Living the Dream – 3. Making a Budget

Making a budget

Regrettably, life in the sun still has pretty much the same bills as life in the rain.

In ‘Living the Dream – 2. Paying the Bills‘, I explained that we were assuming zero revenue to start. Hopefully, we will both be generating something, but budgets are all about worse-case scenarios.

How much will life cost us?

There are no shortcuts here. It was time to break out a spreadsheet, cold towels and start entering in numbers.

What are the major costs? Accommodation, transport, subsistence etc. Much the same as living anywhere. As we have holidayed here regularly over the last couple of years, we already have some experience of local prices. Unsurprisingly, we are unlikely to spend as much on heating as we do in England, but anyone who owns an air-conditioner knows how easy it is to run up a massive electricity bill.

Major Expenditure

One of our key decisions was around transport. With an absence of ferries, the only way to bring a car onto the island is as freight. On top of that not inconsiderable cost, there is a compulsory re-registration fee to pay too. Initially, we planned to mothball our car in the UK and buy a run-around in Cyprus. However, a little research goes a long way. Cars do not depreciate as quickly in Cyprus, so a run-around was going to be a significant investment, particularly if there were certain features that we wanted to ensure were included. Even paying registration and transport costs, it’s better to bring our car over from the UK, so that’s what we will do.

Output

I have never known a budget that turns out to be perfect in every detail. There will be overshoots and undershoots, but at least we have a starting point. The budget allows us to plan cash flow and expenditure, and also focuses the mind on targets for revenue. Just because we are assuming zero revenue, that doesn’t mean we’re not aiming to generate some.

Putting a spreadsheet together is a great way to focus the mind…