February 2018 Review

First of all, apologies for the lateness of this review. I’m not really sure who I’m apologising to, I think mainly myself, but I will endeavour to not be so tardy in future!

It’s been a hectic month and a half since my last post. After returning from skiing I had about 3 weeks to finish off my novel and I got very involved in that, some days spending up to 12 hours working on it. I’m trying to write fiction, and I’ve found that the most time consuming thing isn’t the initial writing, it’s actually the revising and rereading and revising again and so on. Anyway, it’s sort of finished now, but there are sections that I want to go back to and rework. I’ve taken a bit of a break though, it had started to consume my life, and apparently it’s good after you’ve finished writing a story to wait a couple of months before returning to it with fresh eyes, so to speak.

I also went to Munich in Germany in mid February, mainly to see my friend who lives there, but also to see a band play (The Menzingers). I’ve also been spending a lot of time with my significant other. It’s still early days but a lot of my evenings have been given over to her.

I returned to work on the 1st March and hit the earth with a bit of a bump. I lasted about two days and then went off sick with the flu. And yes, it was the real flu, not ‘Man Flu’, I was in bed for about a week with fever and headaches and so on. I went to the doctor after about 5 days thinking I might have something more serious (like bronchitis or sinusitis or something – a little tip, don’t search your symptoms on google) but she confirmed it was just the flu and I had to wait it out. Which I did.

Oh, and one other thing, I got a cat! I’d been thinking about getting one for a while but didn’t want to do anything before I went traveling. She moved in just over a week ago and has set about making the house her own. She’s a rescue cat but she’s quite young – just less than a year old – so she’s constantly hyper and wants to play all the time. Which is adorable and annoying in equal measure!

Anyway, I think I’m about recovered now so I guess I should write this review.

Spending and Income Breakdown for February 2018:

Spending:

  • Mobile phone – £199.12 – So I bought myself a new phone! Specifically, a Moto G5 Plus for £179. My old phone kept turning itself off, wouldn’t connect to wifi, and would always run out of space so I decided it was time to buy a new one. I’m pretty sure these things have a planned obsolescence, what with degrading batteries and new operating systems taking up so much space you’re almost forced to buy a new phone every couple of years.
  • Rent – £550  – I own my house (with a mortgage) but I pay myself rent. I don’t actually move any money around, but for the purposes of my spreadsheet and my savings rate I treat my house as though it were a rental property and I am a tenant in it.
  • Food, drinks, toiletries – £144.19
  • Eating/drinking out, takeaways – £192.24
  • Petrol/travel – £144.97 – Went down to London a couple of times (in addition to my usual petrol costs).
  • Car expenses (insurance, repairs etc) – £20 – Breakdown cover for the year.
  • Gym/Sports – £30
  • Music/gigs/cinema – £15.98
  • Cash Withdrawals – £73.80
  • Miscellaneous – £810.39 – I spent about £470 on a new carpet and fitting for my spare room – I paid extra for some thick underlay as it’s the room above mine and I’m planning to get a lodger. I also made an advance payment towards a stag do I’m going to in April, and bought some new clothes. And of course there was Valentine’s Day…
  • Bank charge – Negative £9.01 (ie they paid me).

Total: £2155.70

Not a great month spending wise, with a lot spent on a new phone and new carpet. I also spent quite a lot on eating out, but then I tend to pay for both me and my other half as I earn more than her. At least, I think I earn more than her, I don’t actually know…

Income:

I split out my income into active and passive – passive is basically my rental income, active is everything else.

  • Salary (after pension/sharesave removed) – £2176.54
  • Pension payment – £877.50 – I put in 6%, my employer puts in 20%
  • Sharesave – £250
  • Matched betting – £0
  • Rental Income (after bills, expenses, council tax and mortgage interest removed) – £982.65 – My rental income was a bit lower than normal this month as one of my lodgers moved out.

