Learn to control money but do not allow it to control you

Cheery_Daff

Wow FW, you're doing really well!

How did you work out your proportions? (sorry if you've said this and I've missed it!). I ask because I've worked out by the end of the year I will have saved 41% of my annual income - but that includes longer term savings, emergency fund, and holiday fund too. Quite enjoying percentage figures at the minute

Firewalker

Cheery, I did toy with the idea of having lots of separate accounts but decided against it; it only confuses me. So we have only three accounts - current, 'do not touch except...' and 'we are so worth it'. The shares transfered into the latter two accounts goes there every month at the begining of the month. What is left in the current account (83%) covers the negative wealth (the regular payments), all 'must pay or else' bills and all variable expenditure (this is mainly subscriptions, gym memberships, stuff for LB, petrol, haircuts, books etc.). In other words there is quite a bit that is important but not essential covered by the current account.

We used to write all we spend to within couple of pounds. However, this was important when we were developing good habits - now we just take certain amount in cash every week and this is it. We can have treats (concerts, outings, etc.) from the 'worth it' account - but we never finish what is in and what is left covers trips (this is how we went skiing this winter). The 'do not touch' account is sacret and not used for living - only for investments (in ourselves, like the course, or when there is a bit more in other things).

What I have not mentioned though is that we (mainly OH) earns on top of our monthly income but this cannot be predicted (working on developing regular income streams now). The rule for this money is different: 70% goes on negative wealth; 20% in 'do not touch' and 10% in 'worth it' accounts.

I just found something else; an easy way to check whether your finances are in balance. It is called 'the balanced money formula' (Elizabeth Warren and Amelia Tyagi, All Your Worth: the ultimate lifetime money plan). According to this one should spend no more than 50% on needs (all that absolutely has to be paid), 30% on wants (things that make us feel human and have some fun) and 20% on savings/debt. I did calculate mine: 38.6% on needs, 24% on wants and 37.5% on savings/debt.

Important: too little spend on wants or fun is no good; in fact this can signal long term trouble and 'falling off the saving/repaying wagon'.

Wow, sorry folks but you can see that I have been doing all this again very seriously. What I am puzzling over is how to grow other income streams.

Firewalker

Firewalker

Mega, major frog eating; and very satisfying it feels as well. Today I did follow the Instructions from the book to the letter - got up at 7.06; sat at my dest with my breakfast and without interrupting read and mind mapped the papers I need to get on with a piece of work. I finished the reading for this stage; altogether eight academic articles read and mind mapped in slighly under three hours. And my detailed plan said '4 hours' for the task.

The best thing is that for the rest of the day I can get on with enjoying life with LB and OH. Now what shall we do?

Firewalker

Firewalker

Yesterday we all went to a nearby part and played tennis – well, we were hitting (or not) a ball and sometimes it went over the net. No one in the family is very good at this (although LB is miles better than his parents) but being good is not the object; having fun is. Light and sunshine were absorbed and rest had. It was fascinating for me that I did so much work in the morning and still managed to have a restful day.

Today is Labour Day and I am going to celebrate by not doing ‘purposeful’ work for my job but pushing some of the other stuff I am building. So the plan for today is:

1) Go for a run
2) Finish the book I am reading
3) Clean and organise my study
4) Plan my blog

And do something fun but we shall decide later what this may be.

Firewalker

Karmacat

Hi FW! Lots of thoughtfulness, and lots of fun too, what a lovely mix you've achieved. And the percentages seem to be working really well for you too. I'm with you on puzzling out other income streams, though I'm working on it with the trading and the projected website.

Firewalker

Finally the Universe and OH are listening to my wishes and major de-cluttering is going on. Mainly in the garage, my study and the dining room. I will have to tackly my shoes as well.

The main problem is the garage though - let just say that it is likely that my than three trips to the tip are needed and that this time OH has a car in which one can put a washing machine (will tell you the story some other time).

Now back to work; mind I already cut the grass in the little patch we town folk call garden.

Firewalker

savingwannabe

Ok Firewalker that was just what i needed to hear. Everyone is decluttering. I am going to declutter old toiletries in my bedroom. Another frog to eat. Rebbit.

Firewalker

What a day I have had today! Remember the four things I put on my list to do today? Well, the only one I have managed is to do my study. But, wait...wait till you hear what has been done:

1) Cut the grass in the garden. Had a go at turning the little flower beds on the side but this could not be done – too hard and there is some vegetation that seems to be green there anyway.
2) De-cluttered dining room; including the side cabinet draws. What I found there were things I ‘lost’ about 15 years ago. All was thrown away or put elsewhere (where it belongs). I also threw away an exceptionally ugly present from Mexico – a clay skull with colourful flowers around it. Your basic nightmare from a country with a cult of death.
3) De-cluttered, organised and cleaned my study. Was ruthless and anything that has not been used recently or has outlived its purpose (like material for papers already finished) was put in a basket and will be burned with ceremony. Interestingly I found credit card statements from 2009 that were not opened – yes, this is what I used to do but no more. The real shock came when I heard myself saying that I want to put my stuff in files – OH almost fainted. Now my projects are filed in time sequence.
4) While I was doing all this OH cleared the garage – three car loads were taken to the tip and if you ask me there is more to go. There is probably some stuff that can be taken to a car boot – I want to do this one as a personal development exercise rather than anything else. But the garage is acceptable, an old futons and a water bed we discarded ten years ago were thrown away...Progress was being made. Table tennis is open and later we may even have a championship.
5) Oh, and the washing is drying outside which appeals to my ethical side –saving resources is not only good for our pockets; in fact this is the smallest part of it.
6) In the process of clearing out I found 55 pence and put them in the jar.

Waiting for the bread maker to finish the pizza dough and will be making yummy pizza for dinner – whatever we fancy on, is what we call it.

By the time I go to bed I want to finish at least two more things – read the book and plan the blog.

Is it Labour Day, do you think? Ah, and ‘MSEers of the world unite!’

Firewalker

gilligansyle

I love having washing drying out on the line. Like you say it appeals to an ethical, MSE part of me; but also I think it has a lovely 'clean' smell that I just can't really identify.

Some major frogs dealt with.

Firewalker

Hey, Gilly, absolutely! The smell is lovely; and here is one for Hypno and Savingwannabe - no or minimalist ironing is necessary. Not that I bother with such 'trivialities' anyway but still...

SW, please do not go and rob any banks - not yet anyway and not without me. My plan is to do all this when I am about 70 so that I can go to prison and not worry about my pension and bus pass.

Firewalker