The Importance of Being Frugal

I normally do the Aldi shopping with my eldest. We’ve got it off to a fine art. He keeps me on track and away from the dangerous middle aisles. Running gear, power tools or a pizza oven anyone? Not that those things aren’t a bargain. They definitely are. But it’s only a bargain if you need it. So I get kept in check. We manage to stay within our budget, get a reasonable mix of food and a few treats thrown in for good measure.

Last week I ended up shopping with my youngest instead. That was a whole different experience. He was challenging me all the way round the shop. He was trying to take things out of the trolley as I was putting them in. Not that I didn’t appreciate his encouragement, but I really didn’t. I was trying to explain that it’s more cost effective to have a few nice things in the house to avoid ending up spending more on takeaways and chocolate runs to the convenient but expensive local shop.

I cook all our meals from scratch, there’s always plenty of fruit and veg in the trolley and a reasonable amount of meat too. I have a budget of £250 for the month for me and two teenage boys. This includes all the food for the month, cleaning supplies and toiletries. To be honest we usually only spend around £200 for the month and I quite often end up moving the surplus from the food budget to another budget that’s run over. I was explaining to him that this was a pretty frugal budget for what is essentially three adults. He disagreed. Vehemently.

I was thinking “Just you wait till you have to live in the real world mate and see how you get on”. Then I thought, is there maybe something I could learn from him and his fresh eyes on our budget? So when we got home he went through the receipt and crossed out what he thought we could do without. He was brutal. Now no doubt he was right. We could have survived on what he’d left on the receipt. Saying that though I’m not sure how sustainable his budget was. For me food is one of the great pleasures in life, and I don’t want to be going hungry just to hit a magic number in an excel spreadsheet. I’m pretty sure though that there is definitely some fat to be trimmed from our budgeting. And probably from my middle too, but that’s a whole other story!

Then he took it a step further. He worked out that he could bring the weekly food bill down to about £25. Now again, I’m not convinced of how practical this is on long term basis, but I was willing to indulge him. Plus I wanted to see where he was going with this. So he’s just cut at least £100 off our monthly food budget. His next question to me was if we put that towards the mortgage how many years does that reduce it by? That’s my boy! You know when you have those moments in life when you are just so incredibly proud of your kids and realise that although they may mock you for your FIRE aspirations, they are actually paying attention after all. So my 14 year old wants to know how much more quickly we can pay off the mortgage if he cuts the food budget for us. The answer to that question is about a year and a half. Maybe he’s on to something here. So I’m not quite sure I’m prepared for the sacrifice involved in cutting down the food budget so drastically, but I think there might well be some savings to be made and passed on to the mortgage payment. Food for thought, if you’ll excuse the pun.

So I think the moral of that particular story is that small changes we make can end up having quite a considerable impact on how quickly we can reach FIRE. I tend to think that I’m pretty frugal anyway, but maybe I’m not as good as I think I am. I was brought up to be careful with money and not waste it. My parents come from good working class stock in the north east of England. They got married in their early twenties and started a family. They rented their first flat in Newcastle, but by the time I came along they had bought their first house, having money for a deposit from compensation my dad got from an accident he had when he was a child.

Mum and dad both left school without any qualifications, which said more about the schooling on offer rather than their level of intelligence. Dad went to night class and ended up qualifying as an accountant. They took a chance when dad got offered a job in London and we moved down to the commuter belt. That’s where I grew up. I remember dad always working when I was growing up. He drove 40 miles in to London every day for his main job and every weekend he was busy working away at home on some sort of home working gig. Who knew side hustles were a thing even back then! At one point he was even working nights as a lecturer too. I honestly don’t know how he did it.

We eventually moved back home to Newcastle after 11 years living down south. My folks have done well for themselves with lots of hard work and a willingness to move around to follow the work. It was never really the done thing to talk about money when I was growing up, and I certainly had no idea about what sort of income was coming in. What I did know though was that you didn’t waste money. That’s set me up nicely with some good frugal habits that continue to this day.  

I’d like to think that I’ve continued down that path with my kids. They certainly know the value of money and how hard it is to earn it. If anything I sometimes worry that they think too much about saving money. I’m happy that they aren’t materialistic in the slightest, but I don’t want them to think that there’s never any value to be gained in spending money. Sometimes it is worthwhile to splash some cash on something that’s going to add value or joy to your life.

For me I think I’ve more or less got the basics covered in terms of not wasting money. I’m sure that there’s more that I could do, but because I’ve never really earned that much, I’ve always needed to be good at managing my money. I’ve always cooked from scratch, made up my lunch to take into work and tried to get the best deal on things that I do need to spend money on.

