Mar ’18 Income and Expenses

So March is over, and what a March. Snow, rain sun – everything! So how did this affect the spending and income? Do you really care or are you just enjoying gawking at what is spent? 🙂

Income

So the standard pay cheque went in – still deducting my companies share scheme which is painful but it is a long term bet so I won’t complain too loudly! I still seem to be draining my cash reserves whilst making sure that I keep the same amount going into ISAs. Another few months and the share scheme payments will cease going out and my pay should bounce back up.

To this day I still have no idea how much pay I will have in my pay cheque in April. The plus side is I got (yet another) Tax Code in the post. This is once again a different one to any I have had before so maybe I should take a bet on how long before my next Tax Code arrives….

The income from my other half’s ISA is also continuing to go up so further extra cash. It’s been a long wait to see it get to this level but it is starting become very valuable.

Expenses

So – what do the finances look like?

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. 37%
Groceries All the food and other stuff needed for home 2%
Alcohol for home Home alcohol consumption only 3%
Bicycles / Car related Any costs related to either the bikes or the car 2%
Alcohol Out Generally, its the pub…. 2%
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…. 1%
Holidays Any spending related to holidays, flights etc. 5%
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) 47%

So a little extra on holidays – a friend is getting married so booked some of the bits we will need for that, but something to look forward to.

Overall things I do nothing about is dropping slightly which is good too. Not at all a bad month – my highest ever savings rate. 47%! I really am amazingly pleased with that rate – so close to 50% I want to keep pushing. My 12 month rolling average savings rate is also creeping up to 40% so I am starting to believe I may yet make this happen!

I also did some money moving around – more into my other half’s ISA, and some extra into the Go T’ Pub ISA to make the most of the allowances that I can. This continues to hammer my cash reserves – I really do need to build these up as they are lower than I am comfortable with, especially as I am pushing up the money going into ISAs I no longer have the flex I used to.

Did you manage to keep control of your budget in March?

Update: As Quitting Teaching asked how my bills are so low – I do have a small confession. I am currently using up loads of John Lewis vouchers at Waitrose that I have been stockpiling for a while. I have done 2 huge shops for food this year of which I haven’t had to pay a penny for and so don’t show up…

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Feb ’18 Income and Expenses

So February is a nice short month so in theory this should be a good month for me – the question is… was it?!

Income

So the standard pay cheque went in – still deducting my companies share scheme which is painful but it is a long term bet so I won’t complain! I double checked back to what my income was at the start of this tax year. Worryingly what I am pulling in now is about what it was back then. That means come April when (hopefully!)  my tax code sorts itself out again I will be a little better off, but certainly shouldn’t be worse off.

The challenge for me here is that I have upped the amount I put into my rainy day funds, as well as other savings so I am worried it will be tough.

It was confirmed that I have an approximate 3% pay rise this year, which will hit in my next pay (back dated as well!) so that should be nice.

The income from my other half’s ISA was also a slow month so not a great month all round.

Expenses

So – Christmas is now far behind us, so what did the month look like? Lets dig in….

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. 39%
Groceries All the food and other stuff needed for home 6%
Alcohol for home Home alcohol consumption only 2%
Bicycles / Car related Any costs related to either the bikes or the car 1%
Alcohol Out Generally, its the pub…. 1%
Eating Out I include purchased lunches in this as well as meals out etc. 3%
Other My catch all for anything I may have missed…. 3%
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) 45%

So although I was really worried about just how much I spent on food for home (and still not quite sure on what), my feeling was that it was not the best of months all round. Having said that, it was still a good savings rate overall just not as high as I would like. The reduced income has caused problems and the only reason that I was able to keep the GTP ISA filling up was by digging into my Cash Flow Fund (CFF).

It is worrying me that not only am I not able to build up the CFF, I am starting to drain it – I can probably only afford one or two months more of this, and I have more than that to go. This means it is going to be tough as I want to increase the amount going into ISAs but that will be a big ask.

So the general stand out for me was “groceries”. I really do not know quite how I spent so much on food. Granted there were a couple of non “food” items in there but still. Seems I just spent a lot. Oh well. I know there were some instant M&S meals in there and some fresh market and butchers meat but…

Eating out was a bit expensive as we went out for a few meals but then I do like to have some life, so I am not going to complain at that.

So I am 5% short of hitting the magic 50% – so reduce the groceries a few percentage, remove the other and reduce the alcohol and I think I could hit it. Would I be happy though, I don’t know.

Either way, 45% I don’t think is to be sniffed at!

How was your February?

Jan ’18 Income and Expenses

So it feels like an age since my December pay cheque landed and January has felt very tight indeed – including finishing with 39p in my bank account! There was also some fallout from Christmas and before which hit, but I will go into more detail below.

