In which I set a budget

I mentioned in my last post that my approach to money so far has largely been not to think about it too much. It’s not that I regularly spend more than I earn and rack up credit card debt or anything like that, it’s more like at the end of each month the money is gone and I sort of vaguely wonder what on earth I spent it on.

I know, of course, that this is hardly the optimal way to handle my finances, and I’ve been getting increasingly uneasy at the amount of money I apparently spend more or less unconsciously without really feeling like I’m getting anything out of them. I’ve set up countless budgets before, but the sticky point has always been the part where I actually track my spending and stick to the budget. Hopefully blogging about it will shame me into sticking to it.

I don’t live in the US, but for ease and clarity I’ll be writing about my budget, assets and liabilities in dollars, using an exchange rate that is a bit different from the actual exchange rate from our currency, but which (at least partially) takes into account the difference in cost of living. Hopefully that makes the numbers turn out a bit more relatable (and, bonus, makes me feel a bit easier about putting specific numbers up online).

I’ll get back to my monthly budget in my next post, but before we delve into the budget, I thought it would be useful to have a bit of background. Last year I got married and my husband and I bought our first apartment. Most of the money I had saved up since I graduated went toward my share of the down payment (along with some money that my parents and grandparents gifted me a few years back specifically for a down payment). And although we did not have a very extravagant wedding (and again, had a bit of help from my parents and in-laws), pretty much the rest of the money we had saved up went to pay for the wedding. We are currently expecting our first, so we are also anticipating quite a few costs related to that. The result is that my current assets and liabilities look like this:

Student loans: $ 28,264*
Mortgage: $ 144,005**

Apartment: $ 170,000**
Retirement savings: $ 5,469***
Emergency fund: $ 1,500
Money set aside for upcoming baby-related expenses: $ 1,380

*These are fixed interest at a very low rate until 2025, which means I’m not paying much interest on them, but I also cannot prepay them without penalty
**I’ve counted half of the value of the apartment and the mortgage towards my assets and liabilities, as my husband and I own it together and pay half of the monthly payments each.
***I do also have a decent chunk of retirement savings with my employer but I’m not going to count that as it’s in separate low tax accounts which I cannot access until the official retirement age (although I can manage which portion is allocated to stocks vs. bonds), whereas this is just money I’ve set aside separately in an index fund (no tax breaks, I control it and can access it at any time).

Short term I’d like to bring my emergency fund up to about $ 6,000, which should give me a decent cushion if anything comes up. I also expect I will need about $ 2,400 total for baby-related expenses (my husband is finishing up his PhD by the time the baby comes, so since I make more I will be covering most things baby out of my salary for now), which means I need to set aside another $ 1,020 for that in the upcoming months. We also have a few things we’d like to fix around the apartment, which I expect will run us about $ 300/month for the rest of the year.

After those things are taken care of, we’d like to start paying down our mortgage more aggressively as well as saving more (I suppose we will come back to the allocation between the two when we get there).

So, what do you think, anything specific jump out at you? Anything I’ve forgotten to take into account?


Confession: I pretend to be good at adulting, but I’m kind of terrible at it

It’s Monday morning and I’ve slept badly knowing I have a yearly review coming up at work today. It’s not that I’ve done anything wrong or that I think I’ll get a bad review, it’s just… I know I’m not doing as well as I could be. Probably because while I love my colleagues and the camaraderie of the team, the work itself is, frankly, not what I’d like to be doing in the long run.

I know the mature thing to do when this happens is to try to figure out what I’d rather be doing look at job postings to see if there is anything interesting available, and yet I don’t. My job is not that bad after all, I tell myself; it has great benefits, pays well enough and I truly enjoy working with my colleagues. And so I keep on, dragging myself out of bed in the morning, do a good enough but never great job at work, sleeping wonderfully on Friday nights and hardly at all on Sundays. All the while knowing I’m just putting off the discomfort of eventually dealing with the fact that I don’t much enjoy my work and of not knowing what I’d rather be doing.

(Side note: during a previous bout of job angst, which happened to occur right as I was reading the opening chapters of Gretchen Rubin’s “The Happines Project”, I wrote to Ms. Rubin asking what she recommended when you know you don’t like working as a lawyer, but you really haven’t a clue what you’d rather be doing. To my great surprise she replied, and very graciously too, recommending I read “The Creative Lawyer” by Michael Melcher to try to figure out what I wanted. I got about 30 pages in before the truths it revealed became too uncomfortable and I stuck it back on the bookshelf to gather dust. Might be worth a try for any other disgruntled lawyers out there, though.)

