Let’s talk about money….

Let’s talk about money…. $£€¥ …. or more precisely budgeting.

 

Most days, I feel very small, naive and unsure about things in this big, bad adult world… I’m merely 24 years old and several circumstances in my life have prevented me from the, let’s call it “normal” developmental path into adulthood, such as getting a first job at 16, flailing through my first tax return and then making heads or tails of bank fees and credit card bills. I was a late starter, but boy did I make sure that I was ready for it when it came… I was prepared for an onslaught of financial abyss and upset, for trying not to fight with my spouse over whether we could afford nice toilette paper or if we had to buy the bargain brand, and of course we would not be able to afford any fancy holidays or anything nice at all, in the first 5 years of marriage.. it was going to be camping trips and visiting relatives who lived somewhere remotely nicer than us.

At least that’s what I was told…

However, here we are, almost 1 1/2  years into our marriage, and we have…. none of those problems?

As a matter of fact, we have moved to England, relocated to Northern Ireland, had a wonderful summer and spent a whole week travelling the North Coast with a dear friend (and even stayed in a Castle!)… Now we’re 8 days away from flying to Canada to visit family for 2 weeks, then I’m off to Germany for a concert on Halloween Weekend. After that, we’re booked back into the afore mentioned Castle for our anniversary in February and we have booked a Cruise along the River Seine from Paris to Normandy for next Christmas… all without credit cards and without getting into any major (or institutional) debt.

(And that’s not without mentioning that we are apartment hunting right now.)

Whenever all this (traveling) comes up in conversation I get accused of taking other peoples money (oh, so your Daddy pays for everything, right?) or that I must certainly have terrible credit card habits (omg, you must be in so much debt!)… Ohmm… no and no? …. Why is it that no one else has figured out how to Budget???

Now, I had the great fortune of having a very clever friend, who years ago showed me, how she uses nothing but her wit, a sheet of paper and a pen to keep her family of 4 successfully financially balanced every month; add to that the the vast knowledge and advice of the very talented Gale Vaz-Oxlade, an independent Canadian author and financial adviser, and I was able to keep myself pretty balanced.

The trick is actually very simple:

1. Your living space (rent/mortgage, utility bills, building maintenance) should not exceed 1/3 of your months earnings.

2. Separate your needs from your wants. In every possible way.

My blank monthly budget sheet looks something like this:

Budget Blank

Green – Income (after tax) * Yellow – expenses total * Blue – Savings * Pink – what’s left for “fun”

 

(So, between my husbands income and mine, our “rent money” actually includes the rent, the utility costs, as well as our transportation costs (train, gas share for carpooling, taxis) because if we had chosen to live in the big city (near work) we would not have needed the train ticket. So we categorized that as part of our living expense. )

With this very simple chart, we manage to prioritize our spending, know what we can and can not afford in any given month as far as “luxuries” are concerned, and always have money to put into savings for a rainy day, and fun trips and adventures.

 

Some examples of “needs” vs. “wants”

Need vs. want

Need vs. Want in Groceries

Need vs Want 2

Need vs. Want General

Once we figured this out, along with timing our payments properly and knowing when to say no and when to really go for something special, we have been able to be incredibly self sufficient. (We can actually put as much as £350 into savings each, every month. Now, sometimes we don’t put away as much, since we do have a few personal debts that still need to be paid off, and we are already setting a good chunk of money aside into the “travel” pot for specific trips such as the one to Paris next year, but the important part is we have that money to work with every month.)

By my current financial projections (*barring any unforeseen misfortune*) we should be completely debt free by next Christmas, and from then on our savings will hopefully just continue to grow. We also know that there are other important things that want to be saved for, so we start saving for Christmas in January, make sure to keep note of birthdays ahead of time, so that we have money for presents and cards (especially those that need to be shipped overseas) and even though we don’t expect to start a family for at least another 2 years, we are already looking into the prices of strollers, bottles, nappy bags, nurseries and the likes, because we know that Children are a blessing – and a very big financial challenge.

Well, as always, I have no idea if this interests anyone, but I am happy to have this off my chest and if it makes a difference, or even just gives some inspiration to even one reader, that makes me even happier.

Thanks for reading.

Take care. xoxo

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