Income

So my pay to cover January (and for the next 6 months) has taken a hit. My company has started a running of a Share scheme, which of course I have taken out as its pretty much a no brainer (although some currency risk). This means that I have taken a pay cut this month and through to May, reducing my income by approximately 8%. I have purposely not changed any of my direct debits to force my savings higher.

Whilst in theory this is great, it does make life very difficult in terms of cash to survive the month – my cash flow fund is getting hit and not going up which isn’t good.

Expenses

So this is going to be painful. The fallout from Christmas has now finished through the wash, and I have had to take a hit this month but it is now out in the balance.

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. 39%
Groceries All the food and other stuff needed for home 4%
Alcohol for home Home alcohol consumption only 0%
Bicycles / Car related Any costs related to either the bikes or the car 1%
Alcohol Out Generally, its the pub…. 1%
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…. 10%
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) 44%

So there we have it. Looking back and at just how low I managed to keep my standard spending which explains why I managed to keep the savings rate so high. I also doubled the funds going into my rainy day fund to help force the savings.

The reality is my Cash Flow Fund took a hit to keep my GTP ISA going up.

So, apart from keeping my alcohol and food bills to an absolute minimum (including making my own lunches, reducing my transport costs, the only thing that was a big hit was the Other category).

The Other category basically caught everything, and allowed me to balance out the residue from November / December. I’ve been back through all my receipts, visa bills and everything and I am still struggling to find out where this all came from. The whole 10% is basically stuff I am struggling to work out how I spent it as it seems that I have counted everything already. Visa bills match receipts, there are no errors or fraud on my account so there we go.

Oh well, a very tight start to the year and no savings benefit from it. The flip side is I made it, so hopefully February will mean that I can actually drive my savings up and have a little more of a life than I did in January, with only 1 day out!

How was your January?

Dec ’17 Income and Expenses

So December finished early for me as I got paid before the Christmas break – great for Christmas, painful for January! The remnants from November hit as expected, however because of when I collected some of the food, some of the Christmas food will hit me in January rather than this month which makes it a little less painful in that sense. Ultimately I still have to pay for it though!

Income

So all steady on the western front here. Same old salary dropped in and a reasonable income from my other half’s ISA. Steady as she goes. Really isn’t anything more to say about this given my lack of other income streams.

Expenses

So, lets take a look at this, should be good for a giggle if nothing else!

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. 37%
Groceries All the food and other stuff needed for home 6%
Alcohol for home Home alcohol consumption only 0%
Bicycles / Car related Any costs related to either the bikes or the car 1%
Alcohol Out Generally, its the pub…. 0%
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…. 6%
Holidays Any spending related to holidays, flights etc. 6%
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%

So there we have it. My general “don’t do anything about” stuff is steady helped by a reduced transport budget.

Alcohol, both at home and out was minuscule this month as it’s the festive season so a number of the evenings out were covered on expenses – what a nice result and some cheer! The rest was stuff I bought in previous sales etc.

Groceries were higher than normal, but it is the run up to Christmas.

Other was the catch from November so not unexpected.

Holidays – I booked a couple of nights in a hotel for a break and some rest, and did me the world of good. Unplanned but never mind.

Savings rate was an incredible 42% – I ran down some of my cash flow fund but my investments remain ongoing, and in fact I put a little extra into the GTP ISA (more on that in the update to come).

So overall I am really happy with the strong finish to the year!

How was your Christmas break, did you manage to keep control of things in December?!

Nov ’17 Income and Expenses

So November shot past, and I am sure this will not be the most accurate report (in fact I know there were some more expenses that I have not included here, but they will hit December when my Visa bill arrives…), but as always it is important to keep an eye on where the money comes and goes as much as possible!

Income

So another good income month, higher than usual as my tax code remained the same (I am dreading April next year when my tax code will change again!). Very handy drop into my account.

My other half’s ISA paid out again this month, even though this is a “slow” month for it (due to the nature of the portfolio, once a quarter there is a much smaller payment, but this is part of the diversification) it was still enough to make a small difference. I continue to use it to build some cash reserves (aka pay off the building work) and pay a little more down on the mortgage – it is all helping that end goal get a little closer.

Expenses

Right… let’s take a look underneath here! There will no doubt be things missing after what happened in November, but I expect this to come out of the wash in December with my credit card statement…. highlighting the risk that credit cards can cause if you are not careful…

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. 37%
Groceries All the food and other stuff needed for home 3%
Alcohol for home Home alcohol consumption only 5%
Bicycles / Car related Any costs related to either the bikes or the car 0%
Alcohol Out Generally, its the pub…. 2%
Eating Out I include purchased lunches in this as well as meals out etc. 4%
Other My catch all for anything I may have missed…. 4%
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) 45%

So, a somewhat unusual month all round. My “do nothing about” was much lower, this is a reflection of the increased income from my tax code change, but also that other areas were lower as I wasn’t in the physical office that much in November, so really drove down the cost. Not enough to make me think about cycling or similar, but there you go!

