Review of All About The Money podcast article.

I just had the displeasure of reading one of the most childish articles on personal finance I have ever read. It’s an article I wrote when I was aged 23.

https://www.bbc.co.uk/programmes/articles/4Gsq4lf46lWz2tB74LH9KQq/why-im-sick-of-being-told-to-save-money

OK, so I didn’t write it, but I probably had the same attitude to money as this young lady back then, and I know what happens when that attitude continues on as you get older. You get in huge debt believing that you will never get old and have plenty of time to make your first million.

As you are reading my site, and I’m sure you are interested in saving money, you are probably left baffled how such an article was published on a mainstream media site arguing against what is logical and reasonable.

On one hand, she is arguing that she has not saved a penny, but on the other has given no reasonable details of actually trying. The one feeble example given was not going on holiday for a year (or an academic year which is apparently 9 months). She attempts to compare a bus holiday to Butlins to going to Amsterdam or Lyon.

While describing her so called fruggal holiday to Amsterdam, she says she got 2 nights for £99. Yes well done great stuff. What about the flights, spending money and eating out (and well its Amsterdam right)? How can spending money to go on holiday be saving money compared to not going and not spending anything?

If you are in the habit of blowing £100 on a night out and eating out several times a week (she mentions running a failed nightclub business) you are not going to save much even if you go to Butlins. I know, I’ve done it (eating out I mean… I’ve never been to Butlins).

I find it particularly frustrating that she justifies having an overdraft because everyone has one. How can having an overdraft ever be justified as ok? I had an overdraft for many years and it NEVER felt fine. I hated paying the fee every month and being in debt to the bank. Being in debt NEVER felt fine to me so I struggle to see how anyone could honestly say they are fine with it.

I think this article is wholly irresponsible and should not be on such a site such as the BBC without a counter viewpoint. I do wonder if the BBC trying to condition young people to spend all their money by convincing them its ok to have zero savings and fall into debt?

I have had many times when I’ve had zero savings and been struggling to pay rent due to blowing all my money when I was in my early twenties. It never felt good! That’s why people say have some savings.

If you have read any of my other posts, you will know I had massive debt (£40k+) and it felt awful. Only once I grew up, stopped spending, and lost my FOMO did I start to feel secure about finances.

Her punchline is: “If I had listened to my bank manager my whole life, I’d be at zero balance in love, life and gallows humour”.

I find this a bizarre statement that tries to justify an immature attitude to life and money. Blame circumstances rather than yourself at your peril. I would be surprised if she has ever met a bank manager. 

The biggest faux pas in this article is her attempt to compare saving money to domestic abuse which I cannot fathom the jump in logic there. Surely saving your own money will mean you are less likely to fall into domestic abuse as you will not be dependant on others and means you can leave the situation you are in.

Establishing frugal habits early on in life such as saving can only snowball later as you gain more income and can save more compared to your expenses. If you don’t get used to a fake Instagram luxury life that you can’t afford you won’t ever miss it. I wish I’d known about FIRE 10 years ago because if I had, I’d be retired by now!

Maybe I’m privileged right now but I worked hard to get where I am – hell i’ve documented part of it on this blog. It’s taken years and years to develop a career that is paid well and I’m proud of what I’ve achieved. I can tell you that since I adopted a FIRE mindset my life has improved vastly. My balance in love, life and gallows humour is infinitely higher than when I was in debt up to my eyeballs and living paycheck to paycheck.

Pension Pondering

 

I had some time on the weekend to consider the best approach to my pension contributions. I found myself going down a rabbit warren of spreadsheets and tax legislation and thought it might be an idea to share what I found.

What are they?

Pension is a term used to describe money which is protected from tax and is intended for retirement. Currently, you may only access your pension funds once you reach 55 years old. Other features include:

  • Mandatory enrolment for all employees who are eligible.
  • Tax-free contributions are limited to £40,000 per year.
  • Max limit of £1,030,000 total lifetime contributions per person.

