Why You Should Not Follow Budgeting Guidelines Blindly!

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Let’s talk about budgeting and why it is dangerous to blindly follow budgeting guidelines.

At the end of the day, guidelines are just a general rule that should be taken into consideration but not followed blindly as there is no one size fits all budgeting plan that exists.

Common guidelines such as the 50/30/20 or 40/30/20/10 rules often fail to take into consideration of your unique situation, expectations and plans for the future.

As such, what I would prefer to do when it comes to budget planning, is to calculate backwards by first deriving the amount of monthly cash savings that is necessary for things that are non-negotiable such as property & marriage as well as things that are required in the short term that is less than 5 years.

Once we have set aside sufficient savings for those items, we will then plan and allocate our expenses accordingly to the different categories (in order of descending priority) such as

1. financial obligation

2. insurance expenses

3. personal expenses

4. long-term investing for anything more than 5 years.

Doing so ensures that whatever you need in the short term, whatever is not negotiable can and will be provided for by risk-free cash savings. Then whatever is left will then go into your spending and investing which will ensure that you do not overspend or overinvest.

Read More: How I Manage My Money As A Financial Advisor!

All of these can also be found in my eBook: “The Price Of Financial Freedom” which will provide you with a comprehensive guide to help you achieve financial freedom and live life on your terms in the shortest amount of time.

You can download a copy of it for free on my website:

If you do not know how to get started with your financial planning or if you do not have the time to manage your finances, you can consider engaging an Independent Financial Advisor who can help you make sense of the market, accelerate your progress and achieve financial freedom by 5 to 10 years earlier!

To find out more information about how you can benefit from my financial and insurance planning services, you can check out what I do on my website here:

Daniel is a Licensed Independent Financial Consultant with MAS and a Certified Financial Planner (CFP®).

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Disclaimer:

This article is meant to be the opinion of the author

This article is for information purposes only

This article should not be seen as financial advice

This advertisement has not been reviewed by the Monetary Authority of Singapore