Sunday, 27 October 2013

The Queen needs a budget so why shouldn't you?

Yes you heard right.  The Queen of England, one of the wealthiest people in the world, needs a budget.

Let's take a quick look at her current situation.
  • She lives on fixed income provided by her employer and her expenses are bigger than her income.
  • Her primary residence, Buckingham Palace, has the following problems:
    • Furnace needs replacement
    • Furniture is worn and needs replacement
    • Some parts of the building are in serious need of repair (cracks in roof, some walls falling apart)
    • Utility bills increased significantly last year due to unexpected cold weather
This sounds just like problems faced by everyone else but of course everything is on a much bigger scale. For example, we may pay $3000-5000 CAD for a new furnace whereas it will cost her $1.65M CAD.

So if we were to do one of those financial checkups on how she is doing it would look something like this:

The Queen needs to eliminate the gap between her expenses and income.  She has made a good start  by reducing her travelling expenses, not spending as much on people helping with household chores and adding to her income by renting out rooms in her home.  Unfortunately even after this, she has had to use a large part of her "rainy day" fund for years for everyday expenses not leaving anything to use for repairs to her house.  An option, available to most people, of downsizing her house and selling other property holdings may not be an option since they are not owned personally by her but by the people of England.  Making hard decisions to correct her situation can not be delayed any longer.  Here are some key items to immediately look at:
  • Talk to her employer about a raise.  The royal family and their properties provided $418M CAD in profit to them last year.
  • Talk to her employer about substantially reducing the property holdings they own either by selling or renting them
  • Reduce non-essential expenses, especially ones not contributing in a significant way to her employer's profit. For example, the Royal Train costs $1.65M per year to operate.      

Want to read more about the Queen's finances?  Checkout the following:

James Whelan

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