November Has Been A Belter

I’m very excited to be doing this November review. The markets have been kind, and my figures should be good. I’ve been working hard on my goals too, so all in all a great November. Let’s start with my Net Worth for the month.

As usual I’ve got last month’s figures in brackets for comparison. I’ve got my Defined Benefits Pension in there based on twenty years worth of money if I start drawing it at 60. I’ve also got my Net Worth not including the DB Pension or the house equity, which seems barmy, but is really just to represent how close I’m getting to mortgage neutrality.

My annual pension statement is finally out (18 months after the last one; you’d think there was a global pandemic or something). The figure I use for my Defined Benefit pension is the annual amount that I would get if I left my company now and then started taking the money when I’m 60, which is the usual retirement age for that pension scheme. I then multiply that by 20 on the basis that I’m hoping to last at least 20 years after I start drawing my pension. I’m actually hoping to get to 100, but I guess that’s not a given. Since I clearly have more service since the last statement was out, my annual figure has increased, so you’ll see that reflected in my Net Worth figures.

Debts

Mortgage £95,822.50 (£96,314.61)

Assets

Cash £34,304.08 (£34,114.80)

Defined Benefits Pension £130,653.60 (£123.683)

AVC’s £9,139.84 (£7,176.61)

Shares £50,102.75 (£40,001.04)

House £250,000 (£250,000)

Total Assets £474,200.27(£454,975.45)

Net Worth including house equity

£474,200.27 – £95,822.50 = £378,377.77 (£358,660.84)

Net Worth excluding house equity and Defined Benefits Pension

£93,546.67 – £95,822.50 = –£2,275.83 (£15,022.16)

Those figures are making me very happy. Of course the work share price has dropped slightly since I updated my spreadsheets, but I’m not going to worry about that too much now. In October I was delighted to sneak over the £40k mark for my shares, and now I’ve broken the £50k mark. I’m aiming for £125k, so it most definitely feels like I’m making progress. My Vanguard index trackers are doing well, and as I say the work share price is much improved. It’s still got a way to go before I break even, but hopefully it’s going in the right direction. The plan is still to sell off the work shares gradually and get everything into Vanguard index trackers within an ISA. A way to go yet, but I’ll get there.

It’s good to see my AVC fund jumping up so much. I’m aiming to get £50k in there so I can take my cash lump sum without impacting the annual amount that I receive. It was great to be able to put in a higher amount for my DB pension figure. It often feels like a bit of a slog sticking with the same company, but I’ll reap the rewards in terms of a bigger pension the longer I can stick it out.

The figure that is making me the happiest out of all of these is the net worth excluding the house value or the DB pension. This is how I measure how close I am to mortgage neutrality. There’s something really lovely about knowing that you could cash everything in and clear the mortgage if you were so inclined. I’m not going to of course, but just knowing that possibility exists would be very comforting. I was in that position previously, but then I bought a bigger house. Very un-FIRE like of me I know. Sometimes I doubt my decision, but mostly I think it was the right thing to do. Particularly with everything that’s gone on this year. Knowing that we have plenty of space has made lockdown much easier. And I’ve always got an asset to sell, or even make money from in terms of renting out rooms in the future.

I can almost touch mortgage neutrality now, and I can’t wait. I am however expecting that I might become mortgage neutral and then go back the way from time to time. I’ve got a fair bit of work I want to do to the house. I’m squirrelling money away for that, and at some point I’ll be splashing the cash to get the work done. That’s life though. It’s not always about having money in the bank and in investments. Sometimes you need to spend a bit to improve your surroundings or just generally to live a bit. Saying that, I’ll probably try and enjoy my mortgage neutrality for a few months once I get there before I spoil it all by spending my cash.

I’m getting used to having less income coming in because my eldest son has gone off to university. My maintenance money has halved and I’m getting less child benefit and working tax credits. Luckily(!) the tax credits were tiny anyway, so I wasn’t reliant on them. On the face of it you’d think that I should be in the same financial situation as before. There’s one less person in the house, so my expenses should drop. It’s a good theory. I am spending less on food etc, but already he’s home for the Christmas holidays and so the food bill has gone through the roof.

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Over the whole year the holidays are slightly longer than the term time, so I do still have a decent amount of expenses for him. Add to that the fact that I will be stocking him up with a decent supply of food to take away with him so that he actually has something to eat. I absolutely don’t care though. It’s fantastic having him home for the holidays. I’ll manage the money side of things one way or another. I don’t ever want him to stop coming home. He’s been such a miss. It’s great that he’s out in the world doing his thing, but it’s also brilliant to have him back and that he still wants to hang out with us. It was good to see that my cash has actually very slightly increased this month, despite having less money coming in. This not going out or driving anywhere certainly has some financial benefits.

Let’s move on now and have a look at my goals for November. Here’s a quick reminder of what I had set myself to work on.

  • Get under 11 stone. And stay there. I am only going to count this as a success if I am under 11 stone on 1st December. PASS I’m absolutely delighted with this one. On 1st December I weighed 10 stone 8.6lb
  • Exercise four times a week. Ideally this will be four runs, but with my propensity for injuries, I’m going to say any exercise for at least 30 minutes counts. PASS I exercised 4 times a week in November, with a total of 17 exercise sessions. It was good that I put in that it didn’t need to be running, as a period of self-isolation after my running partner tested positive for Covid meant I had to do some inside exercise.
  • No chocolate for the whole of November. PASS A couple of sticky moments where I was absolutely desperate for chocolate, but I resisted. What’s more it’s now 10th December and I still haven’t had any chocolate. Hard to see how that could continue for much longer with Christmas just around the corner, but you never know.
  • Finish section 5 of the Duolingo Spanish tree. PASS No problems on this one at all. I’m giving myself a bit of a break on this one now, just doing the bare minimum to keep my streak going.
  • Watch fifteen episodes of 100 días para enamorarnos. PASS I actually watched 19 episodes. This is not even a chore, just something I do for relaxation. I’m still not understanding a massive amount of the language, but it’s definitely helping.
  • Get under 2 minutes for the Rubik’s cube. PASS In November I did the cube in under 2 minutes 19 times. I can’t do it that quickly every time, and I still sometimes forget the algorithms. I’ve definitely done this enough to say I achieved this. I’ve barely picked up a cube for a few weeks now, so I’ll need to make sure I solve it from time to time so I don’t lose the skill.

I have to say that has been an absolutely cracking month for me. I’m not sure if I realised how well I was doing until I sat down and looked at what I’d achieved. It’s not too often I achieve every single goal that I set myself. They were fairly challenging goals too. What’s very good is that I’ve continued the weight loss, exercise and lack of chocolate even after the month ended.

Goal wise for December I’m going to be quite easy on myself. Tis the season to be jolly after all. Saying that I’m keen not to reverse all the good work I’ve done up till now. I’m enjoying eating healthy food, exercising plenty and generally trying to get myself into good shape. I don’t want Christmas to ruin that. I do want to be able to enjoy Christmas though. I have 5 days off work, starting on Christmas eve, so I want to make the most of my time off.

Let’s set a couple of goals for myself for what’s left of December.

  • Get under 10 and a half stone. I don’t need to stay there for the rest of the month, but I would like to at least know that I’ve managed it at least once during the month
  • Don’t start the Christmas eating until the week of the 21st December. Christmas is typically the time for me to eat my body weight in rubbish. I would like to try and a avoid doing that for as much of the month as possible. It’s proving easier than normal with not being in the office and surrounded by tins of chocolates.
  • Weigh less than 11 stone on the 1st January. This should be easy, but it won’t be. I’ve hit that age where I can’t get away with eating rubbish. My body puts weight on really easily, so if I have a week of eating nonsense the scales will reflect this. We’ll see.

That’s it for January. No massive goals, just try not to reverse all the good that I’ve done over the last month or so with my eating habits. I’m looking forward to getting my house looking lovely for the holidays, watching some Christmas films and spending some time with my children. That’s what life’s all about after all, time with the people you love. Have a great Christmas everybody and then we can all start 2021 raring to go and ready to work on our goals to make 2021 the best year ever.

Did We Really Invent FIRE?

Pursuing FIRE feels like being in a secret club. A weird nerdy spreadsheet obsessed club. I like that. We’re all out there in the world doing our thing (in a socially distanced way of course), but we have this whole other side to us that most people know nothing about. I’m fairly open about my obsession with my finances and the fact that I want to retire before I’m dead, but I tend not to talk openly about the FIRE movement. I talk to my kids about it, as I’d like them to learn from my mistakes and for them to be able to buy themselves options in life by making smart decisions. Outside my immediate family though I don’t say a lot, and I certainly don’t talk about the fact that I blog about FIRE.

I love being part of the FIRE community. It’s great to see people doing so well pursuing their goals. FIRE people are my sort of people. They’re goal focussed, driven, good at coming up with solutions to problems, and the fact that there are a ridiculous number of runners in our number is an added bonus. There’s a real mix of demographics too. We’re not all the cliché of a well paid software engineer raking in the big bucks and being able to retire in our thirties. Some of us discovered FIRE much later in life, are on much lower salaries and have kids to support. FIRE doesn’t discriminate though. If you’re willing to work on your spending, set up your investments and stick with it, then you will get there eventually.

