November Review

Two two pence coins

Welcome to the penultimate review of the year. Another chance to see my progress on paying off the mortgage and whether I’ve overspent or underspent on each of the budget categories.

I love to see real numbers rather than percentages on other blogs, as I believe that it gives a true picture of someone’s financial situation and you can then compare it to your own.  Each month I therefore bare all and go through the exact amounts that I have spent on household bills and any personal items. To give you an idea of how much I’ve got coming in my salary, after tax, provides me with just over £2,700 every month.

If you’re new to the blog, just to let you know that these are the amounts that I have spent out of my wages. My partner, Mr Simple, does not currently contribute to the mortgage or any of the household bills as he is paying for all of the work that we are doing to the house. He does pay for his half of the food though.

If you are trying to find ways of saving money and want to get a grip on your finances a budget is a must. Check out my post on drawing up a budget here

Let’s look at the figures then…

Woodland with a path running through it
Planting more trees is good for the planet so we support the Woodland Trust

Monthly bills

Firstly, the mortgage, which is our only debt and which I am on a mission to pay off as soon as possible.  The standard monthly payment was £516.09 and then we made an overpayment of £595. This leaves the balance on the mortgage standing at £73,357.72.

Woodland Trust donation £6.00

Gas and electricity £95.35. This is our usual direct debit. We have underspent over the past year so from next month our payments will reduce to £89.78. It’s not an enormous reduction, but it’s a reduction, which is great considering that most of the time bills tend to go up rather than down.

Council Tax £258.00. The downside of living in a large house is that we are in Band G for this. The only way to reduce it is to move house.

Water £40.50

TV Licence £12.83

Internet and phone £30.00. We are with John Lewis, who have just increased their prices. Yesterday I signed up with Plusnet who have a special deal for Black Friday – broadband and landline for £18.99 per month. This is under an 18-month contract. It doesn’t include any calls, but as we have unused minutes on our mobiles, we plan to use those instead of ringing from the landline. Hooray – another saving as from next month.

Income and savings

It was this time last year that I discovered the concept of financial independence and therefore some of my savings accounts which I opened at that time have borne fruit this month in the form of interest, namely…

  • Charter Savings interest £123.61
  • Ratesetter £47.67. I am due £100 bonus for signing up for a year, but won’t get that until January.
  • Savings I had with Nationwide at 5% matured and I received interest totalling £80.79. The rate has gone down so I’ve moved the total, £3080.79 to my ISA.

Savings are a grand total of £36,840.63.

Interest on Marcus account which I am using for stoozing was a grand total of £9.86.

shelves of vegetables
I spent more than usual on food this month

General spending

Food £150.62 – over budget by £10.62. This does include cleaning products and some toiletries as well. I felt as though it was a frugal month, but the figures tell me otherwise. I think it is more than the past few months as we were home for the whole month, whereas in October we had a few days away in Somerset and in September I was in Italy for a week.  I am due to do a monthly shop for December, but the cupboards are fairly full so I am hoping that the spending will come in under budget next month.

Petrol £94.57 – £25.43 under budget again. I currently have a quarter of a tank, which is when I fill up. As it’s the weekend I haven’t got around to putting anymore in the car, but if this month had had 31 days I may well have spent the full amount.

Pilates £24.00 – this covers three sessions. Unfortunately there was a problem with the hall floor this week, so the class didn’t go ahead. The bad news is that our teacher won’t be able to do the class after Christmas due to changes in her job. We are currently trying to find someone else to do it for us.

Toiletries £31.93 – some body lotion – I spend £9.95 on lotion which contains magnesium, which supposedly helps prevent heart arrythmias, like I have. I then called in at Boots for some hair dye and hair spray paint, both of which were on special offer. I therefore decided to buy two of each, hence I went over budget this month, but only by £1.93.

Social £50.50 – lunch out with a friend, dinner out with a friend and a drink for me and a neighbour at our monthly village get together. Parking whilst out for a Christmas do and an advance payment for another meal next month.

Miscellaneous £41.48 – paint tester pots, a plant, which was a gift and a plum tree for the garden which we are expecting to be delivered shortly.

Volkswagen beetle with bonnet up
As my car is getting older having breakdown is really important

Expenses from bills account – expected annual/regular expenses

There was very little from this account in November….

Physio sessions £64.00

Roadside assistance £61.00 – I get a discount as Mr Simple also has this with Toyota.

