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Debt-Free Budget in Practice

May 24th, 2010 at 10:51 pm

So here it is:

Rent/Bills: 22%
Retirement: 10%
Car Fund: 8.3%
Internet: 1.6%
Food: 4.4%
Long-Term Cash: 32%
Giving: 5.5%
Phone: 1.4%
Spending: 14.7%

I also use 8% of my Gross Annual Pay to buy Shares in my Employer to avoid paying Income Tax - I have to hold them for 3 years before I can sell. This 8% isn't included in the percentages above as they relate to my monthly take-home pay.

So pretty happy with it overall. The only one I feel a bit guilty about is the 5.5% Giving - I had previously said I wanted to give 10% - but 5.5% is a good start. I only have 14.7% to use on discretionary items which is not a lot - but we'll see how we get on.

Every week I work now, I know that 50% of my money is going to my long-term Financial stability - with an additional 8% going to running current car/buying next car.

Also I'm going to try putting 50% of any additional monies I get (e.g. Overtime, Tax Refunds) into Long-Term Cash and 50% in Discretionary Spending/Slush Fund.

I would like to have 50,000 euro in Long-Term Cash by the time I'm 35 - for a reason I'll go into another time - 4 years to achieve that - will see how that goes ! :-)

2 Responses to “Debt-Free Budget in Practice”

  1. elisabeth Says:

    For your Giving category, don't worry, just try to increase it 1% per year and you will quickly be at 10%. Until then perhaps you could donate some of your time or talents to a charity in lieu of money.

  2. Analise Says:

    Right now you are trying to build up your cash reserves to ensure a solid financial future. I would not worry or feel guilty about donating only 5.5%, especially since many people your age are unable to give anything at all because they need all their income to make ends meet. In the future, you can increase it as your finances permit.

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