The online FIRE community gives you a great opportunity to learn strategies and keep motivated. Let’s be honest though, it’s not exactly rocket science. Yes, there’s some maths behind it, but once you’ve learned the basics it’s really just a question of getting your head down and being patient. This is the difficult bit, and where it’s great to be surrounded by people who are on the same path as you. They understand that it’s important not to be splashing the cash on rubbish. We keep each other accountable by publishing our figures and giving ourselves goals to work towards.

Do you have to have stumbled upon FIRE to be able to quit your job and do something different though? Well clearly no. Maybe there’s a whole other group of people out there who have reached FIRE without even knowing what it was. I’ve been kicking about on this planet for fifty years now. Even as an introvert who avoids social interaction like the plague I’ve still had a fair amount of contact with lots of different types of people. I’ve been thinking about people I’ve known over the years who have made big changes to their lives, and with quite a few of them it looks suspiciously like they’ve reached FIRE and have pulled the plug on their 9-5 and taken their lives in a whole different direction. None of them has ever mentioned FIRE, and I’m pretty sure it wasn’t something they knew about.

After about five minutes of ruminating I’ve come up with a group of people in my life that would fit the bill as having reached FIRE and done something completely new with their life. I’ve always been so impressed when people make massive changes to their lives, but I’d never really seen the connection before between what they had done and the fact that they’d hit FIRE without even knowing what it was. I’ll introduce you to these people and we’ll see if there’s anything to learn from them.

First up my ex-husband’s sister and her husband. They were both chemists and live in the south of England in a big house. They chose not to have kids and have always had a good lifestyle. They love their golf and have travelled all over the world. They’re not into spending money needlessly on stuff, but rather would spend it on trips away and nice meals. When they were in their late forties they both got made redundant. They both worked for the same company and had a lot of years service. The severance package was generous and they jumped at the chance to never work again.

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This could look like a lucky break, and it certainly helped them to achieve the great life that they have post work. If we look a bit closer though, good decision making along the way helped make their new life possible. They didn’t have debts, their mortgage was already paid off and they didn’t have an extravagant lifestyle to fund. Lots of other people in their situation would have found redundancy a disaster. Both of them getting laid off at the same time would have meant no money coming in to the house. If they had large outgoings and no income then they could have quickly been in dire straights. They would have been scrabbling around trying to get work, which wouldn’t have been easy at their time of life.

Instead though they were able to spend lots of time playing golf and having some amazing slow travel holidays. My ex sister in law has taken up photography and now regularly gets her pictures published, so she’s even developed another stream of income. What’s even more gratifying about the lifestyle they were able to adopt is the fact that my ex brother in law is now having lots of quite serious health problems. He has great difficulties getting around and is likely to end up in a wheelchair before too long. If they hadn’t been in a position to take advantage of their redundancies then they would have missed out on all those great experiences and many, many rounds of golf.

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Next up is my step cousin and her husband. They lived in Oxfordshire and she had a really high powered job. She spent a lot of time flying all around the world training people in various call centres. This was a high stress job and involved a lot of time away from her husband. They opted not to have children (I’m sensing a theme here!) and instead spent their money on a nice lifestyle and a holiday home in Devon that they bought jointly with my auntie and uncle.

It got to the point where she resented spending time away from home and wanted more time rather than more money. Lots of late night chats ensued plotting an escape route. They realised that if they sold their Oxfordshire house and moved to Devon that they could both afford to give up work. So that’s what they did. They moved to Devon, got themselves a couple of dogs and and seem as happy as it is humanly possible to be. They travel back to Oxfordshire reasonably regularly to see family there and for the husband to do some gardening work for a long time customer. This keeps them in touch with family and brings in some extra cash.

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Another cousin now. I must have a family that’s particularly motivated to change their lives! Let’s hope it’s in the genes and has been passed on to me. This is one of my Newcastle cousins. He’d moved to London when he was starting his career and got into marketing. He did very well for himself and quickly rose up the ranks. Along with that though came the almost compulsory socialising with clients and the heavy drinking that inevitably went hand in hand with that. He met his now wife and they started a family.

Having three young children didn’t mean he worked any less. If anything the pressure to earn seemed greater, and the lovely house they now lived in needed an ever bigger mortgage to pay for. The lifestyle wasn’t sustainable, and they started to talk about him quitting and doing something else. Whenever he mentioned at work about leaving though they offered him more and more money to stay. Nice to be appreciated that way, but I imagine it must make it much more difficult to walk away when they are throwing money at you like that.

Eventually things came to a head as they invariably do. It became clear that things couldn’t continue as they were. His wife hatched a plan. Years of a fantastic salary meant they were in a reasonably good place financially. They sold the London house and moved to Cornwall. They now live in a house with a view of the sea. The kids play on the beach after school and enjoy family time with both their mum and their dad. And the financial side of things? My cousin’s wife set up a small business making soap. My cousin helps her now and they have grown sufficiently to be able to employ one other person. They are even doing well enough to have a small business premises for manufacture and dispatch, rather than just using the kitchen table. The business is big enough to sustain them, yet small enough to allow a quality of family life that was never possible previously.

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And finally a non-family member. This is a man I met at parkrun on Christmas day last year. We got chatting and exchanged numbers. There then ensued 10 months of messaging, flirting and a handful of dates. I had high hopes that this might turn into something promising on the romantic front, but sadly we were after different things so I had to put an end to it. Although it didn’t work out on the dating side of things he has become a bit of a role model for me on the FIRE front.

He’s a retired GP. He was 58 when I met him and had retired at 52. He made a decision fairly early on in his career that he didn’t want to be working forever. He loves the outdoors and spends his time cycling, kayaking and walking. Although he’s retired he pretty much spends most of his weekdays volunteering doing wildlife surveys, so it’s almost like he has a job but he just doesn’t get paid for it. It’s his idea of heaven. He gets himself to some beautiful spot and counts birds, whales, butterflies, or whatever else has been allocated to him that particular day.

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I told him about the FIRE movement and although he’d never heard of it his reaction was that he’d pretty much followed the FIRE principles, but had just figured out a plan himself and implemented it over the years. He put massive amounts into his pension and never had an extravagant lifestyle. From the sounds of it this was a bit of an issue with his wife during their marriage. She couldn’t understand why she didn’t have the lifestyle of a doctor’s wife. Once they were divorced he was able to put even more money away for his future.

Towards the end of his career he moved north from England to the islands of Scotland. He worked as a locum GP moving between the islands. This allowed him plenty of time off to spend his leisure in the mountains. Eventually though he wanted to pull the plug completely. He told me that his spreadsheets got a really good work out at that time as he tried to figure out if he could afford to quit. He realised being mortgage free would be crucial, so he sold his house and bought a modest ex council house for cash. He’s never looked back.

None of these people knew about FIRE, and yet all of them achieved what we’re looking to do. They were all on good money, so maybe that made all the strategising that the FIRE community is so good at slightly less important. Most of them have started some sort of new income stream, but in all cases this has been something that fits around their lifestyle. I don’t think most of them would have been able to predict in advance where this money would come from. The freedom of time allows you to develop your passions and money will often flow from that. They all took a leap of faith. They couldn’t know how it would work out, but they went for it anyway. That’s something I’m going to try and take from knowing these people. Yes, planning is important, but sometimes you just have to jump off that cliff.

How To Earn More Money

I was chatting with one of the kids recently and he pointed out that it seemed that most people pursuing FIRE were on really good salaries. He said that for them it was really just a question of pointing it out to them that they should save a big chunk of their earnings and they’ll be there in a few years. It should be easy for them as they can cover their basic needs with a tiny percentage of their salary, still have some fun money left over and then save the rest without too many problems.

First of all it’s nice to know that he’s been paying attention over the years when I’ve been banging on about money and FIRE. Is he right though? Well, certainly up to a point yes. It’s not rocket science that if you’re earning good money you have a much bigger capacity to save. Of course lifestyle inflation can all too easily creep in, and you might find yourself earning good money but with even bigger commitments. You can always do something about that though.

Although it can be frustrating to read about the big hitters in the FIRE community on fantastic money and being able to save a huge proportion of their salaries, there are plenty of us out there on much more modest income still doing our FIRE thing. Within a FIRE context I’m definitely on a low salary, and yet is that really the case in a wider context? A very quick google shows that the average UK income last year was around £30k, and I would imagine that would be down this year. I’m on about £32,500, so actually a little bit above average. Add in the extra perks I get, such as a base rate mortgage then I’m probably quite a bit better off than the average UK worker. I’m guessing if we averaged out the salaries for people striving for FIRE then I’d be very much near the bottom.

