Now that I'm flush with cash, and I decided to leave some of it uninvested (so, in cash), I'm holding about €40K on a basic savings account. But I'm considering trying to see if I can live on a budget.
The idea is to estimate how much money I need in a year — not a frugal year, a normal one — and then put this amount of cash on my transactional account, while automatically moving any full salary and other income to the savings accounts. So I'd live from this fixed budgeted amount for a full year (or until it runs out if I budget wrong).
From the top of my head, I believe I'm burning about €60K a year. That includes everything, including the (quite small) mortgage, the car expenses, all the bills, and plenty of discretionary spending (but not BIG trips at €5-10K twice per year).
So, I put €60K on my transactional account on January 1st, 2022, and use this as my annual allowance. All the salaries get transferred to the savings accounts in full amounts, and then I'd see if I can make it through the year. That would give me a very realistic indication for the future #FI.
- I need to do some research and see if anyone's tried this before.
- I'll run my numbers to get a real budget, then round it up to the next full €1K
- consider starting it with January 1st, 2022, and running till December 31st, 2022.