august update – clothing confessions and liquidity traps
This is your official August update preamble.
Moving quickly onto the meat and potatoes… 😉
A slightly better month than last coming in at £2,945. Still on the high side and our average monthly spend for the year is now £2,894 which would put our yearly spend at £34,728 if we carry on at that rate. I budgeted £33,894 here so we’re not that far off the mark, but we do have 3 holidays and Christmas coming up. Errrp.
Here’s a non-exhaustive breakdown of our spending this month:
- Groceries £404 – OK OK. I’m admitting defeat on this one. There are two things going on here which I failed miserably to take into account in the budget at the start of the year where I reckoned we could get by with just £230/month. 1) Mrs T is on maternity leave and so is at home all the time and therefore is eating more food at home. Also while baby milk, nappies etc are cheap they are certainly not free. 2) We are having people over far more than we used to, because it’s simply harder to go out (especially in the evenings when going out would mean babysitters). So “hosting” grocery costs have gone up.
- Going out £275 – See point 2) above? That means that our going out costs have reduced so even if we go over budget on the groceries it should hopefully balance out nicely. We’re averaging £216/month for the year, compared to last year’s average of £287.
- Clothes £163 – Confession time: TFS has finally given in and bought some (kind of) new clothes. Mrs T was finally getting embarrassed being seen with me wearing holey, faded T-Shirts and called me out on it, and I agreed she had a point. In true efficient style I visited all of the best and most badass charity shops and bought a load of practically new gear. This came to £44.21. I then found a sale on at a decent brand of clothes that I tend to like (and tend to last a long time and not fall apart after a few washes) called Soul Cal, and spent a further £55.01 in there to bring my total up to £99.22. Yes it was painful but this should do me for at least another year before I even think about clothes again (and even then it won’t be to stock up like this time!). A funny story: Seeing as I went from spending practically zero on clothes this month to “something” I decided to challenge Mrs T to going from spending money on clothes to zero and she bizarrely accepted. As you can see from the figures she failed miserably, I hope you are reading this Mrs T and are feeling named and shamed :p
- Golf £198 – Knew it would be an expensive month for me here and that was to be true. So a naming and shaming for me too 🙂 although the average is only £105/month so should be able to get that back down to target now summer is over. ( Booo 🙁 )
- Cash £70 – Nothing interesting to say about this other than that I forgot what we spent it on which is thoroughly annoying.
- Charity £59 – Brings our yearly total donations up to £390 which means we’ve still got to make £509 according to my 10% of profits “pledge” I made here. Working out who to donate to is still on my todo list.
- Children £182 – A bit of a splurge this month and it was just lot’s of smaller purchases (buggy, high chair, etc…), but we bought second hand and cheap where possible. We’re now pretty set with all the equipment the little one needs for quite a while so should be back to being minimal spending until she starts moving about significantly in about 6 months time.
Remember if you want to look at the full figures or copy my spreadsheet to use/modify yourself just have a look at it here: my awesome spreadsheet. Note: I keep getting edit requests on this 1 but you don’t need to do that to use it yourself. You can just copy it yourself and then edit your own copy by going to File -> Make a copy OR File -> Add to my drive OR File -> Download As (then select a format to download as).
No bonus this month but a pretty decent income total to combat the high expenses yet again, coming in at £4874.95
Income included but was not limited to…:
- TFS salary £2302 – Slightly higher due to HMRC overtaxing in bonus month then rebalancing it this month.
- Mrs T maternity pay £621 – Slightly more than usual for the second month running, I hope they’ve not made a mistake and are going to ask for it back! 🙂
- Matched betting / Secret Side Hustle £1627 – Got back on it this month and I think it’s fair to say I smashed it out of the ballpark. Nice! If anyone is interested I use Odds Monkey matched betting software (affiliate link) for this, which having tried a few different ones out there, I found to be a far superior product in pretty much every way to everything else I tried. Check it out if you are new to matched betting, there are loads of great tutorials to get you going and you can try it for free.
- Investment income £26 – This was an interest payment from The House Crowd
- Sold stuff £103 – We sold Mrs T’s old phone (but then got a new one on a more expensive contract) and some of her clothes.
- Child Benefit £165 – We got this paid twice in August so guessing that will mean we won’t get it next month.
savings rate, net worth and a liquidity trap?
Another high expenses / relatively decent income means we hit 43.64%. This brings our yearly average a smidgen down to 45.14%. Still on track to hit the 40% goal, I dare say quite easily(!?). At this stage I think 50% is way out, but I think trying to keep it up above 45% is a reasonable new mini goal to shoot for.
