Budget, What Budget?
This post at Lifehacker about budgets took me to the budget calculator of CNBC’s Carmen Wong Ulrich, and from there to a comparison with my own spending.
Carmen’s budget pie looks like this:

I took those proportions and made some charts of my own.
Based on a monthly income of £625, Carmen’s machine says I should be spending as follows. (Note that I have renamed three categories: Housing = Housing & Tax; Household = Utilities; Everything else = Miscellany.)
| Housing & Tax | 30% | £188 | ||
| Transportation | 18% | £113 | ||
| Food | 14% | £88 | ||
| Miscellany | 11% | £69 | ||
| Savings | 10% | £63 | ||
| Debt | 10% | £63 | ||
| Utilities | 7% | £44 |
My actual monthly spending is more like this, though it leaves out water bills and long-term debt that I’ve deferred.
| Housing & Tax | £330 | |
| Transportation | £25 | |
| Food | £80 | |
| Miscellany | £30 | |
| Savings | £0 | |
| Debt | £210 | |
| Utilities | £150 |
Two things to note. My monthly outgoings exceed my income by £200, and my proportions are way out of line with Carmen’s. The first means that means I’m borrowing more every month, and my active debt share takes more of my income. The second means that I’m making tradeoffs, such as between transportation and debt, where the combined total is the same in both charts. I have effectively diverted most of the transport budget to pay for debt, and my savings budget to pay for utilities.
Here it is graphically. On the left, the standard suggested by Carmen. On the right, my actual spending.


It’s obvious that my budget shares are dominated by rent, utilities and debt. Showing them side by side will clarify just how different those portions are. In the chart below, green bars are what Carmen suggests. Red is what I actually spend, even though it is greater than my income.

Carmen’s guide says I should spend just under half my budget on the combination of rent, utilities and debt. I am spending more than four-fifths of my £825 monthly outlay on those three things. Given that my £625 income covers three-fourths of the spending, I am borrowing in order to pay some of those three categories, and borrowing again to pay for things like food, sundries, and transport.
It doesn’t work quite that way, because I am spending actual money on food, and borrowing via my overdrafts to pay for the increased borrowing, while deferring some of my debts and postponing payment on my utilities and portions of the rent.
The question of what to do about it revolves around two things: reducing my outgoings and increasing my income.
Reducing outgoings could include things like going to a debt counselling agency and seeing what schemes I can partake of. I have already sought tax relief, so that’s not going to change. I have also been looking into gas and electricity schemes, and may be able to accomplish something there. I should look into water rates as well, since they really stick it to me every few months with a flat rate bill, even though my water consumption is low.
Increasing my income is a much better solution, but given the poor results of my job search so far this year, I’m not counting on it. Given that my current spending is about £4.75/hour on a 40 hour week, I should be able to make ends meet temporarily on the minimum wage, depending on what costs increase (travel, food, taxes, sundries). But that ignores the load of debt I’ve deferred, specifically college loans, unpaid credit cards and utilities. It also leaves out dental work, insurance, both personal and otherwise. So short-term solutions are not proper solutions, and I’ll be in this sort of situation until I can find - or make - a proper job. Possibly some time next year.