I occasionally find myself mentally totting up how much some of my colleagues must spend on coffee from Starbucks at work. This despite the fact that we get free hot drinks from the vending machines. I have a rule that I don’t buy anything at work. I always think that’s a slippery slope if I start buying chocolate from the machines. I’m at work to earn money, so the idea of spending money when I’m there seems totally ridiculous. It’s bad enough that I put petrol in my car to drive to work, despite the fact that I only live 3 miles away. What on earth would Mr Money Moustache say about that? Well, I know exactly what he’d say, but luckily I get to make my own rules about my spending. The alarm already goes off at 6am, so there’s no way on earth that I’m getting up earlier so I’ve got time to bike or run to work. That’s a step too far for me. Maybe one day, but not just yet.

I started taking advantage of a cashback site a year or so ago. I kept hearing about this idea of earning cashback on spending that you were doing anyway, but as it sounded too good to be true I assumed there must be some sort of a catch. What an idiot! All that cashback I’ve missed out on over the years. Once I discovered FIRE blogs I kept hearing more about these cashback sites and realised I’d most definitely been missing a trick. Of course now that I’m taking advantage of this I’m cutting my spending right back, so my opportunities to get cashback are a little limited. But there are always things that you need to spend money on, so when this is the case I might as well get some cash back for it. It’s a no brainer.

A case in point recently was when I was planning our summer holiday for this year. I’d asked the kids where they wanted to go, pretty much gave them free rein to tell me their dream destination and I would consider it. After much debating they came to the conclusion that their ideal holiday was a road trip around England. Ok. Not exactly quite what I had in mind, but the more I thought about it the better it sounded. So we’ve plotted a route and looked out budget hotels on the outskirts of the places we’re visiting to avoid the exorbitant car park charges. I was just starting to think about booking the hotels when an email pinged into my inbox with details of a 24 hour offer for 10% cashback on our chosen hotel chain. Kerching, thank you for playing. Don’t mind if I do. So the hotels are all booked now, cashback is winging its way to my bank account ready to put towards spending money for when we’re away. It’s not a huge amount, but as they say, every little helps. And speaking of that particular supermarket chain, we’ll be making use of the clubcard vouchers on holiday that they very kindly give me just for using my Tesco credit card every month for my day to day expenses. Paid off in full every month. Obviously.

This will be a bit of a different holiday for us this year. The last couple of years we’ve gone to Germany to visit a friend of mine. It’s always lovely to go over there and see her. It’s a bonus that she also lives in a beautiful place with a lake perfect for swimming in just across from her house. Flights are always cheap to get there, so it’s a fantastic holiday that costs next to nothing. Before that we always used to go camping, which again is a brilliant way to get an amazing holiday for next to nothing. Living in Scotland we never have to go too far to get to beautiful campsites. Although we always used to head way up north to stay next to drop dead gorgeous beaches. I really need to dust off the camping gear and head out again. I’m hoping that when I eventually reach FIRE I’ll be able to take advantage of lots of trips away. Camping trips and plenty of jaunts over to Germany are definitely something to aim for when I have a bit more time on my hands.

I think the moral of my recent experiences has been not to get complacent and think that I have all my frugal ducks in a row. I think I’m ok on the basics. I would never just automatically renew insurance etc without shopping around, I’m happy to threaten to move providers to get a better deal, I’m finally taking advantage of cashback sites, I’ve got budgets in place for absolutely everything and I don’t waste money on day to day spending. But just because I’m good compared to the people I see around me doesn’t mean I can’t improve. Five minutes online reading FIRE blogs will prove that to me. I’m a novice when it comes to saving money.  But I think that’s ok. I’m happy to learn, and also to recognise the things that I am prepared to compromise on and what’s a non- negotiable for me. That’s the wonderful thing about life. You get to design what you want yours to look like, both before and after FIRE.

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Find Your Pace and Settle In

I’ve done the Great North Run twice so far, and I’m doing it again this year. I remember a big banner on one of the flyovers last year which said something like “find your pace and settle in”. That became a bit of a mantra for me during that race. I got to a pace my body was more or less comfortable with, got my head down, got in the zone and got on with it. That worked pretty well for me. It seems to me that “find your pace and settle in” applies equally well to working towards FIRE. If I go too extreme then there’s a risk I’ll burn out and end up giving up. If I find the right pace for me on my journey towards FIRE then I can live the life I want to, confident that it’s sustainable for me and that I won’t look back and regret the things that I missed out on in life.

It’s been playing on my mind quite a bit recently that I’m getting a little bit obsessed with what my net worth is and how long I’ve got to go until I’m free. I’m waking up thinking about it, any quiet moments at work have me playing about with various figures to calculate when I can afford to give up work (spoiler alert, it’s going to be a while yet), and I’m constantly mulling over different scenarios that could lead to me reaching FIRE. I am a bit of an all or nothing girl anyway. Moderation isn’t really in my vocabulary. So it’s not really massively surprising that I’m constantly thinking about FIRE. It would be a lot more useful though if this thinking and planning led to a bit more action rather than just counting how many years there are to go. It hasn’t escaped my attention that what I’m actually doing is wishing my life away. Yes I want to reach FIRE as soon as I can, but do I want to do that at the expense of living life to the full and being properly present in the moment? Er, no, definitely not.