Net Worth has jumped up nicely again:
Excluding house equity: £120,570 / +£2,202 / +1.86%
Including house equity: £195,707 / +£2,662 / +1.38%
There were some great discussions after my last post and I really liked the input from fellow new blogger liberate.life, specifically to do with liquidity. It made me realise that not all that much of our Net Worth is much use to us right now as it’s stuck either in our house equity which is an obvious liquidity trap, but also a large portion of the non house is also trapped.
So I decided to add a new box in my spreadsheet called “Liquid Freedom”
It turns out that of £120K non house new worth, only 57K is accessible in any way now (the rest is in work pensions/SIPPs). Further only 28K is in actual cash in the bank, the rest being in medium term investments which would be a ball ache to withdraw from or in ISA’s where the idea is to leave it there for as long as possible (as when you withdraw you’ve lost your allowance).
Ideally I would like to get our liquid freedom up to around £100K and get our real cash reserves up to around 2 x yearly living expenses which is around £70K at our current rate of spending. I reckon we could do this within 2 years with around a 40% savings rate. At this point I would (hope I’d be!) be pretty comfortable quitting my current job and doing something similar to what Mr Liberate.life has done with his wondrous working schedule of 33% the hours of a normal nine-to-fiver.
Here is some bullet points on what we’ve been up to:
- I guess people want to know the outcome of this whole mess? Short version, 99% sure I’m staying and will change my shift pattern to this (in weeks): 8 on / 2 off / 10 on / 2 off / 8 on / 2 off / 6 on / 4 off / 6 on / 4 off. This adds up neatly to 52 weeks, and will mean I’m in for longer periods of time which seems to have been the main bug bear. Conversely it also means I get longer chunks of time off and that 4 / 6 / 4 stretch will fall over next summer, which is something to look forward to. Hopefully this will get signed off and it will be a win/win for both parties.
- Did some decluttering (again) at the start of the month. Always very cathartic. We got rid of our clunky big garden table and replaced it with a nice glass one (see pic below), plus the usual lug of clothes to the charity shop plus cleared out some kitchen crap we never use
- Played far more squash than I have done so far this year, which was great
- Even did a couple of Park Runs to boot, got around 21 minutes both times, still need to break that 20 barrier!
- Generally being knackered due to the above, working, and trying to fit way too much other stuff into our lives (as usual!) along with dealing with a 6 month old baby 🙂 (Not complaining! Love her! 🙂 )
- Submitted our remortgage application from the sun filled garden/new table. That was pleasant but I forgot how long it takes to get these bloody things processed and now we’ve ended up paying through the nose as am on the SVR this month as didn’t get it sorted in time! Gah! And I’m supposed to be a PF blogger?! Hey, I never said I was an expert (see hilarious disclaimer at the side of the page if you need any further clarification on this). Hopefully we’ll have it sorted before next month as I think my head might explode paying the SVR rate for two months in a row.
- Harvested some tomatoes (pretty much the only thing I’ve managed to / bothered growing this year)
- Went for some nice walks in the sun around local areas
- Marvelled at the sunset across the Thames over a few pints of ale
please, shut up
OK I get it, this has been a particularly long but hopefully not so tedious update.
Before we go though, here are some links to interesting stuff I’ve been reading this month:
assholes post round up
Here are some interesting posts I found this month about assholes. Enjoy!
The game theory of assholes (Make sure to watch the 2 stand up videos linked to at the end, hilarious stuff!) – Plus Related medium.com article by Nassim Nicholas Taleb
Are you an asshole? – Well, are ya?
Poppa’s Internet Fuckwad Theory (OK so not about assholes to be exact but very much in the same ballpark)
other post round up
Here are some other posts I found interesting this month in case you missed them:
Why the financial independence community is wrong – From Liberate.life blog, read the whole blog if you have a spare hour or two (it’s fairly new so not too much to go through, yet). He has a lot of interesting things about grabbing your freedom now rather than waiting until full FI which I obviously happen to agree with, if that sort of thing floats your boat of course!
Opportunities Arise From Flexibility – And on a similar theme, then look what happened upon my inbox just a few days later. FI Journey hasn’t posted in like ages but quit his job to start up his own business after paying off his mortgage. Life sounds pretty good for him so far.
Wait but why’s series Odds things in odds places – Learn more about countries you probably know diddly squat about (Russia, Japan, Nigeria, Iraq, Greenland). Also the North Korea post is a must read. That place sounds batshit crazy!!!
How was your August!?
- No, I will not let you edit my personal copy of my bloody personal finances spreadsheet, so can you please stop doing that, whoever you are? ↩