the richest man in atherstone

Every year, at around the end of December and the beginning of January, I create my budget for the coming year. I use GNUCash - an Open Source book-keeping system - to keep track of my income and expense over the year. Not only does this allow me to calculate my expenditure over the twelve months, it also helps me to control my cashflow so that I know exactly how much cash I've got at any time (and ensures I don't go into the red). Additionally, I can pull off a plethora of reports to show my current financial status in terms of assets, liabilities, income and expense.

This year is going to be more difficult financially for my family. My wife's maternity leave has come to an end and she doesn't intend to go back to work for a few years until our baby is at school, so instead of two incomes, there will now be just mine. The fact that I plan to leave my job sometime soon doesn't help matters too much either

After playing around with the numbers for a while, it became apparent that although my salary would cover all the bills, there wouldn't be much left over for recreational purposes. After discussions with my wonderful wife, we decided the best thing to do would be for me to look after the household expenses, and she would control our 'fun' budget. She also plans to pick up a few odd-jobs that she can do from home while looking after our baby to ensure that we have a bit extra for entertainment. So from now on, I'll be asking the missus for money if I want to go out

We also decided that there were a few other things we would like to spend any additional income on and came up with the following plan to split any extra money that I earn.

1. 50% to be added to our recreation budget.
2. 30% on mortgage over-payments.
3. 10% to be put into our savings.
4. 10% to go into our emergency fund.

Of course, this will not affect any money I earn as part of my 'Double To A Million' project.

Every quarter, I will go back over the previous three months and divide my additional earnings accordingly.

Personally, I wanted more cash to go on overpaying the mortgage and my wife wanted more for the recreation budget, however our discussions led to an amicable compromise and we are both pleased with our financial plan for 2008.