October Review

nature red forest leaves
Beautiful autumn colour we can all enjoy at this time of the year
A new strategy

As you may know, I started writing this review last weekend, but it turned into a post about my future self . Let’s see if I have more luck this week. October only finished two weeks ago, but it feels like another world as we have made the decision to stop overpaying the mortgage. As is the case with many of the choices I have been making recently it came about as part of the work I was doing for Natalie Bacon’s life coaching program – Grow You .

October was about succeeding with money. Whilst quite a few people in the program are looking to start their own online business and although that’s a great way to build wealth, at the moment it’s not my priority. I had some face to face coaching with Natalie. which is offered as part of the program. There are several calls each week, which you join by Zoom. Some of them are question and answer calls, where you submit your questions in writing and Natalie will answer them live. For other calls you can ‘raise your hand’ and come on live with Natalie and get coaching. It’s a bit scary at first, no in fact, I’ve done it three times now and I’ve been really nervous every time, but it’s so worth it.

In October I talked to her about the FIRE movement and how I felt I’d ‘missed the boat’. As a former certified financial planner, Natalie is very familiar with FIRE and used to have a blog called ‘The Finance Girl’. Whilst I got some inspiration for how to move forward, I’ve spent time procrastinating, as we all do, about starting a side hustle or earning money in another way.

home real estate
Do I want to tie up all of my money in our house?
Two Options

What I did do though, was to look at two future scenarios; one where we continued overpaying the mortgage and one where we didn’t. I’ve always liked the idea of being mortgage-free. Even before I discovered FIRE I used to make extra payments each month. That was also before I’d even thought about investing. At that time I believed that it was a very risky practice and just for those people who had money they were prepared to lose. How far I’ve come!

When you overpay your mortgage you know exactly where you’re going to be financially in the future, certainly at the moment when the Bank of England base rate is very low and has been under 1% for the last decade. There is something psychologically comforting about that. A feeling of security and predictability. Along with this I think that there’s also the idea that you can’t retire early if you still have a mortgage, or at least that’s what I thought. In fact there are a lot of people who are still paying a mortgage long after they’ve said goodbye to their 9-5. They’ve just made sure that their income, however it’s generated, covers those payments.

The trouble with paying off your mortgage is that all that money that you’re using to make those extra payments could be invested in index funds creating an income for you for the future. At fifty-one I haven’t got a lot of time for the magic of compound interest to work, so the more that I invest the better. My new plan is therefore to add an extra £600 per month to my ISA (tax-free savings account), along with the usual £500 that I am putting in. I will continue to do this for the next four years, until I am 55.

red hammock tied between two trees
I hope to be here by aged 60
The future?

What happens at that point may depend on how my investments have performed, but at the moment I hope to then reduce my working hours to three days a week, which would cover my monthly expenses, including the mortgage, but will mean an end to my savings contributions. I will just leave the money to hopefully grow until I am 60, by which time I should be able to retire completely. I will have two defined benefit pensions to draw on, as well as interest from my investments. The mortgage will have four more years to run, but I should easily be able to afford it.

person holding black ceramic teapot
Saved as usual into my ISA this month
The money

So there we go, the grand plan for the next nine years. Now, back to my spending and saving in October…

There were the usual mortgage payments: £497.11 plus an overpayment (the last one) of £625.00. The balance is now £61,408.10.

I put £650 into my ISA, which stood at £24,651.57 by the end of the month, having decreased by £434.38 due to another downturn in the market. My total savings stood at £38,328.00 as of 31st October, along with the additional £8,000 I have saved for a new car.

Food was overspent again at £156.85 (the budget is £140.00) and I spent £56.12 on toiletries, which will hopefully keep me going for a few months. There were a few miscellaneous items, some of which are just for my half, as the costs were shared with Mr Simple:

New door mat £4.49

Rose bushes £20.47

Notepads £6.87

Pens £7.61

Electric toothbrush £19.98

Toothbrush heads £5.09

light landscape sky sunset
The moon is often out by the time I go for my daily walk
My very simple life

As to activities, as the nights draw in and the weather becomes wetter and windier, I am spending more and more time in the house. My morning routine continues with time for journaling, exercise, meditation and breakfast. I don’t know how I’m going to cope if we ever return to having to leave the house before 9am on a regular basis.

