Sometimes when I’m trying to recall what I did over the last month I have a look at my spending tracker. The expenses tell a story. For example, on the 13th October:
Or how about the 19th October:
Or let’s perhaps have a look at the 2nd November (going into the 3rd):
One day I’m going to look back on these spreadsheets and think, Wephway, the reason you didn’t retire young is because you drank too much. You only have yourself to blame. And then I’ll probably think, meh, it was fun.
The advent of contactless payments and their prevalence now in most bars/pubs has shortened queue times which is undoubtedly a good thing, but it means there is now a record of every misdemeanor I commit. If ever a lawyer, or a journalist, or whoever wanted to paint a picture of me as a reckless alcoholic all they’d have to do is get hold of my bank statements and say, look here, this Wephway, look at all these transactions of drunken debauchery. Here is not a man to be entrusted with any sort of responsibility.
Anyway. October was a quiet month really. I went down to London to see a Marmozets gig. Me and my girlfriend hosted dinner with her uncle and his partner. We went down to visit my parents in Shaftesbury one weekend.
My parents, I should add, are ardent Brexiteers. I am an unabashed Remainer. I felt a bit sorry for my girlfriend on the Sunday morning as she sat through our two hour
argument discussion after breakfast. Actually it was all fairly rational I thought, none of us raised our voices at any point. I’d like to think I won the discussion, but really I don’t think any of us changed our minds. If there is a 2nd referendum, a ‘People’s Vote’, I’d say the only way Remain will win is if the youth turn out to vote. I read somewhere the demographics might swing it actually, apparently 750k Brexiteers have passed away since the referendum and about 2m young people are now eligible to vote (about 85% of whom are Remainers). So there you go, assuming no one changes their minds, time is on the Remainer’s side.
That’s a topic for another time though. How did my spending for October rack up, and am I on target for my 70% end of year savings rate goal?
- Mobile phone – £10. A few days ago at work my workmates were talking about how they’d managed to get really good deals on their phones. One of them, who has the latest iPhone, mentioned some figure in the £35-£45 mark (I forget what she said now). Then they turned to me and asked me how much I spend. “£10 a month,” I said. “Though I was thinking of reducing it to £7.50 actually as I don’t use much of the data allowance.” Their reaction was a mixture of amusement and confusion. I just shrugged my shoulders. To be fair I did buy my phone outright for £150, but I probably would make that back in 4-5 months compared to the latest iPhone. And my phone is a decent one I think.
- 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 – £104.53
- Eating/drinking out, takeaways – £149.58 – Not that bad considering!
- Petrol/travel – £177.77
- Car expenses (insurance, repairs etc) – £48
- Gym/Sports – £30
- Music/gigs/cinema – £9.98
- Cash Withdrawals – £15
- Miscellaneous – £141.48
- Bank charge – Negative £3.56 – ie they paid me.
All in all a very good month, spending wise, however my passive income took a big hit as I paid £663.98 for boiler repairs. Which leads me on to:
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 – £899.16 – 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) – £512.04 – As mentioned above, this was quite a bit lower this month due to a boiler repair and service.
Total Active Income = £3438.66
Total Passive Income = £512.04
My Savings Rate
I work out my savings rate by using passive income as an expense reducer. So in this case my spending is £1232.78 minus £512.04 which equals £720.74. As my active income is £3438.66 and my spending is £720.74 that makes my savings rate 79.04%.
Here is my month to month and year to date savings rate:
My savings rate for the year is currently sitting at 68.56%. To be honest, I don’t think I’m going to make my 70% target this year. And that’s because this week I filled in my self assessment tax return and worked out I need to pay £2325 in income tax. I was expecting it, but it’s still quite painful. I will probably pay that towards the end of December (the deadline is in January).
My Net Worth Tracker
My net worth increased in October from £229.474.56 to £235,316.04, a £5841.48 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 £2.8k of this increase is thanks to me saving my income (well, not spending it all is perhaps a better way of putting it). The other £3k is thanks the value of my investments increasing.
I remember when I first started on this journey to FI, a good 6 years back now, I decided I needed to have a net worth of £240k to be financially free. I figured that £240k would give me £10k a year (according to the 4% SWR rule), and that would be enough to cover me should I lose my job or whatever. Seems quite naive now really, my target has increased considerably, but even so I will feel a big sense of achievement when I reach that milestone I think. It’s not far off now.
Since this time last year I estimate my net worth has increased by £47,077.70. Here’s a lovely graph to show how my net worth has increased since September 2012:
As I mentioned last week, I think the housing market is probably going through a correctional period at the moment, and this year most of my net worth gain has been through solid saving more than anything else.
Having said that, I’ve been on a lot of holidays this year, including Thailand for 4 weeks, skiing in France for a week, a weekend in Germany, a week in Italy, a weekend at 2000 Trees festival, and recently a week in New York. So really, I could probably have saved a lot more if I’d been more dedicated to it. The reality is if I don’t meet my 70% savings rate target for the year I won’t be too disappointed as I’ve had a fun year with many happy memories to cherish.
Thanks for reading,