Miracle on 42nd (birthday) street

Ah, here we are – that time of year again. I always have mixed feelings about birthdays – gratitude for the sheer privelige of each passing year, with the nostalgic sense of time moving ahead in a very finite way. And these days I get wrinkles, saggy bits, and bad hangovers. But as my mother would say, the alternative is death, so yom huledet sameach!

Woo! Photo by Miltiadis Fragkidis on Unsplash

But this year, something feels different – like everything has changed. I feel centred for maybe the first ever time and it’s causing tiny miracles.

For me the idea of being centred is that my whole self is in alignment. It’s about thinking and acting from a place which is calibrated with who I am. It sounds really obvious, but the magic is the extent to which this reduces tension and stress, because I’m not constantly pushing against myself.

Let’s be clear, I can still absolutlely be a twat, get things wrong, get antsy. But for whatever reason, at the moment that no longer equates to spiralling down a sink hole of guilt or shame. It’s like my mental company has shifted so that my inner voice is full of friendly compassion and not the negative drama queens who played a loop of what I was doing wrong and why it made me unloveable. And when I fail I try ad own it and learn from it, then move on, rather than seeing it as another foundation stone in an exhausting life of failure.

I’m also not totally sure where this has all come from. I’ve written a lot about micro-habits and small steps, and living mindfully, so maybe it’s a combination of all those things. Recently I’ve also been asking myself some tough questions, and trying to act on the answers. Why are you going out for a drink with those people when you always come away from their company feeling bad? Why are you second-guessing something you really liked after someone else was negative? What audience are you playing to here – and what validation are you seeking?

A lot of these are also essential FIRE questions – what decisions are you making, and based on whose opinion? By doing that, what are you denying your essential self either now or in the future? Breaking habits can be really hard, both for you and those around you when you start changing. And it’s a life time practice rather than a destination so it’s not like everything is solved forever.

Right now when the world is burning, it feels like a miracle to have come home to myself. Happy birthday indeed!

Net worth update

Schools have gone back here in Denmark, and even though it’s August it’s clearly heading towards autumn. Maybe September will be beautiful, but there is a chill in the air.

We have settled into the new house, and done the first week of school with the new route and routine, and I am getting to understand all the costs associated with this home (clue – it’s more of a mystery than it should be). I’m getting ready to reset my financial goals and as part of this I wanted to review my net worth. Buying a home definitely made my savings take a hit – some of it went to equity but some also to lawyers, removal men, registration fees and so on.

Whilst I usually do this in either April with the end of the tax year, of December, right now I have that new-school-year feeling so thought I would have a look!

NET worth. See what we did there? Photo by Raghavendra Saralaya on Unsplash

So here are the totals and the comparisons, showing that I have a current net worth of £628,532.

 Value July 2021Value Dec 2020Value April 2020Value April 2019
 Pensions  £                     193,164 £              163,540 £              134,240 £           105,675
 Savings  £                       25,368 £                 83,287 £                 68,500 £             26,000
 House Equity  £                     400,000 £              343,000 £              323,223 £           304,000
 Emergency Fund  £                       10,000 £                 10,000 £                 15,000 £               3,500
  £               628,532 £         599,827 £         540,963 £       439,175

Three of my four pensions are ‘defined benefit’ meaning that increases here come from money paid in to my current work pension (also defined benefit); and money paid in plus changes to investments on my SIPP. The projections for all my existing pensions, those from previous employmet plus the SIPP, comes to an income of around £11,881 per year. In my current job, if I leave before 2024 then I just get my contributions refunded so I won’t include a projection from that until I’ve worked out my time.

Over this time, my house in the UK hasn’t increased in value, and I slowed down additional mortgage payments to prepare for the new house purchase. I also put a solid deposit down on the Danish house, meaning my overall equity in property has increased to £400,000. This feels like a lot in terms of the balance, but as one of the houses is rented out and brings in a net income of around £10,000 a year, I am ok with it for now. The main part of that deposit was pulled out of savings, which is why that went down.