So there it is, everything that I’ve spent money on this month. If there is anything that you would like to know more about please let me know. I am in the process of drawing up my budget for 2020 and monitoring my expenses this closely has been invaluable in working out what I should allocate to each category. If you have never kept tracking of your spending maybe you could think about starting next year?

The Bullet Journal

Diary pages
A simple life is an organised one

Get your life organised

Do you want life to be easier next year? Want to feel on top of your task list? How about learning to meal plan? Want to keep track of the cash that keeps disappearing from your purse? Would you like to have one place for all of this? A place which you can tailor exactly to your specific needs? The answer to all those questions is a bullet journal.

The problem with other planners

The bullet journal is a planning system that I have been using over the past two years. When I was first looking at planners I bought a Passion Planner. The trouble was it was too big and had a lot of space for listing your appointments during the day. I wanted something to organise my personal life i.e. my evenings and weekends, so didn’t need all the space for weekday appointments. I then discovered the bullet journal.

What is a bullet journal?

It’s basically a notebook where the pages are covered in dots. The pages are numbered and there is space to create an index at the beginning. It was created by Ryder Carroll who has recently written a book about his system. Although he gives ideas for various page set-ups and symbols that you can use within the journal, basically there are no rules and you can use it however you want.

writing at a desk
Bullet journalling can be a lot of work if you don’t keep it simple

Possible downsides

Some people are turned off because it can be a lot of work setting up the different pages each month, whereas something such as the Passion Planner does all that for you. The answer is to keep it simple. There are loads of YouTube videos out there about how to create beautiful bullet journal pages, but if you’re gonna use it to save time, then you don’t want to make work for yourself.

Then there is the cost. Although you can buy the trademarked Bullet Journal notebook, they are expensive. There are other dotted notebooks out there which you could buy instead or just use an ordinary notebook at first and see if you like this system.

Ideas for how to use a bullet journal

To give you an idea of how I use my bullet journal, these are the pages that I set up every month…

Diary

This is simply the date and day of the week in a list and I can write events and appointments next to it. For example…

1M 2pm Haircut
2T  
3W  
4T  
5F Drink with Sally
6S Lunch at Mum’s

Spending

As I am doing my best to keep track of where every penny goes, the next page in my bullet journal keeps track of my cash spending. I withdraw money once a month, having worked out how much I should need and every time I spend some I write it down. It looks very similar to the diary page, but instead of appointments it shows what I’ve bought and how much it cost. It has also helped me to keep track of how much Mr Simple owes me. Before starting this system I would pay for things in cash and forget that he owed me for half. This may be a step too far for you, but if you really want to dig deep into your spending habits then this is a good way of doing that. Here’s what it looks like…

  Me Him
1M Eggs £5.20 £2.60 £2.60
2T Pilates £8.00 £8.00  
3W Groceries £3.90 £1.95 £1.95
4T    
5F Tea and cake   £4.50  

Task List

This is just half a page or a page with the heading ‘Tasks’. I write a very simple bullet-point list, adding to-do’s as the month progresses and when the task is done I put a cross through the bullet point. At the end of the month you look to see what you haven’t done, decide if it is still a task that needs doing and if so, carry it over to next month.

recipe book with kale leaf
Find recipes to cook throughout the month

Meal Plan

For the last two months I have created a meal plan table. This is the beauty of the bullet journal. The dots allow you to draw, using them as a guide. I create a table with 30/31 boxes, with the day and date in each box. I then write in a meal for that day…

1F Vegetable lasagne and salad. 2S Pizza 3S Chilli and rice 4M Paneer curry, dahl and flatbreads
5T Chickpea and squash stew and couscous   6W Vegetarian shepherd’s pie with green beans and peas

I don’t always stick rigidly to the plan, but it at least gives me ideas as opposed to scrabbling around after a long day at work trying to think what to make.

Daily Logs

Ryder Carroll calls daily logs ‘the workhorse’ of your bullet journal. Just write down today’s date and all your notes for the day go here. You can write the day’s tasks and appointments or use it for journaling, whatever you want. Here’s what mine looked like the day after we came back from our short break in Somerset:

28.10.19 Monday

Had a sunny walk up Dunkery Beacon yesterday and then came home and went out for a curry. Nice to be back home, but have to think about work now. Planning to make time each morning to work on the blog.

