Tuesday, 6 October 2009

Current situation and 'The 10k Target'

As I said, I work in IT at a junior level. I earn 20k a year, and my company is undergoing a company wide pay freeze. In addition my job is on shakey ground (recession and all), and while I can probably get a new job it will be the same salary - I will therefore more or less be guaranteed to be on the same salary for a year or more. (Side Note: Those ads you see on TV saying you'll earn like 35k a year for working in IT? Not everyone makes it to the average salary, and noone starts there...)

Now, I do cover all my bills and expenses, and have a tiny bit left over each month, but not really enough to enjoy myself with (I haven't been out of the UK for years now..), or worse yet, nothing that I can put in the savings account (currently 0). Savings as it turns out are important. If I had saved when I was a student I would not be in this mess. Oh well, lessons learned :)

So what I want to do is simple - I want to find enough in savings and extra 'side' income over the course of roughly a year so that I can *at least* eliminate two of the biggest drains on my monthly finances. These being:

1) Car loan + Insurance
2) Credit card repayments

To do this, I will need to find £6,000 extra over the course of the year to eliminate what is left of these debts. After that I will have at least £200 a month freed up for myself in order to stick in a savings account, or to use the odd time for taking myself off somewhere nice (Bognor? Heh)

*But*, why not set myself a more aggressive target?

Lets go for 10k.

So my target, therefore, is to find 10k in savings and new revenue over the course of a year.

Why 10k? It is a reasonable target, I think, and achievable. Might be hard to hit, in the end, but it is achievable. I'm not a believer in all those get rich quick schemes you find around, and I'm not looking to become a millionaire. I'm going to shoot for a reasonable, if tough goal here, so that even if I fall short I'm still all the better for aiming for it.

10k then. There are two ways to get this:

1) Reduce outgoing expenditures (i.e. find savings, cost reductions in everything I buy)
2) Earn the extra money (by doing odd jobs, selling on ebay, etc)

The focus will be on savings. Because if I can cut x amount out of my spending one year, then I can cut that same amount out the year after if I wish.

I recognise however that I will most likely have to find a new source of revenue or two to bump my earnings up a bit. I earn 20k, I don't think I can fin 10k in savings unless I don't pay my rent. This isn't so bad mind, becuase I am sure I can repeat at least some of the steps whenever times are hard, but I am not expecting extra revenue to be repeatable year on year. I will focus on easy to find revenue that other people can emulate, if possible (i.e I will not be suggesting everyone do I.T consulting on the side, heh).

So to summarise. I need to save £6000 over a year to eliminate my two most troublesome debts. I will consider this project a success if I hit that. But I want to aim for 10k in savings and extra revenue to push myself, and wind up with a little savings after it all.

I will be starting this goal in earnest soon. I will make a few posts in the next month or two planning a few things and looking for easy savings that I can apply from the start. One I've started counting in earnest, I'll let y'all know.

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