Monday, 11 February 2008


Budget is my word of the month, it is the one thing I really need to work on this month. Okay, I am almost half way though the month but my budget has been top most on my agenda. For years I have tried to pay off my debts but without a real budget. Oh don't get me wrong - I would list all my debt payments and make sure that the payments were being made, I would try and pay extra on my credit cards sometimes to clear them. However I hadn't heard of snowballing or snowflaking and seem unable to come to some kind of ballpoint figure for spending money. I have note books going back almost ten years listing all my debt payments month by month, amounts paid and what my income was at that time. But never but a figure on my personal spending. This I feel was the reason for my failure to really get a handle on my debts and clear them years ago.
In January I decided on a weekly personal spending figure of £50.00, I have to confess that since then I have only once kept under the £50.00 amount. But I am working on it and know that it is do able. My personal spending is for all entertainment, travel, clothes, eating out, gifts and the alike. A very small amount for all the above I know but it is only till I get out of debt. It is okay to hurt if it makes you stronger and £200.00 a month is more than some people have to spend - so I am not complaining.
So my Budget is very simple:
10% Paying myself
22% Tax (Paying the Man)
5% (Giving)
51% Debt
Expenses 2%
10% Spending
The concept of paying myself 10% is from the books Rich Dad Poor Dad and The Richest Man In Babylon. I need to feel that some of my income is mine and that it is not going down some dark plug hole. For too long my income has been like sand slipping through my fingers and carried away by the wind. I have nothing to show for years of income.
Sure I am putting too much aside for my income tax but it is better to have too much than to little. And if you have read some of my posts you will know that I have been using this account as an emergency fund but as always I have been refunding the tax account in full.
I would like to increase the amount I am able to give but don't really think I am able to at this time. Even half a percent would be really pushing it, as I haven't been able to really keep to my spending allowance yet.
Yep, I am paying over half my income each week/month to clear my debts. Need I say any more!
You don't believe me? It is true, my job enables me to live without having very many expenses which is great but I am planning a change of career for next year.


Debt Dieter said...

Are you self employed? My tax comes out before I get paid, so I was wondering why it needs to be allocated in your budget?

LisaClark said...

Yes I am self employed and have the joy of a closer relationship with those lovely folk at the Inland Revenue office.