Money, money money. Photo by Jonny McKenna on Unsplash

Either way this shows an increase in net worth of £28,705 over seven months – an average of £4,100 per month. I am pretty pleased with that, especially with the significant amount of money spent on the house purchase, and it also shows me the need to bolster my savings and keep up the ‘set it and forget it’ aspects of my pensions. It also shows an increase of more than £200,000 in a little more than two years, which I am really proud of!

How is your net worth looking these days? I’d love to hear from you!

Anxiety

Trigger warning – this post talks about mental health issues including suicide. If you are having a hard time, please reach out to the Samaritans or someone else you can talk to.

I’m glad to be back after the holidays. Other than the great few days spent isolating at my brother’s I ended up mostly working, it was so important to reconnet with friends and family (and fish ‘n’ chips), and just be somewhere else.

I’ve also been focusing on supporting my son who had his first anxiety attack, on his twelfth birthday.

Not waving but drowning: Photo by Stormseeker on Unsplash

He has always felt things very deeply, and has thought a lot about what is going on in the world. Currently, the world can feel like a pretty scary place, so it’s not at all surprising that the British Psychological Society found recently that one-third of 11-18 year olds are struggling to cope with their mental wellbeing at this time, and would benefit from support.

But he had an anxiety attack so strong and terrifyint that he was rushed to hospital for tests, and spent his birthday evening in a children’s ward. I was very glad for the support and calm care of the Danish health system, and for my boy’s tenacity and confidence in dealing with the episode. It was scary, but there was no shame around it.

My fear now, for both of us, is where this is coming from and what it means for his life. And that made me think about the relationships between fear and action. I should say upfront that I am not a doctor, psychologist or expert in anything other than my family and my opinions – which is what this blog is about. So if anything here triggers issues for you then please do get in touch with the professionals.

Photo credit

Money and mental health have been closely linked for a long time. UK charity MIND found that there is a cyclical relationship – having issues with money can negatively impact your mental health, making you feel anxious, unable to sleep at night or concentrate, and uncertain about the future. On the other hand having pre-existing mental health issues can make you struggle with money, whether through also finding it difficult to find or hold down a job, or to engage with things like communicating or negotiating with companies if you get into debt.

Of course both issues impact people in different ways, but MIND found that people with debt and money issues are three times more likely to have mental health problems. A study from the US found that when these challenges impact people’s lives further into issues such as losing a job or a home, people become 20 times more likely to commit suicide.

The pandemic has massively exacerbated financial stress for so many people. A study in October 2020 found that 70% of UK respondents were stressed about being able to meet rent, bills and basic needs at the end of the month. Many of the temporary fixes of COVID, from furloughs to support grants for small businesses, is coming to an end and we are only just starting to see the new economic landscape and what is possible.

Photo Credit: anonymous at Post Secret

I don’t know what the answers are. From a FIRE perspective, the impact of the pandemic has made me beyond grateful that I have a steady job, no debt and an emergency fund. But with all the uncertainty it’s a terrifying time for people who are just getting started.

So the advice I leave you with is the same as the advice I am giving myself as a mum who is struggling, and that I have given to my son: be kind to yourself. Do the tiny steps which are open to you now, and don’t worry about those coming up in the future. You will deal with them when they come: you will have built the foundation you need through your small actions and you will be ready when they arrive. You don’t need to be ready now, you just need to be you. Breathe as deep as you can. Know that you are loved. You got this.

Holidays!

A very quick post this week, since I am on holiday in the UK. I am VERY excited to be here, since we haven’t been home for 18 months due to COVID.

We are in quarantine though, and since Denmark put the UK on the red list as of this week, we will have to do the same when we get back. I’m not making political points here about how any country manages COVID but I will say that it has cost us (for one adult and two kids) £800 on COVID tests – and none of that needed to be spent in Denmark.

A beautiful spot to be isolating!