  • Transfer money to AM for Xmas meal
  • Advertise bed on Facebook Hub
  • Ironing
  • Order Tesco monthly shop

As you can see I often write tasks on the daily log rather than on the ‘Tasks’ page. It just depends how I feel. Like I said, there are no hard and fast rules.

I hope that this has given you a little taster of how versatile a bullet journal can be. Ryder Carroll’s book gives other ideas e.g. custom collections and trackers, but I think I’ll leave those for next time.

Do you plan? What planners have you tried? Have you ever tried bullet journaling? Is there anything you’d like to know about setting up a good planning system? Just drop me a comment below.  

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Ideas to Save Time and Money at Christmas

Stuffed toy reindeer sitting on a sofa

Christmas is fast approaching – that time of year when it is expected that you spend money you haven’t got to buy gifts that other people don’t need or want. I can hear the booing and calls of ‘Baa Humbug!’, but I honestly believe that this is true. I am not a religious person, but I feel that we have moved a long way from the real meaning of this time of year. There is so much pressure on us to go mad, spend lots of money and eat until we pop. But I truly believe that Christmas is optional or at least all of this excess is.

If I ruled the world I would make Christmas like the Olympics – just once every four years. I am not against the time that we are given off over the festive period, as this enables families to spend time together, but often the weather isn’t good and we all just eat too much and then slump in front of the TV for hours. I would rather have the time off when the weather is better, but as I don’t make the rules here are some ideas for moderating the excess that is shortly to come…

Just buy for the children

This is what we have done in my family for years. Once we all got jobs my mum suggested that we stopped giving presents to each other as we could all buy something for ourselves whenever we wanted to do so. I first met Mr Simple, fifteen years ago and he and his parents were still buying presents for each other. When his mother learnt that we no longer did that in my family she agreed that it was a good idea and so now they are ‘present-less’ at Christmas as well.

Keep the cost of each present to under £5 or £10

If you can’t survive the festive season without having several beautifully wrapped packages to open then keep the budget low by limiting spending on each present. There are Secret Santa schemes for several groups that I belong to and there is always a limit to cost of the gift.

Pick one adult, like Secret Santa, and buy for them

My physiotherapist mentioned this to me recently. He is part of a large sibling group, so instead of everyone buying for everyone else, they just buy a present for one of their brothers or sisters and obviously only receive one present. In this way it could be that although you get one present, it may be of more value and therefore something nicer than the several pairs of socks or smellies.

Give the money you would have spent to a charity

If you decide not to do presents, but still want to give something to someone, then give some money to your chosen charity. Find something close to your heart or maybe linked to Christmas, such as one that provides food or shelter to homeless people during this time.

Invest the money

As you won’t be spending as much money as you usually do, put the savings into a high interest savings account or even better, your ISA, in true financial independence style.

Prepare for Christmas 2020

Once the madness is over go shopping and buy cards, wrapping paper, etc. for next year as it will all be on sale at discount prices.

Share the cooking

Instead of one person taking all the responsibility for cooking, share it around and get someone to bring the starter, someone else the dessert, others mince pies, cakes, etc. Just let the host cook the main course, which will be the hardest meal to transport. There may be people who aren’t so good at cooking, but give them something simple to make, or maybe they can just bring the treats such as chocolates, crisps, nuts, etc.

So there we are, a few ways to save time and money at Christmas and hopefully make it all a bit less stressful and a bit less expensive. Whatever you’re planning to do over the festive season I hope have a lovely break.

Financial Independence – Lessons Learnt Over the Past Year

two blue chairs on the beach
You might be able to sit here every day if you achieve financial independence

It has been over a year since I discovered the financial independence/retire early movement. I have listened to so many podcasts and read hundreds of blog posts in that time. It has helped me to become familiar with many of the principles of FI/RE and for those of you new to this concept I want to introduce you to the basic tenets. This is also an opportunity for me to look back at what I have learnt over the past year and how far I have come in my FI/RE journey.

The four percent rule

Financial independence is achieved when you have saved 25x your annual spending. For example, if you could live on £10,000 a year you only need £250,000 saved. If you prefer a less frugal ‘retirement’, say on £30,000 a year, then you will need £750,000. This is based on the premise that when you stop working for money you will be able to withdraw 4% of your savings every year to live on. Despite the regular withdrawals, at a rate of only 4%, if invested wisely, your nest egg should last until you die.