For more info on pensions in the U.K.; click here.

ISAs are slightly different investment vehicles which are protected from tax but limited to contributions of £20,000 per year. You will not pay tax on any gains on money in the ISA. You may have cash, help to buy or stocks and shares ISAs.  Some more info on ISAs can be found here.

My situation

I have roughly £100k in pension already. So I’m not starting from scratch. After reading a few FIRE blogs that recommend maxing out the pension contributions I built a spreadsheet which allowed me to play around with figures and % of my salary contributions.

Working on the basis that to get the maximum tax efficiency, I should put in all my income above £50,000 which is the level where I pay 40% tax. I would contribute £2533 per month and my employer would contribute £333 per month and it means I could stash away quite a lot very quickly.

Great I thought, let us do it. Then I realised two big problems.

  1. I can’t touch this money until I am 55 (likely to be 57 by the time I get there).
  2. There is a limit of £1030,000 in the pension overall across all funds.

Combined it means I have 21 years until I can touch that money again. It also has 21 years of compound interest growth meaning if I keep contributing to it at that rate, it will vastly exceed £1,030,000, attracting taxes of 45% on withdrawal by the time I get to 57. Not only was it surprising to see how achievable getting to £1m was by age 57, but it was also even more galling that I am having to look at ramping back my pension contributions to prevent investing in a tax-inefficient way.

I worked back to find out the point that if I maxed out my contribution when I should STOP investing. It turned out, based on a 7% annual increase, I would need to invest until I was 41 and then stop completely. The amount left there would grow to £1m by the time I reach 57 and I would not lose money to tax. Although as I will be working and likely contributing to a pension mandatorily, I would have to opt-out and not take up what is effectively free money. It would be foolish to forego that money at a later date. Yes, I understand that if I achieve FI, I won’t need to work but let us not kid myself here, things change and I will be doing something.

Alternatively, I worked out the monthly contribution that I could make until I hit 55 and working back I would pay £1200 pcm to reach the limit by 55. What I should probably do is have a target age for FI, work out the time and the amount I need to contribute to hit the £1m lifetime limit. At this point, I don’t know what age that would be and I am going to assume that I probably won’t really give up working simply because I am FI.

 

I have seen various FIRE bloggers talk about bridging to my pension. Bridging is where you have a pension pot you cannot access until the legal age but use up other funds to get you to the point you can use your pension. I am not convinced by this approach mainly because some of their ideas of achieving this would actually reduce financial independence (remortgage of house and drain resources until you reach pension age). All the time your pension is potentially being hammered by the punitive effect of the 45% tax above the lifetime allowance.

The other issue I have is that on a spreadsheet maxing out my savings like that that is fine, but things like life, family, wanting to buy a bigger home at some point, and actually achieving FI at a young age require money to be available to me at some point before I am 57. Doing these sums has had the unexpected effect of focusing my attention on future life goals and how to achieve them.

I want to be FI but I know that things in life change and what will work now may not work later on in life.

To conclude, for now I am going to contribute 15% of my salary to the pension and in addition, my employer will contribute 5%. I will also put £1666 pcm into my S+S ISA. Any extra (which I think is potentially about £1000pcm) will be saved or invested outside a tax-free umbrella and could make a contribution to a deposit for my next home. I believe that having money outside my pension and maxing out my ISA allowance I will put myself on a better path to FI at an earlier age. It will mean I have a boost from my pension later in life to really live it up! I may also investigate paying off my mortgage, but, as previously discussed, I believe this may not be the most efficient use considering the low-interest rate I am paying presently.
I would welcome any further discussion or advice!

October update

I haven’t done a net worth update post for a while, so now seems like a good time to get back into the habit. I have, however, been tracking my net worth in the background and can say that it has been quite motivating to see my progress.

Screenshot 2019-10-05 at 12.19.18

From when I started tracking this a year ago, I have seen a 20% increase in my net worth, which I think is fantastic. It is almost all from paying off debt and increasing savings.