I’m not moaning about my salary, quite the opposite. For me this is the most I’ve ever earned. I’ve always valued time over money and have never gone for the sort of jobs that would have required me being “on” all the time. Compared to what I was earning seven years ago, this is a great salary for me. I’ve gone from £17k to £32,500 in seven years, which has definitely taken a lot of pressure of me as the sole bread winner in the house. It’s allowed us to have some fun money, which is always much appreciated.

I guess the next logical step would be for me to start earning more money. There are a few ways I could go about this:

  • Move companies and get a new job
  • Stick with the same job and be so good at it I get a pay rise
  • Keep the same job but develop some sort of a side hustle
  • Get a new job within the same company

Of these options a couple of them have some drawbacks associated with them., so let’s have a look at them in a bit more detail.

Move Companies And Get A New Job

If I join a new company I’m going to be penalised on my defined benefits pension. Although it was capped when I was working part time on a much lower salary and so isn’t still a full final salary pension, it’s still pretty attractive and there are some reasonably severe penalties for leaving the company early. It’s not that I couldn’t go down this route, but it would have to be a pretty spectacular job with a really good salary/benefits to make up for what I already have. Lots of the benefits I have now are typically still available to long standing staff, but aren’t offered to new starts. So if I went to a new company in the same industry I’d likely be losing quite a few perks.

I think if I was going to move companies then it would be because I decided to do something completely different. If there was something I was definitely decided on (there isn’t!) then it would be worthwhile to jump ship and accept that I might be slightly worse off for a period of time, but hopefully better off long term. I could retrain, and I have looked at some courses, but it’s a question of the costs involved and whether I would be working long enough to recoup those costs and make it worthwhile. The jury is still out on that. If I had a burning passion to do something then it’s quite likely I would just go for it, but in the absence of that conviction there’s a lot to be said for sticking where I am and keeping the benefits that I already have.

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Be So Good At My Job They Give Me A Massive Pay Rise

In terms of keep doing the same job but managing to get good pay rises, it’s a good theory, the practicalities of that not so much so. First of all it’s very hard to control pay rises, and I certainly don’t work in an environment where you can negotiate your salary. A few years ago I set myself an objective of getting a particular rating which would impact my pay rise and bonus positively. I worked my butt off all year, creating roles that didn’t exist and shoehorning myself into them. It was a time in my career when anything seemed possible. I got the rating I wanted and the pay rise that came with it. The issue is that there’s a limit to what the pay rise can be, and I’m limited by the grade that I am.

Nowadays we don’t even get ratings. It’s all down to what your manager thinks of you and what proportion of the pay rise pot they think you deserve. Of course you can be the best at your job possible, but without a formal rating system, it’s very difficult to judge how you’re doing. I regularly volunteer for additional duties to try and raise my profile within the department, but it does sometimes feel that you’re banging your head against a brick wall. We are so busy this year that I am regularly working for free just to manage my cases, so the thought of doing additional work on top of this to help with my development is sometimes too much to contemplate.

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Side Hustles

I could keep doing what I’m doing on the grounds that it’s not a bad job. On a good day I like talking to customers about their money and I’m good at what I do. Extra money would bring me closer to FIRE though, and I could keep doing any side hustle after I stop work, which reduces the amount I would need to save to live on. That’s a win win in my book. I’ve tried a few different side hustles so far, with varying success.

I like to get ideas from customers I speak to about how they earn their money, and my ears always prick up when I hear about potential side hustles. It’s always good if you can hear about it from someone who’s actually doing it already and making it work. One day I talked to someone who was self-employed. I probed a bit about his business. He sold things and was an author. Sounded intriguing, so I asked him to tell me more. All strictly work related, not at all to see if it could help me with FIRE. Obviously. Turns out he was making a fortune selling stuff on eBay and had written a best-selling book about it. On my next break I was straight on Amazon ordering his book.

I think it’s fair to say that side hustle wasn’t exactly an unqualified success. I think I was maybe a wee bit half-hearted about it. Probably the key to building an eBay empire is to source your goods from somewhere other than just your bookshelves and DVD collections. I made a bit, and I quite enjoyed it, but it most definitely did not make my fortune.

I then moved on to matched betting. I did better with this. I made a few mistakes, which I think is normal, but I soon got myself organised. I made a reasonable amount with this, but nothing earth shattering. I found the amount of time I was spending on it was difficult to justify based around the amount of profit that I was making. I may well revisit this at some point in the future to see if I can make it work for me.

My thoughts just now are thinking about ways that I can make use of my house to make money. In two year’s time both my kids will be off at university. That is going to leave me an awful lot of room in the house. Renting a room out may be something I look into. I’m really not keen on that whilst the pandemic continues, but hopefully at some point in the mythical future the world will be virus free again. I probably wouldn’t want to have a lodger all the time, but maybe students from abroad staying for a period of time might be a possibility. It’s something to think about anyway.

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Same Company, New Job

Probably a more realistic option to earn more is to move roles within the company. This is definitely something I need to work on. Up till now I’ve been somewhat restricted with what I can do hours wise because of the kids. I have a lovely fixed shift of 8am-4pm. I work every second Saturday which I could do without (although I guess as parkrun is not on just now it’s less of an issue!), but apart from that it’s a pretty sweet shift. This shift has been essential up till now because of the whole single parent thing, but now I definitely have more flexibility with them being older. Saying that, it’s not all about the kids. I have running clubs I want to go to on an evening, and you know, a life I’d like to live.

I used to worry that going for a different job would mean I’d need to add a commute into the mix. Just now I live a ten minute drive from the office. A lot of the other jobs are likely to be over in Edinburgh, which whilst not horrendous, would probably mean a 45 minute each way commute on the train. You’ve got the travel costs and the extra time out of your day to think about. In the current Coronavirus world though I’m guessing most of those jobs will be home working for the foreseeable future. That makes the thought of a new job a lot more attractive.

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My thought was always that when my youngest goes to university in two year’s time I’d be happy to go for a new job at that time. Which probably means that now is the right time for me to start to explore my options and work out what would be a good fit for me. I’ll start to build up some evidence of skills I have that I can use in interviews. I’ve just started a one year talent programme, which should give me lots of opportunities to get out of the comfort zone that I’m well and truly stuck in and build up some experience and new skills.

So really it looks as though I either look for a new job within the same company and/or develop a lucrative (ish) side hustle. Either way some extra money in the kitty is going to help with me reaching my FIRE targets. I know I’ll get there one way or another, as it’s something I’ve set my mind on, and once I’ve decided on something then it gets done one way or another.

The True Cost Of Having Children

The first thing to say is that I love my children with all my heart. Having them is without a doubt the best decision I have ever made. I was desperate to have children. I wanted a different sort of life from the one that I was living. I spent a few years surreptitiously going around the shops and looking at baby clothes. My husband at the time and I waited a few years before we started a family. Money was tight and he in particular was keen that we get ourselves in a better financial position before we added kids in to the equation. That was definitely a good plan, if somewhat frustrating at the time. So we cleared the credit cards and tried to get a little bit of money behind us to try and cover my maternity leave.

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Everybody tells you how expensive having children is. They’re not wrong of course, although I’m never quite sure where they get their figures from about how much it costs to raise a child. Based on the figures you see bandied about only millionaires would be able to afford one child, never mind multiple kids. I tend to think that children cost as much as you choose to make them cost. There are certain things that you can’t avoid, but plenty that you can minimise. I think I pretty much lived in Mothercare when I was pregnant with the first one. You’re growing this baby inside you and you just want all the nicest things that are completely unnecessary. Let’s be honest, baby stuff is cute and you want the best for your unborn child. The fact of the matter is that what’s important with children is the time you spend with them, not the stuff they have.

Set Up Costs

There are certain basics that you need – pram, car seat, something for it to sleep in etc. A lot of the extra stuff is not needed, and if you decide that it’s going to make your life easier then the chances are you’re going to be able to get it either for free or very cheap. By the time I had the second one I’d figured out that most of the baby stuff isn’t used for very long, so even if you get it pre-loved it’s probably not seen all that much usage. I was lucky that in our family there are four male cousins. What that meant was that the clothes would get handed down from my nephew to my two and then on to my younger nephew. Result! Even if you’re not in this lucky position, in my experience people are always trying to get rid of their kids stuff. There’s a lot of it and it clutters up your house. People would much rather give it to someone they know can make use of it.

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So as far as stuff goes, minimise what you buy, get stuff for free or second hand and remember that when your baby is first born you are inundated with presents for the wee one. People love it when a baby is born, and I found that neighbours I didn’t even know would leave gifts on the doorstep. A baby is a wonderful thing for bringing a neighbourhood together. Now although buying stuff for children can get out of hand, remember that you are in control of what comes into your house. I really don’t subscribe to the theory that you have to give your children what everybody else has. Maybe I’ve just been lucky, but my kids have never come home and asked for the latest designer label. That’s probably partly due to the way I’ve raised them and also the fact that they’re just not into that sort of thing.

