How to Budget & Analyze your Expenses

One of my goals lately has been to beef up my emergency fund. There is a lot of uncertainty in the market right now, and people are still continuing to lose jobs or having their hours cut. In the worst case scenario, you want to be prepared for the worst, and have enough money in the bank account to sustain you for a couple of months until you get back on your feet.

So I decided to take matters into my own hands and tried to bulk up my savings the fastest way I know possible - to cut back on my spending and monthly expenses. As unique the current situation may be, it is also an opportunity to save money. I don't know about you, but working from home is definitely helping me save money in various aspects.

First, I haven't bought clothes in the last three months. I also haven't bought any new make up. I had to order a new set of skin care, however, since I ran out of basic items. But considering I ordered my skincare from The Ordinary, it was pretty affordable. Not to mention, I'm saving loads on transportation (ie. no bus fares) nor do I need to fill up the gas. I also haven't been eating out, so my meals and entertainment expenses have also been pulled back. Though, I have to say that I've been buying wine a lot more often than I should and the long lines at the BC Liquor Stores don't faze me anymore.

One pitfall is online shopping. Considering I also moved into my new home recently, I find myself spending money on household supplies for my place. You can say I'm adulting or that I'm getting old when I get excited about buying a vacuum cleaner - a robot vacuum cleaner to be exact.

All of this aside, I decided to be ambitious and set an expense budget of $600 for the month of May. Check out my video above to see if I actually kept to my budget and what the breakdowns of my actual expenses were.

Spoiler alert - I actually failed to keep to my budget BUT as part of my monthly review of my budget and actual numbers, I had analyzed my expenses to pinpoint exactly why and how much I went over budget. This way, I learned from my mistakes and was determined to set practical spending habits for the following month.

I'm going to admit - I'm not perfect when it comes to keeping to my budget. I tend to overspend and go over my budget from time to time. What's important is that you have taken the step to understand why and try again the next month. Every bit is progress and that is one step closer to your financial freedom.

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