Spend Like a Time Traveler For a Safer Budget

Saving up and budgeting for the future can be hard. Maybe we need to think like we can travel to the future? What are we talking about? Read on!

Have you ever had an unexpected expense like a car accident or emergency family situation completely knock your budget back by a month? While these occurences won't cripple you financially, having to delay your planned purchases until the next paycheque can be ruinous. Especially if your purchases involve time-sensitive items like flight tickets or holiday plans.

Wouldn't it be great if you can somehow travel to the future, see what's about to happen, and plan your budget accordingly? Well you can't. But what you can do is plan your budget like a time traveler so you can avoid having to deal with this type of situation ever again.

How Do I Budget Like a Time Traveler?

The name is fancier than what it is, but it's essentially budgeting one month ahead. What this means is that you spend this month, what you made last month.

In order to do this, you must first save up enough money to go an entire month without touching your regular income. Then on the next month, spend last month's income while earning this month's income. You will then spend this month's income next month.

It helps to think that the money you're making this month is only for the future version of you who exists next month.

What Does This Accomplish?

Regular budgets dictate how you should spend the money you earn one month, on the same month that you earn it. While this is still good for managing your finances, it will be completely undone if some unexpected expense pops up that takes over your entire month's income.

By having a buffer month, you avoid that from happening completely. You can just use the money from your 'future self' to pay for the unexpected expense and keep spending as you planned to. This is especially useful if you don't have a sizable emergency fund yet to cushion your fall.

Of course, sticking to just this plan won't help if your unforeseen expenditure exceeds your monthly earnings. But it's still a good practice to always have at least one month's worth of funds in your account should anything happen.

There are many ways to plan out your budget and this is just one way to ensure you don't get hit too badly should anything terrible happen. The best way to be prepared for uncertainties is still to have enough in your savings and this method of budgeting is a good place to start.

Still thinking of which savings account to go with? Take a look at our comparison tool to see which banks in Malaysia can offer the best savings account that suits your needs. Do you have anything to add to this article? Share your thoughts with us in the comments section down below!

0 comments

Agree or disagree with this post? Questions? Be the first to post!