I’ve gone through my budget with a fine tooth comb to help me answer the question, how long will my current savings last me? This blog post is a deep dive into that process.
I quit my job and I plan to work for myself for a few months. I would like to do this more long term but will still need to do some short term contracting while I build out my own business.
This is not personal financial advice, if you are concerned or have questions, a professional can help you sort your money out.
Back when I first blogged about my lifestyle plan, I used this spreadsheet to help track my budget. I’ve since refined it and removed all unnecessary budget items to come up with my new minimum budget.
Traffic light system
I’m using a traffic light system to measure if each item is essential, could be reduced or a luxury. For example I’ve cancelled my cleaner until the dust settles and I’m considering reducing my health insurance cover. However I’ve already reduced many other expenses to their minimum.
For example, I refinanced my personal loan to be over 3 years for a minimum fortnightly cost of $250.
My minimum fortnightly expenses can be around $1400 to $1500. And 3 months of emergency savings would be less than 6k on a tight budget. So it looks like my 18K savings could last me 9 months before I have to go back into work.
I’d prefer to earn at least 2K a fortnight because this gives me some extra capacity to save for a holiday and pay down extra off my debt.
Testing out my new budget
In the second tab of the new budget spreadsheet I’m noting down everything that goes in and out of my account. I’ll do this for the next month to see if my budget is actually realistic. My last day at work is the 5th of April. So I’ve got a bit of time to practice my new budget.
I’ll post an update blog post when I’ve let this budget run for a few weeks. Have you ever had to tighten your budget?