It’s almost time to do the October figures, so I’ll do a quick update on how September went as far as my net worth is concerned. As always last month’s figures are in brackets for comparison. I’ve included my net worth both including and excluding the house equity. The latter figure is to show how I’m doing in achieving mortgage neutrality.
Mortgage £83,459.58 (£84,107.72)
Cash £15,897.60 (£16,157.39)
Money in sharesave £13,304 (£12,804)
AVC’s £4,530.85 (£4,486.86)
Shares £30,833.00 (£31,523.07)
House £245,000 (£245,000)
Total Assets £309,565.45 (£309,971.22)
Net Worth including house equity
£309,565.45 – £83,459.58 = £226,105.87 (£225,863.50)
Net Worth excluding house equity
£64,565.45 – £83,459.58 = -£18,894.13 (-£19,136.50)
Nothing to write home about, but nothing horrendous either. Cash and share values are down a bit. I feel that my cash reserves are getting a bit depleted. I haven’t touched my cash ISA, but I’ve needed to dip into the excess cash that I have in my various current accounts. Life’s just a bit expensive sometimes. I can’t even really remember what I’ve spent the money on, but I do know it’s not been anything extravagant. Continuing car and house expenses. My budgets are still balancing, but I do feel that I’ve been paying out a lot over the last few months.
Saying that, it’s nice to see that my net worth both including and excluding the house equity have improved. There’s not much I can do about the share price, but at least if I keep chipping away at the mortgage and saving each month then I’ll hopefully keep going in the right direction. I think the key is not to get too het up about the volatility of the market. It’s strange times that we’re living in, which is being reflected in the markets. As long as I continue to keep my expenses as low as I can, whilst spending on things that add value to my life (I’m thinking travel and experiences with friends and family rather than hitting the shops for the latest designer whatever) then I should continue to move toward my goal of reaching FIRE at some mythical point in the future.
I think the next focus for me needs to be building my AVC pot to a much better level. I’ve had confirmation from my pension that I can use my AVC fund to take the tax free lump sum from my defined benefits pension, rather than using the funds from the main fund and so reducing down my annual pension amount. So if I can get my AVC fund big enough I can get my tax free lump sum and the higher level of pension that I could expect if I didn’t take the cash. Sounds like a win win situation to me, so now just the small matter of saving enough in AVC’s to make this happen. I think my next pay rise will again be siphoned off straight away to AVC’s before I get used to the extra money in my pocket.
I don’t really know what my finances will look like over the next few years. This time next year one of the kids will have just gone off to university, and the other one will have either one or two years left at school, depending on whether he goes off to uni a year early or at the usual time. He’s banking on a general election brining in a Labour government and a subsequent abolition of tuition fees. He’s in the lucky position of having free tuition fees here in Scotland, but he’d like to go to an English university if he doesn’t need to pay fees. So he’s hedging his bets and waiting to see what happens in the mess that is our political system.
Anyway, either way for a good few years to come I’m going to have kids away at uni, but no doubt spending a good part of the year back home for the holidays (or half the year as us regular folks call it). So I’ll still have plenty of upkeep costs for them, but my maintenance, child benefit and tiny amount of working tax credit will have stopped. My plan was always to do the share saves whilst I had maintenance etc coming in, so that when that stopped I would be able to stop saving to make up the shortfall. Then I discovered FIRE and realised that if I ever want to retire then I need to keep saving and investing.
So now I’m thinking that I really need to find a way to earn more money so that I can keep saving and working towards FIRE. No doubt there are areas of my life where I could reduce my spending, but whether I’m prepared to or not is another matter. After my recent experience of riding the buses, part of me did think that getting rid of the car might be the way to go. This was reinforced by the very first day that I was allowed to drive again I went out to Aldi and heard an ominous noise coming from the car. New brakes and discs and £200 later I was on the road again. It’s almost like the universe was taunting me with my decision to go back to the car. For now though, no car is a step too far for me.
Rather than cut my spending down further I do think that earning more might be more realistic. I’m working on that, but I’m not sure it’s going to be a quick thing to fix. Maybe it doesn’t need to be though. I’m exploring a few options at the moment, which is quite exciting. I don’t know if anything will come of these ideas, but if I don’t try then I’ll always be asking myself “what if?”
That’s about it for today. I was delighted to discover the extra hour this morning with the clocks having changed. My phone had changed automatically, so I was up at the right time to meet my friends for a run this morning. When I got back home from the run I couldn’t work out why I’d been out running for so long. Turns out I hadn’t changed my digital running watch, so I was an hour ahead of myself. Love a bonus hour like that. I’d love to say I’d done something really productive with that hour, but honestly I just wrote this blog post, which I was planning to do anyway. At least I still have a good bit of the day left to enjoy.