What we achieved in 2015:
- Started officially our FI journey.
- Started this blog
- Started to record our monthly net worth (currently £96,649)
- Had a monthly saving ratings average of 38.49%
- Increased our net worth in £37,250 (from April to December)
- Started our first challenge FI related
- Calculated our FI target amount (approx. £696k)
We are very happy with our achievements in our first FI year and very glad that we started this journey.
For us the most important thing is the peace of mind that we gain by what we achieved this year. Is to know that if an emergency occurs we have the means to support us for several time. And if an emergency doesn’t occur (that we hope so) then we are nearer our FI!
As you know, we started this challenge in November… well, not really, the challenge was started before but it did suffer some little “alterations”. As a reminder or if you new to this blog you can check all the challenge details and history in the 3 Month – 9K Challenge post.
As 2 months of the challenge are already done it is now time to do an update before the end of it.
In these last 2 months we spent a total of £6451.36: in November £2,736.63 and in December £3.714.73,.
This leave us with £2548.64 to spend this month if we want to achieve this challenge. We never spend only this amount since we track our expenses. This will be interesting…It seems that January is going to be a month without “wants” . Will we be able to do it?
If we needed to describe December month evaluation in only one sentence, it would be: “Second month in a row with savings >50%”. Since we started this blog and to keep track of our net worth, this has never happened so this is a great achievement for us!
And again, we didn’t feel that we renounce happiness to do it. By the contrary, we can even consider that this month we splurge a lot
Supposedly this is our third and last month of this challenge. For who doesn’t know about this challenge, the goal was to spend for 3 months, a maximum of 3k each month, that corresponds approximately to the income of the lowest earner of our household, in this case Mrs Geek salary.
There were two main reasons to this challenge: first for us to experience if we would be able to live with just one income, in case one of us loose his job, and how much do we need to compromise. Second to boost our net worth, as by achieving this challenging would mean almost £15k savings in only 3 months and to achieve the £100k net worth.
Oh yeah!!! What a month this was!!! We has out highest savings rates ever: 64.71% and the lowest expenses amount: £2,736.63.
And the awesome thing is that we did not feel that we needed to compromise our life or happiness to do it. We are now even happier than usual because we were able to achieve a monthly expense under 3k and save a very good portion of money!
How were we able to do it this time? First by eating out less. This month we spent £115.19 in outgoing when our monthly average is £416.16. Also by buying less thing for us and for the house. We only spent £10 in clothing and £26.99 in household goods. It helped also the fact that for some of the categories we didn’t spend anything this month, like flights to home country, pet and ironing. But the surprising category with a null category is electronics!!! I’m so proud of us
Yes we bought a Rolls-Royce but instead of the luxury car we have bought Rolls-Royce Holding PLC shares. With 25% share price plunge this week it was almost irresistible not to buy. The CEO has announced the 5th profit warnings and the dividends can be at risk, but he also said that in 2016 it will be a year to start restructuring Rolls-Royce. As the future is a bit uncertain, we only invested £500 and we added 94 shares to our portfolio, from a risk management perspective we thought that we should take our chances and look here for the long-run.
Here it is the October net worth post. Net worth related it was a very good month! Although this month’s increase is half related with a pension plan that we forgot to include in our net worth But this mean that we are a step nearer to financial independence! Hurrah!
Related with the 9k in 3 months challenge, this month wasn’t good. Our expenses for this month was half of the budget available for the challenge!
Our expenses were £4,096.15 by our YNAB application, but in reality we spent £4,492.22 as we received credit in some of the categories:
After 5 months tracking our net worth, expenses, savings, it is time to review our financial independence spreadsheet.
We calculate the current expenses based in one year (from October 2014 to September 2015). So in this last year we had:
- Monthly average expense: £5,318.12. This means that in 5 months our monthly average expense decreased from £5,711.10 to is £5,318.12. Almost £400!!! This means that we are in the right track!
- Savings rate: 30%
We also reviewed our predicted income and expenses for when we return to our home country. We increased our income as we now think that we want to continue to work in our current job areas. If we receive more income it also means that we can achieve FI earlier. We decreased our expenses based in our current decrease in the UK.
As we plan to have a baby we also add expenses related with education.
Mr. Geek income was also updated, as he has now a new job and was also updated Mr. Geek pension contribution as it is now none as his new company doesn’t have a pension plan.
With these updates our FI age continues to be 48 years old but we can return earlier to our home country at 44 years (instead of 48). Our goal number is now £696.000. but to achieve this we need to live in the UK more 11 years (we would prefer to return earlier).
What are our conclusions from this review? That to be able to go earlier to our home country we need to save more! This is something that we need to go deeper into it. We need also to plan better the planned future expenses in our home country as currently the planned expenses are higher that the planned income.
So the goal is to live currently with less in the UK. This way we will gain habits that will persist when we return to our home country and therefore the expenses will also decrease. We will review this spreadsheet every quarter so the next review it will be on January 2016.
A doubt that arise from this review is that based in our worksheet we will die with at a least 1,000,000 in our bank account!!! So isn’t there a way to achieve financial independence earlier as we don´t have the goal to die with so much money!?!? This is something that we need to investigate…
Here it is our updated dashboard.
Here it is the September net worth post. And we didn’t do very well compared with last month. It seems that we spend less money when we are on vacations
So this month was the month of the year where we spent more in Groceries: £546.27. The maximum that we had spent this year was £364.83. This is a big difference. So let’s check in detail the expenses out of “normal”:
Finally the August net worth post!!!! We could make excuses about the delay with the summer holidays, but actually we returned from holidays on the second week of September…Well is better now than never.
And we are happy with this month! July was our second worst month savings related but August was our second best!
The first thing that come to our mind was: This month we were in vacations, expenses with accommodations and eating out several times… how could we saved so much?