How can I create a budget and customize my budgeting goals?

Mafhoom uses a popular budgeting system called zero-based budgeting. It enables individuals to create a budget(s) from scratch. With zero-based budgeting, the money you have in hand is already assigned to a particular expense or savings account before you spend it. This forces you to plan out your spending ahead of time, avoid impulse purchases, and avoid spending money you don’t have. While all budgeting systems are disciplined by definition, zero-based budgeting is a bit ahead of the curve. Each dirham spent is accounted for.

For instance, if your income is 12000 AED per month, here’s an example of what a zero-based budget would look like:

Starting Balance: 12000 AED

• Rent: 2900 AED

• Groceries: 2000 AED 

• Loan Payment: 500 AED 

• Family Care: 1000 AED 

• Auto & Transport: 1000 AED 

• Bills& Utilities: 900 AED 

• Education: 2000 AED 

• Internet & Mobile: 350 AED 

• Entertainment: 400 AED 

• Shopping: 100 AED 

• Home: 850 AED 

Leftover Money: 0 AED

Pros: If you’re working with a regular salary, you can create one zero-based budget and use it perpetually. There might be times when unexpected expenses appear, and you could forget to include them in the budget. In those instances, you’ll need to tweak your budget.

Cons: Zero-based budgeting can be a little complicated if you have irregular income. In this case, you have to average your past few months’ incomes and go off of that or budget based on your lowest expected income. 

You can create a customized budget by following simple steps.

1. Go to the Mafhoom app > Settings Gear icon

2. Go to Personal > Manage Budget

3. Click Start a budget.

4. Enter your income to set up your monthly income budget

5. Proceed with adding your recurring bills/utility budget. Select only your bills and utilities and deselect the other subscriptions and credit card payments.

6. In case you missed any bill, you can tap Add bill, then once done, Continue to enter the recurring bills/subscriptions budget amount.

7. To add all other spending expenses, tap Add Spending category to set a budget for your spending categories.

8. Once you select any category, enter the budget amount for that respective category > Tap Save to continue. You can add multiple categories to customize the budget according to your spending.

   
    

9. You will be redirected to the overview section to track your budget & spending regularly.