Food and drink this month was expensive – no real surprise there to be honest. I drank more than I should really, ate out a few times and bought expensive pre-made meals rather than anything else so all told not at all cheap, but under the circumstances, I think allowed!

The Other catch all bucket also took a bit of  hit with some taxis, parking fees and other random bits (I include my poppy donation in there as well rather than charity) but again, with the circumstances, not a surprise.

I am however staggered at my savings rate. I am really happy with a 45% although I know this is a false economy as I will take a few percentage point hits in December for things I missed. Regardless of this it means that money is still flowing into my pensions and ISAs helping to steadily build up that pot!

How was your November?

Oct ’17 Income and Expenses

So before I have even blinked October has come to an end and it is time to look back at how October went. Time has once again flown by as shown by my lack of posts in October, and it has already been a little expensive. So, how did the month look?

Income

So a full month of a sensible income now that the tax code fun has settled down. This means I in effect got a reasonable pay rise for the rest of the year (subject to change of course) which means I find myself with a bit of extra cash – bonus!

My other half’s ISA also chucked out more money this month than ever before, so it is starting to really demonstrate the benefit! I really am getting excited about this now as the constant money going in is really paying out more to help day to day fun.

Expenses

So, what has hit this month? Time to unpick the numbers – with some time off from work things are a bit more expensive than I would normally have.

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. 44%
Groceries All the food and other stuff needed for home 2%
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…. 2%
Eating Out I include purchased lunches in this as well as meals out etc. 5%
Other My catch all for anything I may have missed…. 12%
Holidays Any spending related to holidays, flights etc. 5%
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) 26%

So, what to make of all of this? My “standard” costs you may have noticed are somewhat higher than normal. This was due to a one-off additional cost in one of my standard elements that form part of the things I wont change. I could have said no to the extra but there was no way I was going to – it’s part of my journey!

So, what else was in there that caused the large drop in my savings rate?

Holiday – so some time off, this covered the transport, food and drink both in the holiday and out in pubs / restaurants whilst away. I definitely don’t regret spending on it, and for a relatively small amount of money had a very good time away – a break is always good.

Eating Out. Ok, so this month that was an expensive time! Well, I went out for dinner a number of times over the month meeting up with people I haven’t seen for a while. An expensive way of doing it, but some very good fun evenings and got to try a couple of new restaurants!

Other. Ok so this was a little high this month – the downside of buying tickets for the Royal Opera House! London can be a very expensive place if you are not careful. I haven’t been to the ROH for a few years now so this will really be a treat. Yes we could have got cheaper seats, but I do believe in a little treat once in a while, and I want to be able to see the stage!

Despite the reduced savings rate, this is where my cash flow fund comes into its own. My direct debits / standing orders kicked in as usual – still filling up the Go T’ Pub ISA, my other half’s ISA and my pensions. This means my investments are continuing to tick up each month even when I have these challenges! I do need to be careful to make sure I have enough money in my CFF for Christmas.

How was your October?

II purchase of TD Direct

So fortunately for me, someone on the FI London Facebook group highlighted that II had published the charges to accounts for previous TD Direct, now that the purchase has been completed.

I have to be honest, I had completely missed the update email stating that they were changing their charging structure – I had seen that they were going to, but missed the one that said they had. Given this, I thought I would share my thoughts and impact on this having read the terms and conditions – as I know it is always interesting to see what, why and how other people are changing their approach.

Please note: This is only taking their ISA product view – I don’t have a SIPP or Trading account with them (nor intend to) so is in isolation. Everybodies situation is different, so Do Your Own Research!

Current State of Play

Firstly – what do I hold? I have some Cash, Majority UK stocks & ETFs and <0.5% in funds over the entire portfolio. It’s not worth selling out my funds due to the dealing charge (or at least it hasnt in the past!). So I need to consider all of these factors in my numbers.

I don’t use the regular investment option within TD as to do so would have prevented me from using dividend reinvestment. So, my current charges are:

  • £12.50 per trade. This however I take as a performance hit on the individual trade, so is simply added as an overhead, thus in effect increasing the overall price paid per share for my purchases
  • £1.50 for dividend reinvestment. This is only on a few investment trusts so not a major factor, however again, this is included in my performance by taking the cost of this and spreading across the shares
  • Platform Fee. This is very low as it is across the very small holding I have in funds, but is still a cost. The dividends the Fund pays out covers this, so I just treat this as a lower level of dividend payout

That’s it. So basically, if I didn’t trade (or traded once a year), and didn’t do dividend reinvestment my costs would pretty much be zero – a pretty sweet deal.

