How to draw up a budget - the fun way

Jeremy Hunt has rubbed off on me, so to speak

Trees don’t grow on money. Image by Nattanan Kanchanaprat at Pixabay.

There’s a financial phenomenon called lifestyle creep. It means that when you earn more money, you start spending more money. There’s a sad statistic: lottery winners have more chance of facing bankruptcy within 3-5 years than the average person, and almost a third of all lottery winners will go bankrupt in the end. They’re not used to having money, and they blow through it all in record time.

You might think, ‘That wouldn’t happen to me.’ But I consider myself quite smart (get me!) and yet I’ve fallen into the same trap. (Alas, not after winning the lottery.)

Since I took my lodgers in at the end of May and June, I’ve been earning a total of £2,000 a month from rent and writing, which is £24,000 a year before tax. It’s £20,000 less than the average London salary, but is a lot more than the £300 a month I was earning before I took in my lodgers.

However, after the bump in my earnings, I made a series of ill-advised purchasing decisions.

One of the lodgers started asking for an American-style fridge freezer, a microwave and a dishwasher, and I caved, to the tune of £2,000. To be fair, we did need a bigger fridge, but this ate up my savings.

Then I ran into emotional trouble: when my nan died and Lily moved out, I got depressed and decided to throw money at the problem, so began dropping £200 on therapy a month. My therapist was really nice and made me feel better about everything.

You probably won’t be budgeting in Euros. Photo by Images4you at Pixabay.

I also encountered physical problems: before they moved in, I promised the lodgers I would clean the house on a regular basis, but then the chronic fatigue I’ve suffered with all my life kicked in.