Managing your budget

Need to plan an airtight budget? This is how to get started!

Keeping track of income and expenses will give you more security in these difficult times. But how do you handle that in times of corona, with less certainty than ever before?

A clear budget planning helps you get an overview of your essential expenses, large or small. This may allow you to save money for unexpected costs, as well as budget for potential price increases amidst the pandemic. Perhaps you can even create a little pot for your pension or your child’s studies. Whatever your situation, planning your budget starts by grabbing your computer and opening an Excel file.

There is an app for that

There are plenty of handy apps to help you plan your budget for 2021. ROOV comes highly recommended, and offers you tailored advice for saving money. Money Lover and Spendee are also worth checking out.

How to create a budget plan?

While planning your budget, these are the steps to take:

  • Note down your total current income. What is your (and your partner’s) current monthly income? This might be quite different from previous years, given the current crisis – maybe because you were temporarily unable to work, lost your job or had to deal with reduced client demand. Do you both have permanent contracts or is one of you self-employed? Try your best to predict your monthly income for the coming year. If necessary, create different prognoses – some more cautious, some more optimistic.
  • Next, write down your fixed costs for the same time period. Look at things like how much money goes towards housing cost, car loans, insurances and electricity. For most Belgians, their mortgage or monthly rent is their biggest regular expense.
  • Based on these numbers, calculate your core monthly budget by subtracting your regular expenses from your income.
  • Calculate how much of your core budget you need monthly for variable costs. These include food, drinks and clothing. Again, these expenses may be more difficult to estimate in the current circumstances. Use the ING Banking app to check your transactions in the last six months and make note of any recurrent expenses.
  • This should allow you to define your short- and long-term savings goals. Subtract your variable costs from your core budget and check how much money you can set aside on a monthly basis. Ideally you define both a budget for a savings fund that you can eat into in case of adversity, as well as a long-term savings pot, for example for a holiday.
  • After planning your budget, keep a keen eye on your current and savings accounts. The ING Banking app is your friend in this matter. It also shows you any credit card spending, making it easier to compare your budget plan with your financial reality. Especially in current times, when prices are on the rise, keeping track closely is a good idea.

An example of a family budget

Paul and Sarah’s combined income after tax is € 3.600 per month. They have two children aged 10 and 14.

The family’s fixed monthly costs total € 1.650:

  • € 1.100 on mortgage and car loan;
  • € 300 on gas, electricity, water, tv, internet and telecom;
  • € 250 on insurances (fire insurance, family insurance, comprehensive car insurance, …), health care contributions, tax, …

This leaves a monthly core budget of € 1.950. This core budget has to account for fuel costs (€ 200 on average), groceries (€ 600 on average), any potential doctor’s visits, club memberships etc.

After subtracting the variable costs, Paul and Sarah define the following savings goals:

  • Their short-term savings goal is to set aside € 300 per month. Half of this will be spent on purchases during the sales period, while the other half creates a pot for the yearly family trip as well as a buffer for any house repairs.
  • Their long-term savings goal is to set aside € 350 per month. Half creates a savings pot for the children’s future studies, while the other half is used for retirement savings.

Paul and Sarah transfer any amount left at the end of the month into their savings account as an extra buffer.

Long-term savings goals

A holiday cottage at the seaside or in the Ardennes, your children’s studies or your retirement. Some long-term savings goals are more fun than others, but they are all equally important. Do keep these goals in mind when you plan your budget. It will help you start saving early and regularly. Before you know it, you’ll have a nice sum saved up.

Manage your finances easily and safely with the ING Banking app.

Keep an overview of your income and expenses. The ING Banking app lets you check all your bank accounts, wherever you want, whenever you want.