I have three pensions which have increased by about £9k in the past year. I am looking to consolidate these into a SIPP so I may control how they are invested and cut the fee I am being charged. I am waiting until I finish at my current job (in one week!) so I can take them all at once.

I have been focused on paying down debts and building up my buffer. I now have 3 months ‘buffer’ in place which I built up much quicker than expected (thanks to selling my car), I can start investing as it is now safe to do so. I view this as a huge achievement and very comforting to know I could stop working for 3 months and have no worries.

I should note that I do include my equity in my flat into this calculation and that stands around £200k. It is a net worth calculation rather than a FIRE fund calculation.

Screenshot 2019-10-05 at 12.29.44.png

I am going to look at different ways to calculate this and track so any suggestions would be welcome. I didn’t bother tracking it much as I have been so focused on debt paydown and savings that it did not matter much until now.

Holidays and fun

I have just returned from what seems like a month of holidays. I went to San Francisco to visit my good friend and his girlfriend, with my girlfriend. We stayed in their lovely flat in amongst the fog in Richmond, SF, near the Pacific ocean.

They then came to the UK and stayed at our place for a few days before we all went to Munich for Oktoberfest.

This is the first big holiday I have done while on my FIRE journey. It was always going to be expensive but I think it was totally worth every penny.

Having spent several years living overseas, I am no stranger to travelling. However, in the past, it may have been done by loading up a credit card and forgetting about it. I was also ‘great’ at booking things last minute and paying a premium for it.

This time was different…

What did I do to reduce the costs of this holiday? Firstly, planning it many months in advance. We first talked about going in January. Planning so far in advance is not something I am comfortable with, but I did it this time. Having so much time to look forward meant I had time to buy things like flights early and mentally prepare to go on holiday.

The timing was dictated by my friend’s birthday, and also Oktoberfest. so not much room to wriggle. However, it meant that the dates were fixed early and we knew what we had to do. It also happened to be just after the summer peak, so I think that helped with the pricing.

Flights

I bought the flights for San Francisco about 3 months before I went. I have found that often this is the optimal time to book as airlines know people like to book early or last minute. This sweet spot meant I got flights for £400 return from London to San Francisco. If I ditched the hold luggage and had a stopover, it could have been £300 return, but it didn’t make sense to waste time doing that.

Flying to Oktoberfest was a different matter. London to Munich at this time is astronomically expensive. To get around this, I flew to a different city and booked a high-speed train into Munich. It saved about £200 each.

sf

Accommodation

San Francisco is possibly one of the most expensive cities for accommodation in the world. It had the highest rents (double London’s) and the hotels are not cheap. We were able to save a fortune by staying on an air bed in my friend’s home. It was a great way to do it and meant we got to spend more time with them.

Oktoberfest again required a different approach. I don’t have a friend I can stay with in Munich. However, I was acutely aware that accommodation is vastly overpriced around Oktoberfest. I booked a hotel in January and paid upfront to secure the best price. It was also further from the festival, with my plan being to get the metro or taxi’s. Our friends stayed in a grotty hostel near the festival for 235 EUR/night, where we paid 150 EUR/night for an actual hotel room. The cab home from the fest was 25 EUR so a substantial saving! It had the added benefit that it was in a quiet suburb away from the busy areas, something I have come to appreciate at my age.

Spending

To be honest, in both scenarios, I made little effort to save money while on holiday. I wanted to eat what I wanted, and drink what I liked and go where I felt. It was all good. The best thing was I knew all the money I was spending was not on credit. I used a Monzo card to withdraw currency and pay for items which saved on bank charges.

