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An Infant Blog about Financial Independence – Finding My Niche

If you haven’t noticed already, this blog is pretty new. I’ve been an active member in the FI community for years. Whenever the thought of creating my own blog crossed my mind, I always talked myself out of it quick. I didn’t think the world needed another blog on personal finance. It’s a saturated market, readers are picky, most topics are covered and there’s no real need for another one.

Many blogs are written by people who are better writers and smarter than me.

So what made me start Do You Even Budget?

It’s like an itch. An itch to get my thoughts out into the world. To share my view-point. To share my problems and my solutions. I’ve done it so many times in the comment sections on blogs and youtube videos, on forums and in real life, but I’ve always been a visitor. A visitor in someone else’s home.

I wanted to invite you to hang out at my place. To connect with you on a more personal level, to really show you who I am so I can get to know you better as well.

There were times when I wanted to expand on a subject, but felt the need to stay on topic out of respect for the poster. There were times when I wanted to show people how I approach a problem, but they weren’t there to read about me, they were there to read about the blog owner, or the video creator.

So that’s why Do You Even Budget was born.

There is one aspect of FI and personal finance that I plan to cover in detail in future posts. Mental health and money. How to handle your finances when you’re suffering from depression and/or anxiety. As an introverted woman diagnosed with generalised anxiety disorder and depression, financial independence, or just personal finance in general, can be so difficult.

Lastly, if you happen to stumble upon my corner of the interweb, is there a topic you feel is not talked about when it comes to Personal Finance and FI? I’d love to hear your thoughts.

 

 

 

Why Everyone Needs To Make A Bare Bones Budget

You can download the Free template here: Bare-bones-budget

I first heard about a Bare Bones Budget when I was working at a grocery store in central Stockholm. It was my first full time job and it was awful. Every day I encountered frustrated parents, disgruntled office workers, desperate teenagers and depressed pensioners. Everyone had to buy food. Everyone had to interact with me, and if they were having a bad day, I was often made a target.

Don’t get me wrong, some customers were wonderful, but after being yelled at for scanning items too quickly, for looking at someone the wrong way or for simply existing, it was hard to remember the good ones.

I had a coworker named Charlotte who was the opposite of me. Always cheerful, always smiling, always laughing. I remember sitting behind her, watching her talk to an older woman who was having a terrible day. The woman was cursing and throwing items up on the conveyor belt, huffing and puffing like the world offended her. I was waiting for the woman to tell Charlotte to f-off but instead she looked up at her and smiled. I don’t know what Charlotte had said but the smile was genuine.

One day, I was again sitting opposite to Charlotte when an older man said something in a harsh tone to her. I waited for Charlotte to put on a smile, say something nice and disarming, like she always did, but this time she stood up, logged out of her station and rushed off.

I later encountered her in the break room and saw that she was still upset. I asked her what was wrong and she said “I can’t handle it today.” I asked her why and she told me that her best friend had been killed in a car accident two days ago.

Since I was known as the ‘Budget girl’ she pulled out a piece of paper with numbers on it and showed it to me.

She said it was her Bare Bones Budget. The amount she needed to survive each month. I asked her why she had made it and she told me she needed to take time off. She needed time to grieve. Her Bare Bones Budget showed her how long her savings would last, and she wanted me to have a look before scheduling a meeting with the store owner. She said it would give her a few months to process her loss and a few more to look for another job if our boss decided to not let her come back.

I was impressed. I looked at her calculations and notes. She could live for 10 months without working, just from her savings alone. I told her to go for it.

So what is a Bare Bones Budget?

A Bare Bones Budget (BBB for short) is an essential piece of information that can help you, even when you don’t need to use it. It tells you what it costs for you to survive, every month, with no unnecessary extras.

Why do I need one?

It’s very useful to know what your essentials are, what you need to survive. If you pack for a hike up a mountain, you have to make sure that you bring the things you need. Food, water, a tent if you’re out there for more than a day. It’s not easy to remember these things. If you are rushed or distracted, you can forget a crucial item and become vulnerable to the elements.

The same goes for money. Knowing how much we need to survive each month is nothing but power. We can make sure we have enough liquid assets to cover our expenses if we lose our job, become ill or lose a loved one. We can know how many months the emergency fund will last.

If a sudden, unexpected and urgent expense comes up one month, we don’t need to sit down and add and subtract from our normal budget. We look at our Bare Bones Budget and anything above our BBB amount is ready to be put to work.

Another useful thing about a Bare Bones Budget is that it’s usually quite boring stuff. It’s utilities, groceries, transport etc. Not the things we fantasise about when bored (although to be fair, food does play a big part in many of my day dreams…).

So this is a chance to challenge ourselves to make our BBB amounts as low as possible. Financial minimalism. Slash the costs of things that don’t excite us, and put it towards something that does. When times get hard, we’ll be grateful that our Bare Bones Amount is already low.