Although financial independence is amazing, I arrived late to the party, so my chances of being able to save 25x my spending are about zero. Nevertheless, the principles of FI/RE have enabled me to begin to spend my money more thoughtfully and helped me learn what is important in my life.

a takeaway coffee
Not buying one of these every day can add up

Small savings can add up

This is the easy part and something that everyone can do. Unless you’re completely new to the FI/RE movement, then you will already be familiar with the usual list of things to cut out of your life e.g. cable/satellite television, gym membership, daily lattes/lunches expensive mobile phones, bottled water.

I have stopped buying so many coffees and lunches, but also cancelled some magazine subscriptions. I have also not bought any clothes in a year, having realised that I have plenty to keep me going for a while yet.

The three big wins are making savings on housing, transportation and food

These are the three areas where we all spend the majority of our money. Over the past year I have mostly been tackling our food budget. We used to do our weekly shop in Waitrose, which is one of the most expensive supermarkets in the UK. I have to admit that the quality of some of their food is better than what I now get in Tesco, but currently the savings are worth it.

woman buying bread in a market
I have worked hard on making this stress-free

Food

As well as changing where we shop I have also devoted time to meal planning and now do that once a month, along with ordering a monthly food delivery. This is one of the areas where I realised that time is more precious than money. At the beginning of 2019 I was going to two separate supermarkets each week to maximize our savings, but after a long day at work I was exhausted and found this a challenge. I was also disappointed in the quality of the fruit and veg from Lidl and we ended up wasting food as it just went straight into the compost.

Now I choose to shop only at Tesco, which is via our delivery and then weekly top ups, mainly of perishables. The delivery also means that I am not lugging heavy bags of shopping in and out of the car e.g. beer, tins, bottles of cleaning products. I feel that I have completely taken the stress out of shopping. The delivery does come with a charge of approximately £1.50, but for me it is so worth it.

white house with blue shutters
Our house is really too big for just a couple, but we don’t want to sell it

Housing

Housing is a much more difficult area as prior to discovering financial independence we spent £435,000 on a house, albeit the mortgage was only £130,000. It now stands at £73,810.70.

I don’t want to sell the house and so the only other option is to maximise our asset. This could be through AirBnB or renting out a room. The first would be my preference, but I have realise that this may be difficult when we are hosting trainee guide dogs. We love having the dogs and wouldn’t want to give this up, but I’m not sure how the organisation would feel about this. Theoretically the strangers staying in your house could steal the dog, who is worth a lot of money due to all the training hours that has been put into him/her. This eventuality seems unlikely, but it would make me anxious. I am not sure how we are going to address this and probably need to have a chat with someone from the agency.

We are then left with the option of renting out a room on a long-term basis.  At the moment I am not sure about that. Mr Simple has talked about trying to find full-time employment, which may mean staying away from home Monday to Friday. If that does happen I may consider having lodger, ideally one who is just here through the week and returns home at the weekend.

red car in a field
We need one of these, but manage with old ones

Transportation

Ideally a financially independent life is a car-free one, but if you live in a rural area as I do this is not realistic. As I’ve mentioned before I get an allowance from my employer towards the upkeep of my car as it is essential for my job. If you do need a car, then buying second hand is the way to go, which my car was when I bought it. At nine years old it is getting on a bit and costing me more money in upkeep, but it is less than buying a new car, so I am trying to keep it going.

One possibility for us is having one car. Mr Simple wasn’t enthusiastic when I mentioned this recently, but as he is home most of the time and his car sits on the drive way, I do question whether it is really necessary. He says that he needs it when he goes away to work as travelling on public transport would limit where he is able to stay overnight. I think that it’s something we need to consider. I may look at how feasible it is for me to arrange my appointments on the days that he is usually here and to be at home when he is away so that he could take my car.

hands typing on a computer
Sell clothes on Ebay or start a blog

If you can, increase your income through side hustles

There is only so much you can do to reduce your spending unless you want to live like a monk and eat rice and beans every day. Those aggressively pursuing financial independence look to earn extra money in their spare time. You could get a second job, do surveys on line or start a blog. There are lots of ideas here on the Humble Penny website. So far I haven’t made any progress in this area.

logo for Vanguard investment platform
This is where to put your money

Put all your savings in index funds with Vanguard

All that money you save from cutting back and earn from side hustles needs to be put straight into an index fund with Vanguard. The company set up by John Bogle in 1975 seems to be the favourite of the financial independence movement, as a result of its low fees. There’s no picking individual stocks, just own a part of the total stock market, invest regularly and wait. It will go up and down, but over time will gradually increase in value until you’ve got that nest egg from which you can draw your 4%.