Prioritise Experiences Over Stuff

I’ve always made sure that my kids could do what interested them in terms of activities. I’d much rather that I was spending my money on experiences for them – whether that’s them going to things like drama club, judo, swimming lessons or trips away with the school. I’ve also been comfortable saying no to things too. They didn’t even bother asking, but I saw there was a school trip to New York that cost thousands of pounds. Er no. If I don’t spend that sort of money on a family holiday then I’m not going to pay that out for just one of them to go. That’s the thing, as a parent you’re in control. You get to say no. As a parent there are plenty of things you’re going to be saying no to over the years, so you might as well get used to it. Is it any worse to say “no you can’t watch telly, go and find something else to do” or “no you can’t juggle with knives, it’s dangerous” or “no I’m not buying that for you, it’s a waste of money. If you still want it when it’s your birthday/Christmas then add it to your list”?

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Clearly everybody brings their children up differently, and I’m not trying to tell anybody what to do here, just saying what I did and how it worked. For me it was partly that I couldn’t afford to spend much on stuff, but mainly that I just didn’t think it was worthwhile. The house filled up with a tsunami of plastic crap no matter what I did, so there was certainly no need for me to add to what they had.

And don’t get me started on those Facebook posts at Christmas with the mountain of presents for the kids. Don’t, just don’t. There’s no need for it. The more you give the less impact each individual present has. You know what gift is going to bring joy to your child, not just on Christmas morning, but throughout the year. Some of the best gifts I got my kids over the years were a puppet theatre along with dressing up clothes for them to put shows on, bikes, an Xbox shared between the two of them and a shared laptop. I’ve been lucky in that my kids are only 18 months apart in age and have similar interests. This has meant that a present for one is effectively useful for both of them.

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The Extortionate Cost Of Childcare

That’s us dealt with some of the costs you can control with kids. Clearly there are some extra costs that you can’t do anything about. Childcare is an absolute killer. Unless you can manage your work around your kids then you’re going to need some sort of childcare or loss of income. Maybe some people manage to run a business from the house with the kids running around their feet. Hats off to them if so, because I cannot for the life of me see how that would be feasible.

Initially I went back to work full time working a late shift starting at lunchtime. This meant that I “only” needed childcare in the afternoon. With one child this was tough financially, but just about doable. Eighteen months later I added a second child into the mix. This time I had learned my lesson from the first time around where I’d gone back to work with a three month old baby at home. No sleep, a full on job and a touch of post-natal depression made that tough.

Second time around I took a full year off and went back to work part time, working in the evenings when my now ex came home from work. I couldn’t organise part time hours in the job I’d been doing, so I had to switch departments, drop a grade and obviously deal with less money coming in because of the fewer hours I was working. My eldest didn’t sleep through the night until he was four, my youngest used to get up at 6 am and I was working till 10.00 at night. So basically I was constantly exhausted, working a soul sucking job and never seeing my husband. We used to take it in turns to sleep at the weekends. Funnily enough we ended up getting divorced!

For me then I didn’t have any childcare costs second time around, but of course I was earning a lot less as a result. My pension got capped during this time as well, so what I’ll get in retirement is based on what I was earning during that time. A nice financial hangover of the child rearing years. Once the kids were at school I switched my hours to the daytime, but still worked part time so I could collect them from school. They went to the breakfast club in the morning as that was much better value than the after school club.

Luckily my parents have always had the kids to stay in the school holidays. That has been an absolute lifesaver. It’s meant the kids have a brilliant relationship with their grandparents, my folks have loved it and it has saved me a massive amount in childcare over the years. I honestly don’t know how I would have managed without them. Even now my dad’s been on hand to take them off to university interview days etc when I’ve been working.

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So from a cost point of view we’ve got the set up costs of having a baby, which as we’ve seen can most definitely be minimised. You’ve got childcare, which is hard to avoid. You either have to pay out for childcare or you have to organise your work life in such a way that you can look after your kids yourself. I went down the route of wanting to be there for them myself and earning less. In all honesty it probably would have suited me better to have worked during the day when they were younger. Being with them all day and then going out to work all evening was just too much. I think I might have appreciated them a bit more too if I’d had a bit more time away from them. A bit of time for myself. Linked to the childcare is the loss of income. You might choose to work less and not earn as much, change the type of work you do to fit in with your kid’s needs and earn less and you might be less invested in your career because of prioritising your children and so miss out on opportunities and so earn less. There seems to be a bit of a common theme going on here!

Maybe that’s not always the way it goes. It could be that having children motivates people to do well in their career and so be able to provide for their children. That’s not the way it worked for me, but there’s no reason why it shouldn’t. There are plenty of people in higher grades than me at work that are parents, so maybe I’m just using that as a bit of an excuse. Certainly for me the kids were my priority, and anything else came secondary to that.

I’m definitely more risk averse since I became a mum. I very much feel that I have to be in a position to provide for the kids and make sure that we’re all OK. I used to be much more inclined to move from job to job and feel that if it didn’t work out then it wasn’t the end of the world. Now one of my first concerns is that my working arrangements fit around family life. They’re old enough now that this isn’t really something I need to worry about, and yet still I do. In order to move on within the area that I work in just now it’s likely that I would have to work much more often in the evenings. This has always stopped me going for other roles, as I feel I want to be there for my boys when they need me.

It doesn’t seem very positive so far does it? Kids are expensive in terms of getting set up for them. You have loss of income from maternity/paternity leave. You either need childcare or a change in working hours to look after them, which in all likelihood will mean you have less money coming in. You’re likely to be less flexible in taking advantage of advancement opportunities at work. And of course you can’t work away from home, which many roles might require. So you have less money, a less good career potentially and you’re constantly juggling schedules to make sure that your kids are looked after and are healthy and happy.

Babies Are Torture Machines

Oh, and did I mention that the first five years are brutal. Total and utter torture. Yes, babies are cute and your heart fills with joy when you see them. Yes, you know that you would die to protect them and would do anything within your power to keep them safe. That doesn’t take away from the fact that they don’t sleep, they cry a lot and they completely and utterly take over your life. I could not go back to the baby stage no matter what you paid me. I know this is not everybody’s experience. People love babies, they want to be needed and they just love how dependent their kids are on them. Not me. I was always trying to get my children to the next stage, to get them to need me less.

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I am willing to admit that I might not have been doing my parenting in quite ideal circumstances. A child that doesn’t sleep until he’s 4 is not necessarily the norm. My working arrangements, whist ideal from a financial point of view where not great from a life stand point. And when you throw a divorce into the mix when the kids are just 2 and 3 then it’s never going to be easy. I felt like I lost myself for quite a long time. I don’t feel like that any more, but I think it’s important to acknowledge how I felt at the time. Too often we see the idealised parts of family life on social media. I can’t be the only one who felt like this when my children were young.

Prepare To Be Exhausted

The children took absolutely everything that I had in terms of my energy levels. I was exhausted for such a long time. It’s hard being a parent, especially if you want to do it well. Maybe I could have given them more screen time to give myself a break, but that wasn’t how I wanted to play it. I have been far from a perfect parent. I have made lots of mistakes. I’ve been grumpy with my children, when I wanted to exude patience. I’ve craved time to myself rather than wanting to spend every waking minute with them. I am confident though that I have done the very best I could have done. Parenting is something I’ve taken incredibly seriously. I wanted to do my absolute best. I’ve fallen short on many, many occasions, but I know that I’ve given it my all.

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Reading this it sounds as though I regret having my children. This could not be further from the truth. Being a mum is the most important thing in my life. My kids are my top priority. I get the greatest joy from time with my family. Even when they were younger and it was much harder I wouldn’t have changed it for the world. It was hard though, really hard, and I think we need to talk about that more. I desperately wanted children, I waited a number of years before I started my family to make sure we were ready, and yet still it was incredibly difficult. The hardest thing I’ve ever done in my life by far. The most rewarding too mind you. If it’s something you really want to do, then go for it. Be aware though that it’s going to be tough. It’s also going to be the ride of your life.

Musings on Turning Fifty

The Big 5-0

I’ve found myself thinking about the passing of time a lot recently. This is partly to do with turning 50 over the summer. It wasn’t nearly as traumatic as I thought it would be, but it does rather make you think about what you’re doing with your life. My plan is to live till I’m one hundred. Being a staunch anti-royalist I don’t want a telegram from the queen or king (although I suppose it would be fun to send it back saying I didn’t recognise their authority as a monarch to acknowledge my birthday). Now in this scenario where I’m living to 100 I am really healthy, still park running every Saturday and I have all of my faculties about me. If that’s not the case then I’m maybe not be quite so keen to hang about so long. My best friend has already made me promise that I’ll take him to Switzerland when the time comes as he has no wish to hang about in a decrepit state. I’m sure he’d return the favour if needs be if he was still around and I needed finished off.

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Let’s assume that I make it to at least 100. That means that I have already lived half of my life. OK, so we can pretty much discount the early years as I have no recollection of them. My teenage years and early twenties I wouldn’t go back to if you paid me, but from then on in and I’m happy to say they’ve been pretty good years. Ups and downs of course like everybody else, but mostly I’m fairly happy with the way my life has turned out.

