What is Personal Budget?

Personal budget is a plan that shows how much money comes in, how much goes out, and where it goes. It’s the most basic and powerful tool in personal finance. Without a budget, you’re driving in the dark.

How to create a budget

Step 1: List all income

  • Net salary
  • Extra income (freelance, odd jobs)
  • Investment returns
  • Others (rent, pension)

Step 2: List all expenses

Fixed (don’t change):

  • Rent/mortgage
  • Condominium fees
  • Health plan
  • Internet/phone

Variable (change every month):

  • Food
  • Transportation
  • Leisure
  • Shopping

Step 3: Apply the 50-30-20 rule

  • 50% for necessities
  • 30% for desires
  • 20% for financial goals

Budgeting tools

  • FinMoovi — app with automatic categorization by AI
  • Simple spreadsheet (Google Sheets)
  • Notebook and pen (it works!)

Common mistakes

  1. Not including small expenses (coffee, delivery)
  2. Forgetting annual expenses (IPVA, IPTU, insurance)
  3. Not reviewing monthly
  4. Creating a budget that’s too restrictive (not sustainable)