Budgeting helps us stay on track toward reaching our financial goals. With the rise of digital banks, people have become more conscious of their finances.
While many focus on the high-interest rates provided, budgeting through digital banks can also be a big help.
Creating a Budgeting System
The first step in creating a budgeting system is figuring out how much you will set aside for different expenses. There are a lot of alternatives here with no definite best way to budget for expenses. Some people prefer going with the 20/30/50 rule to make things simple, where 50% of their money is for necessities, 30% is for wants, and 20% is for savings and investments. Others prefer putting great detail into how they budget, with each expense planned to the dot.
While each way has its ups and downs, the more important question is how you’ll be able to execute the plans laid out. The common problem is that people tend to overspend. Usually, this is due to failing to keep track of how much was spent on non-essentials.
Budgeting through digital banks can keep you on track
Aside from high-interest rates, something digital banks usually boast is the ease of opening an account. Nowadays, it usually takes less than 30 minutes to open a digital bank account. The only documents needed would often be a government ID and proof of address.
Being able to quickly and easily open multiple accounts can be a big help in sticking to your budget. By creating multiple accounts, you can designate each one with a specific purpose. For example, one digital bank can be used solely for the purpose of holding your savings. Another can be used for your bills and necessities such as food, rent, etc. Then a different digital bank account can be used for non-essentials.
Instead of having one big amount of money where you still need to remember how much is allotted for something, you can just allocate money to different accounts from the start. By budgeting through digital banks, you don’t need to put in the effort to remember your budget every day while also making it near impossible to overspend.
Which digital banks should I use?
There’s a multitude of digital banks right now, with each one having unique offers along with its own interest-rate promos. For example, Maya has a case for being one of the easiest to use among the different digital banks. Most establishments accept payments from Maya, where you’d only need to use a QR code to finish the transaction. You can send Pag-IBIG contributions through your Maya account, and you can also claim your own Maya debit card. Cashing in is also free if you’re transferring funds from certain banks. These make Maya a solid choice to use for bills or expenses. The digital bank also offers different promotions to increase your interest rate, but it’s unclear how long they can keep running high-interest rate promotions.
There are also others like Seabank which offer 15 free transactions across any bank every week. On top of that, they also offer a 5% interest rate for balances below P250,000. Then there’s Tonik which offers a group stash feature – handy for groups that tend to save up together for trips or even for Paluwagan.
You can check out our list of digital banks if you want to look at and compare the different features and promotions each one offers. As for which ones to use for what, it mostly depends on what’s easiest for you. For example, you can set up your budgeting system so that your Maya account serves as your necessities account for the ability to pay using QR. A Seabank account could be for the bills, while you use GCash for wants.
On a Final Note
It might seem troublesome at first to set up a system like this. But, once it’s up and running budgeting should become an easier task to do every month. Just remember to always keep your pins and passwords safe to protect yourself from phishing!
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