Me and my husband are in our early 30s. Our upbringing wasn't the best, and our parents had a very unhealthy relationship with money. After years of dealing with depression and making stupid financial decisions, we (particularly me) are finally starting to grow up and take budgeting seriously.
I would like to check that I'm moving in the right direction, and see if there is anything I may still need to learn about or take into account. I'd also like someone who knows more about this to assess how bad my situation is. I started using YNAB and have been reading this sub and watching their videos. Note: I am in an European country, but I tend to find a lot of the advice on this sub to be useful, even if there are some differences.
Here's our current situation:
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living together, no kids, one cat
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I am working from home as a freelance programmer. This means highly variable income. On a great month, I can earn 5-6000$. On a bad month, it can be as low as 1500$. The average is probably around 2800$, and I need to pay around 40% of that in taxes. So I get to keep around 1700$ a month.
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husband is studying something that will bring a lot of money when finishing. It is free and he is even getting money from the government to do so, even if not much (yay socialism). He gets 700$ every month. It's pretty demanding, so he can't currently get a part-time job or do freelancing, but he has plans in that regard for summer/next year.
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no debt (got some good clients these past few months. Managed to pay off a couple thousand credit card debt)
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no savings (about 1000$ in bank account atm - will disappear by end of month)
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pension is handled by the state. At retirement age, you get a fixed amount regardless of what you do. Private pensions are also a thing, but not mandatory.
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we have free healthcare
Here's our expenses:
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rent and utilities: 1150$ (actually quite cheap, the only alternatives would be moving to an old apartment in a shitty part of town - and moving would cost at least 3000$, or having roommates, which neither of us believe we can live with)
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internet: 40$
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phones: 38$
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transportation: 200$ (public transport pass for husband. We don't have a car, it would be more expensive)
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groceries: 400$ (working on reducing it)
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medical: 250$ (ADHD meds+therapy, I find it nearly impossible to work without them)
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company expenses: 50$ (software subscriptions etc.)
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cat: 42$ (includes health insurance and yearly vet visit+vaccines, decent food bought online in bulk and limited toys)
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smoking: 100$ (bad habit, trying to quit)
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media licence: 30$ (state tax if you have internet or tv)
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fun: 100$ (we sometimes buy video games, going out etc. Working on keeping it at a minimum, but won't be able to cut out entirely)
Total: 2400$
So we're pretty much barely breaking even.
Here's where I went wrong in the past: whenever a client would pay me, I would be like "woo look at all the money in my bank account! Let's go buy XYZ to celebrate! We can afford it, and surely I'll get even better at this and make more money in the future!". Or "I can afford to take a break, play some games or do some cleaning, work fewer hours for a while".
Then taxes happen. Or I don't find a client for a couple of weeks. Or a client is late with payment. Or I get a huge dentist bill. Or the water pipes burst in the apartment complex and we suddenly have to pay 1500$ (that only happened once in an old apt) And that's where the credit cards come in.
My husband is a saint in this. He rarely buys anything (other than the occasional video game). He kinda desperately needs new clothes at this point.
I have started eliminating my old way of thinking, planning more for future expenses (I wouldn't even think about taxes or cat health insurance before the month it's due). Using budgeting software helps me realize that although my bank account is "bursting", all that money will be used for something.
So, the advice I've given myself is:
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stop buying things you don't need. You have boxes full of impulse purchases you've forgotten about! Also, sort through them and sell some (even if most of it is worth under 5$).
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stop taking days off unless really needed. Work every weekday, the discipline is important even beyond financial reasons.
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focus more on building a passive income stream in-between clients, instead of just anxiously waiting for more work. I have a few app ideas I've gotten started on.
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continue monitoring where the money is going, eliminating anything that isn't important.
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make a meal planner. Enter all usual meals in software like Paprika and see how much they cost. Plan cheaper recipes you like more often, and make the expensive ones into a special treat.
Thanks for reading my novel.
Do you have any other advice for me? Am I overlooking something, or being naive in some way? How bad is our situation, realistically?
Submitted April 06, 2017 at 05:13AM by stupidquestionsineed http://ift.tt/2p4Cvqw
