2.2 The Excuses – Lack of money (part 1)
You must gain control over your money
or the lack of it will forever control you
Dave Ramsey
I am starting with the excuse “Lack of money”. The reason why is because, I literally feel that my world, at the moment, are controlled by them. And I hate that feeling. Furthermore, I have this idea that trying to save this planet, also cost a great deal of money, otherwise I wish to believe that I myself would have already made the necessary changes in order to help this planet.
To get me started on this financial journey, I have borrowed a few books on the library and they all start with the same advice.
Step number 1 – Get an overview of your economy.
The last ten years my economy has been a bit chaotic, because my income has been uncertain and so has my expenses due to several moves. I have not been able to plan or go into dept with my economy, because financial for me, it has literally just been about survival. But last year I have had a secure income. So, it is time to get an overview.
The first thing I did was to print out my account statements for a year and go through them to get and overview of my yearly income and expenses. After that, I found out how much debt and savings I had, in order to get the full overview of my situation.
The numbers that I am calculating with are the average numbers from 12 months and I write in percentages, while I am not too comfortable with putting the direct numbers out there for everyone to see. I am a one income household with three children.
All my incomes after taxes, are therefore what I calculate as the 100%.
My debt is -210% and my savings are 24%.
My fixed costs monthly such as rent, electricity, heating for the house, car mobile, internet, insurances, tv-license, and payments for debts are in total -29 %
This means that the percentage of money available to me each month is 71 %
According to my borrowed economy books that’s not too bad at all. They all say that around 45 % is a good percentage of the amount to have available before variable expenses. And yet I am using the excuse, that lack of money is one of my reasons for not making the changes for “Keeping Mother Nature Happy”.
So, something is not quite right here, because at the moment, my savings are vanishing with a speed that is so rapidly, that I can’t quite keep up.
Guessing that the problem is in the variable expenses. Here is an overview of them.
Food
Fast food
Diverse
Household
Animals
Children
Savings for the children
Gas
Fees from the bank
Other
In total
Balance
-29%
-1%
-12%
-9%
-3%
-10%
-8%
-2%
-1%
-1%
-76%
-5%
A negative balance each month on -5%. Is still to much, while I am spending more money that I am earning. Furthermore I have very little savings for myself which needs to change, if I want to get out of “Money survival mood”.
Step number 2 – Analyzing my expenses
The highest post in variable expenses is “Food”. I knew that the food post was pretty high, because I primarily buy organic food, but still to be -29 % for 1 adult and three children. That’s a lot. Going through my economy books, I read that a family with two adults and two children uses around 21 % of their money on food.
If I add the money spend on fast food and put together with the food post it becomes -30 %. So there is a little way for me to go to hit the 21 % which is the general household spendings on food.
The second highest post is the “Diverse” one, and I have divided the post into the “OK”, the “Argh” and the “What happen here” categories.
Post
The "OK" post
Clothes
Tours out of the house
In total
The "ARGH" post
Office
Webpage
Courses
Health care
In total
The "What happen here" post
"Me" post
Books
House searching
Gardening
In total
In total
% spend a month
-0,22%
-0,31%
-0,53%
-0,90%
-0,55%
-3,59%
-1,60%
-6,64%
-2,59%
-1,22%
-0,29%
-0,73%
-4,83%
-12,00%
The first categori the “OK” post are clothes and tours out of the house. I rarely buy new clothes, because the girls inherit close from their older cousins and I have saved a lot baby clothes for my son, that we got when the girls were small. As for myself, I buy second hand clothes. My children are at home with me, so even though I try to find free activities for us to do, we sometimes also need money to pay for tours out of the house. And I am ok with that.
The “ARGH” post is where the post in themselves are OK, but where the amounts spent each month are too high, especially since I have balance that says -5%.
The “What happened here” post, are just things that shouldn’t have been spend money on. The “ME” and the “Books” posts were supposed to be none existing at the moment. While I treated myself with some courses that were quite expensive and takes -3,59 % of my budget.
The 3rd highest post is the “Children” post. I have my children at home and this means that I don’t have expenses for daycare etc. But, having them at home also means that we need to have some learning materials and other stuff for them to be activated with during the days at home and diapers. This is why it is -10%.
The “Household” post is really high at the moment with 9% while I recently bought a new dishwasher and washing machine. Furthermore I buy most of my household products in special stores to avoid unnecessary chemicals, which costs. In my economy books the amount to use on household products is estimated to between 4% -5%, so there is something to gain in this post, if nothing more needs to be replaced.
“Savings for the children” at -8 %. A part of my income is an amount that comes from the children’s father and I had just decided that those money and some others should go into the children’s savings. And if they needed anything, there would always be money for it. The money will just stay on their accounts for the future and it gives me a great feeling of security, that there is always money available for them.
I have prioritized to have animals in my life. I have animals bought from the shelters, so that I don’t support trades with animals. I believe that animals should be free and have their own rights just like humans, but the world is far from that point. So, I have filled my house with all the animals I am allowed to have, a cat and two guinea pigs, hoping that they are happy to be here. The guinea pigs are quite new and the investment in equipment for them, was expensive. I wish they could have been free range, but with a cat, it is just a no go. I therefore really wanted to give them a large indoor cage, where they could exercise in and also to have an outdoor cage, to make them feel the earth underneath their feet, the sun on their body and the wind in their fur. The Animal post is therefore pretty high at the moment – 3 %, due to the starting equipment for the guinea’s but also because they are pretty high cost, compared to the cat.
My car is my freedom, and I love it. It brings us on weekly adventures and it is just a great helper in my everyday life, making it run a bit smoother, when living alone with small children. I have managed to keep the gas money a very small part of my budget -2 %, while I have a weekly amount of money available to us for gas. And having a very flexible everyday life, I am able to plan how much to use the car. When the money for gas is done, then there is just no more driving.
“Fees from the bank”, is a very small amount of money each month – 1 %, it is just something I really dislike paying for, because I feel like I don’t get anything in return for that money.
And the last post is “Other” which contains computer assistance, library fines, cash withdrawals etc. and it is -1%.
So, to sum up, I have now analyzed my overview of my economy and it has really been an eyeopener, and I might need a few days to think about it. But I have achieved my goal with this post and that was to get an overview. From now on, it can only go forward for me financially speaking, right?
Have a nice day/evening/night 😊
Bibliography
1. Jensen, Karsten Ingemann. “Financial surplus for family, free time and spendings”. (1. edition 2016) Akademisk Forlag.
2. Frankel, Lois P. “Nice girls don’t get rich” (1. edition 2007) Schultz Forlag.
3. Juul, Gustav. Frost, Louise. “More economy for the money”. (1.edition 2013) Peoples Press.
4. Reissmann, Mette. “Control your economy”. (1. Edition. 2010) Nyt Juridisk Forlag.