Become Financially Independent

I’ve paid off some of my N.I contributions. But I still have quite a big shortfall. I’m going to wait to finish paying it off, though, because it’s not my biggest priority at the moment and I need to wait until I enough money that I won’t miss it.

But: unfortunately, I was mistaken about being on emergency tax! So no tax refund for me. How annoying!

Otherwise, I need to get a new job but somehow I haven’t managed to bring myself to start job hunting yet. It’s because I know I want to do something different but at the moment I don’t have a 100% clear idea what, or how I’m going to go about it. What I need to do (and probably the sooner the better) is brainstorm the kind of work I’d like to do and how to find it!

I’m in the middle of two projects to do with finances:

1. Starting to pay voluntary National Insurance contributions (because I had shortfall) so I should end up getting a full pension when I retire.

2. Getting my tax back for the last tax year—my employer still has me on an emergency tax code! Grrr! Hopefully next time I write here I’ll be about a thousand pounds richer through tax refunds!

And I’ve been putting money in my ISA every so often. AND (at least at the moment) more money is going into my bank account than out!

It seems that over the last seven months I’ve spent on average 2109 shekels per month on ‘essentials’. For the first four months of this year it was averaging at more like 1294 shekels per month but from May onwards things got a bit more expensive what with moving house and going on a seven week trip which took in two plane tickets. Maybe plane tickets aren’t ‘essential’, but anyway… I expect the ‘essentials’ will get a little cheaper from now on.

I’m not sure what’s happening as regards my debts to my boyfriend and his dad (more plane tickets). I’ll have to ask him about that. Somehow I feel like his dad won’t accept the money back anyway. He’s probably forgotten all about it. If he considers that the money was a gift then, although it doesn’t exactly harmonise with the whole ‘being financially independant’ thing, it does mean I can start afresh and be considerably less in debt.

I read the book, Sorting out your finances for Dummies by Melanie Bien. I found it extremely helpful and would recommend it to anyone who lives or banks in the UK. I also moved my savings into a tax-free ISA so I’ll start getting more interest on them. It wasn’t actually the best product on offer but I ended up doing everything at the last minute. Note to self: it takes more than two days to research and open a new bank account.

Now I’m going to look at the book and see if there are any other things I can do in the near future that will get me more money! I’m also going to try and work out a plan for saving, based on what I think my big expenses will be over the next five years.

Okay, last month I spent about 1300 shekels on necessities but so far this month, even though it’s almost over, I’ve only spent 715 so I’m going to keep monitoring this to come up with some kind of average figure.

I’ve started a record of how much money I have in my bank accounts and am going to update it every month. It feels so good to just know these things. Previously I’ve always been completely clueless about it. And it looks like I’ll be able to pay back my boyfriend’s dad for the plane ticket within the next month or so. Whether he’ll accept the money or not is another matter!

I compared the original budget I made with the one my boyfriend helped me with and it’s funny: we both came up with the same figure for what I should be earning per month… only his budget included me paying back my debts and in my budget all that extra money just went on fun stuff. Jeez! I am being very strict about my ‘fun’ spending but have still manged to eat a little way into next month’s fun budget. But I’ve got nineteen private students now and I guess if I keep earning good money I can afford to increase my fun budget a little bit.

The next thing I want to do is find a good book about managing personal finances and read it. I hope I can find something that is relevant to countries other than the U.S.

I feel like I’m progressing with this goal. Six or so months ago I devised a tentative budget plan for myself and, more recently, my boyfriend helped me devise another one. I haven’t got round to comparing the two budgets yet but I want to do that soon and come up with something more concrete.

I knew that when I got back from travelling I would want to get more work. I was getting sick of not having much money and having to rely on others. I was tired of never saving anything. Since I got back I’ve been advertising and I’ve got five new students (I teach English, privately) so now I have fifteen students in total. I’m really happy about this; I’m earning about twice as much as I was before (charging more!) and putting money in the bank. It also just feels good to be out there doing stuff, being a bit less of a homegirl.

My boyfriend and I also decided that we would have a ‘fun budget’! Yes, it sounds a bit dorky but it definitely makes me feel a lot more in control of my spending and less guilty about spending money on fun stuff because I know it’s coming out of my allotted amount.

I’m even using Excell to keep track of my accounts, recording my earnings and spendings for each month. Last month I spent about 1300 shekels on necessities and 225 shekels on fun. This month I’ve already slightly exceeded the fun budget but not by much – and it was worth it!

So, the next thing to do is to compare the two budgets…

I had to borrow money to pay for a big trip and would have struggled even more without a surprise tax return. I just didn’t plan carefully enough. If I had gone on the trip alone, I would have simply saved until I had enough money and then gone. But going with my boyfriend meant that we had to take the trip when he was able to do it (I’m able to be much more flexible) and I didn’t really let the fact that we were working to a time frame affect the way I saved. I knew I could rely on my boyfriend for financial help if I needed it – so I did. In the end it made me feel less self-sufficient, which is a little bit like being a victim, being dependent. It’s strange how I felt much more capable of looking after my own needs and being independent when I wasn’t in a relationship. I struggle to maintain this independence once I feel like there’s someone who will take care of me. Perhaps I need to remain accepting of help without expecting it or coming to rely on it. I would like to be more financially independent. In order to do this I have decided that I have to:

1. Work out my current expenses per month.

2. Predict future expenses, e.g. for the next five years.

3. Work out how much money I would like to be saving, per month.

4. Know how much money I actually have at any given time. Keep a record of it.

5. Read a good book on managing your personal finances.

6. Work towards equal distribution of expenses between my boyfriend and I.

7. Pay off debts (to my boyfriend, his dad, and my parents).

8. Take steps to make sure I’m earning enough to cover my expenses, plus saving.