I’m in the same type of denial, if not quite as bad, when it comes to my finances. I make a decent amount (though by no means loads) of money; it really should not be a problem for me to build up a good chunk of savings or aggressively pay down the mortgage. And yet every month I somehow manage to spend most of my money without really knowing where it went. The thing is, I know exactly what I should be doing, what the mature thing to do is – I know I need to automate my savings and track spending and yada yada. I know all of that and still I just don’t do it.

(Side note again: If you like reading about personal finance and, like me, rather enjoy being made to feel even worse about the mistakes you know full well you’re making, check out Mr. Money Mustache’s blog. I keep reading in the vain hope that it will rub off on me and I will somehow effortlessly drop online shopping as my preferred form of escapism and become a sage, uber frugal (and, it goes without saying, super rich) person who enjoys peppermint tea (yuck!), saves at least 50% of their income and gets all their clothes second hand.)

Same thing applies when it comes to not eating too much sugar, paying my bills as soon as I get them and keeping our condo decently cleaninstead of letting it descend into chaos that requires a five hour cleaning spree on the regular. I know what to do, but somehow I cannot seem to just do it.

The thing, though, is I’m pretty sure no one but my husband (well, and now the internet) knows this about me. I can speak at length about how interesting my work is if required to make a small talk session with acquaintances flow smoothly. If you ask me for advice, I can rattle off personal finance edicts like it’s my job and as long as I get a 20 minute warning I can fake a cleanish looking condo whenever people come over. All of which just serves to make me feel like a fraud. Do any of you do this too? Or are you one of those magical unicorns who have broken through the inertia and actually do the stuff you know you “should” do on the regular? (Teach me your ways!)

Anyway, what I’m getting at is that I think my life would be a lot less stressful and a lot more enjoyable if I would (at least on occasion) just do the thing I know I should do right when I know I should do it, instead of putting it off for ages and spending tons of energy feeling guilty that I didn’t send those thank you notes yet/annoyed that that lightbulb is still out/angsty that my card will get declined at the end of the month/grumpy because I haven’t worked out in a week.

So long story short I’m going to try (occasionally – let’s be realistic here) just doing the thing. Revolutionary stuff, I know. The good news is I expect I will manage to screw this up in novel and amusing ways, and you get to read along and pat yourself on the back that at least you’re not as hopeless as *that*.

More later!



It’s all about motivation, said the cab driver, explaining how he had (to his friends’ astonishment) gone from being the lazy one in his group of friends, to getting up at 4 am to go to work and picking up extra shifts whenever he could, as soon as he knew he was getting married.

It had started with a throwaway comment that I was a late riser, which he refused point-blank to accept. “You are not a late riser, you are a person who chooses to get up late”, he told me, and instead of the superficial, uninteresting (and frankly slightly whiny) conversation about work (too demanding) and the weather (too wet) that usually accompanies the ride back from the airport, we were suddenly knee deep in an honest, genuinely interesting discussion about values and choices.

I had to concede that yes I could choose to go to bed earlier and yes I do quite easily drag myself out of bed at 3.30 if I have a transatlantic flight waiting, but, I argued, that is different from the day in day out slog of getting up to go to work. It’s not that I dislike my job (I actually have great coworkers and work I mostly enjoy), it’s just the every day-ness of it. How do you manage to stay excited to get up for that every day?

He asked me if I knew the arabic word for human, and when I said the only arabic I knew was shukraan (thank you), he went on to explain that arabic is a very rich language, and it has all these nuances and intricate etymological connections that can be quite interesting. For example the word for human is “al’iinsan”, which is etymologically related to the word “nansaa” (forget), because humans always have to be reminded.

We constantly forget what is most important to us, we lose track of it in the routine of everyday life and before we know it we’ve spent the better part of a month/year/decade worrying about a petty disagreement with a neighbor or losing 30 lbs or whether we’ll get a promotion. We forget that most of life is made up of weekdays, and are prone to be distracted by the shiny newness of vacations and the distraction that weekends present until finally we’re so out of touch that we live for the weekend, spending 5 out of 7 precious days in a kind of dazed auto pilot mode.

All of which is to say that I unexpectedly woke up at 5.40 this morning and instead of reading or going back to sleep, I sat down to write the first post of a blog I’ve contemplated for years.

– Liv

Photo by (Mick Baker)rooster via Flickr (CC License)