Saturday, June 08, 2019

Do You Have A Slush Fund?

Yes, Marcus does have a slush fund.  And I'll come onto that later.

First though I'd like to discuss Basic Accounting

Spending Money
Marcus and Agata never want to be in a position at the end of a month asking ourselves the question:  Shit, where did all the money go.

Because we are living in 2019, predominantly from our savings, we do maintain a rigorous spreadsheet of all expenditure.   I think anything less than 1 GBP is not accounted for, but conversely there are not many things you can buy for such a sum in England these days :-(

Our comprehensive spreadsheet has been running for over 4 years now as we attempt to perform an important balancing act

Expenditure <=  Interest on Savings + Any Earnings + ( Savings /  Years to Live)

but when I think about it, it is really

Expenditure <=  Interest on Savings + Any Earnings + ( Savings /  YTL) + Slush Fund

The Slush Fund

I've actually widened the definition and actually don't want it to include any illegal activity.

My definition of a Slush Fund is an income stream or capital resource that you can draw on, that you regard as external to your notional Wealth summary.

In Marcus' case my Slush Fund are the remnants of earnings that I have earned ( and have fully paid tax on  BTW) whilst I legally worked in America, oh so many years ago.   

But I ask you the question  where is your slush fund?  Because I am convinced that using my extended definition, many people have them

- An incremental savings pot, that you add to when you can.  An 'off the books' pot of money that you can use for treats or emergency purchases

- The Bank of Mum and Dad.

A tried and trusted resource that once called upon is difficult to turn off.  Can be used to pay for University fees, your first car, and sometimes a House deposit.  If you hit the big time your parents might also actually buy the House, then transfer iti.e. the Legal Title, into your name.  It's an old trick that still works in the UK.   You end up with a house for free. How about that.

- A Credit Line [ infinite term]

Often related to the above.   This is a borrowing facility that you the borrower will try to pay back, honestly, you want to, but will never actually manage it.  Equally the Lender, if not a relation, then usually a close friend is extremely sceptical that the loan will ever be repaid.

- Death of a Relation

This is a rich elderly relation with money, who is going to expire soon enough and push your finances into positive++

What Happens Next :-(

Marcus' emergency Slush fund is about to end. I mean to reach 0 dollars and 0 cents.  So then we will see how sustainable our current lifestyle and financial model really is.