I am lucky enough to quarantine with family, so we are also enjoying a lot of quality time. After the last few months of preparing the house move, this is a much needed break. I love our lives as expats, but I am also really glad to be home for a while. Plus we already had fish and chips (with chip shop gravy mmmmmmm), so the world is a happy place.

More finance thoughts in August after two weeks off, but wishing you some lovely time in the sun until then!

Budget Check In: June

Ah June. Long (it’s Denmark, so very, very long) days; al fresco dinners in the garden; the start of the summer holidays; *all* the football at the Euros; and the last month in our rental home. I knew June and July were going to be pretty brutal, and that has been the case so far. Trying to juggle work which is super busy, the kids and school or clubs (or ‘I’m boooooooored muuuuuums’) and moving house has been a huge pain. My ability to handle pain is probably evident in my overspending this month.

A note on my budget check ins: I was reading through the other check ins from this year and it felt a bit like watching a learner driver repeatedly start off doing pretty well, then start skidding around, and crash toward the end of the test, every. single. time. I know I’ve overspent every month, to a greater or lesser extent, and whilst I do a lot of hand-wringing at the start of the month I have always got good reasons (ahem) to go ahead with the spend anyway. Recognising this, I plan to do a budget and spend overhaul from September, giving me the summer to get settled in the new house and really work out what I am doing, my medium term goals, and – more importantly – a plan.

Half way through the year! Photo by Glen Carrie on Unsplash

So how did it go? It wasn’t that bad, but I can see a couple of interesting choices glaring out from the grid below.

Item Monthly BudgetSpend June% of monthly budget
Childcare costs £       1,100.00 £          726.3066
Car (insurance, tax, petrol) £          125.00 £                   –  0
Charity £            66.67 £            67.95102
Eating out £          120.00 £          165.23138
Entertainment – subscription £            50.00 £            18.9538
Entertainment £          100.00 £          335.39335
Kids – extra curricular £          250.00 £       1,276.11510
Family £            50.00 £          292.01584
Groceries £          400.00 £          657.84164
Holidays  £          300.00 £                   –   
Insurance £          200.00 £          493.99247
Personal care £            30.00 £            57.39191
Shopping – general £            25.00 £          539.492158
Shopping – gifts incl birthdays £            58.33 £          434.32745
Shopping – clothes £            29.17 £            15.0051
Rent and Bills £       1,500.00 £       1,500.00100
Transport £            41.67 £          173.74417
Utilities £          200.00 £          112.5156
TOTALS £   4,645.83 £       6,913.21 

So, once again I overspent my budget by A LOT, spending £6,913 against a budget of £4,645:

  • My mum finally managed to come and visit which was amazing but meant covering her flights, tests and so on. This was well worth it for the support it povided us during a challenging time, and since she is on a small pension there is no way I would let her cover this.
  • I paid out for my daughter’s three after school clubs for the 2021-22 school year since they opened the registration for current students and the spots fill up quickly. This cost £1,275, or about £127 a month for the duration of the clubs. Since all her friends (four of them!) have left school this summer and moved away (downside to the expat life) and things might feel a bit lonely for her, I figure that having some clubs where she also has friends will be comforting.
  • I had three big splurges, one of which was an accident:
    • Since it was the Euros football was on, and I LOVE football, I went to see most of the matches at the pub with friends. The atmosphere was amazing, and supporting both Denmark and England meant a lot ot good times. It also meant a £300 bar tab over the month.
    • We had a few colleagues in my team leave this month as well, some people who have been in the team for five years. We had a huge team dinner and I covered the bill of £350 with an understanding that we would work out how to share this – that hasn’t happened yet, but it will.
    • I, um, might have had a moment during a LEGO sale. It was half price and I have two LEGO-loving kids, so a £400 moment occurred. This will cover my son’t upcoming birthday and major Christmas gifts for them both, so I tell myself it was a good idea!
It might be coming home… Photo by Robert Anderson on Unsplash

So what did I save? Again I focused on getting the last of the money together for our house move including £3,000 for the removal men/house preparation etc , so I have just been putting extra into my current account to make sure the money is there for whatever comes up. No great savings news then, but at least I carried on with the usual basics which is still savings (or paying toward capital) of £ 2,348.

