Aug ’17 Income and Expenses

So it’s that time of the month yet again – how time flies! It’s taken me a bit longer this month with everything going on, but better late than never! So how was August? Well this leaves me in a very interesting place I have to be honest, so this is going to be a similar duplicate statement!

Firstly, August’s pay cheque (at the end of the month) included the reworks from the HMRC changes, however for this post, the money I had to spend in August came from July’s pay cheque, so it won’t feature in this month. Why the confusion? I always have my pay cheque covering my next months expenses so that will be commented on next month. However the difference against my normal income has just been shifted into savings so it really doesn’t make that much difference.

Secondly, some home improvements I mentioned here. We had to pay a significant deposit (70%) of the total cost (roughly) so this is going to have a major impact on the finances. Now as the money for this came out of cash accounts, this doesn’t impact my retirement plans at all – I just need to up my savings rate to restock the cash reserves!

This does leave me with a little bit of a dilemma as to how I should track and report this – should I ignore the cash expense as it won’t affect my retirement planning? If I do that then I can’t claim the extra savings I will be trying to make to restock the savings. Would I have spent this money if I were retired? No I would have saved up to get it first – so to assume that this is normal spending also isn’t really fair.

In the end, I will be tracking it as I had spent the total. Worst case is if I have to spend that every 4 or 5 years on home improvements then it is factored in, and if I don’t – we can have a really rather nice holiday!

Income

So as always I had my steady Salary drop into my bank account, always nice.  I don’t include any of my personal ISA dividends in my income statement, that’s just part of the growth of those portfolios. The income thrown off by my other half is included. A little bit of a pain, but the rolling 3 month average from it still continues to tick up – for tracking I am going to change this to 12 month rolling to even out any blips. Going forwards this will be restocking my cash reserves rather than paying down the mortgage, but either way still savings in one form or another.

So, steady as she goes on income – very slowly creeping up.

Expenses

So – expenses take 1. This is what the month would have been like had we not had the large deposit to pay.

Item	Notes	Amount
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.	41%
Groceries	All the food and other stuff needed for home	3%
Alcohol for home	Home alcohol consumption only	4%
Bicycles / Car related	Any costs related to either the bikes or the car	0%
Alcohol Out	Generally, its the pub….	3%
Eating Out	I include purchased lunches in this as well as meals out etc.	1%
Other	My catch all for anything I may have missed….	6%
Holidays	Any spending related to holidays, flights etc.	0%
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)	42%

 

* 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.

Digging in

So, what to make of all of this? Not much to be honest – I spent far too much on alcohol this month but then there were some offers on at Majestic again so it would have been rude not to 🙂

The other was a little high, but that is explained by some direct payment for the home improvements, and also I needed some new work shirts, and there was an offer on TM Lewin non iron shirts, so I bought some! I am slowly trying to replace my normal shirts with non iron to save on time and effort. Lets face it, by the time I have got into work after walking and train rides, they are never going to be pristine!

So – a savings rate of 41%. Now the big question – what does this look like if I take into account the home improvement budget?

Well, then my savings rate falls to -35%. Despite the ouch – I still contributed money into the market – my ISA, my other half’s ISA, my company pension and my private pension so they continue to tick up. I now need to knuckle down and get that savings rate over 50% to start repairing the cash balance!

So my official declared savings rate will be -35% 😦

How was your August?