So it’s Friday evening and what better way to celebrate the weekend than to sit in a dark room and write a blog post about last month’s expenses! That’s how I roll baby. Seriously though, I’m quite glad I’m not out again, because my health, my finances, and a little bit my mental sanity has taken the strain this last month. So what have I been up to?
At the start of May I went to Sorrento with my girlfriend for 5 days. We stayed in an all inclusive hotel, which meant that I ate a silly amount of food (including pizza) every day . All the drinks were included as well so I drank an inordinate amount, including a bottle of wine every day for dinner, beer, cocktails, many more cocktails, and some more beer.
We did make a trip to see the ruins of Pompeii for a bit of culture, and we took a boat trip out to the island of Capri which was very scenic. All in all I would highly recommend Sorrento, the people were friendly, the weather was lovely, and the scenery was spectacular. I just wish we’d had longer to be honest. Oh, also they have some fairly unique taxis in Capri:
Going out (a lot)
The rest of May flew by. The 12th May was Eurovision so many drinks were drunk round my friend’s house for that. The weekend after I had a couple of people staying over so naturally we drank a lot and then went out and drank some more. Then the weekend after that was a cider festival down in Burwell. And the weekend after that was the beer festival in Northampton.
All of which is why I’m kind of glad I’m in on a Friday night and not out drinking again. In fact, I’m actually starting to worry a bit about my burgeoning waistline. In the last year and a half I’ve put on about 2 stone, and my social life is definitely part of the reason for that. I don’t drink alcohol when I’m at home, but when I’m out I very much conform to the British drinking culture I’m slightly ashamed to say.
I have mastered the floss dance though, so, you know, there’s that.
Major Expenses in May
Obviously one of my main expenses in May was the Italy trip – me and my girlfriend split the costs roughly 60/40 and once cash is factored in I spent about £730 on the holiday. We had a little bit of a financial chat while we were there actually, and it emerged that she is on a pretty good salary. I don’t really want to say what she earns here but we did joke that eventually I could be a stay-at-home dad, a kept man as it were. (I mean, I say I was joking…)
I was also stung by some repairs I needed for my car. I forget what they did, something to do with the exhaust and the suspension, but it knocked me back £691 which was fairly painful. My car is now 12 years old and the repairs seem to be coming in more regularly now so maybe it is time to start thinking about getting a newer one. At what point do you decide a car is so old and worn out it’s not worth getting repaired anymore? I don’t know but I’m hoping I can get another two or three years out of this one.
Other than that I didn’t spend a huge amount apart from of course all the eating and drinking out which totaled to about £300. Ouch.
A side note, before I dive into my expenses. I watched my first ever episode of Love Island a couple of days ago and I was quite shocked. It emerged one of the guys had spent £1k on a first date. Now, obviously he’s a bit of an idiot to spend £1k on a first date, that’s crazy unless you’re rich which I don’t think he is. But the thing that shocked me more was the reaction of the girls. They positively cooed over him, I’ve not seen anything like it. I guess these people are not representative of the population as a whole but even so, what kind of example are they setting? I’m fairly sure there are a lot of impressionable people watching that show.
Anyway now I’ve got that mini-rant out the way, here’s my expense breakdown for May:
Spending and Income Breakdown for May 2018:
- Mobile phone – £15.34. This should go down to £10 a month as of next month (I definitely said that last month as well) now I’ve moved to a new provider.
- Imputed 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 – £144.47
- Eating/drinking out, takeaways – £237.61
- Petrol/travel – £102.21
- Car expenses (insurance, repairs etc) – £691.50
- Gym/Sports – £30
- Music/gigs/cinema – £20.57
- Cash Withdrawals – £151.87 – Euros mostly for the holiday.
- Miscellaneous – £655.77 – Mostly holiday costs.
- Bank charge – Negative £9.76 (ie they paid me).
Another relatively expensive month. I’m hoping June will be better, but then I thought May would be better until I got hit by my car repair bill. I definitely need to rein in the drinking, for my health and my bank balance.
I split out my income into active and passive – passive is basically my rental income, active is everything else.
- Salary (after pension/sharesave removed) – £2289.50
- Pension payment – £899.13 – 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) – £1221.62. I had a new lodger move in this month so my rental income has received a bit of a boost. Of course, he immediately asked for a couple of items of new furniture and because I’m a nice landlord (ie not a social parasite) I obliged.
Total Active Income = £3438.63
Total Passive Income = £1221.62
My Savings Rate
I work out my savings rate by using passive income as an expense reducer. So in this case my spending is £2589.58 minus £1221.62 which equals £1367.96. As my active income is £3438.63 and my spending is £1367.96 that makes my savings rate 60.2%.
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).
This year I’ve started doing a graph of my savings rate from month to month and for the year to date. Here you go:
My savings rate for the year is currently sitting at 69.5%. The graph is starting to take shape – I am still hoping to keep that savings rate about 70% but we’ll see.
My Net Worth Tracker
My net worth increased in April from £209,342.27 to £214,630.60, a £5288.33 increase. 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.
About £2.2k of this increase is thanks to me saving my income (well, not spending it all is perhaps a better way of putting it) and the other £3.1k is thanks to the value of my properties increasing in value according to Zoopla.
(I say this every time – 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.)
Since this time last year I estimate my net worth has increased by £53,095.80. Here’s a lovely graph to show how my net worth has increased since September 2012:
Somehow I’ve had another reasonably good month in terms of my net worth creeping up, though it doesn’t feel like it when I’ve had such big costs. I think it helps that I have certain savings automated. The sharesave and pensions leave my salary before I see them, and my mortgages are both repayment (ie part repayment/part interest) so I’m paying down both mortgages (thereby increasing my equity) without thinking about them either.
It’s the old ‘pay yourself first’ motto – I can’t remember who popularised it, but basically set up your savings so you never even see them and you get used to only seeing what’s left.
Even so, I can do better, and there are some big costs on the horizon. It’s a bit early to think about marriage and kids but it does scare me a bit how much they’ll cost. Talking to my boss this week, he has three young kids and he says he and his wife pay about £1800-£2000 a month in childcare costs. Seems mad to me really, but it makes you think.
Thanks for reading,