 Monthly saving planMay% of plan
Mortgage (UK house)  £                500 £              500100
Mortgage Overpayment  £                500 £              500100
Emergency Fund  £                  100 £               100100
ISA £               1,250 £               50040
Kids savings £                   248 £               248100
SIPP £                   300 £               300100
  £   2,898.00 £ 2,348.0087

So this month, again, an unimpressive savings rate of 20% compared to spending 80%. July will also likely be odd again due to the move but I am glad that at least I kept to the regular savings. I need to do a mid year review of our net worth, since I have moved a lot into the new house.

So how was your June? And your summer budget planning? I’d love to hear from you!

Beautiful June! Photo by Ann on Unsplash

House buying – luck, privilege, and focus

I wrote last week about buying a $1 milion home: over the last few days we got the keys and have been cleaning, painting and generally getting ready for the furniture move on Monday. Oh, and sort of freaking out about the whole thing but that’s pretty normal.

Some of the discussions I’ve had since then got me thinking – given how hard it is to buy a house as a single parent, how did I get here?

I want to say upfront that I never had a divorce settlement. I didn’t “get half the house” or much less “take him to the cleaners”. For all sorts of reasons that probably require some kind of therapy to understand, my marriage didn’t involve the mingling of finances, or equal financial engagement, at all. The good thing is that we took that attitude to the divorce meaning that I took out what I put in. Given that it was my money anyway, and I also did all the childcare, I can live with that. Note: many other ways of being married, or divorced, or thinking about money and marriage are available, and I wish you joy of them.

My first home purchase was in a tower block (not this one) Photo by Ben Allan on Unsplash

So how DID I get here?

A combination of luck, privilege and focus. It’s important to recognise that the focus itself might not have been enough – luck (mostly around timing) and privilege definitely helped. That’s not to say that this is not an option for others, but I see a lot of people talking about how they bought a house all by themselves whilst the back story shows how much they relied on their parents. So let’s be honest. I found it hard – other people will find it much much harder. But it’s not impossible.

House 1: bought for £55,000 sold for £110,000

My partner and I decided to try and buy twenty years ago, when I was 22. We had been living together for five years and rents in our home town were rising all the time. Even at that point the average property price for a two-bedroom home (a flat in the fancy part of town, a house in the non-fancy) was £170,000, and amount that would have required me to be earning £45,000. I was fortunate to get a great job out of university on £18,000, but that was still a world awya, and my partner’s self-employed income was limited as he established his business.

So we found the only thing we could afford, in a tower block on a housing estate, and bought it. We were always really frugal, and had been saving since we got together, saving £10,000. The flat was on the eighth floor though, meaning it wasn’t possible to get a mortgage. Here’s the privilege: my partner’s parents lent us the rest of the money. We set up a repayment plan in line with current mortgage rates, and continued to be frugal, doing a lot of work ourselves and taking in a lodger in the second bedroom though we didn’t pay off much extra on the loan.

When we split up four years later, we had the flat valued at £110,000. Based on splitting the equity 50:50, I got £30,000. I put this in a savings account and went off to pursue my humanitarian career overseas.

House 2: bought for £170,000, sold for £270,000

So by this point I am 30, and have a baby. I have a confused marriage where he is overseas (and not contributing anything financially or emotionally) and things are rocky. I am back in my hometown and the cost of living seems to be crazy. For the first time, I am fully responsible for another human being and realise I have no idea what I’m doing.

So I decide to buy a house and settle down. I still have an income that counts for a mortgage, even though it’s from a charity based overseas. And since I was living in South Sudan / Uganda / Rwanda for the past four years I have also added to my savings pot so with the equity from my first home I have a £70,000 deposit.

The glorious kitchen of my second home

The luck here is that it is 2009. House prices dropped by 16% in 2008 and I looked at a lot of repossessions which seemed heart-breaking. I wanted to stay on the same housing estate, but also realised pretty quickly that I couldn’t afford to live in another part of town. So I was looking at the lower end of the price range for a house. And my goodness I saw some unloved, filthy heaps.