Despite the bad weather I am still walking on an almost daily basis. Most of the time I go out about 5pm, on my own, listening to a podcast, for 30-60 minutes. About once a week I go out with a couple of neighbours, one of whom is the owner of the lovely black Labrador that Mr Simple and I sometimes take for a walk. An opportunity to catch up with friends whilst also doing some exercise.

And that’s it. How was your October? Did you make any major decisions about your finances? I’d love to know.

My Future Self

adult alcohol blur celebrate

This post started out as my monthly review, but has turned instead into an example of how to make decisions about your future self . Thinking back over October and about what was memorable, one occasion was a spontaneous glass of wine in a neighbour’s garden. I was coming back from a walk and bumped into two neighbours. One of them I know a little. The other one I used to work with, about ten years ago and to put it delicately, she’s not my sort of person. Nevertheless, after discovering that she lives in the same village as me, I am polite to her and she is friendly to me.

When I enquired where they were off to, the neighbour I know a little said that they were planning to have a glass of wine in her garden and she asked me to join them. I am not good at doing things on the spur of the moment and my first reaction is always to say no, but two things made me accept. Firstly, the sun was shining and I thought that it would be nice to sit outside, even if it was October and secondly, the garden in which we were going to sit opens to the public once a year as part of the National Garden Scheme. In other words, it’s a lovely place to sit with others and contemplate life.

three assorted beverage bottles on brown wooden table

The more challenging decision was when we arrived in the garden and I was asked ‘white or red?’. I have never been a big drinker and since I was diagnosed with a heart condition I rarely drink. My weekend evening tipple is one bottle of Beck’s Blue – low alcohol lager. Occasionally Mr Simple likes to have a glass of wine and as that means opening a bottle I usually have a small one as well. The problem is that I often regret it the next day. Even one small glass of wine in the evening can lead to me feeling too warm in bed and sluggish the next day. Natalie Bacon, the life coach that I follow, doesn’t drink alcohol and she has recently released a podcast about her year of being free from alcohol, which had made me think about my alcohol consumption.

I did though, on that sunny afternoon, submit to peer pressure and had a small glass of white wine, although there was a little voice in my head saying, ‘just ask for a cup of tea’.

cafe tables on the street

Since then I have been thinking about my future self and whether she drinks alcohol. I have realised that I don’t want to give it up, as I do enjoy it on occasions. Thinking of examples of those times when I do enjoy it they are mostly when we are on holiday or sharing a midday meal with friends or family. As I’ve probably mentioned before I much prefer a long leisurely lunch than a heavy meal in the evening.

On those days I enjoy a glass of wine, in particular a glass of rosé in the sunshine. Just imagine a beautiful summer’s day in France, tables and chairs outside a little restaurant and a glass of wine to accompany a delicious three course meal.  Another occasion when a glass of wine goes down well is with lunch on Christmas Day. The upside to drinking in the middle of the day and with food, it that the physical impact is much reduced. The food seems to cushion the immediate effect of the alcohol and the several hours before bedtime allow my body to process the alcohol before I go to sleep.

autumn autumn leaf autumn leaves chocolate

The long and the short of this is that I have made the decision that I will only drink alcohol at lunch time and with food. This has yet to be tested though. A friend has invited me and Mr Simple round to her home. She has a fire pit and an outdoor heater so that we can all sit outside and social distance whilst still being warm. I know that alcohol will be involved and plan to decide on an alternative before we go. In fact, just thinking about it now, if it’s a cold evening something warming, such as a hot chocolate, sounds much more attractive than a cold glass of wine actually.

So have you made any decisions about your future self? If you want a copy of my guide on how to write your future self letter you can down load it here. It really is possible to create a vision of who you want to be one, five or ten years from now and with that in mind make decisions today to move to you closer to being that person.

Creating a Money Mission Statement

Tanja Hester’s great book ‘Work Optional’

If you’re like me, when you discovered FI/RE you wanted to be financially independent as soon as possible and started cutting everything that you could from your budget, maybe to the point where life became miserable. As the saying goes, it has to be more than just getting to the destination, you have to enjoy the journey along the way. How then do you make decisions about what to spend your money on and what you can do without? How do you have enough in your life to make it enjoyable, but avoid spending on things that you probably wouldn’t miss that much? The truth is this is probably going to look different for everybody.

