How We Manage Our Budget (Updated)

I first talked about getting our accounts in order back in May. We had a system, a seemingly organised system, but it wasn’t working out too well. I think by simplifying our accounts, and closing a couple of sinking fund/savings accounts, I’d made things a little more complicated. I’m all about simplifying things, but not if it causes you a problem, so I tweaked things a little.

We now have three saving accounts attached to our checking account (travel, gifts and everything else) and I will be using cash for grocery and miscellaneous spending. Hopefully this new system (+ budget) will work perfectly for us in our new home.

OUR MONTHLY BUDGET:

MONTHLY BUDGET

The spreadsheet shows our planned monthly expenditure + how we save on a month by month basis for annual expenses and travel.

ACCOUNT SET UP:

CHECKING ACCOUNT
TRAVEL FUND
GIFT FUND
EVERYTHING ELSE FUND
EMERGENCY FUND (TAX FREE SAVINGS ACCOUNT)

NOTES:

  • The gift, travel and everything else fund are attached to the joint checking (to provide easy access)
  • Our long-term Emergency Fund’s are kept in tax-free ISA’s
  • From the checking account we pay the bills and fund our online savings accounts.
  • All our automatic bill payments (Direct Debits) are set to be paid between the 25th and 1st of every month and are, where possible, the paper free kind.
  • Grocery is paid for in cash.

I think that’s it. Now I’m just hoping the system works.:)

Spending Diary (20th July 2014)

Monday 14th July
- £45.79 Grocery
- £12.64 Beauty Items

Tuesday 15th July
- £6.20 Postage

Wednesday 16th July
- No spend day

Thursday 17th July
- £17.10 Fish & Chips

Friday 18th July
- £39.50 Ikea
- £26.76 Grocery

Saturday 19th July
- No spend day

Sunday 20th July
- £10.99 Cable (for Mum)
- £13.85 Grocery

Yikes that’s a lot of spending. It’s obvious that going our each day (like I do when I’m here), leads to extra spending. I even fell into the Ikea trap on Friday. I took Mum for a browse and ended up spending nearly £40! Must do better this week!

It’s time to get our focus back!

You guys are probably sick of reading about our house move by now. I know I’m fed up writing about it! All I want to do right now is get going on the fun part – the decorating. But I have to wait, hopefully just one more week.

Anyway. Financial Freedom and Focus!

Over the last few days/weeks M and I have had a lot of discussions about the future, and where we go from here financially now that the mortgage is gone. We know that our goal timescale for Financial Freedom is ten years, but we’re slightly undecided of the exact financial path we’ll take during those ten years. However for the now we have to have something to work towards and focus on, which means having a set of written down goals. A plan. It’s the only way we can stay focused.

And here’s what we’ve come up with so far. Of course we’ll need to break it down a little every year, but this is exactly what we need to re-focus.

TEN YEAR FINANCIAL FREEDOM PLAN: JULY 2014 – MAY 2024

  • Invested assets at 25% of goal by December 2016
  • Invested assets at 50% of goal by December 2019
  • Invested assets at 75% of goal by December 2021
  • Invested assets at 100% of goal by December 2023
  • M retire from f-t workplace

To help us on our way I’ve done a lot of work on our new budget set up, and organised all of our bank accounts. I’ll talk about this more when I’m back on my computer. (The laptop I’m using right now hardly works and so posting spreadsheets is out of the question lol)

It seems simple enough! Ha! The longest step is the move from 25% to 50% because we’re not starting at zero for the first step. Anyway we’ll see how we go. At least for now we have something to focus on, which was our main aim.

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