Eventually I found a four bed house in a quiet cul-de-sac (important on a house estate with a reputation for joy riders) and put in an offer. Then I found that the flipside to 2008 was that banks were not keen to lend money to single people with precarious incomes. Around the same time my lovely granny passed away and left my family an inheritance (likely the only one we will ever get since we are not that kind of family). The bank will still not lend me the money. So again with the privilege – my mum and siblings club together their inheritances and lend me the other £100,000.

It’s hard to overestimate how much work needed doing: it had no heating at all, asbestos in the roof, single glazing, an extension which hadn’t been approved and had to be formalised by building standards, a kitchen where there were actual human turds in the cupboards. Safe to say I called in a lot of favours over the years, and did a lot on credit.

I had another two years overseas with my work, and rented the place out. Since I wasn’t entitled to a pension in that job (long story – I keep planning a series of posts entitled ‘mistakes I made with pensions, and why it’s a massive headache’ so do come back for more) I focused on the house as my main asset and worked on paying off my family. In 2014 I came back, thinking I would stay in the UK, and realised that now my son was older I didn’t want to stay on our housing estate. So I sold the house for £270,000, repayed my family loans, and had £140,000 to use as a deposit.

Phew. I think I would have made it without the family help as banks unclenched and my income settled, but it might have taken a lot longer. And living in a city where house prices have gone up 300% in 20 years, every year counts.

Sensible countryside! Photo by Lawrence Hookham on Unsplash

House 3: Bought for £352,000. Currently worth £400,000

This is my sensible house, and ironically we have only ever lived in it for six months. I bought really planning to stay in the UK, but then with work and other issues (not least pension obsession which kicked in at 35) I took another overseas job with the kids and we moved to west Africa. I rented the house out, and, given that accommodation was provided in my new job, I put a lot of extra money toward the mortgage. I took out a mortgage of £152,000 and currently owe just £50,000 – that means I have paid off £100,000 in five years. I aim to have it completely paid off by the time we leave Denmark.

So there we go. A rollercoaster ride which would not have been possible without the support of family, an early start, a high savings rate and a risk-taking approach. I wanted to just put some honesty out there about how this all happened for me – however hard I work and save (and I do work and save very hard) without that additional help, things would at the very least have taken a lot longer.

So – whats your housing story? And how can we think about collectively helping one another for those people in our situation who don’t have family support? I’d love to hear from you!

We bought a $1m house!

I wrote recently about buying a house as a single parent (TL:DR – it’s really, really hard) but this week I want to share the exciting news that we are about to move in to our new home. and for lots of reasons, it’s a home worth $1 million. [note – I usually share my figures in £ but it sounds better in dollars so I am doing it, just this once].

Side note: I was talking to a married friend about this and she said ‘but why do you keep saying WE bought a house? I mean, you’re doing it alone’. In mentally wrestling with this I can’t decide if it makes me feel annoyed since my family unit counts as a ‘we’ since it isn’t a pronoun that couples somehow own. Or perhaps she meant it in a kindly way to recognise the challenges. Either way, it’s the kind of comment which wastes my mental space so I share it with you here in the hope that I can then forget about it. In case it stays confusing, ‘we’ in our case means myself and my children. Plus I promised that we can get a cat, so the moggy counts too.

Yes WE can 😉 Photo by Marija Zaric on Unsplash

So, we bought a house! I wrote back in November about planning to do this, a post which built on three months of decision making since our landlord told us that – like many people during COVID – had decided that they wanted to move back home. It has been a long long process since then, and it has meant putting other financial goals on the backburner. Plus actually it has been stressful and knackering, but since we had to move out anyway some of this was unavoidable.