I learned that planning in advance, spreading the cost of the holiday over the year, and being reasonably frugal can lead to big savings with little impact on enjoyment. I realise this is not rocket science or new to anyone, but thought I’d share my experience.

oktoberfest

Car-free and debt-free in 24hrs

Today I waved goodbye to my trusty 2014 BMW M135i. I am a bit of a petrol head and have enjoyed driving this car immensely. Its 3.0 litre, straight-6, twin-turbo engine meant you could hit 60mph in 4.9 seconds. It was also de-badged, meaning most people would assume it to be a basic 1-series at the traffic light and often were surprised when I drove off at such pace. I will miss this car SO much. Thinking back, I was so proud of it when I got it and loved terrifying any passenger foolish enough to join me for a drive.

FullSizeRender 9
My baby BMW. A true ‘sleeper’ car.

Selling my car has been on my to-do list for a very long time as my ongoing ownership of the vehicle was the major elephant in the room for my FIRE journey. How can I possibly justify owning such a car on finance when trying to achieve FI?  I simply could not and that is why I have sold it.

I will admit to procrastinating on the sale because as often with cars, it is a heart over the head decision. Finally, I have come to my senses and sold it. Car ownership is in many ways a sign of status and success. Selling such a status symbol is almost a sign that you have failed. However, that is flawed thinking. We are so ready to buy cars on credit to have this ‘status’ and in the process make a huge commitment to pay something every month. It is almost like having debt is the status symbol in our society.

FIRE is about removing and changing that mindset. I now believe that NOT having a car that is costing me dearly and not having debt is a status symbol. I hope to be able to buy a decent car outright when I can afford it without finance. Then it truly will be something to show off.

How did I sell my car with finance outstanding?

I used the car buying service Motorway to sell it. As the car had finance on it, a private buyer was going to be a challenge as people are wary of making such a purchase with the finance outstanding.

The process was very easy. You visit their website and then upload some snaps of the car. They will find a buyer and give you a call. With Motorway, the dealer will happily give you a price and then pay off the finance directly to the finance company. The difference will be deposited in your account.

The only difficult part is the finance company is often slow to update their records, so it is advisable to go with a reputable buyer who is trustworthy and you know will have paid or are good to pay off the loan. The buyer I have is a large company so I have no worries (yet) that they have not paid it.

They send round a driver to your house to collect the vehicle and away it goes.

The price I was offered was about £800 more than webuyanycar.com and the process seemed easier as the car was collected from my home rather than me going to a location and having to get back on public transport.

I do accept that selling the car this way will obtain a lower figure than selling privately, but if you have finance on the vehicle, it is almost impossible to get a private buyer to go through with the transaction. I tried selling the car last year and had this exact problem. Would you buy a car with finance outstanding? Hell no.

Another way could be to take out a loan to pay off the finance and then sell privately and immediately repay that loan.  I think I could have sold the car for about £1500-2000 more by doing that. However, it added another risk and complexity to a process which I had already put off and made every excuse under the sun to avoid commencing selling the car. Besides, the whole point in selling the car was to get out of debt, and taking on another loan to do so seems counter-intuitive.

It is done and now I really am debt-free. Selling the car will add another £450/month to my budget once finance, tax, insurance, fuel and servicing are accounted for. I also got £2000 in my pocket which I will put in my ‘buffer’ account for now. 

 

 

 

 

 

Summer update

July has been and gone. I spent a lot of time feeling smug about paying off my debt and because I got a new job. I think July has been a time of me giving myself a break financially. I’ve allowed myself to spend a bit of cash on holiday and on doing things I want to do.

I went on holiday with my lovely girlfriend to Scotland where we did some hiking. I bought a decent mountain jacket and waterproof trousers which cost about £375. It kept me dry and I fully intend to do more mountaineering soon. I also decided it was a birthday present to myself 🙂  It’s a hobby I have let slip away with living in London and being, frankly, nowhere near mountains. The great thing about this is that it was not a financial strain, I bought it with the money I have earned and not on credit. Great feeling. Also, maybe once I’m FI I will still have this jacket and will be able to do this activity as often as I want.