I think I’m probably at the point where I’m saving as much as I’m prepared to, based on my current income. The key now is going to be growing my income, hopefully from some sort of side hustle that I can fit around my current work, children, friends and hobbies. The things that I’ve got in place so far to pay off the mortgage and invest will keep doing their thing whether I’m constantly thinking about the figures or not. Keeping track of spending and what you’re worth is clearly an important part of reaching FIRE, but once you’ve got your life organised to spend less than you earn and invest the rest, then you should just be able to get on with living your life. So being slightly less obsessive is something for me to work on. I’m not sure how successful I’ll be on that score, but I can only try.

So without further ado, here’s my net worth figures for last month.

Debts

Mortgage £88,889

Assets

Cash £15,558

Money in sharesave £9,804

AVC’s £3,516

Shares £32,227

House £228,000

Total Assets £289,105

Net Worth including house equity

£289,105 – £88,889 = £200,216

Net Worth excluding house equity

£61,105 – £88,889 = -£27,784

So ta da, I managed to just sneak over the £200k mark for my net worth when I take into account the house equity. I was lucky with a bump in the price of the shares I hold from work, which nudged me over that elusive figure. It won’t take much for it to drop down below again, but hopefully with my continuing paying off of my mortgage and keeping saving then I’ll keep going in the right direction. The next milestone is getting to the point where I have as much in savings and investments as I owe on the mortgage, so I could theoretically pay it off. I reckon within the next two years that net worth figure excluding the house equity should be at zero. Hardly an impressive figure, but better than the negative amount I’m at just now.

I’ve had a change of heart about what I’m going to do with my pay rise. I was planning on investing in index trackers, but instead I’ve decided to put another £100 a month towards my mortgage. I’ve gone back and forth on this one, as I know I need to grow my passive income, but at the same time I can’t be financially free whilst I’ve still got the mortgage as a millstone around my neck. I think for me I’d feel more comfortable knowing that my debt was getting smaller. Barring interest rate rises (I know, I know, I’m forever the optimist) then this new payment means that I’ll have my mortgage paid off just before I reach 60. As 60 is the worse case scenario for when I want to pack in work, then I feel better knowing the mortgage will be gone by then to allow me to stop working. £100 is also more than my payrise, but I’m working on the assumption that I’ll find the extra money somewhere. I always do.

So with my current expenses excluding my mortgage I reckon I can live on about £15k a year. My pension at 60 will be about £10k, so I just need to make up the shortfall in passive income. Any income from a side hustle can hopefully also continue to pay for fun stuff that I’m sure will be in abundance in my post FIRE life. A bit of travel thrown into the mix with all my free time would be much appreciated. So I want to keep hammering away at the mortgage, keep on with my current share save schemes, as they’re due to net me a nice wee profit over the next couple of years, and work on increasing my income so I can afford to invest more now and use that to top up my passive income once I reach FIRE. Sounds like a bit of a plan.

A plan to reach FIRE is one thing, but what a post FIRE life will look like is a whole other thing. As I was getting ready for work on Monday morning I started to daydream about how differently my day would go once I’d reached FIRE. I certainly wouldn’t have set my alarm for 6am, although I imagine I would still be waking up fairly early, but having had enough sleep to feel fully rested. I might get up and do some yoga in the house. I’d spend my morning working on some sort of a side hustle, which I’d decided to continue after I reached FIRE to bring in some extra cash. I imagine when being free from work was still a novelty I would spend a bit of time getting my house sorted. I like to think I’m quite good at decluttering, but the reality is that just now I begrudge spending too much of my limited free time clearing things out. When I have much more free time I could sort my possessions and only keep those that were useful or brought me joy. I’d like to think my house would be a lot cleaner than it is at the moment, but whether that would actually be the case or not remains to be seen. I tend to do as much cleaning as is really necessary and then clean like a dervish when it gets messier than I can stand. I’m not entirely sure that would change with more time on my hands.

I think I would enjoy spending more time exploring where I live on foot rather than whizzing by in the car in a mad rush. I love walking, but just now I hardly spend any of my time actually doing it. Without things being so busy I would have time to walk places rather than automatically jump in the car.  It would also be nice to spend time with friends without being exhausted and feeling like you’re needing to try and find time to fit in visiting them. I think everything will be all the better for not being shattered all the time and having the luxury of taking your time with things.

I think the key to a happy post FIRE life will be to have enough going on that you feel fulfilled, but not so much that you end up feeling just as frazzled as when you’re working for the man. As with everything in life, balance is key. Sometimes when I’m off work I end up feeling at a bit of a loose end and that I’m not really achieving anything. For me, a bit of structure works well. So I imagine once I’m able to stop working I’ll want to adhere to a bit of a schedule, whilst allowing enough flexibility to go with the flow and make the most of opportunities that present themselves.

