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Financial Literacy

How a household organises its money. No promises of getting rich, and nothing being sold.

  • Financial Literacy

    How much to spend per category: the 50/30/20 rule and where it falls short

    The 50/30/20 rule says half for needs, 30% for everything else and 20% for savings, and it is a good starting point for looking at a month. But with low incomes or high rents, needs pass 50% on their own and the rule stops being possible. The limits that last come from your typical month; the rule shows which direction to push them in.

  • Financial Literacy

    How to read a bank statement and see where the money went

    A bank statement says when money left and who it went to, but not what it was for. To see where it went, read each movement with four questions: is it the household's or one person's, was it fixed or decided this month, does it repeat, and is it right. Done once, over a whole month, it shows what no budget built from memory shows.

  • Financial Literacy

    Who owes who: settling up between two people

    Settling up means comparing what each person paid with the share that was theirs, and transferring the difference. Done expense by expense, it is tiring and creates friction; done once a month, on the balance, it is one sum and one transfer. Each person's share comes from the agreed splitting rule, half each or in proportion to what each earns, not from memory of who paid for what.

  • Financial Literacy

    Subscriptions: the money that leaves without anyone deciding

    A subscription is a decision made once and paid every month without being made again. To decide which to cancel, the question is not "do I use it?", because almost everything gets used now and then. It is "if I did not have it, would I sign up today, at this price?". The ones that fail get cancelled; the ones that pass stay, and become chosen rather than inherited.

  • Financial Literacy

    Emergency fund: how much, where to keep it, and when to use it

    The right measure is not months of salary, it is months of essential costs, which is a considerably smaller number and therefore a reachable one. The first target is one month, not six: it is the step that stops a breakdown ending up on a credit card, and it is the only one reached early enough that people do not give up on the way.

  • Financial Literacy

    Joint or separate accounts? Couples and the three-account setup

    A joint account alone shows what the household costs and erases each person's autonomy. Separate accounts alone give autonomy and leave nobody seeing the total. The three-account setup, one for the house and one each, solves both at once, and it is simpler to maintain than the alternative of settling up every month.

  • Financial Literacy

    Fixed and variable expenses: the difference that changes your budget

    Fixed does not mean the amount is always the same, it means you cannot decide not to pay it this month. Electricity changes every month and is fixed; a subscription is the same to the cent and is not. Sorting by amount puts the wrong things in the wrong boxes, and a budget like that cannot tell you where there is room to move.

  • Financial Literacy

    Where does my money go? Why it disappears by the end of the month

    The money does not vanish at the end of the month, it vanishes all month long. The end of the month is just where you notice, because that is where the balance stops covering. What consumes it is not the big decisions, which get remembered and weighed, but the small repeated ones, which cost nothing on their own and together cost a whole category.

  • Financial Literacy

    How to split expenses as a couple: 50/50 or in proportion to income?

    Down the middle is simple, and it works well when the two incomes are similar. When they are not, the same half weighs far more on the budget of whoever earns less, and what is being divided stops being the cost and starts being the breathing room. A proportional split shares the cost by the same percentage of what each person earns, and leaves both with the same room.

  • Financial Literacy

    How to make a household budget that survives month two

    Almost every budget dies in its second month, and not for lack of discipline. It dies because it was built from memory, and memory holds what repeats, the rent, the electricity, the supermarket, and forgets the car insurance, the dentist and the service. A budget that lasts is one that leaves room for what does not arrive every month.