I shared this before but if you are really interested in the nuts and bolts of buying a house in Denmark you need this fantastic and very detailed guide, but below are the steps that I took as a British expat:

1. Had a browse of the market. This was the point when I realised what kind of price band we were looking at. We wanted a house with a garden, in the suburbs, with four bedrooms and some separated space (i.e. not a single storey) so that there is room to have childcare support who can stay over, and within walking distance to the train which will take us to work and school. Unfortunately this is what pretty much everyone else is looking for especially post-COVID, driving up the speed of the market and house prices. But this was a useful step as it showed me the kind of thing that was available and the amount of mortgage I would need to make it work.

2. Looked for a mortgage. In Denmark, there aren’t really mortgage brokers which means you have to do all the legwork yourself. In the end I used a broker who specialises in working with expats since, not surprisingly, all the paperwork including the surveys are all in Danish. The first calls I made to banks showed that I was eligible for a mortgage but as an expat I would need a 20% deposit – or to find, up front, about £155,000. It is testament to how much I wanted to get out of paying our extortionate rent that I looked into remortgaging my UK home in order to find this deposit. I couldn’t make this work (for lots of reasons though I did find one broker who would do it, it came with conditions I didn’t want to accept) so I went to the Danish broker. They found me a mortgage with a 10% deposit (where the bank provides the 80% mortgage still but then also grants a 10% loan). In the end this was a saving grace since it made me stick to a lower overall budget. And let’s be frank, that was still a budget of $1m which makes me twitch just a little every time I think about it.

In case I didn’t mention it enough 😉

3. Made some hard financial decisions. The 10% requirement means that I had to find £80,000 for the deposit. I was able to do this by pulling various savings and investments. I took out almost my whole £40,000 emergency fund leaving just £3,000. I also pulled money from investments – with stocks and shares ISA there’s no fees or penalties to take money out, but I withdrew a lot and left £12,000. I really reflected for a long time on whether this was a good idea, since it took a lot to build up those pots of money, but looking at the balance of risk I think that we stand to be better off in the long run unless a black swan event turns up. And we might have had enough of those for a while….

4. Looked for a house. Oh. My. Goodness. this was the painful bit. Being a) on a tight budget (for Copenhagen) and b) quite detail oriented, I ended up looking at 40 houses. I made offers on two, both of which were rejected – one where someone else beat us to it, and one where the survey showed it needed a new roof and the owners wouldn’t accept a lower offer based on the money needed to do that. But, after spending every weekend for months looking at houses, we finally found a house that fits the bill. Hurray!

5. Did all the paperwork and processes. This is pretty easy in Denmark thankfully – the bank also has amazing processes where they organise paying over the mortgage at the right moments which also removes the possibility of getting scammed which scared me witless when buying my UK home. You have to have home insurance in place, and a kind of insurance which protects everyone in case there is something that the house survey has missed.

6. Made my peace with the compromises. So I am not quite there with this one, but it’s coming. We had to move further out than I would have wanted, and to a slightly different part of town to where we are now (and where our friends are). We are at the top end of my ‘distance from train’ condition, ditto ‘size of garden’. But I am hopeful that once we settle in and stop comparing to where we are now, I’ll forget about these things and enjoy our new home in peace.

Getting ready for this… Photo by Markus Spiske on Unsplash

So there we go. I post on Sundays, and this time next week (all being well) we will have the new house and be sorting it out – the weekend after we will be all moved in. Wish us luck!

Hope!

Hope is the thing with feathers, as Emily Dickinson said. After a few weeks of ‘coping’, this week I am back to full on hope.

Hope is the foundation of all my decision making – and the thing which keeps me tenacious and working in spite of appearances when it feels like things aren’t moving. Believing that you can change things, whether it’s your bank balance or how the world views you, means believing in the possibilities enough to carry on.

Yes indeed. Photo by Ron Smith on Unsplash

There have been so many things which make me feel blessed and hopeful recently. The summer weather and breeze, spending hours at the beach getting some energy back (and some vitamin D). The end of another school year and brilliant school reports for both my kids talking about how they are doing well but how they are kind and thoughtful: reminding me that however I feel I am doing as a parent, it’s good enough. Small things, but small things is what we have.

