SHARING IS CARING: My Ideal Budget for 2022 

As we about to end this year, one thing that I have in my mind is to plan my budget for next year. Since I will start to build my passive income starting 2022, I need to strictly manage my finances well. For sure it will be a lot of cash out for this upcoming year due to the house rental renovation & my vacation, so as early as possible, I should plan and manage my finances well.

Here below is the diagram of my current expenses and savings:

EXPENSES

For me to know the amount intended for my expenses, I specified it to three different Items:

SELF: Grocery. The amount intended for this expense is for my monthly needs such as food & groceries.

SELF: Leisure. The amount intended for this expense is for my monthly leisure like hanging out with friends, travel and many more.

Family Needs. The amount intended for this expensed is entirely for my family only. Since for this upcoming year, there will be more cash flow for us, I planned to send money alternately.

SAVINGS

For my savings, here are the responsibilities that I currently have and its intended use:

Business Fund. This fund is entirely for my passive income plan which is house rental.

Insurance Fund. This fund is intended for my health ad emergency purposes.

Insurance & Investment Fund. This fund which is payable for ten years is intended for my retirement which can also be use for purposes such as my kid’s education and any business ideas.

SSS Fund. This savings is entirely for my retirement purposes only.

Emergency Fund. This fund is the amount intended for any family emergency. The purpose of this savings is for others savings not to be affected if there’s any challenges that may happen.

Joint Account Fund. This fund is intended for me and partner’s future. We will use this fund for any plans that we have as we settle down.

Local Fund. This fund is for my extra savings that can be used for my vacation and other purposes.

As you can see, my income goes more in my savings since I had started my long-term investment funds. For me to be able to maximize my savings capacity in building my passive income, I need to get rid of my existing responsibilities by getting another source of fund. That will be my project for this year! As much as I can, I need to take two things out of my responsibilities so I can fund more my business fund.

For sure there will be a lot of things that you have in your mind right now. So to give you some suggestions, here are some activities that you can start to do in this upcoming year. Whether you do these things or not, it is important that you decide it based on what you truly feel. Like what I stated in this blog, any plan will do as long as it will inspire you to be a better version of yourself.

FUND GOALS FOR THIS YEAR

The only way for me to maximize my savings is to have more source of income other than my salary. Considering that I’m working overseas, I only have limited business ideas that I can start with. After thorough considering the different pros and cons of the businesses I am planning to start, I decided to first work on rental income.

At first, I planned to buy a foreclosed property and to renovate it. That rental income will be intended for my family’s needs and for my SSS insurance. Just a few months ago, upon considering the challenges bought by the pandemic, I decided to use the existing property that my parents have and just renovate it so we can double the monthly rental amount. I suggested it to my family and what we had agreed is I’ll be having the 34% share for each month rental payment. That amount will suffice my monthly payment for my SSS and that set up will be a win-win opportunity for both parties.

Once this project will succeed, I can now put the amounts intended for my family’s need and SSS to my other savings funds. Now, here below are the following target that I need to do in this year 2022.

1. Get rid two of my financial responsibilities (SSS & family Expenses) by using another source of fund.
2. Secure an advance one-year payment for my two-insurance fund.
3. Start my first renovation project for our family’s one house rental unit.
4. Get rid all of the existing debts.
5. Prepare fund for my own house rental.
6. Prepare my leisure fund for my upcoming vacation.
7. Strengthen my Emergency Fund by investing more amount.
8. Enroll all of my long-term investment fund in an auto debit payment set-up.

PROJECTED EXPENSE FOR THE YEAR 2022

Since I have a lot of projects for this upcoming year, I need to expect that there will be a lot of cash out on my part. Good thing is that, I made sure that I readied my funds as the 2021 year started. I can say that my funds are sufficient for those projects and at the same time, my emergency fund is well secured. Now as I officially start my passive income business which is a house rental, I need to carefully consider all the expenses that I have for the next year. For me to be able to do that, I need to identify my expenses and be specific on the target budget for each.

Now here below are the projected expenses that I have for the next year. As you can see, my business fund is stated here since I still considered it as an expense today due to the fact that it will take time for me to have the return of investment. Meaning, once the project is ready for occupancy and the amount that I invested on that has been paid already, that’s when the time I can earn profits out from it.

To carefully understand each financial responsibilities that I have, here below is the clear computation of the expenses for this year 2022:

1.Business Fund – House Rental Renovation [Budget: PHP150,000]

As of November, we are still currently looking for an ideal contractor. We decided to renovate our existing house rental in the simplest and practical design that can also justify the target rental amount which is Php 6,000 monthly. As soon as we get a contractor, we can start the renovation since my fund for it is ready. It will also be ideal to start it as soon as possible so that it can be rented out at the earliest.