Tanja Hester, in her book ‘Work Optional‘, suggests creating a ‘money mission statement‘. This starts with looking at your mindless spending, which may have come about as a result of lifestyle inflation. If you think back to when you were a student or when you got your first job and compare that life with your life now, how is your spending different? What do you spend money on now that previously wasn’t part of your life? Do these purchases really enhance your life or have they just become a habit?

Tanja goes on to repeat a point which is the focus of ‘Your Money or Your Life’ by Vicki Robin and Joe Dominguez. Basically, money is a reflection of the time that you spent earning it. If you get paid £20 an hour and you buy a handbag for £100, that cost you five hours of your life. If you look at purchases in this way, as a function of your time on this planet, you may think twice before you click ‘buy’ on that Amazon basket next time.

So how do you develop your money mission statement to help you decide what you are prepared to spend money on and what you are going to leave on the shelf? Tanja suggests some questions for you to consider. So here’s the questions and what my answers to them are:

My best ever investment
What is the single best thing you’ve ever spent money on?

I have struggled to choose one thing. At the moment I would say Natalie Bacon’s ‘Grow Youlife-coaching course which I joined earlier in the year. It has changed the way that I think about so many things in my life and given me the tools to really examine my thoughts and try to address the challenges that life puts in my path. Previously, I might have said my social work course, which enabled me to have a job that on the whole I really enjoy. The other things that came to mind were major holidays of which I have some great memories.

What ongoing expenditure makes you happiest?

My answer to this was again ‘Grow You’, but I would also include the online Pilates programme that I have discovered since the beginning of the lock down. Both of these are in the category of personal development. One for my body and one for my mind.

coffee magazine
I used to spend a fortune on magazines and didn’t always read them
What do you spend money on that you wouldn’t miss?

As I write, the answer to this question is honestly ‘nothing’, as I have really pared my budget down to the bone. Before I did that the answers would have been magazines, fiction books, facials, hairdressing and clothes. That’s probably why I have managed to go without these over the past 18 months and not miss them too much. On the other hand I have missed holidays, eating out with Mr Simple and friends and good food, which until the beginning of the pandemic were gradually creeping back into the budget.

What would feel like too big of a sacrifice to be worth it?

In my efforts to cut the budget to the bone I have reduced our grocery spending drastically, but I must admit this hasn’t always felt like a healthy way to live. I’ve realized that the food that is cheap is very carb-heavy, such as bread and pasta. I began to miss my avocados at breakfast. We don’t eat out as much as we used to do, but I have begun buying better quality products, such as extra virgin olive oil.

baguette baked baking bread
Even the simplest of meals out feels like a treat at the moment
Could you spend less on the things you value without missing out on the core of the experience?

I found this a hard one. We love meals out, but it’s something we only do rarely. When we do we like to splash out and go somewhere particularly nice. Doing it less often also makes it feel more of a treat. Since March the only food we’ve eaten out was a breakfast baguette and tea and cake, both at local country parks last month. Just those simple treats felt very indulgent.

We have had less expensive holidays over the past couple of years and they have still been enjoyable, but I don’t think that I would be happy if we could never repeat the experiences we had before Mr Simple got made redundant. For example, we did a cycling holiday in Tuscany with Skedaddle. A private car from the airport, bikes and directions provided and bags moved for you everyday whilst you cycled to the next hotel, enjoying the beautiful countryside and leisurely lunches. With holidays like that you’re paying to let someone else do all of the organisation and every so often I’m willing to part with my hard-earned cash for that service.

Was there a time in your life when you enjoyed your lifestyle, but spent less than you do now?

I enjoyed my twenties. After university I worked part time and volunteered a lot. I didn’t have any responsibilities. I didn’t have a mortgage, although I did live in some awful places at times, with neighbours who played loud music at 3am or where I didn’t feel completely safe walking the streets after dark. Holidays were volunteer projects where we worked five days out of seven, cooked for the group and camped. Travel to most of the destinations was by coach, often overnight. Not the most luxurious or a very comfortable way to travel. Would I want to go back to that time? No. I definitely wouldn’t want to rent a property again. I would though like to work part-time, as I did then.