 I sometimes have hermit like tendencies, so making myself go out in the world will be important for me. As long as I’m still running then my various clubs will work well for this, but I’ll also need to factor in some other social interaction. Just now I crave time to myself, but once I haven’t got the enforced social aspects of work, then it will be important to make sure that I’m not spending all my time alone. Nice problems to have. You effectively get to design the life that you want to have. It takes a bit of thinking about though. For so long our lives are structured by our working hours and then trying to cram our actual lives in to the few hours in the evenings and the all too quick weekends.

So all in all I’m reasonably happy with how things are going in my quest for FIRE. It’s been really motivating to get over the £200k mark for my net worth including my house equity. Still a long way to go to say the least, but I’m definitely making progress. The next step is to increase my mortgage overpayment again to make good use of my pay rise. I’ll keep having a think about potential side hustles and do some more research on this.  It’s been good having a think about what I want my post FIRE life to look like. By visualising my ideal life once I’ve reached FIRE I’m much more likely to keep on track and make the necessary changes to bring in the extra income that will allow me to be free from my mortgage and have enough passive income to support my lifestyle. Let me know how you’re getting on with your FIRE journey. I’m always keen to learn from others that are striving for FIRE, or who have already achieved the holy grail of financial independence. 

The True Cost of Love

It probably hasn’t escaped anybody’s attention that it’s been Valentine’s Day this week. Although with all the hype involved it seems like much more than a single day. Supermarkets all over the land have seen men desperately shopping for flowers and chocolates. Even the likes of Aldi have whacked their prices up on flowers in anticipation of the big day. I have a bit of an issue with the idea of throwing money at a day designed to show your love for someone. Although actually, was the whole point of Valentine’s Day originally that it was an anonymous way to show you were keen on someone? That seems to have gone out the window a bit now and it’s all about conspicuous consumption to demonstrate your love.

As this was my first Valentine’s Day in five years that I haven’t been a confirmed singleton, I wasn’t quite sure what the crack was in terms of what I should be doing. Some judicious enquiries at work amongst the guys in my team solicited the advice that as long as I got the boyfriend a card I was good to go. Apparently this particular holiday is all about the guy splashing the cash and the woman sitting back and enjoying the adoration. Hmmm. Not sure I’m crazy about the whole idea of that. I like to pay my way and am not all that keen on major discrepancies on spending based on gender.

Turns out I had nothing to worry about. The boyfriend is a bit more imaginative that the average Joe (maybe my man picking abilities have improved with age). When I saw him last week he handed over two envelopes, one to be opened on Monday and one on Wednesday. These were not the usual red flashy envelopes, but ones recycled from other uses. Already he’s got brownie points from an environmental point of view, not to mention I’m totally intrigued and can’t wait to open them.

So 6am Monday when the alarm goes off I’m wide awake and ripping open that day’s envelope. Inside is a booklet he’s made up of the story of how we met. Cleverly he’s left out any Plenty of Fish references, but shown us having a hot chocolate up at Costa at the cinema. He’s even included a thought bubble of me hoping he wasn’t an axe murderer (much more of a genuine concern that you might think). Already he’s off to a fantastic start. When I get to work everyone wants to know what was in the envelope and there’s lots of chat about what might be in Wednesday’s envelope.

Tuesday I get home from work and I can’t figure out why there’s a beautiful plant on my doorstep. I literally walk right past it and go inside. It’s only when I talk to the kids about it that one of them suggests it could be for me from the boyfriend. Sure enough it is. So bonus points for a lovely plant, and bothering to drive out of his way to leave it at my front door.

Wednesday’s envelope has a book of coupons which he’s made up for me. Redeemable for home -made meals, bubble baths, support at one of my races etc etc. There was a very important disclaimer right at the back of the book. “Can’t be redeemed when the football is on”. That really made me laugh. It’s funny because it’s true.

Thursday I got an email through with a video card and he cooked for me on the night time. I didn’t even need to redeem a coupon for that! All in all it was a top week. I’m feeling somewhat bad that I just got him a card and baked him some Valentine’s cookies, but I think he’ll survive.

So the moral of this particular Valentine’s story is that there really isn’t any need to spend a fortune to show how much you care about someone. Let your actions and not your money do the talking. Coincidentally that’s really going to help with your FIRE aspirations too. So often in life I find that the best things in life really are free (or at the very least minimal cost).

I spent a lovely night in with the kids last night. We had games night, which was so much fun. We’re all majorly competitive, which can make playing games interesting to say the least. We do play Monopoly sometimes, but we have to lay out some pretty strict ground rules for ourselves, otherwise it ends badly. Total strops and meltdowns are not uncommon, and that’s just me. Last night was Kahoot, which was great fun. If you’ve not tried it I’d definitely recommend it. We hooked up a laptop to the TV and then you each use a phone or tablet. You select what sort of quizzes you want to do, load it up and off you go. We battle practically to the death. It’s so much fun. A totally free night’s entertainment. Well, some treats in the form of chocolate are usually required, but minimal cost anyway.      

