So its that time of the month again when my salary hits and it’s time to review what I have spent my hard earned cash on, and where I could have done better. It’s the last gasp of the tax year, so let’s see what has happened.
So this month’s salary was padded out with my bonus…. rather nice if I say so myself!
This really is a major bonus (pun intended) to my ambitions. The entire delta of my post tax income against my normal income is going straight into my pension (unfortunately my company won’t put it straight into my pension) – I am not going to update my savings rate based on this one off as it does seem to warp things.
It will have an effect on my retirement plans as it will add a large chunk (possibly >10% depending on tax relief etc.) into my pension right before the end of year. This has the added bonus of when I get round to doing my tax return (probably in May), then I will get a nice refund from HMRC to pay back for the misery they caused in December. Needless to say all of that refund will go into either ISA (most likely my other half’s) or Pension (less likely as I want some liquidity). The bonus that keeps on giving!
This really builds my positive feeling for the coming year – another large step forward (albeit in my least flexible pot), but means my networth for the year should have gone up significantly.
As always I don’t include any of my personal ISA dividends in my income statement, that is just part of the growth of those portfolios. The income thrown off by my other half is included, however this is an incredibly small amount at present (less than 1% of income) so it is more of a statistical error!
So, a nice bonus bump (although possibly bad market timing but best to be in the market), with the regular salary ticking along (no pay rise), and my other half’s ISA slowly adding further contributions.
So this months expenses have been warped by a ski holiday earlier in the month. I foot the bill up front and as my visa bill trickles in we can divide up the costs across the group and I will get the funds back. This is annoying on one way – the money would have gone into my ISA just before year end and helped to increase that further as my last contributions. On the plus side it all went on my reward card, so I will get points. When I do get the money back from the other members of the group, that will all go into an ISA, so another way of protecting my savings, but this does mean it is not really a fair reflection on my holiday costs over the year.
|Things I choose not to avoid*||Mortgage, Insurance, shared bills etc. – yes, we could move somewhere cheaper, not have insurance, reduce our bills a bit and so on, but we are where we are.||43%|
|Groceries||All the food and other stuff needed for home||2%|
|Alcohol for home||Home alcohol consumption only||0%|
|Bicycles / Car related||Any costs related to either the bikes or the car||0%|
|Alcohol Out||Generally, its the pub….||1%|
|Eating Out||I include purchased lunches in this as well as meals out etc.||2%|
|Other||My catch all for anything I may have missed….||1%|
|Holidays||Any spending related to holidays, flights etc.||38%|
|Savings||Anything left over! This includes money into ISAs, mortgage payments and non relief pension contributions. My company pension comes out before it hits my bank account so isn’t included, nor do I include the “top up” of money when my money goes into my personal pension (i.e. I put in £100, I register it as £100, not the £125 that gets credited in my pension)||13%|
I will confess.. The 0% on alcohol at home whilst statistically correct, I didn’t spend £0. I did have to buy a few more beers for the end of the 6 nations. Still – the huge spend on booze back in February is mostly intact and I would be surprised if it doesn’t last well into May, but that will depend on the weather, a few nice glasses of wine out in the sun and it will go fast!
So a lower savings rate than I would have liked, although a little artificial. If I were to take only my share of the bills on travel then I would be up by a lot more than this, so it isn’t as all doom and gloom as it appears at first glance. It is also artificial as I still contributed the same amount to the other ISAs and Pensions via the flex in my Emergency Fund.
So how did I do on my dry run for this month?
Dry run 1: Savings.
Each month I will aim to put into my current ISA the same amount that I plan to put into the Go T’ Pub ISA and see if it is realistic. With some holiday booked and a few other challenges I am already aware of this is going to be a real challenge, but its important to setup for success as best I can
FAIL. Had I not gone on holiday then this would have been a success but I did, and so I failed. Miserably.
Dry run 2: Reduce my alcohol expenses.
This needs to average out over the months, as I tend to buy when the offers are on so it comes in peaks and troughs. I am going to aim to reduce my “Alcohol at home” budget by 25%. This really is going to be a challenge as the whisky collection has been hit hard over the Christmas break and so I do need to buy some more soon(ish) which will hurt.
PASS. So I spent more on going out on alcohol this month for a variety of reasons however still low on rolling budget this year – the plus side is that a number of these nights out were company sponsored 🙂
Dry run 3: Reduce my “Other” expenses.
This is going to be a lot tougher one as these really are other things (e.g. the Weekend FT, a taxi home from town etc.). There was a large one off expense in this category this year which won’t be repeated so this is a little bit of a cheat, but you never know what the future holds, so I will still focus on reducing this.
PASS. This I will class as a success as apart from a few taxis (shock horror – how dare I when I am not FI!) home in an evening, it was pretty good.
* This covers a number of things that I would class as essential for me. Yes, I could move to somewhere cheaper to reduce the mortgage (which in turn would reduce the insurance I have to pay), yes I could reduce my bills by switching energy supplier etc. but it comes down to what I am happy with. There are a few other things in there that are classified as essential that others may object, and so I have just lumped it into there.