Well after a tumultuous October, I’m glad to welcome November to the books.
Let’s walk through the figures.
November 2021 Budget
I’m allowing myself an income of £4,000 this month.
Here is what I’m going to do with that income.
Of that £4,000, £2,000 has been set aside to buy assets—in this case, a mortgage deposit. (Even though a house isn’t an asset, for my purposes, I’ll consider it as such until I have acquired it.) This is also to comply with my policy to save half of all my income to be used to acquire assets.
Meet My Liabilities
That leaves me with £2000 of my income for spending on liabilities—which in my case is everything I need to do with money this month that won’t directly put money back into my pocket i.e. living expenses etc.
I had saved £250 from last month to contribute towards big liabilities I knew I would have to meet this month. For example, my car insurance payment (£370), my car tax payment ((£210), and starting repayments on the money I loaned to myself last month (£60 per month). Those expenses total £640. Clearly that £250 I brought over from last month won’t be enough, so I know I need to find £390 more in this month’s budget to meet those expenses.
I had £24.40 left over from last month which I can also spend in this month.
I spent £360 on my own personal credit card (issued by the Bank of Myself), which you won’t see on here, but is the reason I have to repay the £60 per month mentioned above.
All in all, I have a spending budget of £2,274.40. £640 of which is already accounted for by the big ticket items mentioned above. That leaves me with a total of £1,634.40 to spend on living expenses this month.
£1,634.40 is the lowest ever run rate I’ve set for personal expenses. I know it is doable because a lot of people in my position (and probably with more obligations than I) live on less than that. Up until now, I haven’t been able to do it. It will be a challenge for me. There are things I still want to do this month like getting back into working out at the gym and eating out with friends which all cost money. I’m going to have to take a hard look at all that I’ve got on and see where compromises can be made to meet this figure. I know for sure that if I do nothing, and keep living like I did last month, I certainly won’t be able to do it. But if I’m proactive and take steps to cut things or uncommit from things then it is entirely possible.
I want my normal monthly expense run rate to be less than this—ideally, around £1,300 so this is a challenge I have to start to rise to.
Let’s go November. Please be kind.