If we say that I’ve been making decisions for myself since my late teens and early twenties. To make things neat and tidy, let’s say twenty. That means I’ve had thirty years already as a fully functioning adult. In another thirty I’ll be 80. I’m guessing I might be starting to slow down a bit at that point. I met a woman in her 80’s the other week who seemed full of life, was at park run every week before lock down and seemed bright as a button. That’s the way that I want to age, but I guess there’s no guarantee of that.

Potentially that means I’ve got another 30 years to go until I might find it more difficult to do everything I want to with my life. Hopefully I’ll still be able to do plenty, but I’m not sure I’d be able to rely on it. I think maybe the way to think about it is that anything after 80 is a bonus. With a bit of luck I’ll still be going strong, but I really need to try and plan on getting everything done before then. So that works out rather nicely. The first 20 years were really all just about getting to the point of becoming an adult. The last 20 years up to 100 will be a nice bonus where I might be slowing down a bit. That means I have 60 years to play with. I’ve had 30 of them already, so I’d really better get on with making the most of the next 30

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How’s It Been So Far?

If I’m completely honest I’m not sure I’m living the best possible version of my life that I could be. I have an alright job, that at times I really enjoy, but at other times drives me to distraction. It’s not fantastically well paid, but it keeps the wolf from the door reasonably well. The only debt I have is my mortgage. I’d love to be free of that, but for now it’s more important that I work on building my investments. If you compare me to Joe Bloggs then I guess I’m doing pretty well financially. Certainly compared to my peers in the office (back when that was a thing!) then I’m doing amazingly well with the salary that I earn.

My colleagues think it’s ridiculous the amount that I save and tell me that I should treat myself with my hard earned money. The problem is that I don’t feel that spending money is treating myself. I would rather see more money in my Vanguard account. I sometimes feel that I go too much down the frugal route though. Last year I had a leak from a crack in the shower tray in my en-suite. The whole bathroom needs doing so we just all use the main bathroom now instead. I’m saving up the money to get that done, but as I have the money sitting there in savings already should I just use my emergency money for that? After all there was water pouring through my kitchen ceiling – how much more of an emergency can your get?!

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FIRE Community Peers

It’s hard sometimes when you look at others in the FIRE community and see how well they are doing and how much they are managing to save. I’m not a big one for comparing myself to others, unless it’s to learn from them and to get motivated to do better. That’s also the good thing about finding like minded people though. Rather than listening to Mr Spendy Pants at work I can read Mr Money Moustache and realise I am completely and utterly extravagant and need to stop spending immediately. When you find people that are either where you want to be already or are working on arriving there then it makes it much easier to feel that you’re on the right path.

Now saying that, FIRE can look very different from person to person. As a single parent on a not fantastic salary I am never going to be in a position to save as much as some others. Not unless I somehow increase my income of course. The good thing with not earning that much and then saving a fair chunk of that is that you get pretty good at living on not that much. Which means that my FIRE fund doesn’t need to look all that healthy for me to be able to manage on it. I don’t just want to be able to manage though. I want to be in a position to live a fabulous life. I’m not convinced I need a massive amount of money for that, but I need enough that I’m not worrying about the money side of things and have sufficient to live the life I want with all the extra time that I’ll have.

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Wanderlust

Something I love to do is travel, but I haven’t done an awful lot of that since I had the kids. When they were younger we used to go camping in the north of Scotland. I loved those trips away and wouldn’t have missed them for the world. Now though they’re not interested in camping, so we need to find other things to do. I have a friend over in Germany, so we’ve visited her a few times. She has a great lake for swimming just across from her house, so it really is idyllic. Then we had a road trip around England and Wales last year, which was amazing. This year we’ve made do with a staycation like everybody else.

In the last few years I’ve managed away three times without the kids. The first time was to Gran Canaria for a week of sunbathing and out dancing the night away. It was fun, and just what was needed, but usually I like a bit more to do when I’m away. The next trip was to Cuba, which was totally amazing. Havana was incredible and I would go back there in a heartbeat. I also got away to Malta, which is somewhere I’d always wanted to go, but which blew me away with how much there was to see and do. For such a small island it definitely warrants a return trip.

I think one of the things I might look back on and regret is that I haven’t travelled as much as I would have liked to. It’s something I love to do, and it’s just not been a regular part of my life. I’m not sure my Lean FIRE budget is going to allow a massive amount of travel. Although I suppose if I do slow travel then that should keep the costs down. I’ve already told my friend in Germany that she should expect to see a lot more of me when I stop working!

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My finances have almost certainly restricted my life choices somewhat, but I’m not sure my life’s been any the worse because of it. You cut your cloth accordingly and make the most of what you do have. Luckily I like the free things in life. As long as I can get outside – whether that’s running, walking, cycling or camping then I’m going to be happy. Sometimes I have to remind myself of this fact. Lock down has really not been a problem for me; more an opportunity to be allowed to stay home. It’s become perfectly clear to me though that I need to make myself go out. Much as I like staying in my own little safe bubble of my house, I need to go out into the world and have new experiences. It’s not good to stagnate, no matter how comfortable it might feel.

Bargain Basement Hobbies (Mostly!)

It is good though that for a lot of the time I am very happy pottering about on my laptop. I restrict my social media usage somewhat, as that’s most definitely a time suck that I could do without. I love to learn things online. I’m currently up to a 489 day streak on Duolingo learning Spanish. That’s such a fun thing to do, although I do need to step out of my cosy little Duolingo world and get back to watching some Spanish TV and find some new podcasts. I like to watch online lectures from universities too. I’m part way through an intro to Psychology course from Yale. I’m hoping it might help me figure out myself and the people around me, but if not it’s a really interesting way to spend a few hours.

My hobbies then are pretty much free or low cost. Most of the online stuff is free. OK, with my running I get through a couple of pairs of trainers a year, and we won’t talk about race fees! It’s well worth it though, and the local races are really good value. There’s no feeling quite like lining up with 50,000 other people to do the Great North Run. When you run over the Tyne Bridge it’s worth every penny of the extortionate entry fee. And the good news is most of this year’s race entries have rolled over to next year, so I shouldn’t have much to pay out for in 2021.

Now that I think about it, my life is pretty sweet. OK, so I don’t totally love my job, but a lot of the time I don’t hate it either. I’m not sure that’s quite as positive as I’d hope for, but I can work on that. Although I’m not going to leave the company I work for as it makes no sense with my pension and staff mortgage, there’s no reason why I have to do the same job for ever either. Especially taking into consideration the fact that in two year’s time both my boys will be off at uni, and so I will have a lot more time to myself.

I’ve already talked to my boss about the fact that in the next few year’s I’m going to be looking for my next opportunity. A couple of years before my youngest started high school I started to prepare for that time when I knew I’d be able to go full time and would have slightly more flexibility. I started volunteering for extra things within my role so that I would have evidence to show what I was capable of. It worked and I managed to get my current job, which was a big step up from what I was doing before. That’s my plan again. I’ve already been accepted on a one year talent programme, which I’m hoping could be a stepping stone to other things. We’ll see.

Be A Bit More Of A Sociable Sassenach

I think the one area of my life that I maybe need to work on is the social side of things. I have some good friends, but a fair few of them live a long way from me. I only seem to make friends with people who move around. I worked it out one time that I don’t have a single friend who still lives in the place they were originally from. Some of them have moved back, but they have all gone out into the world rather than sticking with their original birth place. This makes them interesting people, but also means that just because they are geographically close to me when we become friends, doesn’t necessarily mean that will always be the case! It does mean I have plenty of people to go and visit though.

What I really need to work on is seeing people face to face and actually going out and doing things with them. I have a great group of running friends, so training with them is always a lot of fun. Unless you get injured of course and then you drop out of the group for a period of time and it’s easy to start to feel isolated. We do occasionally do non-running related things (or we did pre-covid), but mostly it’s training and going to races. Considering the amount of time I seem to spend injured and how these women are most of my local friends I really need to see them outside of the running sphere too.

I do have hermit tendencies, which if left unchecked can get a bit out of control. Although I love being in the house it’s not all that good for me. I tend to think of myself as very shy and incredibly anti-social, but actually that was much more true of my younger self than me now. I definitely need time to myself and quiet time to think, but I also need company much more than I have ever really acknowledged to myself. When I do go out I love it and really feel that I get a positive uplift and am ready to tackle the world afresh. I also find it totally exhausting and then need some time to myself to recover! Balance is the key to this one I think.

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Cupid’s Arrow

My love life I suppose is another area where I haven’t exactly excelled. Two divorces and one five year living together relationship that also failed. Funnily enough though I don’t really see this as a bad part of my life. I am forever the optimist and always look for the good in situations. OK, so I’ve not had a happily ever after, but it’s not all been doom and gloom. I’m a big believer in divorce rather than than living unhappily ever after. I’ve not completely given up on finding love. And I am very good friends with my most recent ex husband. Fourteen years after we got divorced we’ll happily hang out together with the kids and I think he probably talks to me almost more than he does to the kids. Although he is house hunting just now and he mentioned the house opposite mine that has just gone on the market. I’ve told him to forget that immediately as that is far too close for comfort!

