Using the SIDE Formula™ to Accomplish Wish List Items

With the passing of each day (and the power of the internet!), I continue to add new places and experiences to my wish list. This is great if I didn’t intend to fulfill each item. But I do, which means I need money.

When I first started traveling extensively a decade ago, I used to fly by the seat of my pants and make decisions based on my bank account balance at the time. As I grew older, thankfully, I grew wiser and began saving money for those unplanned or spontaneous opportunities that would require a large amounts of money.

Now, after over 4 years of living abroad (and countless money management strategies), I’m sharing my personal finance strategy with you.

The SIDE Formula

As we all know, a good rule of thumb is to put a little money aside each month….and so, to help with that, I created the SIDE Formula™ to help me do just that. The SIDE Formula™ is simple:

S – I – D – E = W

The letters in SIDE stand for: Salary, Invest in Yourself, Debt and Expenses. And ‘W’ stands for Wish List. This is the money leftover after all your ‘adult responsibilities’, available for your use to travel, splurge on an experience, or anything else on your wish list.

NOTE: Some people choose to put this money into an account designated for a specific, future event (i.e., cruise, European trip, honeymoon, etc.). Some choose to spend that money each month for smaller, but still impactful experiences and mini-trips. The decision is yours once you have identified your W!

USING the SIDE Formula

To download the SIDE Formula™ template, login to and search for ‘SIDE Formula’.

* * * *

S:  Identify Your Monthly Salary

This is easy if you only have one income source. But if you are part of a couple (like me), or have multiple income sources (in multiple currencies, like I do), it is increasingly important to get all that information listed in one place.

The SIDE Formula™ Template Tip: Make sure you list everything in monthly denominations.

I:  Invest in Yourself

From the thousands of blogs, books and experts I’ve come across, one principle holds true and firm: pay yourself first. From the first time I heard this principle, I’ve applied it and watched my wealth grow.

So first things first, set up a recurring transfer from your checking to your savings account (I recommend 10%) and contribute the same (10%) to your retirement fund.  Saving for a rainy day is important (most experts suggest having enough money saved to cover you for 6 months), and no one will disagree with saving on a regular basis. The same is true for retirement savings. We’ve all heard the story about how saving just a little in your 20’s and early 30’s will be worth more when you retire than contributing a lot of money in your 40’s and 50’s. So let’s just follow good advice and save for a rainy day and retirement. Trust me. You won’t miss this 20%.

TIP: If you’re an American citizen, you should speak with a tax accountant to learn about their retirement contribution options, especially if you’re earning income from outside of the US.

D: Debt

Although you’re traveling/living abroad, you still need to be an adult and pay off your debts. Scheduling recurring payments will help you avoid late fees and make sure you’re held accountable. The goal is to pay off as much debt as possible before leaving home…and also not to incur more debt while abroad. With a monthly budget, this shouldn’t be too difficult.

E: Expenses

No life is expense-free, so this is the part where you want to think about all your bills: insurance, rent, phone, transportation, medication, etc. Think long and hard about what you need versus what you like. Necessity and comfort are two different things. I’m not suggesting that you stop eating out completely, become antisocial and stop showering so you can reduce your water bill; but you should think about what you can give up in the name of living a simple, minimal and kick-ass global life. Again, this is a lot easier to do than you think (says the woman who shares a non-smartphone with her husband, moved to Turkey with one suitcase each and travels monthly. I promise, it’s possible and you won’t die!).

The SIDE Formula™ Template Tip: Modify part D on the spreadsheet to reflect your own expenses. For example, my employer here in Turkey pays for my insurance, so I don’t use that line in the calculator.

NOTE: I don’t like budgeting for food because eating out is a form of entertainment for me. No matter how hard I try to eat-in; it never happens. Instead of fighting it, I’m embracing it and choosing to forgo other, non-essentials like getting a monthly manicure/pedicure and smartphone.

If you haven’t done so already, download the SIDE Formula from the Google Docs Template Gallery and discover how much money you have left to make your W’s come true!


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