I generally find that the things I seem to enjoy the most in life are either free or not got much cost involved. That’s not to say that I’m immune to the lure of spending. I’m a sucker for a nice sunny holiday, although I don’t think this necessarily has to break the bank. In terms of my day to day life though I’m pretty happy to live fairly frugally. I think I’ve been doing it so long that it just seems natural to me now.  

I do wonder sometimes if I maybe take things a bit too far. It’s not that I never spend any money, but I do seem to spend an awful lot of time thinking about money and how long I’ve got to go until I’m financially independent. Spoiler alert, it’s going to take me a while. For someone who genuinely believes that money really isn’t important, I do seem to somewhat obsessively count and think about the money that I do have. I tell myself that it’s not money for its own sake that’s important to me, but rather the options that it gives me in my life. Knowing the size of the mortgage that I still have to pay off is definitely one of the reasons that I feel tethered to my current job. The thought of leaving is majorly appealing, apart from the financial aspects. I feel that my job’s relatively secure, comes with a cheap mortgage, a pension and sharesave schemes that sucker me in to staying.

The jury is still out on whether I’ve got the balance right between saving and spending. I feel that I’m still quite close to the start of my FIRE journey, and that if I spend money that I don’t need to then it will take me even longer to get to where I want to be. Saying that, it’s all a balancing act. My kids won’t be at home forever, so will I regret not spending more money on experiences for us to all do together whilst they’re still living in the house? Maybe. I do worry that I’ll look back and wish that we’d done more as a family. Saying that, they’re teenage boys, so dragging them out of the house is not always the easiest thing in the world, or necessarily what they want to do. I guess the key is to spend money on things that genuinely add value to our lives, but not wasting money on things that don’t. So when they were younger it was a bit of a standing joke that we were always at Pizza Hut. The thing was though that it was a pretty cheap meal out, but we always had such a fantastic time. We’d go early evening mid-week and spend hours there just hanging out and having such a good time. Now that same trip out isn’t so much fun, so we don’t go out for meals quite so much.   

I’ve recently had an increase in the maintenance money that I receive from the ex hubby. I’ve always been of the opinion that a good relationship with my kids’ dad is much more important than screwing as much out of him as I can. So I never went down the CSA route. We’ve been divorced for 13 years, and we’ve only increased the amount he pays me once during that time. Teenage boys are not cheap to feed to say the least, so I thought it was about time that we had a wee chat about the amount he pays me. He’s doing really well for himself, so I knew he could afford to pay more. He agreed immediately and suggested that he give me more than I’d asked for. Best ex-husband ever! So I now have a bit more to play with each month. Well actually, that’s not strictly speaking true. I’m now able to balance my budgets again after a gas and electricity hike in my monthly payment played havoc with my finances. Anyway, there is now going to be a small amount left over at the end of each month, but I’ve decided to spend this on fun money for the family rather than save it. Hardly a great demonstration of working towards FIRE, but a good decision all the same I think. We’ll spend the extra money on experiences as a family, which I think will be money well spent.

I’ve been thinking about this saving versus spending on experiences dilemma quite a bit recently. I work with someone who’s in her mid- twenties. She’s been talking for a while about a school friend of hers who is ill with cancer. It was awful to hear of someone so young being so ill, but she had a large group of close friends who were all trying to take the positives from it and doing lots of fundraising for a cancer charity. The treatment seemed to be going well and the friend was managing to still see her friends. Then suddenly the friend got an infection and passed away. It seems so shocking when it’s a person who’s so young. Suddenly the thought of squirrelling money away for the future seems a bit ridiculous. The future is promised to no one. Now saying that, I don’t believe that spending money to buy a whole load of stuff is the route to happiness. If I suddenly discovered I only had a year left to live, the last thing I would be doing is hitting the shops. But would I be splashing a bit more cash on going out with the kids and creating memories? You bet your life I would. So why would I not do that now? So now I just need to work out what sorts of things my teenage boys want to do. It’s not quite as easy as it used to be. Pizza Hut and the cinema used to be the height of happiness for them. Now it’s more likely to be Maths lectures and Doctor Who based events. Although there is always games night.    

So I guess what I’m trying to say is that whilst the best things in life are most definitely free, sometimes it might be worthwhile to spend a little bit of money on experiences that will enhance your life and create memories with your friends and family. We’re only here for a finite period of time, so we need to make the most of it. For me, living life to the full is not about wasting my time buying stuff that will clutter up my house, but rather about spending time with the people I love doing things that will make us happy and give us things to talk about when we’re doddering around the nursing home. And if in a rather happy coincidence many of those things turn out to be free or good value, then all the better for this trip that we’re on working towards FIRE.

Net worth

I’ve got around to updating my figures for my net worth. I’m actually doing a little bit better than I thought I was. It’s really easy to feel that you’re banging away doing not much, but actually the things that I’m doing are having an effect.

So here are my figures.