The other big update is a new job. After the scare, I had with my current company back in April, I decided to seek out a new job. In fact, I was lucky enough to have been headhunted for a new role in a similar line of work. I got a £10k pay rise (probably more like £15K if you include the extra pension contributions and other benefits). There are also great career prospects and the opportunity to progress to partner in the company. I’m pretty pleased about it. All of this will accelerate my journey to FI.

Investing

I have also started looking into investing more seriously. I have seen that other FIRE blogs have an investment policy statement. I really have no clue where to start with on that front but will come up with one soon enough. I am also conscious that I want to build up my financial buffer. This seems rather dull in comparison to investments, but I need to do it to get the comfort I need. As with everything in the FIRE process, patience is required.

Credit Check

I decided to undertake a credit check out of morbid curiosity. Although I have no intention to borrow money again, I wanted to check I had paid off all my debts and had no skeletons in my closet.

I was both mortified and proud of myself when I saw the borrowing history. In case you didn’t believe how much I have paid off in the time scale, I wanted to put it here from the website Check My File .  The graph is a couple of months out of date, but the lines don’t lie. The only thing I have left is my car loan which I am planning to get rid of soon.

Screenshot 2019-08-10 at 12.53.40

My score is 880 which is good. Great if I need to apply for a mortgage again… as this is the only debt I am ever getting again.

The graph also gave me a reason to reflect on why I got in this situation. I did write a report about this in a previous blog post but I don’t think I touched on what appears to have been the true reason for my debt emergency. The data shows that my debt skyrocketed in Feb 2016. This was also when my father passed away. The two are inextricably linked. I recall that is also when I bought my car. However, I can barely recall what else I bought. That’s the sad thing about getting in debt, you often have nothing to show for it but are lumbered with the resulting ball and chain.

Matched betting

I also dabbled in a bit of matched betting using the intro offers at betting sites. I must admit it was terribly confusing, but I have somehow made £70 for only a couple hours work. I don’t know if I can be bothered doing any more as you have to stake a fair bit of money for it to work, but maybe I will return to it once my ‘buffer’ is in place.

So July has been a month of reflecting on my past as painful as that may be. However, the important thing is that it is my past and it shall remain so. I am committed to looking forward and to embrace the path to financial independence.

 

The day I paid off my debt

Today I made the final payment on my credit card. It felt scary to do it. I had all kinds of anxiety thinking things like “I’m going on holiday at the end of the month, do I have enough?” Well, the answer is yes, I do have enough. It’s a feeling I’m not used to having, but I have enough because I’ve sorted out my financial life.

 

There have been so many times in the past 6-7years where I’ve been struggling to get through the month, or worse just spending recklessly It’s deeply ingrained anxiety that I’ve lived with for years and now, finally, I have managed to break out.

 

Maybe the magnitude of what I have achieved has not sunk in yet, but I was expecting to feel different. People say it is like a weight being lifted. I agree it does feel that way. However, today the weight on my back was very light compared to the one in January of this year. I have been breaking chunks off every month since then and the weight of debt has been lightening. Today was the last piece and one I’ve been looking forward obliterating for a long long time.

 

Now I have done it and, yes it feels great. I must be 100% honest and state I am not debt free. I still have my car loan and at this point, I’m happy paying that out until it ends in Feb 2020 (I love the car too much) and the car is now worth more than the loan. But all the other debt is gone.

 

The road into debt

 

To mark the occasion, I would like to reflect on how I got myself into the mess I found myself in. As with any story or struggle, it is not one that happened suddenly, but gradually over time.

 

I took out loans for sensible things like education to pay for my law conversion course. I then borrowed a lot to take 10 months out of work to study for the Bar. All worthy endeavours, but expensive. Add to that a general issue with not saving enough because there was always pressure to spend to go to weddings, holidays, drinks and meals out with friends resulting in me struggling to save any money.  I’m glad to say that those days are in the past.