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My wonderful boys

I’ve saved the best for last. My fabulous, fabulous children. All parents are biased, that’s how it’s supposed to me. I’m not immune to their faults; they have many. That’s as it should be. Who wants to know somebody without any flaws; how boring would that be? They are incredible though. I can’t take any credit for this. They are very much their own people, and I’m sure at one point I was able to have some sort of influence on them, but this is very much a thing of the past now. As it should be. They are 16 and 17, so are exploring the men that they are going to be. Of course I still tell them what I think, but they need to make their own decisions. I was very strict when they were younger, and this has allowed me to be much more relaxed about things now.

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They’re very intelligent, which is not really important in the grand scheme of things and is just a luck of the genes for them. Obviously all parents think their offspring are bright, so it’s not really surprising that I’m saying this. They are though. The eldest is about to head off to Trinity College, Cambridge to study maths. I know. The younger one is just as clever. Quite frankly I have no idea what they’re talking about most of the time. I just smile and nod. As I say, this is just luck on their part. Well, luck and the fact that I like clever men! What can I say, there’s nothing sexier than a man who can punctuate and speak eloquently. But seriously, if one more person asks me if their dad is clever I’m going to scream!I’m definitely not on their level, but I’m not some sort of a simpleton either.

More importantly though they work hard, they pursue their goals and they are constantly learning. One of them taught himself Esperanto just for fun. They’ve both self-studied subjects that they were interested in but which the school didn’t offer (Maths of Mechanics and Statistics, “just because they’re really fun subjects mum”). We had a spell where one of them was obsessed with various Rubik cubes (there’s a surprising amount of different shapes and sizes) and he went along to compete in a cubing competition. One of them is in the Labour party and the other one is an ardent communist. It’s a really fun house I live in! I’m not sure you should see your children as role models, but I really do. I value their advice and really listen to what they say to me.

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Of course they’re still teenagers, so they’re also infuriating, messy, grumpy and sleep at ridiculous times of the day. Generally speaking though I feel like being a mum is the one thing that I’ve definitely got right. I’m not saying I’ve not made mistakes, because I definitely have. All you can do is your best, but I know that I have tried my absolute hardest as a parent. Whatever has been going on in my life my boys have been my priority. I’ve based decisions around what is best for them. That includes giving up drinking fourteen years ago. I used to love drinking, but I realised that I wasn’t going to be able to be the sort of mum I wanted my boys to have if I kept up with my hobby of downing glasses of wine. So I stopped. Best decision I have ever made.

I’m pretty sure I’d have been a more relaxed parent if I’d kept drinking (there’s no equivalent of the relaxation you feel when you have a drink after work; running comes close, but it’s not quite the same). I’m pretty sure my boys wouldn’t describe me as a relaxed parent, but I think that’s OK. They know I expect them to try their hardest, but they expect the same of me too. And they’ve been free to pursue whatever interests they were passionate about. What wasn’t encouraged was sitting about passively watching mindless TV. I’ve expected them to find things to do to entertain themselves, and they’ve managed that without any difficulty. Let’s be honest, there’s loads of really interesting stuff to find out about in this world.

So all in all, maybe my first 50 years have been pretty good. My finances could be better, but I’m working on that. I don’t have a kick ass career, but that’s allowed me to spend time with my boys whilst they’ve been growing up. I have some great friends, even if I don’t see them quite as much as I should. What I do have is two amazing boys who are getting ready to launch themselves on the world. Look out world is what I say! Maybe now it’s going to be my time to work on myself and make sure that the next fifty years are totally amazing. I’d better get working on that ASAP.

June 2020 Net Worth

It’s been a while since I’ve put my figures up, although I have continued to track them myself. I’m not quite sure why I’ve stopped posting them, as I always feel that it’s a way to keep myself accountable. I guess I feel that I’m already keeping a check myself, but it can be useful to share them to anybody who is out there and listening. Normally I would put last month’s figures in brackets for comparison. This month however I’ve put January’s figures in brackets just to show what’s happened since the start of the year. I break down my figures to both include and exclude my house equity. The latter figure is to show how I’m doing in my quest to reach mortgage neutrality.

Debts

Mortgage £98,281.81 (£80,767.87)

Assets

Cash £36,507.46 (£14,988.95)

Money in share save £0 (£15,304 )

AVC’s £5,567.13 (£5,175.36)

Shares £36,282.17 (£33,554.66)

House £250,000 (£250,000)

Total Assets £328,356.76 (£319,022.97)

Net Worth including house equity

£328,356.76 – £98,281.81 = £230,074.95 (£238,255.10)

Net Worth excluding house equity

£78,356.76 – £98,281.81 = -£19,925.05 (-£11,744.90)

There’s probably quite a few things to say about these figures. So first up the mortgage. Clearly from what’s showing above I have borrowed more money on the mortgage. There are a number of factors that came into play with regards to this. I have access to a base rate mortgage through work. Only having to pay 0.1% is a pretty compelling reason to borrow money against your house. It is a benefit in kind, so there are some tax implications, but still you know, it’s 0.1% This is a benefit that work are going to remove for any new borrowing this year. What you have at base rate you get to keep, but if you want to borrow extra, move house or don’t yet have a staff mortgage then tough luck, it won’t be available.

On that basis there was an argument to be made for borrowing extra even if it wasn’t needed and tucking it away in a cash ISA and being up on the deal. I am going to need access to extra money at some point. My boiler is not in a brilliant state. We have a few days every year where it doesn’t work, so we have no heating or hot water. Not ideal, but also not a disaster. Rather crucially though they can no longer get spare parts for it, so it’s no longer able to be repaired when it does hit a problem. So far it’s always spontaneously started working again, but I can’t bank on this forever. My en suite is also not useable due to a cracked shower tray and subsequent leaking through the kitchen ceiling last year. Add that to the fact that the loo in there has never really worked. At some point a total redoing of the en suite will be in order. And my car had been proving very expensive to repair, so I was thinking about replacing it. With lockdown and the consequent lack of driving I’m currently rethinking that, but we’ll see.

Anyway I figured that I would not spend all this extra money for as long as possible, but that I would borrow it and stick it away and earn some interest on it and be up on the deal. I’d done the application just before lockdown with the thought that I wouldn’t draw the funds down straight away. Once everything kicked off Coronavirus wise though I decided to get the money in my bank account ASAP in case they pulled extra borrowing. I was worrying unnecessarily, but it was certainly nice to have the extra cash in my account. So that explains the extra cash in my balance.

The next big thing is the share save money. A big fat zero in there. I had two share saves still on the go, but as the share price dropped like a stone and it became clear that it wasn’t going to get anywhere near the option price anytime soon I cashed them in and took the cash without any penalty. This worked out really well as it allowed me to put the money into index trackers. I finally have got myself a bit diversified. Not nearly enough, but I’ve made a really good start. I’m not doing any more share saves. It’s index trackers all the way for me now. I’ve gone from putting £500 a month into share saves to doing £600 month to Vanguard Index trackers. It’s been my plan all along to do this. I don’t know what took me so long, but at least I got there eventually.

Work do a share match where when I buy £30 shares each month they’ll give me £45 worth for free. If I keep them for five years it’s even tax and NI free. I’ll keep doing them, but other than that I’m done with work shares. I just need to offload the ones I have already. Due to the current share price and what I paid for them I can’t quite bring myself to do that just yet, but at some point I’m just going to have to accept that money is gone and it’s never coming back. The index trackers are doing really well, so I’ll be better off putting the money in there. I’ll start to do that gradually to make sure that I get everything in ISA’s.

I had a share save mature in January. I got totally stung on that. I was in the process of transferring the shares to my share dealing account ready to sell immediately and put into index trackers. It took two weeks to move them across and during that time I could see the price getting lower and lower, I went from having £1200 profit to being so much down on them that it barely seems worth selling them now. At some point they will need to go, but the pain is too recent to make it real by selling and realising the loss.

The values of my shares are up slightly from January, but considering that includes the matured share save where I was saving £500 a month for three years, that’s pretty rubbish. The least said about that the better. I’m not expecting the work share price to recover any time soon. There’s always something with it. First it was let’s just get past the PPI deadline then the price will be better, then it was Brexit (remember that?!) and now it’s Coronavirus and the subsequent economic fallout. I feel like it’s the end of an abusive relationship. I can’t believe I stayed with them so long, what was I thinking, my life is so much better without them in it etc etc etc. The final straw was when they announced that they wouldn’t be paying the dividend. I realise that wasn’t their decision, but I was furious as it was actually the final dividend from last year. We went so many years without one being paid at all, so to have it pulled now is doubly gutting. Maybe that means next year’s dividend will be extra good, but I don’t think I can count on that.