FIRE is all about hope to me. Hoping that I can give my kids a better future – including being there for them in person at different times in their lives, really loving them, and giving them the conditions to thrive. Hoping that I can live my values. Hoping that I can support my family by myself but doing so in a way which aligns to my values and my contribution to the world.

But hope isn’t enough by itself.

Feathers of hope: Photo by Daiga Ellaby on Unsplash

Showing up day after day, doing the work, making the tweaks. One thing I’ve learnt is the need to be patient with myself. Keeping the faith is half the battle – the other half is doing the next right thing, however tiny it feels.

What is making you hopeful this week? I’d love to hear from you!

Budget Check In: May

May has been AMAZING weather wise – sunny and warm, beautiful blue skies and suddenly every single plant in Copenhagen has sprung into stunning lush greenness. We’ve been swimming in the sea a few times (ok, it’s still freezing but it’s refreshing and the sand is warm and it’s totally worth it). Getting into the last months at this rented house and doing a lot of decluttering, and winding down to the end of the school year. So a busy month, and one which feels a bit more positive – change is a’coming.

Hurray for May! Photo by Waldemar Brandt on Unsplash

Budget wise, it’s been better than last month but still not amazing. My daughter’s birthday is in May, and whilst I bought most of her gifts in April I paid for her party this month. Last year we did a COVID-friendly budget party at home but this year I am so crazy with work and getting ready to move that I figured I would just throw money at the problem. She had a wonderful party, and I didn’t have to clean up afterward, so it was worth it!

Item Monthly BudgetSpend May% of monthly budget
Childcare costs £           1,100.00 £       872.7175
Car (insurance, tax, petrol) £              125.00 £                –  0
Charity £                 66.67 £          14.8822
Eating out £              120.00 £       241.96202
Entertainment – subscription £                 50.00 £          79.37159
Entertainment £              100.00 £       156.19156
Kids – extra curricular £              250.00 £                –  0
Family £                 50.00 £          22.3745
Groceries £              400.00 £       855.33214
Holidays  £              300.00 £       489.59116
Insurance £              200.00 £                –  0
Personal care £                 30.00 £       185.30618
Shopping – general £                 25.00 £          45.58182
Shopping – gifts incl birthdays £                 58.33 £       951.721632
Shopping – clothes £                 29.17 £          72.15247
Rent and Bills £           1,500.00 £       1000 0
Transport £                 41.67 £       138.92333
Utilities £              200.00 £    1,559.59780
TOTALS £       4,645.83 £    5,886.65130

So, once again I overspent my budget BUT by much less than last month. I spent £5,886 against a budget of £4,645:

  • I realise that I have radically under-estimated gifts, parties and what not for my children’s birthdays. In my mind, I am a super frugal righteous parent, but that’s not who I am in real life. There are definitely elements of making up for the lack of family in there – they don’t get gifts from their dad or his family, and only from my mum and brother. So there’s a lot to make up for. I only get them things they will really love / use, so even though there is an element of guilt, it doesn’t feel wasteful.
  • Grocery spend continues to be way over. I need to properly focus on this, but will do so when we move to the new house and I get a bit of head-space. Currently we’re just getting by – I’ll get to it.
  • Utility bills were insane this month and will probably be terrible next month as I tie up everything we owe for this place. I had huge bills on water – where the company asked me to pay for the whole year up front even though I said I would be moving out in July, um no thanks – and also on heating. I hope the new house has cheaper bills than here, but if not, it will be worth putting some time into fixing whatever the issues are.
  • I spent again on personal care including visits to osteopath. This is something I should be able to claim back, but for now I will leave it here and balance it at the end of the quarter.
  • Finally I spent a bit more on transport due to bike issues, but I love my bike and get a huge amount of value out of it, so I will live with this.
Sea-swimming, Copenhagen style. Photo by Kevin Angelsø on Unsplash
 Monthly saving planMay% of plan
Mortgage (UK house)  £                500 £              500100
Mortgage Overpayment  £                500 £              500100
Emergency Fund  £                  100 £               100100
ISA £               1,250 £               50040
Kids savings £                   248 £               248100
SIPP £                   300 £               300100
  £   2,898.00 £ 2,348.0087

So what did I save? Again I focused on getting the last of the money together for our house move in July, so I have just been putting extra into my current account to make sure the money is there for whatever comes up. No great savings news then, but at least I carried on with the usual basics which is still savings (or paying toward capital) of £ 2,348.

