Quarterly return posts supplement my monthly Financial Dashboard, covering investments in detail and looking at my yearly targets. Here I track purchases and sales, document progress against my (in progress) investment strategy, and discuss re-balancing and changes over time.
So that was that, my first year properly tracking my finances, getting my head screwed on and documenting warts and all. There was the little matter of house moves, a wedding, a honeymoon, two job changes… but never mind all that jazz, how did I get on in Q4 and in relation to my yearly goals?
- Cash Savings Accounts £1800 (+£800)
- Investments £0
- Cars £3000
My net worth now sits at £~28,500, an increase of £6.5k over the course of the year and £8k since I started tracking in this spreadsheet. Including pension contributions my average saving rate was 15% (5.5% without). This is an area I want to target next year, so alongside simplifying my spreadsheets ahead of investments I will set a 2019 goal to save 25% of my earnings.
Goal 1: Build an emergency fund
My first 2019 goal was to build an emergency fund, as per the r/UKpersonalfinance flow chart (1).
Partial success for 2018 here, as I now have £1600 set aside in a high-interest regular saver. This is equivalent to two months of my contributions to our shared expenses, or one month if I had to pay for everything alone. Foolishly (naively) I put this in an account that pays yearly interest and therefore I’m still using credit cards as my emergency fund until the account matures in a few months time. At that point I’ll shift it to a high-interest current account, using the bank account savings website (2). I mentally recover some pride that I’ve been implementing a pay-myself-first policy, with money going straight into this saver on payday. I’ve also saved a little in my Starling current account (wooo 1% interest), and I now have money in my account at the end of each month instead of being in my overdraft. MrsShrink and I are aiming to hold three months worth of our combined household expenses in our joint high-interest current accounts, and I plan to hold another three months in my accounts. This is a goal I’ll continue to work on for 2019.
Goal 2: Pay off debts
At the start of the year my short terms debts stood at £2.5k to family and £4.3k on 0% interest credit cards. By the start of Q4 this had come down to £1.25k and £4.1k respectively. When I consider the intervening house move and wedding, I’m not too frustrated by the persisting credit card debt. I’ve managed to go through two of the most expensive lifetime experiences without sinking further into the red.
We’re due to start paying down the rest of the loan to our family next month. In the meantime I’ve been paying down credit card debt, which now stands at £2.6k. I’ve closed one redundant (emergency use only, therefore empty) credit card, which actually hit my credit rating as my % usage shot up. I increased my monthly payments to £350 and plan to have my debts cleared within six months (a goal for 2019). Another partial success, which I will slightly rephrase to “Pay off short term debts”. As TI says over on Monevator, I’ve been borrowing from my future self (3).
Goal 3: Reduce superfluous outgoings
This is where I feel I’ve had the most success this year. My headline outgoings have dropped from ~£3300/month to ~£2500 for the household. At the start of the year we were paying rent on one property, a mortgage on another, utilities for both plus storage fees for some of our furniture which was in limbo.
The front-loaded wobble in April/ May/ June was when we moved house twice in two months (while also getting married). Think we seriously confused the local councils.
This was a big reduction in our outgoings, but to push further I need to cut other costs. I’ve already covered my gradual reduction in car spending in Decembers’ Dashboard, so what about going out, groceries and daily living expenses?
This busy graph is summary data from my Beast Budget spreadsheet. It’s actually the first time I’ve looked at it fully. On first glance it doesn’t look very positive, but I only began tracking many of these items properly (i.e. for both my account and our joint account) in April. If we take out grocery and eating out temporarily as the biggest spends we can see I’m spending a bit more on exercise, less on food at work (no more over-priced canteen lunches!) and about the same for the rest.
A target goal for most of Q4 in my Financial Dashboard has been to set a realistic budget for our household food expenses. Over the year we’ve been successful in eating out less, but we’re spending a lot more on food at home. The numbers spite the lies I tell myself.
So where is all that grocery money going? To get a clear picture I went through all my accounts for the year and totted it up.
We’re fairly consistently spending ~£400 a month on food. Earlier in the year we spent about £300/ month, split between lots of £20 trips to Lidl/ Aldi, and fewer bigger (£50-80) top up shops in big supermarkets. In July we started to get an organic local veg box (pretentious? moi?) and meat box from a local butcher delivered. I had hoped this would cut our costs at the supermarkets, but it looks like we’ve continued to spend the same and this has come in on top. Frustrating! For Q1 2019 we’ll set a monthly target to spend less than £300/month on food as part of my Financial Dashboard goals.
Despite the increased cost we’re going to persist with the local veg and meat. Restricting ourselves to one meat delivery a month means we eat a healthier more varied diet, and the meat itself is fantastic quality making it a treat to have. It comes from a family farm <50 miles away, and the animals live good lives cared for by the butcher’s father and grandfather. There’s been a massive push to highlight the impact of meat on the planet and climate change, but there is little else that would survive the hillfarms of Wales than the hardy sheep (4)! Brexit may also impact the availability of cheap meat from the continent, so I’m securing my protein supply early. Likewise cheap imported fruit and veg may be on the wane, and the quality of our locally delivered veg is fantastic. I enjoy the seasonal variety (it challenges my cooking!) and I’m hoping to grow more through the year to reduce costs and add flavour.
The local veg and meat tie into a goal for 2019; to live more sustainably. This is fairly loose (like many of my topline goals) but will include things like reducing household waste, reducing our travel footprint, cutting food mileage and waste, growing our own food and generally getting rid of all the meaningless plastic tat. I’ll keep a track and will hopefully run a “grow my own savings” spreadsheet like Jono at Real Men Sow (5).
Goal 4: Commence investing!
So this is a partial fail, and I’m not unhappy about that. 2018 has been a crap year for the markets on both sides of the pond (6, 7). Close friends inherited from family members in August and have lost 10% since. I had (again naively) planned to start investing sometime in the middle of the year, but put it off to set an investment plan, pay down my debt and get a solid emergency cash fund. I’m glad I chose to focus on my foundations before building a wobbly investment house. 2019 will be the year of investments.
- Goal 1: Build an emergency fund
- Goal 2: Pay off short-term debts
- Goal 3: Save 25% of my earnings
- Goal 4: Live more sustainably
- Goal 5: Commence investing!
The best of luck to everyone for their 2019 aspirations!