by Americans/Westerners. You need to learn about EPF, not Roth IRA (both retirement accounts, but for different countries!)
#2 – I spend too mindlessly
Do you feel weird if you *don’t* spend money for something you want (not need) in a day? RM10 here, RM20 there, RM50 for that. Then this budgeting challenge applies to you.
What to do: Do a no-spend challenge
One of my favourite types of personal finance content is no-spend challenge write-ups by actual people, like the I Tried a #NoSpendChallenge for a Month and I Didn’t Buy Anything Extra for 3 Months – Here’s How Much Money I Saved articles. They’re just so much fun to read. This type of content usually include:
- Their ‘rules’ – what expenses are excluded during the no-spend challenge (like medical, for example) (Note: I love the guidelines in this article)
- How they adjusted their lifestyles
- How and where they failed or caved
- How much money they saved
- How they learn to be more intentional with their purchases after the challenge ends
Important: You don’t ‘fail’ if you accidentally spent during the no-spend challenge. The point is to be more mindful, and learn your spending triggers. Most people who go through this challenge became less impulsive spenders afterwards – that’s a huge WIN.
#3 – I don’t know if I spend more OR less than I earn
So, you earn a salary or an income, but you don’t know if you are spending within your means or not. Maybe you have leftover money before payday? Maybe you don’t? You have no idea.
What to do: Use my 50/30/20 budgeting guideline template
Personal finance 101 – before investing, before insurance, before anything else, is cashflow management. In essense:
- Earn more than you spend = good
- Spend more than you earn = bad
The only way through this budgeting challenge is to know approximately how much you spend each month in different categories. I’ve made a template exactly to help with this: Can You *Really* Afford It? Use the 50/30/20 Rule (Free Editable Template)
Take the template and do it, it’s free. I made a video guide and everything.
#4 – I just like buying stuff
Shoppers have this mentality. They tell themselves that they just like buying stuff. That’s their identity
But the thing is, stuff accumulates. Often (but not always), that results in a messy head and a messy space. Look around you – is there stuff everywhere?
What to do: Declutter and Sell Unwanted Stuff Challenge
I think its ok to like stuff. Its just not ok when stuff takes over your life, you know? So if stuff is everywhere until you can’t even think properly in your rest space, take action.
Outer organisation influences inner organisation. Watch a couple videos on decluttering (I’m partial to Marie Kondo’s methods), then sell/donate/throw away what you don’t need.
The awesome thing about this budgeting challenge is you get IMMENSE benefits. Here are some:
- Much clearer head afterwards
- You can get $$ from selling your unwanted stuff, obviously
- It’s an activity so it distracts you from mindless shopping due to stress
- You rediscover stuff you already have = less buying the same thing
- This is also an opportunity to learn and improve on your sales/marketing skills as well! Always handy
Problem: It’s probably easy to sell high-value items with existing demand, but how about the random RM5-RM20 stuff? They’re too mafan to list individually.
Solution: My top tip here is to sell/donate/throw away them away in bulk, not individually. For example, I regularly sell a box of books instead of individually. You can do the same with clothes, toys, books, etc.
#5 – I keep my spending low, but other people keep making me spend more than I should
You’re frugal as heck, but still spending more than you should.
Maybe people around you keep asking to borrow money. Maybe they always invite you to expensive activities. Maybe your colleagues keep asking you to buy the stuff they’re selling as side income.
What to do: Learn to say no
This is one of the trickiest (if not the most) budgeting challenge in this list. Chances are, you prioritise harmony, hate confrontation, and a people-pleaser. This is a whole article on its own: How to Say No to ‘Can I Borrow Your Money?’
#6 – I just enjoy [expensive habit] too much
This is also one of the tricker budgeting challenges in this list because we’re all creatures of habit. And its possible that some of those habits are part of your identity and something you do within your core friendship group.
What to do: Quit-a-bad-habit challenge
Some things to quit:
- Drinking (excessively)
- Going to the mall/browing shopping apps just because you’re bored (I have this)
- Mindless shopping trips with friends
- Whatever activity that just got too expensive and out of your budget (even if its technically a healthy activity!)
What other bad habits would you add in here?
For me, quitting alone doesn’t work, you gotta have a replacement activity. This is the basis of my Free/Cheap Things I Do to Stop Online Shopping Habit article. Basically, I listed everything I could do *instead* of online shopping. It doesn’t work ALL of the time, but enough times, and that’s progress.
Something I should tell you upfront is you may lose friends along the way. I lost touch with most of my smoking buddies. It happens, and it’s okay.
#7 – I’m scared to spend money on myself
When we talk about budgeting challenges, we always assume that someone has a spending problem – they spend more than they should.
This is the opposite sprecturm – there are people who are extreme savers, who have earned and saved enough (sometimes even 50% or more of their salary!), but find it hard to spend on things that are good for them. You feel extreme guilt, even.
I know about this budgeting challenge firsthand, because I used to struggle with it. I even wrote an article talking about My Dilemma with Lifestyle Inflation.
What to do: Start addressing your money trauma
I’m not diagnosing, and you need more resources beyond this article, but you may have money trauma. You might see money as a protection tool. It makes you feel safe, so you want more and more and more of it, ‘just in case’ something happens.
The recovery (?) from this won’t happen overnight – there’s a lot to dissect, probably stemming from childhood or how you grew up. You don’t want to be in the same situation again.
Either way, know that buying products and services that enhance your quality of life – assuming you sorted out your savings etc – isn’t a bad thing. You can start with these 9 Things to Buy for a GREAT Financial Life.
Why start with those? They’re all products and services that are good for your financial life – you’ll feel way less guilt for buying them.
Which budgeting challenge are you going to do?
Like I said in the beginning, EVERYONE is working on addressing their budgeting challenges. Heck, I’m still working on mine. It’s a lifelong journey, but hey, that’s self-development in a nutshell.
So.. all the best. Let me know which of the budgeting challenges above you’re most keen to do for yourself in the comments.