The AVC balance is not looking too healthy either. There seems to be a bit of a pattern emerging here! It’s up slightly, but considering I have quadrupled the amount I’m paying into my AVC’s that’s pretty piss poor. My thoughts on this one are to stop overpaying my mortgage so much and take advantage of the tax benefits of the pension. So I’ve borrowed an extra £20K on the mortgage, but reduced by monthly payment by £200. I was massively overpaying the mortgage, and I still am paying about £80 a month more than I need to. At such a low interest rate though it seemed silly to be bringing my mortgage down. I still would love to clear my mortgage, but for now my priority is to build up enough money in my AVC balance to get my £50k cash lump sum at retirement without needing to reduce the amount of my annual pension. I can then use that lump sum to hopefully more or less clear the mortgage. I’m slightly conflicted on this strategy as the mortgage feels like somewhat of a burden, but for now I’m happy to go with the maths.

So to summarise, I owe more on my mortgage, my work shares have tanked, my AVC balance is not great and my net worth is down. On the plus side though I have a lot more cash on reserve at a very low interest rate that gives me scope to do something useful with. I have finally diversified, even if there is still plenty of work to do on that front. I’ve made the decision to not overpay my mortgage as much but instead to put more into my AVC fund. The index trackers I’ve got are doing well and hopefully demonstrating that I’ve made a good decision with my finances. So I’m going to try and take the positives from what could be a very depressing update. Yes the figures are pants, but I’ve finally got my finger out and made some decisions about my money. Whether they are the right decisions remains to be seen, but as always taking action is a good thing. Action conquers fear as they say, so here’s hoping I’ve made some good choices and I’ll start to reap the rewards moving forward.

October 2019 Net Worth And Trying Not To Buy Yet Another Party Dress

Here we go with how my finances are looking for the month of October. As always last month’s figures are in brackets for comparison. I break down my figures to both include and exclude my house equity. The latter figure is to show how I’m doing in my quest to reach mortgage neutrality.

Debts

Mortgage £82,712.71 (£83,459.58)

Assets

Cash £15,289.89 (£15,897.60)

Money in share save £13,804 (£13,304)

AVC’s £4,573.30 (£4,530.85)

Shares £33,128.09 (£30,833.00)

House £245,000 (£245,000) 

Total Assets £311,795.28 (£309,565.45)  

Net Worth including house equity

£311,795.28 – £82,712.71 = £229,082.57 (£226,105.87)

Net Worth excluding house equity

£66,795.28 – £82,712.71 = -£15,917.43 (-£18,894.13) 

I’m pretty happy with those figures I think. My cash figure seems to be getting a little bit lower every month. This seems to be an almost imperceptible creep down the way. With one thing and another it seems to have been quite an expensive year. House and car expenses have been quite high, as have general life costs. I guess that’s just the way it goes sometimes.  The good thing is that I’ve not needed to touch the £10k that I have in a cash ISA, but rather I’ve been using the surplus that I keep in my current accounts. So it could be worse, but I could do with a cheap few months. Seems unlikely with Christmas coming up and the fact that I’ve just booked a trip to Berlin with friends to run the half marathon over there next year. You have to live a bit though, so I’m not going to worry unduly about it.

My AVC’s seem to be faltering a bit, but I’m trying to ignore that and remind myself that this is the long game I’m playing, rather than get caught up in the month to month values. That’s the downside of a monthly catch up on what you’re worth. It’s great for keeping you motivated, but it can cause a certain amount of fixation on what’s happening to particular parts of your money.

Overall things seem to moving in the right direction. The big picture figures all seem to be doing rather nicely (helped by a healthy share price of the work ones that I own). I can see that I’m getting closer and closer to mortgage neutrality, which is something I’m really looking forward to. I’ve got a big birthday coming up next year and it would be lovely to get to the point where I could cash in enough assets to clear the mortgage if I was so inclined. There’s something about a birthday with a zero on the end of it that makes it even more important than normal to have FU money. I don’t think I’ll quite hit the sweet point of mortgage neutrality by the time I get to 50, but I won’t be far off it. Something to aim for anyway.

I’ve started playing around with some graphs showing how my figures have been doing this year, the first year that I formally started tracking what I’m worth. It’s interesting to see the upwards trajectory, despite a few dips over the months. Once we get to 2020 I’ll put out a summary of 2019 showing how I’ve done. It will be nice to have a record of where I started the year and how I got to the end point.  

So overall I’m feeling quite positive about my figures. I feel like I’m haemorrhaging money at the moment, so it’s good to see that things are still going in the right direction. I’ve got some potentially expensive times coming up. My boiler is a little temperamental at times. It doesn’t seem to cope all that well in very cold weather, which is inconvenient in a boiler to say the least! Last weekend it died a death and refused to come on, just when we needed it most. We don’t have an electric shower, so if the boiler isn’t working we have cold showers, which is a character building way to start the day. I’ve managed to coax it back to life, but I think I either need to accept that every few months we’ll have a couple of days without heating or hot water, or bite the bullet and replace it. For now I’m ignoring the issue and hoping that we’ll get another couple of years out of it. At some point I’ll need to address the issue though.

As I said I’ve booked a trip to Berlin with the girls for a bit of a running getaway. I’m very excited about this, but of course it all has to be paid for. Entry to the race, the all-important T-shirt (which you have to pay for separately!) and rental of the chip so you can get a time(I’ll never complain about the cost of entry in to the Great North Run again) comes to just shy of 100 Euros. It’ll be worth it though. This trip is to celebrate a couple of us turning 50 next year, and quite frankly I can’t think of a better way to mark my advancing age.

I was talking to someone at work this week about my finances. I was saying to him that I still can’t use my ensuite, as since the shower tray cracked and the subsequent leak I haven’t got it fixed. He thought I was crazy and should get it sorted before Christmas. I explained that what made most sense was completely doing out the bathroom, as already the loo won’t flush, the wet wall could do with replacing and the floor will need to be changed. I said that I would get it done, but just not immediately. I said that instead I’d spent £700 getting my main bathroom sorted so that we had a shower screen, new wet wall and the existing shower attached to the wall. He clearly thought I was crazy for having an ensuite there but not spending money on it to get it usable again.

Now I definitely will be getting the ensuite sorted, but the money isn’t there in the budget just now. Yes I could dip into my cash ISA money. It’s there for emergencies, and isn’t this an emergency? Well not really. We still have a bathroom that we can use. In our last house we only had one bathroom and we managed just fine. And in this house we also have the luxury of a downstairs loo, so there’s no crossing your legs if someone is in the shower. I’m pretty sure we can wait until next year to get the extra bathroom sorted.

The general consensus at work seems to be that I’m loaded but very tight with my money and won’t spend any of it. There is an acknowledgement that I am in such a relatively good financial position because I am careful with my money, and yet still I get some good natured ribbing for my reluctance to part with my hard earned cash. I’m not tight when it comes to collections for people at work, or paying my share when we’re out, just on spending unnecessarily on myself. I get told on the one hand that I have done so well as a single parent to get myself so financially sorted, but then the same people also tell me that I should spend more on myself. I do get where they’re coming from, but sometimes you can’t have it both ways. There’s only a finite amount of money coming in to the family coffers, so I can either save and invest it or spend it. I can’t really do both. Well I could, but that would slow my plans down, and quite frankly they’re going to take long enough to achieve as it is. I just smile, agree that I should treat myself more and carry on as I am.

I seem to be out of step with much of the world in this way of thinking though. The mind set seems to be I want it now and I deserve to not to have to wait. I think that’s one of the reasons why I like the FIRE movement so much and the idea that planning for the future sometimes means delaying your gratification. And realising that maybe the thing that you think you want/need is not all that it’s cracked up to be.

Case in point, Christmas night out dresses. I have a Christmas ceilidh to go to next month with my running club. I found myself in Debenhams (my guilty pleasure) and suddenly I was perusing party dresses. I don’t need another going out dress, particularly as I don’t go out very often any more. Somehow though I was in the dressing room with a very fetching green number on twirling in front of the mirror. I tried very hard to remember what The Minimalists would say about this. I could definitely have done with Josh and Ryan on speed dial to talk me down from that dress. I remembered their rule about waiting for purchases, so I put it back and went home. I then went to my wardrobe and counted the twelve perfectly nice dresses that I already had that would be perfect for a Christmas night out. I’ve decided that next time I think I need a new dress I’ll just go shopping in my own wardrobe.

I’ll continue trying to not buy things unnecessarily, without depriving myself. I’ll spend money on experiences that will enhance mine and my family’s life, and try to avoid buying yet more unneeded party dresses, no matter how pretty they are or how nicely they’ll twirl around when I’m trying my best to follow the directions at the ceilidh. I love a wee ceilidh, even if I didn’t have the advantage of learning all the dances when I was at school. I usually get cut a bit of slack though, on account of me being a Sassenach. Going wrong and getting confused is all part of the fun, especially at Christmas time.

September’s Net Worth

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.

Debts

Mortgage £83,459.58 (£84,107.72)  

Assets

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.