 

Additionally, I had to take out loans to fund a project in the building I live in which is a leasehold property. Of course, the project overran and increased in cost. That has been a struggle and a drain on my resources, however, it looks like I won’t have to pay anything for a while now thanks to a court ruling. That has cancelled £7000 of money that was demanded by my landlord but I refused to pay. I’m only kicking myself that I paid anything at all as I could have not paid at all and been about £10000 better off.

 

In 2016, I lost my father and grandmother within 2 months. That also led to a spiral of spending pointlessly – I bought, or rather entered a PCP agreement to get a BMW to cheer myself up. It did cheer me up and gave me great freedom as I had not previously owned a car for 6 years. Sometimes you have to live a little… but yes I could get a cheaper car.

 

After completing my studies last year, and I started earning again in September 2018, I began to think about the debt. I couldn’t see a way out. I got a tax refund and paid off the rest of my government student loan (£2400) before I started the new job so it wouldn’t come out of my salary.

 

I then came across an article on FIRE in the NY Times which really inspired me. I heard about all these people, some younger than me, who had retired. I couldn’t believe it. How would I ever get there?

 

I started in earnest and made some rookie mistakes. I wrongly started investing in the stock market around November 2018. This was a mistake I realised when reading Mr Moneymustache’s post about debt emergency. The debt should have been my priority. https://www.mrmoneymustache.com/2012/04/18/news-flash-your-debt-is-an-emergency/. I cannot agree more with his philosophy here and urge you to do the same.

 

His philosophy changed my mindset completely. This was a blazing emergency and I needed to change my life no matter what. Over the course of a month, I started to add up all the cards, loans and overdrafts I had. It was frightening. I was about £39,000 in debt (£15,000 car loans, £16,500 unsecured, £1500 overdraft). This was unsustainable. I was paying around £800/month on loan payments alone.

 

I used the tools at my disposal and paid off one of the loans with my savings, then paid off a loan with a 0% credit card offer to save around £500 of interest a year. I also made a stretch plan to pay that card off by June. I cut my expenses back by hundreds a month. https://playingwithfire.uk/2019/02/

 

Every time I got paid, I put the money into the credit card (£1500-1800 a month) so I couldn’t spend it and held on tight for the rest of the month. There were some dark days as I had only a few pounds left in my account at the month’s end. I stopped going out, eating out and skipped holidays. I cooked meals at home (turns out I love cooking). It was not the best fun I have to admit. I viewed it as a sacrifice to get me out of the hole I had dug myself over the years. When things got tough I looked toward the day I would be free and that kept me going. The first few months were the hardest as they were during winter. Lots of PS4 games were played and thank God for Red Dead Redemption 2. As things got easier I allowed myself the odd meal out and the odd pub visit.

You probably want to know about the numbers. Well, I get £4005 a month after tax in salary, another £500 in rent from renting my spare room out (tax-free), and £500 to cover expenses from my girlfriend (she lives with me in London).  My monthly expenses are about £2700 all in (and could be less, to be honest). I tried to put every spare pound into paying my debt. I never could find the full £2300 as I always overspent but I got close each month and maybe with the Emma app I will!

Here I am, still in June having achieved it. I have paid off £16,600 in 5 months and had a further £6400 of debt cancelled as it was unlawful. Gone. Done.

Screenshot 2019-06-30 at 14.05.22

debt graph jul19

I thought it would take literally years to do this. But treating paying my debt off as a blazing emergency worked. All my efforts for these 5 months have gone into saving money and paying it down as soon as I got my paycheck.

 

It’s been an incredible journey and one I’m glad to have shared and held myself accountable to by writing this blog. It had kept me focused on the goal.

 

I couldn’t end this post without thanking my girlfriend who has taught me so much about frugality and self-discipline these past few months. She has supported me through this period of change and now we can have a healthier and happier life together.

 

What now?