Debts

Mortgage £89,432

Assets

Cash £15,404

Money in sharesave £9,304

AVC’s £3,278

Shares £31,206.

House £228,000

Total £287,192

Net Worth including house equity

£287,192-£89,432 = £197,760

Net Worth excluding house equity

£59,192-£89,432 = -£30,240

So with the house value included I’m pretty happy with those figures. I can almost taste that elusive £200K figure. Realistically though I’m going to need somewhere to live, so unless I can find a comfy cardboard box to call home then I definitely haven’t got £197,760 to play with. Saying that I live in a fairly large 4 bedroom detached house which I bought last year. Once the kids move out then I won’t need that much space, but whether I would actually sell up and buy something smaller is another matter. I want to have enough space for the kids to come back to stay whenever they want to.

Without the house equity included it’s not looking quite so rosy in the sassenach saving world, but that’s ok, I can work on that. I’m aggressively overpaying my mortgage(well as much as my single income household budget will allow). I reckon within 3 years I should be able to get to the point where I’ve grown my assets and paid off enough of the mortgage that I no longer have a negative figure when I exclude the house equity. That will be a happy day. In the meantime I’ll continue to overpay the mortgage, keep contributing £500 a month to my work sharesave scheme and keep working with my budgets to keep my spending under control and ensure that I have enough left over to invest. When my sharesaves mature the plan is to take the money with the profit I’ve hopefully made and invest in some low cost index trackers.

All the shares I own are with the company I work for, so I think the key message for 2019 is that I need to diversify. About £20k of the shares are in an ISA, so I’ll probably keep those. Also some of the shares I need to keep for a number of years as there were conditions whereby I got free shares and it will be tax and NI free, but only if I don’t sell too quickly. But once the share price is a bit more favourable then I’ll offload some shares and stick the money in trackers.

I’ve included my AVC’s in my figures, but not my defined benefits pension. If I stay with the company and retire at 60(in just under 12 years) then I’ll get about £10K a year. It should be much more, but the company pretty well screwed us on that a good few years ago. The salary that your pension was based on got capped, so basically any pay rises don’t have an impact on your pension. At the time I was in a lower grade job and working part time so it’s had a huge impact on the amount of pension I’ll get when I retire. I realise I’m lucky to have a pension, especially as this scheme isn’t available to people who joined the company later, but still. It is what it is. I try not to think too much about it as it annoys me. I just need to sort my finances and be glad that I’ve got something there in terms of a pension.

I’ve just updated all my budget spreadsheets for the year end, moving over the final figures to the 2019 spreadsheets. Overall I’m pretty happy with how my budgeting went in 2018. I’ve gone over on a few areas of spending. I had an expensive couple of months with the car, but then it is 8 years old now, so I guess that’s to be expected. Also my petrol and entertainment budgets went a wee bit over, but I know why that happened.

After five years of being completely and utterly singe I bit the bullet and tried out internet dating. To say I was sceptical was the understatement of the century, but as one of my friends famously said to me “Men aren’t just going to come knocking on your door to ask you out”. Apparently I had to put myself out there a bit. Who knew? So four months ago I decided to go for it. One Sunday night I stuck a profile up and waited to see what would happen. I didn’t even bother looking at any profiles, I rather lazily just waited for people to contact me. My rather haphazard plan worked pretty well. I got a few messages through. Plenty of the expected dross. Any that said “hi sexy, want to chat?” got dingied straight away. Luckily there were enough normal people on there too. Sky Running guy was the most interesting, and we were soon messaging away. I was quite enjoying myself when he totally freaked me out by suggesting we meet up. Did he not know I wanted to take things slowly? Anyway we met for a safe hot chocolate at Costa at the cinema. I was actually so terrified I was shaking and could barely string a sentence together. I can’t remember all that much about that date. It can’t have been that bad though, as that was followed up with another date for crazy golf and a meal. Four months later we’re still dating and having a great time. I’m not sure frugality and dating are natural bed partners necessarily. You kind of have to do the whole going out on dates thing. Saying that, we’re not exactly splashing the cash all the time, although it has been nice going to a few different events that I probably wouldn’t have gone to on my own or with the kids. Also he lives an hour’s round trip away, so I’m spending more on petrol than I used to. All in all though I think it’s money well spent. It’s always a balance in life isn’t it? I want to be financially independent, but not at all costs. I want to enjoy the journey too.

So overall I’m fairly happy with my current finances. I’m not on a massive salary, but I’m managing to budget well enough to live within my means, overpay my mortgage and save each month. I’m keeping the wolf from the door in single parenthood land, so I think I’m doing alright for myself and my boys. I need to rejig my investments so I haven’t got all my financial eggs in one basket, so that’s a job for this year. I’ll be getting a small payrise in April of about an extra £50 or £60 a month, so if my budgets are all still balancing then I think I might try investing in some index trackers. That will let me dip my toe in the water and get comfortable, so hopefully when my share save money comes through I’ll be happy to stick that in trackers too. Watch this space.

