Last month was not so great for the net worth figures, so let’s see how we’ve done for the month of August. As always I have put the previous month’s figures in brackets for comparison. I show my figures including my house equity, which is always a nice figure to see, even though I know that I’ll always need somewhere to live, so it’s not a true reflection of what I have to live on. I also show the figure excluding the house equity but including the mortgage. Although this seems counter-intuitive, as without the house you wouldn’t have the mortgage, I include it to show how I’m doing in my quest to become mortgage neutral.
Mortgage £84,107.72 (£84,843.68)
Cash £16,157.39 (£15,750.70)
Money in sharesave £12,804 (£12,304)
AVC’s £4,486.86 (£4,217.63)
Shares £31,523.07 (£27,982.60)
House £245,000 (£245,000)
Total Assets £309,971.22 (£305,254.93)
Net Worth including house equity
£309,971.22 – £84,107.72 = £225,863.50 (£220,411.25)
Net Worth excluding house equity
£64,971.22 – £84,107.72 = -£19,136.50 (-£24,588.75)
It’s nice to see a bit of a bounce back of the shares that I own. Last month was a bit of a tricky month, with a big drop in the value of my shares. It’s satisfying to see that this has only been a temporary setback (here’s hoping!) and that things seem to be on the up again.
I’m very happy to dip under the twenty grand mark in terms of how far from being mortgage neutral I am. This continues to be a two pronged attack from me. I’m throwing as much as I can afford towards the mortgage to bring it down and also saving as much as possible to increase my assets. This is a really important target for me. I didn’t formally track my net worth in my last house, but I would periodically do a back of an envelope calculation, and was always delighted to know that my non-house assets totalled more than my mortgage. Psychologically there’s something very comforting about knowing that you could cash things in and pay off what you owe.
Then I decided that I wanted a bigger house for myself and my boys to enjoy now, and to have enough space for them to keep coming home to visit when they fly the nest. I’ve gone back and forwards on this decision about whether it was the right thing to do. We were probably ok where we were, but I’m such a homebody, that I really appreciate the extra space that we have now. And the thing is that I have an asset here that I can sell. There’s no saying that I have to stay put as and when my situation changes. I’ll definitely feel more comfortable though when I’m mortgage neutral.
Pensions, Pensions, It’s All About The Pensions
It’s nice to see my AVC contributions growing there. I don’t pay a lot towards this, it was basically just a pay rise that I got a year ago that I decided to put into AVC’s before I got used to having the money. As I’ve got a defined benefits pension that I don’t need to pay into, I’m in a reasonably good position. Saying that, because the company screwed us over big time as far as this pension is concerned, it’s nowhere near as good as it should/needs to be. So my plan is to try to enhance this pension with AVC contributions and shares.
I was blindly paying AVC’s without much thought having gone into it. This month I decided I needed to do a bit of research, so I’ve been ploughing through some rather heavy documents figuring out what charges I’m paying, looking at how I’ve got my money invested and what my options are when I do finally pull the trigger on work. I was pleasantly surprised on the charges side of things and I already knew that I needed to diversify the investments as it’s all UK based at the moment.
My plan on the pension side of things is to rejig the investments a bit to get a bit of diversity in there and to contact the pension company to ensure that my understanding of what happens to my AVC pot when I retire is correct. It looks as though I can put my AVC balance towards my cash free lump sum on my main pension, so that I’m not taking as much cash out of that side of things and so keep my pension income as high as possible.
I’ve Finally Embraced Index Trackers
I’ve opened up a Vanguard index tracker ISA this month and have put in the money I received from my dividend payments. At just over £600 it’s not a massive amount, but it’s a start. The next two sharesaves that mature I’m buying and immediately selling to get my money along with the profit, and that’s going straight into the index trackers too.
Water, Water Everywhere But None Of It Covered On The Home Insurance
I’ve got a bit of an expensive time coming up. I’ve had some home emergencies this month, with a leaking toilet downstairs and then a more serious problem with the ensuite shower developing a crack in the shower tray and water coming through the kitchen ceiling. Luckily I realised the ceiling was sagging ominously, so managed to poke to a couple of holes in it to avoid total collapse. I seem to have got to it just in time.
I thought I might be covered on the home insurance, but it seems not. There’s a £500 excess for water escape anyway, so it probably didn’t make much sense to claim. I’m not great at DIY, so I got my handyman round to have a look for me. The ensuite basically needs a fair amount of work to get it fit to use again. As the toilet in there is such a shocking design it can’t cope with a single sheet of toilet roll, there’s an argument to be made for starting from scratch with it. I’d keep the shower and shower screen, as they are fantastic, but other than that it’s basically a new bathroom that’s needed.
I’m not wanting to shell out for that just now, but we do need a bathroom that we can all use, as up till this point we’d all been making use of the ensuite as the shower in there is amazing. The plan that I’ve come up with is for him to sort out my main bathroom. Just now it’s only tiled half way and only has a hand held shower and no shower screen. He’s going to take off the tiles, put up wetwall, attach the shower to the wall and put up a shower screen. Total cost under £700. He’s also shaved a little bit off the bottom of the downstairs loo door which would no longer shut because of the leak. That means we can now use it again, and we’re just going to live with slightly wobbly floor tiles that have lifted because of the escaping water.
At some point I will get the ensuite done properly, but in the meantime at least we’ll have a fully functioning main bathroom. Oh, and at some point I’ll get something done about the kitchen ceiling. I’ve got a dehumidifier going to dry it out, but actually it doesn’t seem too bad, and I might even get away with just paining over it. Disaster averted. I always meant to get the main bathroom done at some point anyway, so this has at least forced my hand. Hopefully this won’t impact on my figures too much for next month. These things happen when you’re a home owner, and at least I have the money there to make use of.
Generally speaking I’m really happy with the figures for this month. They’ve definitely perked up a bit since July. There are still changes that I need to make to my finances, but I know what they are and I just need to wait for the right time as far as the share price is concerned. A little bit of tweaking to do with my pension, but nothing too drastic. I seem to have things fairly well automated, which for me is probably the key to being consistent. If things happen automatically with my money without me being involved then all I need to do is set and forget. That’s the plan anyway.