 

The next stage could be to sell my car. Then I genuinely would have no debt (other than my mortgage). But I do like that car… no, I love it.. but selling it is the sensible thing to do. Let us see.

 

Next month I shall start building a buffer of savings of around 3 month’s worth of expenses. On my current budget that is around £7000-8000. I will target about 4 months to get there.

 

 

 

Emma, my new best money friend.

Budgets are fantastic tools to allocate your monthly income against certain items and keep on track with your spending. I have used budgets for many years and they have indeed helped me manage my money better.

I have an Excel spreadsheet that has my income at the top from which I deduct all my expenses, leaving me with a remainder figure. At the moment that remainder is in theory quite large thanks to all the cutbacks I have made in my quest for financial freedom. But the quandary I find myself in is that the remaining money I actually have left always seems to fall short of this hallowed total.

When I budget, I have all the usual categories such as utilities, car, entertainment etc but I have two overarching types of outgoings which I call ‘fixed’ and ‘unfixed’.  In the fixed category I have expenses such as electricity direct debits, council tax, and mobile phone account. The unfixed category is the one that I have eating out, groceries and lunches. The idea is that these expenses will vary on a monthly basis and are unfixed.

The thinking behind these two categories was to differentiate between fixed regular monthly payments that I must make every month and unfixed discretionary spending that I have always struggled to keep track of and control.

Over the years I have tried to keep track of these ‘unfixed’ categories and have always failed. I either get bored or don’t want to take the time to track my expenses. I have had various short periods of time where I have tracked it but that has always fallen away and I find myself back at not tracking these and simply assigning some broad sweeping category called ‘eating out’ or similar. Even if I did the exercise of adding up my expenses, by the time I get round to it, it would be too late and I’d have already spent the money and blown the budget.

I have long since been on a hunt for a tool that can assist me with assigning expenses to my budget and actually keeping track of what I’m doing as I go.

Enter the app called Emma. I downloaded Emma for my iPhone about three weeks ago and have been using it on a daily basis.

The idea is that you give it access to all your accounts and credit cards and it keeps track of everything and automatically assigns items to a budget you input into Emma. I must say so far so good. After some initial troubles getting my Barclay Card account on there, it has been very easy to use. I can open it and see my balances live and also all my outgoings. It does little reports every week to highlight spending and alert you to areas you may have splurged.

I put the budget data from my Excel sheet into it without much trouble whatsoever. On the pro version, there are more budget categories, but to be honest, I feel I can live without them for now. I can see me buying the pro version at some point

I have not had such up to date spending data ever. I can see that I have £51 left of my ‘eating out’ budget with 8 days to go until the end of the month. With that kind of insight into my spending, it really does help me make real decisions on my spending.

Emma also removes the hassle of logging into multiple accounts to check balances and has that data in one place. I think this is one of the best features and certainly makes that leap of faith that one must take to give over all your banking passwords worth it.

Another useful feature in Emma is it works out how much money you have left before you are paid again. I think this is the clever bit as it features prominently on the first page as a huge reminder of what not to spend.

In the era where most transactions are via contactless payment, this is a great tool and one I would highly recommend to anyone wanting to take control of their budget and expenses.

There is also an investments section that is clearly a very useful tool in the same way that the bank accounts are. Sadly, none of my investment accounts is supported and I have not really delved into this section in great detail. However, for the simplicity of having all your pension and investment account in one place, I think Emma is great.

I am at a point after 5-6 months of trying FIRE that my finances are in good shape. I do believe that if I had met Emma before, I would have become far more aware of my finances and taken action much sooner. By action, I mean living with my means, actually knowing how much money I have to spend and feeling in control.

I would thoroughly recommend giving Emma a try.

Summertime is coming (allegedly)

Here we are in mid-June already. The 12C and pouring rain would lead anyone to believe it was mid-March, but that’s the UK for you.  It’s been a busy few weeks for me as I have travelled to Luxembourg several times for work and also had numerous new ideas and ventures come my way.

