Wednesday, 11 April 2007

Where we stand...and what we're doing

Oh boy am I in a bad situation.

  • Checking Account Balance: -£183.07 ($359.45)
  • Savings Account: £0.00
  • Tax Free Savings: £0.00
  • Credit Card Debt: £0.00
As you can see I am currently broke. I am one month behind on my rent, and I don't get paid until the end of the month. Oh yeah... I need to save £5,000 in 6 months. Yup that's $10,000 folks.


You may be wondering why I would set myself such a ridiculous goal. $10,000 in 6 months! In 6 months, I'm moving back to Florida. I've been in the UK studying and working for the past 2 years,my girlfriend and I both decided it's time to move back (more on that subject later). The thing is, I definitely do not want to move back without a good financial cushion (and lets face it, my current financial situation is no cushion....more like a ditch filled with poison tipped spikes). The plane ticket is bought, the accommodation is set (I'll be paying the mortgage on my dad's house in Florida) all I need is to buckle down and set my sights on my goal.

How the heck am I going to save $10,000 in 6 months? I would need to put away $1,666 each month. I don't know about you, but after rent, gas, groceries, electricity, and water... I don't have $1,666 left.

1. Favourable Exchange Rate

£1.00 = $1.97

The exchange rate has been stable since December usually fluctuating between 1.95 to 1.97. Based on these rates $10,000 is equal to £5,092

In order to save £5,092 in 6 months I will need to put away £848 per month (still a hefty amount. but more doable)

2. Living To A Strict Budget

I make £1,024 per month. My goal is to put 30% of that into my Tax Free Savings Account ( I can put £3,000 into this account per tax year)

That leaves me with £716.80 to pay our rent, pay our bills, buy our food, put gas in the car etc... Obviously with this amount of money to work with, we need to live very frugally. I will post our budget in another post so you can see exactly where everything is going and how much we're spending.

3. Finding Additional Sources of Income

I am a professional web developer by trade, so it is easy for me to find people who want to learn how to make websites and tutor them in the dark arts of web design. I use craigslist and gumtree to advertise my services for free. Currently I have 1 student and another who is interested. I charge £20/hr and put that money directly into my Tax Free Savings.

Being a web developer freelance web projects are of course a potential gold mine. However, this is a very over saturated market and getting contracts are not that easy. I will make more of an effort to acquire more freelance contracts, as this is going to be the area I will make substantial sums of money (£350 - £1500) that could go directly into savings

The key here is to set a good portion of your monthly salary into savings and live within your means. Any additional income you may acquire should be ignored and placed into your savings immediately.

The question is can I do it. Can I save $10,000 in 6 months?


Cents You Asked said...

Most of my freelance web work has come from small businesses after meeting and talking with the owner. Putting yourself in places where you can meet this type of person is the hard part. Maybe visiting a local professional organizaiton would work?