Resolutions

It’s that time of year again. Time to sort out my life and make lots of unrealistic resolutions. Actually that’s not really how I roll. Although I do seem to have yet again become a professional chocolate eater over the Christmas period, so pretty soon I’m going to have to do something about the tightness of my jeans by either eating a bit less and running a bit more, or buying new jeans. Hopefully not the latter option.

The last few years I’ve tried to make positive rather than negative resolutions. So last year was all about trying to get more sleep. Considering how much I love to sleep this should be a really easy one for me. I’ve even put an app on my phone that gets very passive aggressive with me when I’m ignoring it’s entreaties for me to go to bed yet again. And yet still every work lunchtime finds me in my car with the seat right back having a 20 minute power nap. I’m getting a bit better I think. I’m probably getting closer to 7 hours a night rather than the 6 hours it used to be. Maybe this year will be when I get to a solid 8 hours a night. I’m sure I could make much more progress on my goals if I wasn’t so exhausted all the time.

Two years ago I had some great resolutions. I had already got back into running after a 20 year plus hiatus, I was training regularly and had done quite a few races, including some half marathons and one full marathon. I was loving it, but felt that I really needed to find some people to run with. So I decided in the new year that I wanted to start doing Parkrun and to join a running club. I have to say they were the most beneficial resolutions I have ever made. I work every second Saturday, but when I’m not working, 9.30 will find me at my local Parkrun. On Christmas day I completed my 45th Parkrun, so I’m within sprinting distance of my 50 milestone when I’ll qualify for my free Tshirt. My kids give me a row when everywhere I go I try to recruit people to Parkrun, but seriously give it a go. It’s so friendly and inclusive (and free!) A 5km run is a lovely way to kickstart the weekend. I also joined my local Jog Scotland group. Again it’s really friendly and caters for all abilities. I’ve made some great friends through both Parkrun and Jog Scotland, and I now have some brilliant friends to run with. We’re usually so busy chatting that we barely notice the running. I really want to join another running club too that will give me access to some more intensive training sessions, so that’s a resolution for this year. I’ve been putting it off as I’m not sure I’m good enough, but I guess I’ll only start improving when I get out of my comfort zone. There’s also a really scary 5km vertical run up a mountain in September that even just the thought of is seriously terrifying me. That’s probably a really good sign that I should go for it. When they mention danger of serious injury and death in the terms and conditions then you know it’s a properly hard core race.

I’m a great believer that you can only really focus on a couple of areas of your life at one time. I usually find that when one thing is going really well my concentration slips in other areas. The trouble is there’s always so many things I’m keen to work on. I did loads of extra things above and beyond my actual job title at work in 2018, so I’m really hoping that will be reflected in my performance rating for the year, which will directly influence my bonus and payrise. I really need to decide once and for all what I want to do work wise. There’s some very compelling arguments to be made for staying with the same company. I think that’s why I’ve hung around so long. I’m managing to do enough things that really interest me but that aren’t actually anything to do with my job title to keep myself interested enough to stick around. I go back and forwards on staying with the same company but looking for an internal move. The problem I have with that is I have great working hours of 8-4(although I could do without the weekend working) and it’s 15 minutes from home to desk. The thought of potentially brutal shifts and an expensive (in terms of both time and money) commute really puts me off. I go through spells of looking, but then get lazy. Also I’m well thought of in my current department and work with a great bunch of people, which again makes me reluctant to leave. I think at the very least I need to explore the possibilities and see about earning some more money this year.

Finance wise I want to get my head down and keep overpaying my mortgage. I think the easiest way to organise your finances is to automate your plans so that you don’t have to make a conscious decision every month about what to do with your money. The old adage of pay yourself first has got a lot of merit to it. My sharesaves come off before I see any of my money, and my mortgage overpayment comes out like clockwork shortly after payday each month. I’ve got my budgets all set up, and it’s that time of year again to get all my budgeting spreadsheets ready to go again. I like to get myself hunkered down for a few hours and organise my finances for the year to come. It’s one of my favourite things about the new year.

There’ll likely be a few changes to the finances coming up this year. Maths Boy is hoping to head off to university this year if he gets his first choice of university. He’ll only be 16, so he may wait another year if he doesn’t get in where he wants to. I’ve definitely got mixed feelings about him heading out into the world at such a young age, but what can you do? I’m not quite sure how that’s going to impact my finances. I get maintenance for him and his brother from their dad, but I never went down the CSA route. I didn’t want to be screwing him for every penny I could, so we just agreed to an amount. I have to say we’ve managed to be incredibly amicable, which was what I wanted for the kids. I’ve missed out on a lot of money that I could have had from him over the years as he’s done incredibly well for himself in the years since we split, but for me that’s much less important than being able to still get on with the father of my children. I can’t quite work out if I’ll be better off when the kids leave home in terms of fewer costs, or if losing maintenance payments, child benefit and a small amount of child tax credits will make things more difficult. Time will tell.