Is there anything you enjoy, but are willing to give up to reach your goal?

As I said above, I have cut my budget the bone and given up lots of things. I see this as a temporary measure until we are financially stable enough to go back to splashing out a bit more on our food budget, eating out and holidays.

crop woman with coffee writing in notebook on bed
Use all of this information to create a spending philosophy
spending philosophy

Finally, combine all of this into a spending philosophy by filling in the following statements:

  • I spend mindfully and without guilt on: Pilates, Grow You, good food, food with friends and personal development books.
  • I spend only as much as necessary on: household bills and clothes
  • I do not spend money on: magazines, expensive holidays and frivolous items that I don’t need

In a nutshell, my philosophy is based on the value that I place on maintaining my physical and mental health.

So if you’re struggling to decide what to cut back and what to keep or maybe you’ve eliminated too much from your life and feel like you’re missing out how about having a go at this exercise and developing your own ‘money mission statement’?

September Review

It was great to be out in the countryside again

For the second month in a row we got out hiking in our nearest national park. We’d booked a week off at the beginning of the month and although unfortunately the weather wasn’t brilliant, we did manage to make use of some dry days. As well as going hiking we also took our neighbour’s dog to a country park. There’s a little café at the park. It used to be bit naff, but the owner’s wife took over sometime last year and now it’s great. We treated ourselves to a breakfast baguette each and a coffee. It was the first time that we had eaten something that we didn’t cook ourselves at home since March. It felt very indulgent and slightly scary. Towards the end of the week, we took him out again, a bit further afield to another country park that we’d not visited before. This time it was cake and a cup of tea at the café there.

personal organizer and pink flowers on desk
I did a lot of work on planning this month
Personal Development

The topic in Grow You, my life coaching program, was procrastination and planning. I have written recently about ‘calendaring’ and I’ve implemented that in both my personal and working life. Now instead of to do lists all tasks have a slot in my calendar. It’s not just cleaning, cooking and other chores that go in the personal calendar, but exercise and relaxing as well. It’s quite amazing how much time appears when everything has its own slot. I know that you may be thinking that this is restrictive, but actually it makes life much more relaxing. For example, when I look at the carpet and think – that needs vacuuming, I don’t have to worry as I know that every Wednesday evening vacuuming is in my calendar and I’ll get around to it then.  I can’t recommend it enough.

person wearing white silicone strap black smart watch
Wearing a Fitbit does bring home to me how little I move if I don’t go out for a walk every day

My average daily steps were 8,570, slightly more than August, which I think is partly due to us having better weather in September than in August, amazing as that sounds. It wasn’t brilliant every day though and my new waxed hat has come in handy on a couple of occasions.  I have continued with my Pilates program, trying to do something on a daily basis.

person holding black ceramic teapot
It was an unexpectedly expensive month
The BasicsBudgetActual

There were a few large expenses that I didn’t expect. We decided to buy a freezer to put in the garage. This is something that I have been talking about for a while, although Mr Simple has been slightly reluctant, wanting to sort out the garage before buying one. He finally decided we needed one, probably because the other two freezers in the house are chock-a-block with chopped apple from the garden. That’s now all moved to the garage freezer, along with runner beans, gooseberries and tomato sauce make with tomatoes from the greenhouse. It has freed up space in our home freezers for batch-cooked meals. We also decided to buy a new mattress. We are sleeping in the spare room as Mr Simple is decorating our bedroom. Although we will be buying a new bed for ourselves, the one on which we are sleeping will be for guests and the mattress is at least over a decade old. We’ve both been suffering with back ache recently, which we put down to the old mattress and now that we’ve got the new one, that seems to have been right. My half of the freezer was £250 and the mattress £132. I used the final part of holiday money that I hadn’t spent to cover these rather than putting it in my ISA.

We made our usual payment of £497.11 towards the mortgage and an overpayment of £650.00, leaving a balance of £62,430.87. I invested £600.00 into my ISA and by the end of the month the balance was £24,986.04. The returns were -£45.30 – not a good month. Adding other savings to that, which are in a fixed term savings account, my total was £38,284.02. That doesn’t include the £8,000 I have saved for a new car.