My money’s in a Target Retirement Fund. This is part stocks, part bonds the balance of which changes as you get nearer to the year that you have selected for your retirement. Vanguard does it all for you, so the fee it slightly higher than their other funds, but it’s still very reasonable compared to an actively managed fund.

So there we are folks, the basics of the financial independence/retire early movement and my progress so far. How’s your journey going? I would love to know. Are you just starting out or are you already retired?

Why You Really Need a Budget

calculator
If you want to stop being poor you really need to start budgeting

I get fed up of reading blog posts where people say they don’t budget or they don’t need a budget. It makes me mad! You may be one of those people that finds the thought of having a budget rather boring, but it’s essential. If anyone tells you that you don’t need a budget they are lying. Not having a budget means that your bills don’t get paid on time. It also means you may have to get into debt just to be able to pay for the basics in life.

In the world of Financial Independence/Retire Early there is a focus on making it sound fun and exciting. In reality, it can be hard work. Stephen Covey said that effective people are prepared to do things that other, less effective people, aren’t. Believe me, if you want to be effective in the field of early retirement and financial independence you’ve got to put in the work. This means having a budget. To some of you will seem like common sense, but I am always amazed at how many people don’t actually have a grip on their money.

So what does a budget look like?  

How to set up a basic budget

If you want to have any chance of getting control of your finances then you need to start looking at what you are spending your money on. If you don’t know how much is in your account and you are blindly handing over your credit/debit card to buy something that you don’t really need then you are in trouble.

You could start by keeping track of your expenses over the next few months, but really you need to look at a whole year. I’d recommend pulling out your old bank statements and having a look at where your money went.

Light bulb laying on grass
If you want to keep the lights on you need to start budgeting

Predictable Expenses – monthly

Let’s start with the easy part. Look at the regular bills that you are paying each month. For me these are gas, electricity, mortgage, council tax, water, phone and broadband and TV licence. I recommend setting up a separate account to pay these out of. You can automatically transfer a set amount to that account the day after payday. With that done you won’t be at risk of having the gas cut off.

Predictable Expenses – annually

Secondly, there are some bills that you only pay once a year. For me these are:

  • Car service
  • Car tax
  • MOT
  • Vehicle recovery
  • Car insurance
  • House insurance
  • Travel insurance

I also add money for medical expenses such as opticians, dentist, my physio appointments. Finally I add money towards my holiday fund. For some of the annual bills there is the option to pay them monthly by direct debit, but often this increases the annual total.

Make a list of all your one-off annual expenses, plus anything else that you want to save towards each month. Add up how much you spend on these in a year and then divide by 12. If you are going to have a second account for your monthly expenses you can then add this amount to your post-payday transfer every month. That way, when the yearly bill comes around you’ve already got the money saved. It also prevents those expensive months, as you spread the cost over the year.

Savings

If you haven’t yet got a grip on your spending, then finding some money to put away each month may not be at the top of your list. I would hope that as you’ve gone through all of your main expenses you will have discovered where you could make some savings. Hopefully you’ll have been amazed at how much you’ve wasted on things that in retrospect you could have done without. Once you’ve worked out how much you can afford to save it’s just a matter of transferring that amount to a savings account or preferably an ISA each month.

woman doing pilates
A Pilates class – one of my weekly expenses

The remainder

What you have left is yours to spend as you see fit. I have six categories for this money. They are food, petrol, toiletries, Pilates, social and miscellaneous. As I am someone who likes budgeting I allocate a certain amount to each category, but it’s entirely up to you how you spend this. As long as you don’t go overdrawn by the end of the month then you’re doing okay.

So there we are, a simple guide to start to get a grip of your expenses. It may seem like a lot of work to start with, but once it’s in place you won’t have to worry anymore when you get to the end of the month as to whether you’ve got enough money to pay the bills.

Do you have particular problems with your budget that you are trying to tackle? Let me know in the comments section or if you’d rather keep it private send me an email via the contact form and I’ll see if I can help you.