I have drawn up my annual budget for 2009.
The expenses side was quite straightforward as I expect little change in most areas. The noticeable exception is our holidays where we spent relatively lightly in 2008. This year I have budgeted for a slightly more expensive Christmas holiday for the family and also a short, children free holiday for mr & mrs traineeinvestor. I have assumed small increases in school fees and that the rates waiver given by the HK government will not be repeated. Overall I have budgeted for a 4.9% increase in expenses. My tax burden will be higher this year (I have just paid the first installment).
As I do not earn a fixed salary, there is always an element of uncertainty associated with my budgeted income. The degree of uncertainty in 2009 will be higher than in previous years due to a change in jobs which will take place shortly. Quite frankly, it is difficult to predict my level of income in 2009 with any degree of confidence. Accordingly, I have arbitrarily assume it will be the same as in 2008 (which may prove to be either conservative or an exercise in optimism).
My savings rate is likely to depend more on my income than my expenses. Given the uncertainty associated with my income, my savings rate is also something of a guess but I have (again arbitrarily) set my self a mental target of 50% or more of pre-tax income.