A Constant Striving For Improvement

I recently watched Eliud Kipchoge breaking the 2 hour mark for the marathon. It was an incredible thing to see. I stood in my lounge shouting encouragement and crying when he achieved his dream. The physical aspect of it is totally amazing. I was delighted when I managed to break the 2 hour mark for a half marathon, so the fact that he’s done that for a full marathon completely blows my mind. He clearly has a remarkable talent. The conditions were just right for him, with everything from the location, the pacers, his shoes and his fuelling all controlled as closely as possible. Ultimately though it was down to him. His belief that he could do it this time and pushing through the pain to succeed in his goal.

Listening to the commentators, they were talking about some of the things that make him such a great athlete. Clearly he has the innate talent to make him an incredible runner. That’s not enough though. He had a tough start in life, with hardship being an expected part of his life. Even now in his training camp the mantra is “run, eat, sleep, repeat.” That’s what’s needed to be the best. Even if I had the talent I don’t think that life would be for me. There’s too many things I want to achieve in my life to focus exclusively on one thing.

Apparently Eliud is a big believer in reading self-help books. He likes to think deeply about things and then applies this to his running. He doesn’t have a mental coach, which is a bit unusual for a top athlete, but rather he likes to read and apply what he’s learned to his sport. I must admit that I’m a big fan of books that help me to improve myself. I like to read books about setting and achieving goals and how to make changes to my life. Some of these types of books are a bit too pie in the sky for me, but as long as they’re offering practical advice that I can see how to implement in my own ife then I’m in.

The Need To Take Action

Of course the danger with these types of books is that you just read endlessly, nod sagely and do nothing about implementing the changes that are needed to change your life. I’ve definitely been guilty of this in the past, and although I do take action nowadays, I’m sure I could be doing more and making grander changes to get me to where I want to be much quicker. I think the key is to read enough to galvanise you into action, but not to spend all your time setting goals and reading about how to achieve them, rather than actually doing something about bringing about the change you want to see.

I like to think that I’m pretty good at reaching my goals once I’ve set my mind to them. For me the difficult thing is working out what I want to do in the first place. I have a spreadsheet set up with goals for the different aspects of my life. So I have separate tabs for health, running, work, learning, money and the house. The danger is that this just turns in to a massive To Do list. As long as these are all steps along the way to reaching an overarching goal, then that’s good, but sometimes these feel as though they are a little unconnected.

Streaking Is a Wonderful Thing!

Something I’m really enjoying working on at the moment is improving my Spanish. I’m currently on a 143 day streak on Duolingo. I work on this twice a day, going through the tree and listening to the stories and podcasts. This is something that I love doing. I like to feel that I’m learning new things and improving my skills. But how is this going to help me in my life? I’m not planning on using it in my job and I don’t even have a holiday planned where it would come in useful. I suppose it’s possible that at some point in the future I might move back to Spain so keeping up with my Spanish keeps that open as an option for me. I’m not sure if that’s really why I’m doing it though. It’s fine if I’m just doing it for fun, but I didn’t really plan to spend so much time on this, I just started and got really into it.

Coding Is Messing With My Mind

Something new that I’ve started working on is coding. Again, it’s not something that I’ve consciously planned to do, but I suppose it was in the back of my mind. You know when opportunities just seem to present themselves and everything seems to come together almost as if it was meant to be. The kids are both into their coding, with one of them in the midst of building a game for his Computing project as part of his Higher course. The other kid wants to do this as a living, so there is a decent amount of computing/coding chat around the house. It’s maybe inevitable then that it would be on my radar at some level.

At work we have the opportunity to give back to the community with a day off work to volunteer. Most people go and do gardening or painting or something similar. In the past I’ve done that, but last year I went into a school to talk to the students about managing their money. It was a bit nerve racking, but I really enjoyed it. Don’t even get me started on how little so many of the kids knew about basic budgeting, saving and borrowing. Anyway this year I’ve been holding off on using my day looking for another interesting opportunity.

Finally a project was advertised to go in to schools to help kids with coding projects. It said it was suitable for complete beginners as the idea was you would work through the project first of all yourself and then guide the kids through it. The idea terrified me, so that immediately told me it was a great idea for me to apply for it. I’m going for my induction shortly to get all my vetting done and I’m really looking forward to getting stuck in.

Meanwhile posters appeared where I work about drop in sessions to learn how to code. They will be once a week and you work away yourself on the freeCodeCamp website, but there’s someone there to talk things through with. Again I was terrified, so again a good reason to go along. Sometimes things just seem to come together and you just have to go with the flow. Probably if I hadn’t gone for the volunteering opportunity to teach the kids how to code then I wouldn’t have even noticed the drop in sessions that were on offer.

So I’ve been to that first coding session and to say I was bamboozled to start with would be the understatement of the century. I think I probably already knew that I would find it hard, but that’s no reason to give up. I worked away during my hour’s lunch break and made some progress. I then got home that night and worked away some more, this time with the assistance of my home grown computer experts. I’m on holiday this week, so that’s given me some time for some more practicing. It’s hard, but I’m really enjoying it. When the penny drops on a particular part and I get something to work I’m so pleased with myself.

So for now my plan is to keep working away at the free Code Camp curriculum. I’ve started with html and seem to be managing that without too many issues (well, you know, a bit of tearing out of my hair, but I’m getting there). I’ll just keep plugging away, use my lunch break once a week to go to the drop in sessions and keep practicing at home. Hopefully my vetting will come through quite quickly for getting in to the schools and I’ll manage to help the kids with some of the projects. Who knows where all this will lead? Not me anyway. Will this lead to a change in career? I have my doubts, but I suppose it’s not beyond the realms of possibility. The fact of the matter is though that I’m learning new things, expanding my horizons and peering into the future to see what might be possible. If I don’t try then I won’t know what I can do.

Get Out Of That Comfort Zone

I’m shocking at dealing with change. I retreat into myself and try and resist at all costs. Ironically though I get bored if things don’t change often enough. Although I want things to remain constant, I get incredibly frustrated when they do. I really need to force myself out of my comfort zone. Learning is what sustains me. I’ve always loved learning new things. Ideally I would be a student or on a training course for the rest of my life. Probably not the most practical plan, but lifelong learning is definitely the way to go for me.

This is partly down to loving learning, but also because I always want to be improving myself. I always feel that I have so much more potential than I’ve ever come close to achieving. It seems to me that there should be a switch inside myself that I could just put on that means I would understand so much more about the world. I know this switch doesn’t exist, but I sometimes feel that I’m so close to understanding things, but I just can’t get my head around them. Although I studied sciences up to O level, I’m much more on the social sciences side of things. I love language and my brain really struggles with the maths side of things. I do feel though that if I could just understand some basic maths concepts then lots more things would become clear to me.

It just so happens that I have two maths and science fiends living in my house with me. Both of them have those sorts of brains that revel in maths and science. One wants to study maths at university and the other computing.  I know all parents think their children are amazing, and I’m no exception, but just from an objective point of view my kids are good at this sort of stuff. Both of them have taken exams a year early and sailed through them and one of them is trying to get in to Cambridge to study maths. The other one wants to study computing, and would aim for Cambridge too but unless tuition fees get abolished he’s going to stay in Scotland (clearly my FIRE rantings have had some effect!) I have to say I can take absolutely no credit for the brains on these two. I’m not exactly dragging my knuckles on the ground, but I’m not in the same league as them. What can I say, clever men are my thing, which means you get clever kids when you procreate.

It would be ridiculous not to make use of these live in maths brains to get them to help me to understand some of this stuff. They won’t be living at home forever, so I might as well make the most of it now. So one of them is teaching me some algebra. I don’t quite know how this started, but suddenly I was solving equations on the blackboard. My house is a bit random in that we have blackboards around the place and both of them have a blackboard wall in their bedrooms.

One day I was walking home from work thinking about how big a pot I needed to accrue so that using the safe withdrawal rate I would have enough to top up my defined benefits pension. My sociology brain somehow realised that algebra would be able to help me with this. I burst through the door and got one of the kids to sit down with me and point me in the right direction to figure it out. I was insanely pleased with myself, and this has become a bit of a regular thing over the last week or so.

Part of this is that I just want to know how to do this stuff. To some people it just seems so easy, and I want it to be like that for me. Sadly it’s not, well not yet anyway. The other part is that I want my kids to be proud of me. I’m not saying that I’m some dummy, or even that intelligence is the only important thing in life, but I really want to be the best that I can be. What is it that they say? You are the sum of the five people you surround yourself with? Something like that anyway. Well at least two of those people are my kids, and they are pretty incredible, and I want to be like that too. They’re still only teenagers and yet they are so interested in learning things. I really don’t feel like I can have any credibility in the house if I’m not striving to improve. I realise that I should be the role model to my kids, and not the other way round, but honestly if I could be half as clever and interesting as they are then I’d be more than satisfied with myself.

August 2019 Net Worth Figures

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.

Debts

Mortgage £84,107.72 (£84,843.68)

Assets

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.