During the discussion with my family, we both agreed that my share in the monthly rental would be Php 2,000 and the rest will be for them. I planned to use that amount for my SSS monthly payment so I can focus on my other savings fund.

1.SELF: Grocery [Budget: PHP32,400] SELF: Leisure [Budget: PHP32,400]

For me to be able to manage my expenses for my needs and for my leisure, I divided the budget amount into two. As soon as I work, I promise to myself to stick in the lifestyle that I’m used to. So regardless of the promotion or a salary increase, I still stick to the monthly budget that I’d been doing for almost 5 years. By doing this, I was able to minimize my spending and prevent myself on being overwhelm with the money that I’m earning.

I think that this practice is very ideal for anyone. This would help them to manage their spending’s for themselves and focus on their needs rather than their wants.

2. Family Needs [Budget: PHP37,800]

For this year 2022, I still planned to send money not unless the house rental renovation will finish. As soon as I can renovate two of our property, I can now stop financing my family. This will be a good thing for both of us since sooner or later my Dad will retire as well. The more that I helped them in building passive income, the more they can achieve the ideal life that they’re dreaming of.

3.Vacation Allowance [Budget: PHP100,000]

Although I don’t have yet the exact plan on when I will have my vacation next year, I need to ready my budget for that so I can ensure that I won’t spend a lot. It was last 2018 when I had my vacation and it’s been four years already since I went home. Due to that, I need to ready all my funds so that I can spend time with my family and also work on my target projects for this upcoming year.

BREAKDOWN OF TARGET AMOUNTS FOR 2022

Upon knowing my expense, what I need to do is to set a target amount for each savings and expense fund. By doing this I can easily know the amount that I need to save each month and at the same time what I can only spend. It will serve as a guideline for me to know the current status of my finances and the same time my progress.

As you can see, I invest more than a half of my money in my savings. From long term, passive income and emergency funds, all should be well guided for me to make sure that I can reach all of my financial goals. The only thing that can make it possible, is for me to make a step-by-step plan yearly. I need to double my efforts in any thing that I’m doing in the present because every action that I will do will justify my future.

The more amount I can save for my Business Fund, the earlier I can start the projects that I have in mind. As long as I can focus myself on building sources of funds, the more ideal for me to venture in a lot of opportunities.

As of now, the investment that I’m considering to do are the following:

1. Real Estate Investment (Foreclosed properties)
2. Real Estate Investment (Condo Investment)
3. Franchise (Water Refilling Station)
4. Pag-Ibig MP2
5. Medium Term Investment Package

I’m aware that everything will take time and I should not rush in making decision.  I need to carefully review my current situation and capacity before I indulge in any investment opportunities. As another year start, I need to continue all the things that I did in this year. I should not lose hope and be optimistic that I’ll achieved all of my goals.

IDEAL MONTHLY BUDGET FOR 2022

Since I already have the necessary details of what I planned for the year 2022, I can now start to build my ideal monthly budget that will serves as my guide. This will be based on the annual budget that I had decided which is stated above.

For me to ensure that I will follow this budget, I will make a tracker of all of my finances. I planned to have a separate tracker for my investment and my expenses so I can have a chance to review it. By knowing where will my money goes, it will be easy for me to adjust and get rid of unnecessary spending. Since there will be a lot of things that will happen this year, I need to be very mindful in any added expenses out of my budget.

Hopefully there will be a blessing for me in this upcoming year so I can save time in reaching the target amounts of my funds. If ever I can’t find that opportunity in the existing company that I am right now, I still have a chance to look for it somewhere else.

Looking back to the start of this year, I can see how far I’d been in reaching my goals. Although there’s a lot of challenges came, I was still able to reached my target financial goal that I planned for this year. As I start to make use of my business fund which I saved, I need to manage my finances strictly so that I won’t use all of my savings. I need to live within the budget and strictly adhere in the guidelines that I made in this upcoming year.

I still have one more month to go to completely achieved my goals. The sacrifices and efforts that I’d been putting will truly be worth it in the end. Although I wasn’t able to achieve some of it, I can still say that I learned a lot of things in this journey.

As I turn 26 next year, this will be the start of how my money officially grows. I will continue to build passive income that will help me to funds all of my dreams and hopes in life.

I still have a long way to go but all I can say is I will never give up and continue to soar high!