a.k.a Budget a.k.a dashboard of how
broke rich you really are
Guess what you and I are going to talk about today? MONEY. Yes. Money.
I have learned a few things about money in the last year and here I am sharing them with you. I think I jumped the gun with my Emergency Fund post and I should have started from here.
For those who know, my money plan used to look like this:
Single Source of Income – 100%
- 10% – Tithe
- 20% – Household Expenses x Feeding
- 10% – Giving
- 20% – Investment
- 20% – Recurring Expenses – Offerings, Internet, Date Night, Airtime,
- 10% – Turn Up money
- 10% – Savings
My income was slashed by half recently due to an unforeseen expense. *sigh* When this happened, my money plan looked something like this:
- 50% – Debt Repayment (Long story!)
- 50% – WTF am I supposed to do now?
So, the question is: How am I surviving? Here are a few tips that have helped me re-align my money plan since the beginning of the year.
- Know yourself. You. Your habits. Recurrent expenses. Responsibilities. Desires. Seriously. You need to know yourself. How? Forget the old. Forget it, now. The old money is gone. Focus on what you have now. No Had I Knowns.
- Write it all down
- Yearly Expenses
- Renewal of documents/Licenses
- School Fees
- Professional Membership Fees… etc
- Monthly Expenses
- Internet Subscription
- Transportation (Uber)
- Weekly/Daily Expenses
- Expenses that don’t have head or tail
- Car related expenses – (Currently, this means shoe expenses for me)
- How many streams of income do you have? How much per stream? What are you worth? Where? If it’s zero, that’s okay. Everyone starts somewhere. If it’s 1million, all well and good. 1,000, das alright! Outline all your available monies here:
- Can your number 3 cover your number 2? If not –
- Do you need to cut down on your expenses or earn more?
- Which one is achievable at the moment? Side hustle or minimalism? There is a sense of independence that comes with having your own money or getting paid for something you know how to do. We’ll talk about this some other time, let’s focus on what we have now.
Now, you have written down the facts. Let’s put it to work
What should your money plan look like?
If your income is monthly/weekly or as-the-deal-clicks, it does not matter. We still need to plan. Why do we need the plan? Because you need to know where your money is going. There are a few money planning recommendations I like (I always work with percentages)
- The Angelina Jolie Way – Save 1/3, Live on 1/3 and give 1/3.
- The Must Save Way
- Living Expenses – 70%;
- Long Term Goals – 20%;
- Short Term Goals 10%
- This one works too
- Tithe – 10%;
- Invest – 20%;
- Living Expenses – 50% (Rent is accounted for here. If you pay your rent annually, save this in a separate account)
- Do what you want – 20%
- Every Naira Has Work Money Plan
- Save 50%; Live on 50%
- Don’t be like me. Your debt repayment should not swallow up your income like that. I was so caught up in the moment, signing post-dated cheques and It didn’t hit me till I got home. I cried eh! Like a baby.
- You need a template for your budget? Check here
On the next edition of the Money Series, we will talk about how to stick to the money plan you decide to build.
Carry out all the steps and choose a money plan that works for you – It is pay season, so you can make the most of this. Share in the comments section which of the Money Plans you can use based on your Income now.
Disclaimer: All these ideas, thoughts are from my head – books I have read, life experiences, amebo work… Yes, I work in a bank, but I am not a Professional Accountant, Money Manager or worevs. For professional advice, contact a professional. I am just sharing the things that have worked for me and others that I know in the past.