So this month, a very unimpressive savings rate of 20% compared to spending 80%. July will also likely be odd due to the move but in August I am going to revise the budget and properly commit to it.

How was your May? Would love to hear from you!

House buying and the single parent

I wrote in November that I was thinking about buying a house here in Denmark. My contract is, all things being equal, at least for another 3.5 years, which means an awful lot more horribly expensive rent. Plus since my landlord is coming back and we have to move anyway, incurring both the costs of spending an awful lot of time looking for somewhere and organising and paying for movers.

So we have bought a house!

I’ve been looking since September, and it has been absolutely brutal. As with many places, already high house prices have continued to rise during COVID and family properties (as we are looking for) have increased even more as people look to move out of apartments. In Denmark, the supply is also quite low, meaning that there just aren’t enough properties to go around. I almost wish we had bought the first thing we saw in September, since that will have gone up in price by about 8% since we saw it.

The ideal Copenhagen home (clue: our new house does not look like this). Photo Credit, Architectural Digest

It is even worse in the UK where house prices are soaring. People moving out of cities, or flats; a lack of housing stock; the temporary suspension of Stamp Duty; and realising what an incredible amount of house you can buy pretty much anywhere in the country if you sell a London home means that the average house price in the UK is now £256,000 – up a whopping £100,000 since 2012.

In the UK, you can usually borrow four-and-a-half times your income meaning you need to earn £56,888 in order to qualify for a mortgage. With the average income being just over £31,400 (and that already the median, so it will be skewed by very high and very low earners) this means that the majority of people – and any single person who is not a majorly high-earner – is priced out of the UK housing market. Since one-third of single parents were living in poverty before the pandemic, and have been one of the groups hardest hit in terms of income partly due to an inability to work and manage kids at home alone, buying a house can seem a million miles away from many single parents who are already working their hardest to create a secure future for their kids.

Denmark, like many countries, has other alternative options including Andelsbolig which is co-operative housing offering both affordable rental and houses to purchase. The conditions of being part of the co-op mean that it’s not possible to take advantage of the system and the apartments (not usually houses) stay in the relevant pricing market and can benefit others in the future should someone move on.

This is Iffley Lock in Oxford, near Iffley, where I would buy a house if I magically became a millionaire. Photo by Lia Tzanidaki on Unsplash

This month, the Australian government took the incredible step of recognising this issue for their citizens and actually doing something about it. The New Home Guarantee scheme will allow single parents to buy with just a 2% deposit, with the federal authorities guaranteeing the other 18%. It is only available to 10,000 women (about 10% of Australia’s 1 million single mums) and whilst that might be a drop in the ocean it has to be celebrated as an approach which both recognises that we have assets and incomes but struggle to get over specific hoops in many financial processes.

I wonder if the UK Government would back a similar scheme? Though with the income needed to buy a house, there will still be struggles for the majority of the almost 3 million single parents in the UK. Sometimes I think the best solution is housing co-ops where we can live with multiple families and share some of the burden.

Together for all! Photo Credit: Radical Routes (and check them out if you are interested in housing co-ops)

But until we get to radical social change, creating support structures so that all families can leverage their income-generating power to build assets and have somewhere secure for their children to grow, should be an area for policy makers to think about. Generational wealth has a significant impact on society, and single parenthood – and the intuitional fabric which keeps people in poverty stuck in that cycle – prevents people from building wealth to hand on. There is a direct relationship with this and continued income inequality which has wide-ranging social implications. And, if you are living it, absolutely sucks you dry.

What’s your story been with housing? I would love to hear from you!