How do I set up my Bare Bones Budget?

Make a list of all your expenses. If you already have a budget, great, you can use that. Go through each expense and determine what would happen if you stopped paying for it right now.

If you stopped paying rent, you’d be evicted. If you stopped buying groceries, you’d starve. If you stopped paying electricity, you’d freeze. These are examples of Bare Bones Budget items.

If you stopped buying coffee every morning and started making your own at home? Nothing bad would happen. This is not a Bare Bones Budget item.

After you’ve listed all your necessary expenses, you add them all up. The sum you’ve reached is your Bare Bones amount.

For example, if you need £1,000 a month to survive and you have £7,000 in liquid assets, you can survive for 7 months if you lost all your income.

It’s simple. It’s effective. It’s useful.

Finally, look at your Bare Bones amount. Respect it. The next time you want to drop that amount on something you don’t need, remember that it could have kept you afloat for a whole month.

Charlotte returned to work after three months with most of her savings unused. She was back to her smiling and cheerful self in front of customers, the grief only showing during the silence of break time. I told her that I had gone home and made a Bare Bones Budget of my own after I had last spoken to her. She laughed and said it was ironic that she had taught me something about money. I told her that everything I knew about budgeting, someone had taught me, and that the best lessons often come from people like her. People who solved a problem they were facing.

You might not be in a situation where you have to follow the Bare Bones Budget right now, but it could happen. If it happens (touch wood), you’ll want to be prepared for it.

You can download the Free template here: Bare-bones-budget

How my Dad Taught Me About Money By Never Talking About It

In my early teens I asked my dad for an allowance. I had heard about my friends receiving a weekly allowance from their parents. I thought my dad would not have any objections giving it to me.

He did. My dad has six kids, ran a farm and worked as a veterinarian. A hard worker and a wonderful dad with an amazing talent for music. He had the love and respect of everyone in our small village. Since I had never gone without anything, I did not think money was an issue in our family. How could it be an issue when we lived on the most idyllic farm, and had plenty of food on the table?

He suggested that, instead of an allowance, I should ask him for money when I needed it. I thought that sounded fantastic. He didn’t mention a limit, nor specify how often I could ask, so I went away thinking I had the easiest setup of all my friends.

I immediately realised that asking for money was difficult. Each time I would ask for money I had to tell him what it was for, which was fair enough, and he would give me the amount he thought was appropriate. I had to make sure my reasons were good.

During that time I began to realise that all families weren’t well off financially. Some of my friends had say not to school trips, couldn’t afford to host birthday parties or even to buy new clothes. Sometimes I’d visit their houses for dinner and I’d notice that, for some of them, feeding an extra kid was a struggle.

In my thirteen-year-old mind, this was worrying. Going without food, not being able to buy new clothes or pay the bills. What if that ever happened to my family?

As a result I began to pay extra attention. When I asked my dad for money, he’d sometimes give me the last cash he had, while muttering ‘That’s all I have’. He might have have meant ‘that’s all the cash I have’, but to me, that was a sign of financial struggle. Like my friend’s mom saying ‘There is no more food’ when one of her children asked for seconds.

He’d sometimes complain about how time consuming it was to pay the bills. That meant there were a lot of them. A lot of bills meant a lot of money. When something broke on the farm, he’d spend hours trying to fix it while complaining about how expensive the replacement parts were. He never mentioned amounts. Never mentioned how it affected our family financially.

For all I knew, we could be living on the edge of bankruptcy or we could have hundreds of thousands in savings.

So I began to save all the money left over from events or shopping trips so I wouldn’t have to ask as often. My dad did not mention it or ask why.

As I grew older, I managed to get jobs during my summer break. I worked as a tour guide, a swimming instructor, I picked berries and worked at a day care centre. When I received my pay-check I would show my dad, who would nod, and say ‘Good’. He never told me to save it or to spend it. He never said anything other than ‘Good’.

I saved all of it, and it felt good. If my dad struggled, at least I wasn’t making it worse.

Those savings lasted me all throughout the following school year. I only asked my dad for money once or twice until I started my first full time job in Stockholm.

I kept saving the money I earned, only going on trips abroad when I had saved enough and then some. I never wanted to be in a position where I had to ask for money. I never wanted to be in a position where I could not pay bills or buy food.

I began to read about budgeting, saving and investing. The more I learnt the more I began to worry about others. No one spoke about money unless I asked them. If they told me they were struggling, I would help them make budgets. I would encourage them to save rather than spend it all and end up having to ask their parents for help. I assumed that since I didn’t know about my own family’s financial situation, how could they know?

I became known as the girl who’s good with money. The person to ask about budgeting, about being frugal. The girl who puts any windfall into savings rather than spends it on vacations or things.

