A plan for saving up money to invest

More and more we hear people talking about investing. Every now and then when the topic is in the air again, I find it really exciting. Would it not be great to get retired before old-age pension or not to worry about budget while being on state pension.

The biggest obstacle on our way of becoming an investor is mainly finding funds. A little more than a month ago my partner generated a brilliant plan for gathering money to invest. Maybe some of you have heard about joining the club of fifty percent investors: this means that every month you should invest 50% of your income. My partner modified it: you have to invest the same amount that you spend. We had quite a long discussion about how could I afford such cost-control as there are months that I am obligated to spend my whole monthly income, so we made a few exceptions in the rules. It is wise to set the rules before starting “the programme”, because it seems like a slippery road when you are allowed to make changes at any time you want.

We made rules that these are outgoings that are taken into account:

  • comfort goods such as cellphone, clothes, new TV set, computer, furniture that does not need to be renewed
  • outdoor activity costs such as restaurants, cafes, theatres, movies, other entertainments
  • all avoidable costs such as buying a dog instead of getting it from shelter, toys for kids which they do not really need etc

And these are the outgoings are not taken into account:

  • unexpected and inevitable costs such as car repair when something brakes
  • healthcare costs because this is not something to save up with
  • loan repayment as basically it is not a cost, except when it is car leasing or something comparable
  • long-standing home costs such as renovation costs, furniture, machinery, except these costs that are not really necessary such as an espresso machine while we have a press jug etc
  • holiday travel costs because this tends to be quite expensive but you cannot forget to enjoy your life as well

I started the programme in the beginning of July and I can say that the first month has been successful in following the rules! I created an Excel sheet where I update my outgoings according to bank account statement and deduct invested amount from expenses I have made. I also show current balance in the end of every row to have a convenient overview of the calculations.

Now, lets start saving up some money to invest!

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