After my week in Morocco starting my yoga teacher training ,this past week has been time to get back to reality. I’ve taken a good look at my February Happiness Project resolutions and got started on changing my relationship with my finances. As I’ve been trying to settle into a freelance way of life one thing I’ve realised has to change is the way I view my money. I no longer have a monthly pay-cheque to rely on and, whilst I might enjoy the various freedoms this gives me, I need to be a bit more self-sufficient and on top of things when it comes to financial matters. This week it was time to tackle the ‘create a financial system’ resolution.
Waking up my financial brain
Shocking revelation – thinking about finances isn’t too fun for me. I am not a numbers person. I really have to switch my brain on and make it work hard if I want to get anywhere with budgets etc. I’m even finding writing this much harder than I would a post on a different topic.
Although not a numbers person I am an organised one. I enjoy feeling in control (as much as I can be anyway) and on top of things. For a long time I’ve felt my finances have largely been controlling me, rather than the other way around. Now that I’ve left my job, and have no steady income, I’ve been feeling the pressure to get things in order. If you read my money story post you’ll know I’ve got some savings and am okay for money. You’ll also know I want to buy a house this year, which means I am actually freaking out about money despite being relatively okay.
So I’m proud to report that this week I managed to create a spreadsheet for managing my finances, and boyfriend and I have got ourselves a joint account.
Creating a financial system
The problems I identified after breaking down the larger problem of “I’m freaking out about my finances” were:
- I have no way to record my incomings and outgoings
- Don’t have a target of how much I need to earn in a year to be okay
- I haven’t got a savings goal
Once the problem has been identified, it’s usually much easier to find a solution.
I’ve created a spreadsheet that, although in need of some tweaking, is a functioning way to keep track of my money. Now, when I say I created it I mean I adjusted it from this brilliant template from Nicola at The Frugal Cottage.
What I like about this budget template is that it has a tab for a yearly forecast, a separate tab for the actual expenditure and income each month and one tab for each month to note down what was spent where. It’ll require some discipline to stay on top of, but provided I do that I think it’s going to be a big help.
Am I feeling happier about my finances?
Creating my financial system is definitely a good step towards happier finances. Knowing how much I need to make over a year to cover my expenses is reassuring. It’s nice to finally have that figure in place, based on going over my expenditure in detail. Having a joint account for shared expenses with boyfriend is also much better. We used to constantly be transferring each other money for bits of food/household stuff the other had bought. Now we have an easy way to keep track of what we’re spending on that sort of thing. Plus, it’s way less hassle to transfer a set amount once a month.
I definitely feel there’s still work to do on making my finances happy though. For one thing, reading Nicola’s blog is making me panic about the fact that I’m not saving for my old age at all. Which makes me realise I need to learn about savings and investments in general. My ‘wise up’ resolution is going to be all about these things.
Another problem I’ve identified that’s causing me some stress is related to the costs involved in buying a house. The question I need to tackle is this:
How much do I need to put aside for the costs associated with buying a house besides the deposit? And, how much of my savings do I want left over after factoring in these costs?
Moving forwards this month I’ll be looking at these questions. I’ll also be wising up on savings and investments and considering if I have a savings goal.