So that was it for September. Like most people life is very quiet and as we go into winter I am certain it will become even quieter. I expect there will be lots of cosy nights in front of the fire watching the telly. See you next month.

Your Future Self

I spend a lot of hours planning just a few weeks out of every year

If you’re like me you spend a lot of time planning your holidays, considering every detail of just two or three weeks of your life out of every year. In times when we could travel abroad I used to plan our annual two-week holiday to France in great detail. The areas that we wanted to visit, and then the specific tourist attractions in those areas. I’d spend ages on Google Maps looking at the route, picking out small towns where we could stop for our midday meal and consulting TripAdvisor for the best restaurants for that leisurely three-course lunch. place. By the time the holiday came round I’d have it all typed out in a lovely table, with accompanying leaflets that I downloaded giving ideas for walks and cycle rides. I’d include all the travelling times, the day’s activity and where we were staying that night.  

And then the best bit, implementing the plan and getting to visit and experience all the exciting things on the plan. Occasionally things wouldn’t always go as planned – places would be unexpectedly closed or we’d come across a more interesting place to visit than I’d proposed, but on the whole, we did what it said on the plan. It was great. We didn’t spend hours working out what we were going to do or where to go whilst we were actually in France, as all of the hard work was done beforehand. We just typed the day’s destination into the sat nav and off we went.

What do you want to have achieved by the time you’re old?
What about the rest of our lives?

Now, I love holidays and I’ve certainly missed going away this year, but they are only a small part of most people’s lives. The rest of the time, the 47-50 weeks of the year when you’re not away, just happens. When it comes to that time, i.e. the majority of our lives, few of us take the trouble to consider our destination or what we actually want to do on our journey. We all know the general plan – school, uni and/or job, find a partner, buy a house, kids, grandkids, retirement, death.

The trouble with not making a plan is that you may arrive at a place that you never wanted to be or you end up sitting in that chair in the old folks’ home thinking about all the things that you were going to do, but never did.

It will always end like this, but what about the journey?
Advice from Stephen Covey

Stephen Covey, the authority of ‘The Seven Habits of Highly Effective People’, talks about beginning with the end in mind. In order to decide what you want ‘the end’ to be he suggests imagining your funeral. I know it’s morbid and not something most of us want to think about, but bear with me here. Just take a moment to consider what you would like your family and friends to be saying about you after your life is over. What have you achieved? What good have you done in the world? What was important to you? This can help give you some general themes e.g. she loved nature and wildlife, he was an entrepreneur who took risks and made a million, he devoted himself to his family.  

Write to Yourself

In order to begin to me more specific about your future life, what I recommend is writing a letter to the present you from a you in the future. Decide how far into the future you want to go. Imagine it’s 2025 and Covid19 is a distant memory. Describe your ideal life. Consider areas such as your family, home, health and job. If you’re reading this in December and about to make your New Year goals perhaps just take yourself a year into the future and contemplate how you’d like to be living in December the following year. You can make your new life as realistic or fanciful as you want.

As well as activities you can also look at the sort of person you want to be e.g. someone who looks after their health, a person who gives to charity, a non-drinker. You can then use those principles to guide your current choices e.g. cutting down how many glasses of wine you have on a night out. You don’t need to change everything all at once, but just know the direction in which you’re going.

My Future Self

I’ve started to do this recently, looking at the life I’d like me and Mr Simple to be living when we’re retired. Not only does it give you long term goals to work towards, you can also identify things that you can do now. Mr Simple and I met in a walking group and we used to spend one day most weekends out hiking in the years before we lived together. More recently, particularly since we’ve moved to our current home, we’ve spent most of our free time working on the house. When I saw that in our retirement I’d like us to spend time together hiking I realised that was something that I could implement now. We don’t plan to go every week, but I’ve put it in the diary for once a month. So far we’ve managed to do this on two occasions. It was great to see the hills again, although my body’s not used to it now, but it was amazing. It’s particularly good at these times when you have to enjoy the simple pleasures that life has to offer.

Get Started

So, do you want to put as much thought into the rest of your life as you do into your holidays? If you’re not sure where to start I’ve got a freebie for you setting out areas of your life to consider. Just sign up below to get a copy and start planning the rest of your life.

Further inspiration from my favourite life coach – Natalie Bacon’s podcast and future self free training.