Why personal budget?

Why personal budget?

by Raluca Șandru – Financial analyst


Every day we are engaged in numerous cash flow activities.

Each month, our income is divided into payments belonging to the following categories:

  1. Fixed costs – telephone, utilities, maintenance, monthly installments, kindergarten, school, daily food basket, hairdresser, sport, fuel, etc.
  2. Variable costs – clothes, home appliances, equipment, various materials, car repair, insurance, taxes.
  3. Wishes – holidays, car, house, fittings.

Many times we are tempted to fill up the fixed shopping cart to cover future needs, but the sums allocated to them will diminish the remaining amount for the other categories, thus delaying the timing of their fulfilment.

We often seek to find the necessary funds to fulfil our needs through loans, so we increase the monthly fund required for fixed costs and our satisfaction will be minimal because the burden of the installments will wipe out the transitory joy generated by covering the need or the desire.

We suggest you a solution… allocate today the amount you are willing to give to the bank for your wish, you will do it anyway if you get a bank loan for this and you will take responsibility for the monthly installments, the effort is the same, make a capitalized account that you cannot access for at least half a year.

This way you will first pay for your wish, which will motivate you and give you the satisfaction of your work, the money will belong to you, not to the bank, and the period in which you will collect the desired amount will decrease with the period in which the bank requires interests, being able to use these funds for your next wish.

It’s great!… but it takes time! I want to buy these things as soon as possible.

We recommend you to keep track for a month of your expenses divided into those 3 categories. Next to each sum, give a mark on the importance of that amount. Be honest! The blouse that you liked and which was on sale is not a basic need!

We believe 3 ratings are enough to realize where your money are spent and at the end of the month it will be easy to reflect on the amounts from those 3 categories divided by the 3 most important ratings.

Come on, it’s not hard… we think it’s a lot harder to always try to remember “Where did the money go?”

Well, we don’t force you to establish an austerity plan, but ask yourself the question: “How important is this desire for me?”… when you are tempted to buy other things you will surely ask yourself: “Do I really need this? Since I can find other things in the closet that have been left untouched for some time?”

Do you still think it’s hard? But do you think the installments will let you choose? You know that next year you’ll want a memorable holiday… You surely deserve it! Why pay more than necessary? When you can collect each month money in your dream holiday account!



Raluca Șandru
Raluca Șandru, Financial Analist at Exprom, brings in 16 years of experience working in finance. She has graduated higher studies in Financial Management and Control and is responsible for developing the Financial Management Support instruments available exclusively at Exprom.