Total Active Income = £3304.04

Total Passive Income = £982.65

My Savings Rate

Here is my usual spiel, with February’s figures put in:

Most people looking at my stats above might see an income of £3304.04 and spending of £2155.70 and say, aha, your savings rate is 1-spending/income which equals 0.35, or 35%.

Others might add the active and passive income together for a total income of £4286.69 and use the same calculation above to get a savings rate of 50%.

Other bloggers might consider the mortgage repayments as an expense also (I’ve only considered the mortgage interest above) but that’s a different topic altogether.

My method is to use passive income as an expense reducer. That is, my spending is £2155.70 minus £982.65 which equals £1173.05. As my active income is £3304.04 and my spending is £1173.05 that makes my savings rate 64%.

See my earlier post here if you want a bit more explanation on this. I do think it is an accurate way of measuring the savings rate (until someone tells me otherwise).

I thought I would do a graph of my savings rate from month to month and for the year to date. Partly this is because January was a fairly unusual month for me, a low income and a low expenditure, and so I wanted to see what my overall savings rate is for the year because this will put January’s figures into perspective. So here goes:

savingsratefeb2018

There you go, doesn’t look like much at the moment but hopefully it will become clearer as the year goes on.

My Net Worth Tracker

My net worth decreased in January from £195,648.85  to £193,833.17, a £1,815.68 decrease. This is based on the estimated values of my properties minus my debts (mortgage/loans etc), plus my savings, plus my investment accounts (including pension) and the total of my bank balances.

Same as last month, the decrease this month is mainly down to the values of my properties decreasing a little according to Zoopla. I’ve said it before – I realise Zoopla isn’t the most accurate way of measuring a property’s value but based on my rental yield I don’t think it’s too far off – actually I’m probably being quite conservative in my valuations.

It’ll be interesting actually, in a couple of months the mortgage for one of my houses is up for a renewal and I’ll be changing to a different mortgage provider so I presume they’ll want to do a valuation. It won’t give me an accurate valuation of my house – you never know how much your house is worth until someone actually buys it off you, but it will probably be more accurate than Zoopla, so we’ll see what happens.

Since this time last year I estimate my net worth has increased by £59,189.37. Here’s a lovely graph to show how my net worth has increased since September 2012:

networthfeb2018

So my net worth has dropped again slightly. It looks like house price inflation has decreased across the country, though there is massive regional variation. House prices are still increasing somewhat in my area, but they are actually decreasing in London, and they’re increasing by a lot in the North. This shouldn’t be a complete surprise really, London prices had become quite ridiculous so a correction of sorts makes sense. I’ve seen some articles attributing the London house price decreases to Brexit which is possible but I’m not so sure really. (I’m not trying to defend Brexit here, I still think that is a massive mistake, I’m just saying I don’t think Brexit is the cause of house price decreases in London.)

So there you go, it won’t be long until I’m back to do my March review!

As always thanks for reading,

Wephway

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One thought on “February 2018 Review

  1. Thought you were suffering from “the dip” as The Escape Artist has posted…….then I assumed it was the new partner (although old and married I remember those all-consuming days and months)…..and it turns out to be mostly about the book!

    The valuation of properties has always bothered me slightly as it’s an inexact science as you say, your house is really only worth what someone pays for it, and that is only on that day, during those economic conditions, plus all sort of other factors. The very next day it will be a different value…..

    Anyway, particularly with mortgage renewals, I’ve never gone after maximum valuation, and the broker I use has always discouraged it. This of course is counter intuitive, because every pound changes the LTV, which can change the interest rate charged, which in turn can mean serious savings over the life of the mortgage. I don’t think I have ever got a bad deal, I just might have got a 0.1% better deal, maybe.

    Mind you, I have never been worried about my valuations being refused, so that is a load off the mind when juggling finances (last time we re-mortgaged, all three were up for renewal at the same time, thankfully we took the opportunity to mix things up with different length deals so it won’t happen again).

    It probably isn’t news to you, but the best you can do is basically harass estate agents and spend a lot of time scouring Rightmove and Zoopla for “sold prices”, to come up with the magic numbers.

    Like

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