I need to sit down and work out my net worth again, as it’s a while since I’ve done that. The kids are away this weekend and I’m not working, so maybe I’ll get a bit productive and have a good hard look at my finances. I’m already looking forward to seeing what 2019 brings. I’ll focus on deciding what I’m going to do with my work situation, join a new running club and hope to reap the benefits from that. I need to be averaging 7 hours sleep a night so I’ve got enough energy for everything I want to do. Oh, and of course see how I get on with this blog. Lots to do and probably not enough hours in the day, but I’ll do my best. There’s lots to look forward to and lots of work to be done to try and get myself a bit closer to FIRE. 

About Me

I’m a 48 year old single mum living in Scotland who moved here back in 2000. The details are a bit blurry in my memory, but there was definitely a man involved. One marriage, two children and one divorce later, the man is most definitely an ex now, but the love affair with Scotland continues. This is home for me now. Divorce is hard on the finances, there’s no doubt about that. We split when the kids were tiny, so it was a long hard slog juggling childcare, working part time and paying the bills. I’ve worked in financial services for the same company since I moved up here, but not in a high paying sort of job. Five years ago I managed to manoeuvre myself into a job with that same company working full time and earning a lot more than I had been. Saying that, my salary now has only just nudged over the £30k mark, so we’re most definitely not talking big bucks here.

 My main focus for a lot of years was paying as much of my mortgage off as I could. When I took out my first post-divorce mortgage back in 2006 interest rates were a lot higher than they are now. I’m lucky enough to have a base rate staff mortgage, which is great, but it does somewhat suck you in and make you very reluctant to leave. As interest rates dropped, I just kept paying the same amount to my mortgage and I loved checking my balance and seeing it coming down. I was torn about what to do with the house. We just about had enough room where we were, and if we stayed put the mortgage would have been cleared by the time I was in my mid-fifties. I really wanted more space though. I’m pretty sure my kids are going to be living far away from here when they fly the nest. Maths Boy has already applied to mostly English universities, despite my dire warnings of student debt if he goes south of the border. To be fair, his dream is studying in Cambridge, and I don’t want to be the one to rain on his parade. Coding Boy thinks his future lies over the water in America. Whatever happens, they both have really clear ideas about what they want to do with their lives and careers, and Scotland doesn’t seem to feature all that much in those dreams. So, I wanted a big enough house for them to be able to come home to stay whenever they wanted. I’ve got that now, but unfortunately I’ve also got the mortgage to go with it. I’m overpaying again, but effectively I’ve started my mortgage afresh. Even at the current low interest rates I’m going to be 62 before I’m done with it.

I’ve become a bit obsessed with FIRE blogs over the last few years. I seem to spend an inordinate amount of time reading them and feeling that I should be doing more to sort my finances. I’ve got budgets set up for everything with a corresponding spreadsheet. Don’t get me wrong, I’m most definitely not a Mr Money Moustache, but I do alright with the money I have coming in. At the end of the day you have to live a bit too. Time just seems to keep ticking away though and I don’t seem to get much closer to FIRE. I’ve come to the conclusion that rather than trimming the fat any more, what I really need to do is increase my income. That’s easier said than done though.

 I go round and round in circles trying to work out what to do for the best. I know I need to get my mortgage paid off and increase my pension and passive income so that I can afford to retire at some point. I have a defined benefits pension, which unfortunately got capped when I was working part time and earning £10k less than I am now. So basically me going full time and getting a pay rise hasn’t helped my pension any.

 At 60 my pension will be about £10,000 a year. I’ve worked out that without a mortgage or any work related costs I can live on about £15,000 a year. Of course I need to take inflation into account, but when I’m retired I won’t have two teenagers eating me out of house and home. I’ve got about £1500 a year coming in from dividends just now, which I reinvest. Rather foolishly though that all comes from shares in the company I work for. The plan is to change that. In 2020 and 2021 I have Share Save plans maturing, and I’ll just take the money from them and invest it in something else. Index trackers seem to be the sensible route to go down.  Most of the shares I own just now are in ISA’s, so I’ll probably just leave those well alone.  Any not safe from tax I’ll sell (when share prices are not quite so dire) and either pay off some more of the mortgage or put the money into index trackers.  At this stage my goal is to retire at 60. Not exactly early, but much better than it could be. The dream scenario is to quit my job in my fifties, but I think that’s going to be a tough ask. The key is going to be to increase what I’m earning. I think you can only reduce your expenses so far. I definitely could cut costs, but the question is would I want to. I don’t want to look back on my life and think that I’ve not spent money on experiences that could have enhanced my life. I think that Minimalism has a lot to offer in this regards. For me it’s all about the people and experiences in my life, not about the stuff. Saying that, I really want to be financially independent and have the choice about what I want to do work wise.  Having a separate source of flexible income that I could continue when I retire from the traditional 9-5 grind is the way to go. Watch this space as they say.