Thursday, June 28, 2007

Spending - some controls needed (1)

This month's spending has been horrendous due to a number of reasons:

1. we went on holiday - which had been largely budgeted for but it still hurts to see the cash leave the bank account. The fact that the holiday cost more than expected was a reflection of the original budget being inadequate rather than a lack of control on the spending side;

2. we (meaning me) went a little berserk with the shopping while on holiday buying new carpets and paintings. We will have to pay for the latter to be framed. In effect, I have spent about twice my annual budget for luxuries in a single month;

3. a succession of minor routine non-routine expenses for items such as medical expenses, insurance premia, a birthday party for one child, increased school and tuition expenses (another child will start school in August) which collectively have had a significant impact on this month's savings. Some of these expenses will be recurring.

With the latest property purchase due for completion in the first week of July and refurbishment and mortgage payments starting immediately after completion, I will also be bleeding cash until the refurbishment has been completed and the property has been rented out.

I have revised the budget for the second half of the year and it is not a pretty picture to reflect both the June blowout and the expected recurring increases in expenditure for the rest of the year. Although the savings rate will still be "high" by general standards it will fall short of what I had hoped for.

I will be spending some time over the next few days working out where I can cut some expenses.

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