This is my journey through the 30 Day Simplify Your Life challenge. If you would like to join in, you can get the ebook here and follow along.
The official Youtube video for “Where to put your money” week, by muchelleb.
I am working through the challenge in an order that suits me best, instead of directly following the set challenge order. Feel free to do the same!
Day 17: Decide where to put your money
Day 17 in the official challenge is actually ‘figure out what lights you up‘ but I have already done this. So today we are returning to mental decluttering and going for challenge day 19: Decide where to put your money.
The first step is to evaluate your spending habits. I feel like there wasn’t really too much to think about here because I have always been a very good saver. I have always saved at least 50% of my income and been very careful with how I spend the rest of my money. Although, over the last couple of years, I had started to spend more money on clothes, I have reduced this dramatically since starting this challenge. In terms of day-to-day small purchases, I spend a lot of money on public transport to get to and from work (can’t really help that) and try and restrict myself to buying three coffees a week. So I feel like I’m not too bad!
The next step is to write down where you want your money to be going. This is my list:
- Makeup (only what I need)
- Bonsai tools (only what I need)
- Good quality clothes (I now buy clothes very rarely and prefer to aim for sustainable clothes from independent sellers unless it is a basic that I will get a lot of use out of)
- Date night/adventure money (which usually involves a meal, paying for parking, tickets if needed and any related purchases)
- Gifts (I am far more happy to spend my money on gifts for others than on myself)
The next step is to make a list of things you don’t want to spend your money on. Mine is reasonably short because I am already pretty controlled with my money:
- More than three coffees in the work week (weekend coffees are not counted in the limit because weekends are for enjoying and socialising)
- Stationery I don’t need
- Low quality clothes from fast fashion brands
- Hair and face products I don’t need
- Impulsive snack purchases
After this, you are supposed to create a budget that caters for the lists you have just made. I already have a very structured financial process which means I don’t really have to budget so much (it helps that I have very few bills). So this is what I work with (specifics not provided):
- House deposit ~ 60%
- Bills ~ 10-15%
- Holiday fund ~ fluctuates
- Wedding expenses (which will become household savings for big ticket items once wedding planning is done) ~ fluctuates
- Fun spending ~ fluctuates (this is the money leftover for me to spend after the rest is split between the other accounts)
I have provided a range for bills because this fluctuates slightly depending on how many bills I have in a particular fortnight. Holiday fund, wedding expenses and fun spending fluctuate a lot for a couple of reasons. A main one is that I use fun spending to purchase gifts for people so typically I will allocate more to this account around busy festive and birthday periods (meaning less money goes to either wedding or holiday). Similarly, we may have a particularly expensive fortnight for the wedding meaning we have to forego the payment to the holiday fund. However, typically, I will allocate a specific amount to wedding and holiday and leave what is left over as fun spending (which covers the cost of items in my ‘what I want to spend money on’ list).
For some this seems like a lot of accounts but I love having this split because it means I can spend the money in my fun spending account happily, knowing that I have saved up for everything I need. Sometimes it means I don’t have much at all in the fun spending account but I would prefer that over no house deposit!
And that’s it! That was a pretty easy challenge for me. I hope you guys could get something out of it.
Keep smiling and saving
~ Alice Maisie