I came out of my hotel room and walked with swag to the hotel reception to checkout. I was proud of the fact that I’d come in massively within budget and had more than enough cash to settle the additional charges for my hotel room. The receptionist hands over my bill and all I can see is a bill for £1067(!) when I’d been expecting to pay for the one £23 breakfast buffet meal that I’d charged to my room. My eyes popped but I tried really quickly to cover the alarm bells. We usually get hotel bookings made centrally so that no one has to settle such huge bills on their personal cards but it appeared that someone had forgotten to do so.
What to do, what to do. I’ve been doing a lot of freelance work travel so have booked flights, hotels, trains, and other business trip associated expenses that I can’t get a refund for until I submit my invoice at the end of the month. Coupled with the additional support money I sent at the start of the month, I wasn’t sure that I had £1067 available on in my accounts. My rainy, rainy day fund is literally in cash in a shoebox in my room & I have money in bonds, stocks and currency that I wouldn’t be able to liquidate at such short notice. I also have no credit cards because being financially irresponsible meant that I’ve destroyed my credit rating and can’t even get a payday loan now.
I raided my FI fund, borrowed some money from the joint account I share with my housemates and got the money earmarked for trips next week and my checking account and put that all on my Monzo card wondering how I was going to make it through till the end of the month. Thankfully, just as I was about to pay, my colleague discovered what had happened and offered to pay for us both on her credit card. Phew! I haven’t had a thudding heart and subsequent relief so palpable for nearly a year. I certainly don’t want to do so again.
My strategy for this first part of the year has been:
- Focus on fulfilling my support promise (£6 000 for the year)
- Paying off the minimum amount of debt I could (£70 a month at the moment)
- Build up my emergency fund steadily to Dave Ramsey’s recommended baby steps level (£55 a month to meet the £660 shortfall I started off 2017 with)
- Keep £200 available in my “expenses” account to handle the flights and hotel room bookings I anticipated for my side hustle
I then planned on spending May through December focusing on debt then increasing my cash on hand via the emergency, tax and expenses funds to ensure that I’d never be caught out by an unexpected expense.
I never saw this one coming and immediately regretted putting £400 from my emergency fund towards support (earlier in the month) knowing that after I sent off my invoice for my side hustle, I’d be able to replenish it. I can’t take a chance this sort of situation ever happens again. Over the next couple of months, here’s how I’m going to ensure that:
- Replenish emergency fund to expected levels (£615)
- Replenish tax fund – which holds the amount of money I expect to pay when I file as a self-employed person next January (£1 590)
- Replenish and grow my expenses i.e. my new contingency fund (£1 000)
This way, if anything else like this happens, there will be no racing pulse. No internal panic. I’ll have more control, will know that I can get through the rest of the month and won’t need to lose face.