I still don’t know what my dad’s financial situation is. He wont tell me. And even though I sometimes wonder if my relationship with money would have been different had he told me, I’m also grateful he didn’t. It forced me to learn fast. To care about others and be careful with the demands I put on them since I can never guess what situation they are in.

I am not rich but I am safe. I still budget every month, I create templates that I give away for free in hope of helping others, and I donate my time and money to food banks.

My dad, like so many other people in the world, never talk about money, but I do.

Why I Want To Become Financially Independent

When I mention to people that I am on a journey to Financial independence and early retirement (FIRE), I am often met with a snicker. And not a nice snicker (is there such a thing as a nice snicker?) but a “Jesus christ, you’re one of those freaks” type of snicker. This is usually followed by statements such as:

I guess you don’t spend money on anything then“,

You’re missing out on life!“,

You’re too young to retire!

and my personal favourite “You could die tomorrow, you know.

It always surprised me that during my 10+ years of doing this, I rarely get a response that deviates from those four. It goes to show that my choices aren’t the norm. I’m ok with that.

“I guess you don’t spend money on anything then”

I wish I didn’t have to spend money on anything. I wish I could live in a society without money. If I could barter and trade my way through life, I’d be doing that. Since I can’t, of course I’m going to spend money on things. In fact, I spend a large amount of money on  things that I’m sure a lot of people would object to.  I love good food. I love organic food. I love grass fed beef. I love beer, whiskey and good coffee. None of those things are cheap. I love to drive my rattling car, I love to go to events, I love to travel. Again, not cheap.

(I’m mentioning things that aren’t the basic necessities, such as rent/mortgage, food to survive, and clothes to cover my food loving body. I assume that’s not what they are referring to.  )

My point is, I base all of my “frivolous” spending on my values. I don’t want to spend money on things I don’t truly care about, or things that society thinks I should have. I’d much rather put that money into investments to fund one of my main goals in life (other than good health, relationships, and being a good human being): financial independence.

“You’re missing out on life!”

I spent six months of my life as a full on vegan. I did it to challenge myself, to explore other types of food, to see if I could align my eating with my environmentalist soul. What I discovered was not six months of suffering and self deprivation. I discovered new and exciting things. Different ways of cooking and preparing strange (to me) ingredients that I would never have tried had I remained in my meat-eating lane, trucking along, eating the same old things, over and over again because it was convenient and familiar.

I’m a huge believer in challenging myself and that often means imposing strict rules.

For example, I’ve been watching a lot of MSNBC’s Lockup lately. One of the many reasons the show fascinates me is the level of ingenuity and creativity shown by the inmates who are locked up. With limited access to every day conveniences, they have to come up with creative solutions to everyday problems. The shower-head disperses water too wide to get all the shampoo out of your hair? Attach a deodorant bottle to compress the water flow. No make up? Rub vaseline onto a magazine page, which has been printed using a colour you find pretty, then apply the coloured vaseline as eyeshadow, blush or lipstick. No dumbbells available? Fill up a plastic sack with water, tie a sheet around it, make a loop as a handle and build those muscles!

What I’m trying to say is, creating restrictions in our lives does not mean that we are missing out. If we do it with an open mind, we can discover and experience things we never would have otherwise.

“You’re too young to retire!”

I don’t want this essay to be too long since your time is valuable, but here’s the thing about retirement: It does not have to mean quitting my job and doing nothing till I die. If that was what it meant, then I’d probably not be as motivated to get there. Retirement to me is pulling off the freeway everyone else is on. Discovering new routes, stopping wherever I want to stop, leaving whenever I want to leave. Retirement, to me, means not having to do things I don’t want to do because I need the money.

Imagine going to work because you love what you do and you want to be there, not because you have bills to pay and food to buy. Even if your boss paid you nothing, you’d still go in because it’s no longer about the money.

That is what retirement means to me. The option to work or not to work. The option to work for free for a cause that matters to me, just for fun, or to simply spend time with people I like.

I’m not too young to retire right now. I’m too financially limited to retire right now. And I’m changing that.

“You could die tomorrow, you know.” 

Damn right I could die tomorrow. I could also not die tomorrow. I could die 60 years from now and why would I want to screw the older version of myself because I want to spend money on silly things I don’t need right now?

I don’t spend money on unnecessary things out of respect for myself. I respect and love the older Ebba, even though she’s not here yet. The same way I don’t pour oil into the ocean because it wont affect us right now. Further down the line it might. The earth could be nuked or hit by an asteroid tomorrow or 10 years from now, but what if it isn’t?

The selfishness of my younger self could make things really difficult for the older me and I’m not willing to risk it.

So those are the detailed responses I give when talking to people who are genuinely interested in knowing why I live the way I do. If I’m sitting in a pub, talking to a person who is trying to convince me to go on a £5,000 cruise because it was the best thing ever and I’m stupid for not going, I usually just snicker back and change the subject.