Firstly, the debt situation has continued to improve. I now only have £1440 of credit card debt left to pay. I was immensely proud of myself for getting this far and feel like this period of hard-core debt reduction is nearing its conclusion. That is getting me excited about starting to invest and save money.

I have been sitting back and reflecting on the journey since January this year. I had roughly £17,000 of loans, credits card and overdrafts. Now, of that, only £1440 left. I can’t believe it. I will write a dedicated article to mark the day I become debt free which I hope is fast approaching.

Secondly, I have started a side hustle. After the bitter disappointment of having 20+ rejections for pupillages, I realised there was nothing stopping me from setting up a legal advice consultancy. So, along with a former classmate, that’s exactly what I did. I have set up a legal consultancy specialising in construction law. I’m hugely excited about that and look forward to our first clients. Fingers crossed!

Lastly, in parallel, I have been quietly sending out my CV to various companies which have yielded me several interviews. It is always hard to know how much to ask for, but I think asking for at least 20% more than what I am currently on was a good guide. There are other factors to consider such as job security and type of work I will do. However, I do think it is my time to maximise my return and cash in. The more I earn, the quicker I will reach financial independence.

The situation at my current work has barely improved and I think I don’t need the stress of not knowing whether the company will be around much longer in my life. Working somewhere you are almost surprised when you receive your paycheck is no way to live.

So it’s been a very productive few weeks for me. I truly believe that focusing on the fire goals has allowed me to focus on other areas of my life for the better.

May update

May has been a long month by all measures. Many things have come to a head and I’ve felt both directionless and demotivated at times, and extremely excited about the future at others.

Firstly, the issues with the company have made me reassess what I am doing career-wise. I think I’ve mentally checked out of the company, and although I have half-heartedly applied for new jobs, it’s only a matter of time before I do so properly. I just feel there is no point in working hard for a company that is on the brink and is being run so irresponsibly. The atmosphere in the company has become rather unstable and certain individuals are attempting a power grab (the chairman’s son-in-law). As he is a deeply unpleasant man and is unlikely to be going anywhere, it only leaves me with one choice long term. In the meantime, I will keep working and collecting the dough.

Secondly, a visit by some antipodean friends of my girlfriend gave me some great ideas. They had given up their jobs and were planning on travelling round Europe in a camper van. It will be 3-4 months of adventure and fun. Although they were not officially doing ‘FIRE’ they were certainly far more financially free than me. It goes to show that at age 28 and 26, with careful saving, they were able to undertake this great adventure. They don’t do very high paid jobs but decided this was a goal and lived a lifestyle that would allow them to reach the goal. They lived in a shared house in Melbourne and didn’t eat out much. Now they have enough money to give up work, buy a camper van and live carefree for a bit. Well done them.

The great idea was the result of a side hustle that my friend had where he ran a website and provided services to contractors making £16,000 in the process. I realised that I could do exactly the same thing with my skills albeit, providing a different service. So I plan to set up a company of sorts and do it part-time. Should it take off, I would do it full time. Watch this space…

Debt progress

I have been paying off my debts steadily. I have to confess that I didn’t mention a £700 credit card bill that I let sit since February in any of my previous posts (mainly because I was ignoring its existence). So that was disappointing, but it was there and is now paid. I also paid £300 to my other loan which got me below the £3000 mark. This was a huge achievement and the end really is in sight.

I feel like I am 2-3 months away from clearing my debt. This is slightly longer than I had anticipated but I have felt the need to splurge a bit this month. A trip to Bath for the weekend, eating out a fair bit, and a trip to Scotland to visit my mother have eaten into my balance. However, they were all needed and enjoyable. I didn’t use a credit card to pay for any of them and I still have money in my account at the end of the month AND I paid £1000 of debt off. Not bad.

I do feel I will have to reign it in a bit this month however and really get to the end of the debt, but overall I feel that my finances are under far greater control than they ever were before.

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Dream campervan