Looking back over the last few years, I have tried to work out what the total cost is to me against the portfolio.

The first thing that completely shocked me, is that despite believing I was a low volume trader, it appears that I may have been anything but as prudent as I thought I was.

In fact, in only 2 of the last 7 years have my total costs been below the new £90 cost – and that was the very first 2 years! Looking through the history to try and spot some trends, it leads me to this:

Dividend Reinvestment. Likely to continue, with SMT, NCYF always re-investing (6 per year), and so would JRS, JFJ, WPCT and Downing depending on what dividends they pay out – but I will go worst case and assume zero (i.e. deflate my costs). Anticipated cost is therefore £9.

I am also averaging almost 8 trades a year. Now, this is somewhat inflated due to 2013-2015, and the rebalancing I did earlier in the year. Assuming I purchase once per quarter, and add in a random purchase in between as well for balancing, that would give me 5 per year. Add in maybe 1 purchase per year for my “gambling”, that would give me a grand total of 6. Anticipated cost is therefore £60.

Sales. I am averaging approximately 2.5 sales per year. Whilst I am expecting the only things I will sell are going to be some of my gambles, I would imagine there would likely be 1 or 2 of these per year. For minimal cost, I will put this as 1. Anticipated cost is therefore £10.

So, based on that, the total cost of the new charges would be approximately £79. £11 down on the new charges they are bringing in. This is also based on a minimum trading. I can foresee selling BMS, PAF and potentially HGM at some point in the future, and buying other speculative shares, so I wouldn’t be surprised if I get close to the £90 anyway.

The New World

So, now they have published these wonderful new terms, what are they?

First – the big news is that they are introducing a quarterly charge – £22.50. Ouch.  £90 per year. Just for having an account with them.

They state that this cost can be used towards the cost of trading, so you can accrue trades (handy if you rebalance on say a yearly basis). The caveat to that is that the maximum value you can accrue is £90 (i.e. one years subscription). The plus side is that they don’t expire.

I won’t look into the frequent trading rates as you need to have, on average, traded more than 10 times per month for the previous 3 months to qualify on this – excluding regular and dividend reinvestment. I can’t imagine anyone going for FI would trade quite that much (people who have made it may well if their portfolio is of that size!).

Regular trading rates have also changed. If you carry out sub £100k trades infrequently then quids in – they have reduced the rates from £12.50 to £10. If your trades are more than £100k then the bad news is they have gone up – granted only by £10 per trade (£30 -> £40 for £100k – £500k, and £60 -> £70 for >£500k). I doubt that will affect many people out there but still impacts on overall costs.

Dividend and Regular investments are reduced to £1 – so a win there for me too.

Transfer out is £10 per line item, with a minimum of £30, a maximum of £250 – however they have said that this will be waived in the first year, so it gives me some time to make my mind up!

So, what does this all mean to me, and should I move? Now there is an element of the lazy here that it would be a real pain in the a$$ so I won’t do it if it will only save me a few quid. More than about £25 and I will seriously consider it. More than £100 and I would probably action it!

They are introducing a transfer out cost, however it is free for the first year, which allows me to buy some time.

What it means?

So, where does that leave me? I will continue to dividend reinvest my my Investment Trusts – however if I have read the terms correctly I will now pay £1 per reinvestment however I do not believe that is included in the trade credits they offer me, so no change to current on that.

I am not doing any regular investments, so nothing to note there either.

That leaves my day to day trading…. which, until now, I thought I didn’t do a lot of. The data says otherwise. What do I expect to trade over the coming months? Well, I have some cash sitting around that is ready to deploy into some ITs, so that is at least 1 trade. I will have swathes of dividends coming in each quarter, which will mean at least 1 more trade per quarter. That takes me up to 5 over the next year already. I expect at some point I will sell or trade on some of the higher risk shares I have so I am going to be close to the £90 per year.

I have traded more than the annual charges for the last 5 years (including this year to date) – quite frankly this surprised me.

As I have a year where it is free to transfer out for now I am going to sit tight. The IT trade I was going to make this month I will now delay, so I will sit on my hands and trade nothing until after the new charges come in (caveat: if I see something at a value I can’t say no to, I will still buy it), and monitor just how much I trade, with an aim to reviewing in maybe August next year.

Do you have an account with TD? What are you planning to do with it? Do you really trade as little as you thought you did?