Apr 23, 2010
Let’s talk about money
I struggle with money. There, I said it, even despite all the posts about tips on reducing your spending!
The cold hard truth is that I spend over 50% of my take-home pay in one go. My rent payment. If you factor in my utility bills, council tax, and other bills – I pay out almost 75% of my income on bills.
Over at Get Rich Slowly, there’s a post on the Balanced Money Formula originally from All Your Worth. This is what the picture from it looks like:
Even after I pay 75% onto bills, I still have the basic need to eat some food once in a while. I spend an average of £200 a month on groceries for two people. That’s 18% of my take-home pay.
In other words, around 93% of my take-home pay goes on what I would call needs.
Ouch.
There are some basic and obvious steps we can take to make our spending a bit more balanced.
- The other half can get a job. Well, I hate to make excuses, but he’s an immigrant in a small-town with no driving license. Jobs are scarce at the best of times. We continue to try, but this one is out of our hands to some extent.
- We can move somewhere cheaper. We are planning to do this in the next two years. At the moment we are tied into a contract, and the apartment we rent is one of the cheaper ones (and when we picked it, I assumed a second income)
- We can reduce our spending on needs. This is the thing we can take action on now. We can avoid using the heating and cooling systems, we can eat more cheaply, we can stop using so much electricity.
- We can raise our income. Effectively, this means freelancing for me, and doing stuff like gardening, dog walking, online surveys etc for him. Eventually it may mean trying for better jobs and promotions, but given the scarcity of jobs and our lack of transport, this isn’t something I see paying off immediately.
So that’s our situation. I do pretty well with keeping costs down (we spend very little on eating out, ‘gadgets’, alcohol etc), but there is clearly still work to be done.
It looks like you are doing what you can to cut down expenses. Council tax is a real bummer though isn’t it, and don’t get me started on utility bills. When you have cut down to the bone (and generally I find I can always get a little closer to the bone), the only real alternative is increase income. With your job and side business it looks like the burden should fall squarely on your other half’s shoulders. But as you mention that might be harder than it appears. Hope you figure it out. Good luck!
Aye, since writing this post he has had a positive response for a (very) part-time job, and another job interview so fingers crossed things will be improving soon!
Moving to a listed building with single-glazed windows probably didn’t help the utility bill problem, especially with the winter we’ve just had… but the place is so darn nice!