Thursday 2 August 2018

Financial planning

I have never really been one for budgeting, but the recent Chateau improvements have been so painful that I have been forced to actually keep track of outgoings. I have subsequently discovered that no matter how carefully I map things out it is inevitable that something comes along out of the blue and ruins everything. This month it was our annual home insurance policy. I opened the banking app on my phone expecting to bask in the rosy glow of having the balance down to the penny, only to discover I was massively overdrawn again. Naturally I could not find the latest paper statement, and it goes without saying that I had forgotten the password for online banking to access the pdf ones. And then in trying to remember it I obviously failed miserably and ended up locking the account.  This meant a phone call to an anonymous call centre and being asked a ton of security questions – and all of this before 7am – before I could finally get to the bottom of why, once again, my financial planning had been an abject failure.

I don’t know why I was surprised. I’ve been tracking our daily cashflow (on a spreadsheet of happiness.... well, unhappiness actually) for about nine months now, and not once have I ever been right. If I had gone with my original forecast of where we would be by late July 2018 I would have been extremely cheery. As it is I am downright depressed at how quickly money seems to just vanish. I keep hoping I might be a victim of fraud but actually it is just me and my inability to remember anything or actually save a dime. Each month I naively line up a move of cash from the current account to a savings account, in my mind watching the nest egg grow, and then each month what actually happens is that I need to take money out of the savings account to top up the current account. Luckily I had saved up a bit in happier times as otherwise we would be in a fair amount of trouble.

The biggest drain has been the renovations. Even though the builders left fully seven months ago, the state of our finances suggests they must still be working up on the roof somewhere. I love the new space that we have, but if someone had told me before we started that the financial implications of having it done would stretch for decades I might have had second thoughts. Initially I predicted things would be back to normal by March. March then became May, and shortly afterwards June. This is a result of various things - it is apparently common knowledge that whatever you budget for a building project will come in at roughly 80% of what you actually end up spending. I can now confirm this is true. Things just come along that you never would have expected - the bed not fitting up the new stairs was a classic, as was discovering that the quote didn't include the bathroom. Or the windows. So now my spreadsheet suggests November, which realistically means March 2019 as all sorts of nasty things come along in January , including the tax man – well, tax men plural to be more accurate as I unfortunately have two of them to satisfy and they both appear to delight in wrecking my savings ambitions.

I am not looking for sympathy. Times remain tough, but as I work in financial services I am presumed to be immune from austerity and equally, you might think, to be able to actually engage in accurate financial planning. To a certain extent the really hard choices are ones I don’t have to make and for that I am grateful, but I am really annoyed that even with a decent job I just can’t stabilise the downward spiral. Anyway, must dash, got some holidays to book.

This is a not a real booking as I'm sure you realise, I would never spend anything like this on a trip. I just found it amusing that on an $11,000 fare you could 'save' as much as $37. 


  1. Take it from me Jono, you don't want to get sloppy with this sort of thing. For a start, a life's earnings are finite. It doesn't last, it ends. And it ends when you stop earning. Are you going to work and earn forever? can you guarantee you will have the job that pays so well even tomorrow?

    Budget properly. A great big fat pay packet treated carelessly is a waste of an opportunity. The opportunity is total freedom from wage slavery. All the trappings and goodies you buy with the money are simply distractions to keep you working. In the meantime, the clever sods in the places you work are getting you for nothing.

    The budget sheet should be annual net income - Total.
    Minus annual expenses then divide by 12.
    Minus monthly expenses, then multiply by 12 and divide by 52.
    Minus weekly expenses.

    What you have left is what you can spend, or not to remain solvent.

    Word of caution, the budget needs to allow for you living to 100 without earning from a job.