Living as an expat has certainly added to the complexity of my budgeting exercises. There are many financial perks to living in a dangerous post such as Afghanistan, but there are also a number of fluctuations that I continually have to manage.
- No danger pay whenever I’m out of Afghanistan, including while working in Southeast Asia;
- Per diem that is post tax while on business;
- Advances and reimbursements for business expenses;
- Fluctuating R&R expenses;
- No danger pay or post differential when I’m in the states;
- Fluctuation of taxes as allowances ebb and flow.
This means that I have to be careful with automated finances, as the incoming pay will fluctuate often as my travel bumps up in the near future.
To make sure that I was keeping this delicate balance I recently spent some time updating my budget. James’ budget is relatively fixed, so I’m just concentrating on mine for the moment.
Here are the figures that show the variations that should be expected. Note that the taxes had to be done as a percentage of what is currently being deducted, and may have further fluctuations.
Looking at the allocation of my expenses you can see that I’m spending less money than ever before, with only six percent of my finances going to discretionary expenses. Having no place to spend my money helps this considerable.
If you add it up I’ve also got 21% going towards reduction of debt and another 47% going towards retirement funds and investments. Note that this includes investment of paying off our second mortgage.
Other findings include discovering that although I won’t be paid danger pay while I’m leading tours in Southeast Asia, the added post tax per diem will actually put more in my pocket in the end. This is a bit of a relief, as I wasn’t certain how this added travel would impact my budget. I will of course find more things to spend my money on in Vietnam than Kabul, but I’m willing to endure such hardships. ;-)
All in all it looks like we’ve got things on track when it comes to budgeting. As you can tell from the detail on the budget image, there is a pretty large fluctuation in the final excess cash. To adjust for this I will not be paying James or the R&R fund while I’m in the states, and then invest the additional excess funds for when I’m in Kabul or leading trips.
I hope this helps people get a picture of what our budgeting looks like. I know the exercise has been helpful for us.