Part of the reason for writing my blog was to cover topics i feel most passionately about. Those things being money saving, frugality, life hacks, technology and a few other bits and bobs. I’d thought I’d kick off my writing about money by showing you all how I arrange mine.

Now given the public nature of the internet I’m not going to discuss figures, I will however discuss percentages as these don’t give my salary away! So come 2008 I started to look at the budget I had set up in 2007. To much money was wasted and it was time to evaluate my losses.

This coming year will be potentially tough. I am going for a job this week and if I am lucky enough to get it I will have to start paying rent on my own (Current flat is a reward for doing my current job). I got a job this week so I need to think about the 3-6 months between current salary starting and new one coming in. This essentially means I have no cash flow, well there is a little, but it is cash flowing out. I therefore need to be extra careful for the first 6 months of this year.

This post shows a pie chart of how my outgoings/free cash is currently organised. A few of the categories had to be combined because they formed such a small percentage of the chart it wasn’t worth displaying them separately. The pie chart represents what happens to the income from each paycheck. As you can see a good proportion goes to investments which I can utilise for things such as stocks and shares. The current investment sum however will be used to fill as much of my new ISA (tax free savings for the american readers) this coming April. A good chunk goes to my emergency fund which given my approaching new salary i need to increase to £13,800, a 57% increase from my current goal. However the impending increase for February 2008 for the emergency fund is due to the lack of income that is fast approaching in June. Therefore given the relatively large amount of ‘free money’ I have i’m going to increase my emergency fund by 100% between February and June 2008. 

Part of my new job also includes a good pension plan so I will maintain the current payments that I am making now until I start, there is no need to increase at this point given the hardship I will soon face. I also have a large holiday fund which I will continue to maintain. However, I’ve decided it would be wise to decide upon an upper limit for this account and then let the excess overflow into other accounts. The other savings section represents money put aside for Christmas and birthdays. These figures don’t need adjusting as they were determined in January and were fixed sums that I know I need to achieve. The expenditures represents any monthly subscriptions and bills I have. I am aiming on reducing this by 14% by changing my mobile plan given O2’s new iPhone tariffs being released in February.

In all this is so far proving to be an effective budget, frugality skills will help me to use as little of the ‘free money’ I have available on things I don’t need, hopefully feeding this money into my emergency fund which I will live off come July 1st 2008. Come next months budget review I will be giving you comparisons of January and February and where I saved money and how. Please stick with these articles as they will only improve as the data collected grows.

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