Budget Check In: February

My second proper budget check in (having been blogging for 14 months. Small victories). And a lovely short month to focus on, after January which seemed to last 3100 days instead of 31. However, it did contain the February half term holiday; and an even-more-enormous-than-usual heating bill after I did the meter readings and it turned out we used a whole heap more than anticipated in 2020. This was also the month that we had to pull the house deposit together. But here we are: a check in of spending and saving for this month.

Month 2! Photo by Glen Carrie on Unsplash

I carried on the habit of tallying up the budget weekly, which I found really helpful. What I also noticed was that I do well throughout the month then have a sudden splurgy freakout in the last week and get takeaways etc and generally let loose. I had never really understood that I did this, and it’s so helpful to identify habits like this and be able to work on them.

So, how did we do?

  • I spent £6,164, or 133% of my monthly budget. This clearly sucks. There were three issues this month: £700 on winter tyres (I didn’t need them last year, but with temperatures of -9 and weeks of snow and slush, this year I really did). We also went on holiday for the February break, which cost £978, sharing a holiday home with another family just a 90 minute drive away. This felt expensive but it was totally worth it to spend time with others, somewhere with a heated pool and a hot tub. Money well spent having not spent a night away from home since June. Finally, we had a monster heating bill of £1,000 which will be the same every quarter this year. Blimey. We got all the old jumpers, socks and blankets out the day I got that bill, so fingers crossed that we won’t have another such bill next year.
  • There were some smaller over-spends against the monthly budget but these should work their way through. I spent £100 on a birthday gift for a colleague where others will pay me back; and another £100 on a series of exercise classes prescribed by the doctor, where my health insurance should cover the cost. Starting that exercise class is hopefully a step on the road to a healthier me, but oh my gosh it’s total hell.
  • But there were also lots of areas where I was well under the budget, and I spent 104% of the grocery budget which is the closest I have come to sticking to this one and which I am proud of! So, some gains in spite of the overall overspend.
Winter tyres. Surprise huge payment! Photo by Sid Ramirez on Unsplash
February
Item Monthly BudgetSpent Feb% of monthly budget
Childcare costs £         1,100.00 £          730.0066
Car (insurance, tax, petrol) £             125.00 £          731.82584
Charity £                66.67 £             25.8339
Eating out £             120.00 £             92.7177
Entertainment – subscription £                50.00 £             37.2474
Entertainment £             100.00 £             16.0216
Kids – extra curricular £             250.00 £                     –  0
Family £                50.00 £                     –  0
Groceries £             400.00 £          417.87104
Holidays  £             300.00 £          978.41326
Insurance £             200.00 £                     –  0
Personal care £                30.00 £             73.45245
Shopping – general £                25.00 £          134.12536
Shopping – gifts incl birthdays £                58.33 £             86.00147
Shopping – clothes £                29.17 £                     –  0
Rent and Bills £         1,500.00 £      1,500.00100
Transport £                41.67 £          101.16243
Utilities £             200.00 £      1,240.24620
TOTALS £   4,645.83 £      6,164.87133%
Savings though – am I sitting on a pile of cash yet? Photo by Mathieu Stern on Unsplash
 Monthly BudgetFebruary% of plan
Mortgage Capital  £                    865 £                 865100
Mortgage Overpayment  (actually deposit this month) £                1,250 £                100080
 Emergency Fund  £                    100 £                100100
ISA £                1,250 £                50040
Kids savings £                    248 £                248100
SIPP £                    300 £                300100
  £   3,148.00 £ 3,013.0087

Whilst the savings rate doesn’t look as good, I didn’t count up everything extra that I paid to my deposit for our house in Denmark, which all had to be in the account by the end of this month and which is in place! That’s £90,000 as a down payment ready in the bank, waiting for a big decision next month. I struggled to get the last little bit in place, so even though it looks as though I saved less than planned I am pretty confident that any additional money trickled into the deposit account and will count as capital at some point!

Overall I saved 34% of my income, and spent 66% which is a little worse than planned.

Hopefully this is because of money spent – such as on the car – where it will balance out over the course of the year. And I am proud of some of the areas where I have been able to really control my spending and starting to see changes, such as grocery spending.

How was your February? I’d love to hear how its going!

Risk and the single girl / parent

Risk is such a huge part of life. Every decision we make has an inherent risk attached to it, but most decisions are not something we give that much thought to. Maybe we should: the arguments around tiny habits and the difference they can make is certainly compelling, but at least for me I rarely think of these small things in terms of risk.

When it comes to finance, though, risk can start to feel like something that we have never dealt with before. And it is something of a different game. In finance, risk is predominantly thought of as the other side of the coin to returns. You make a decision about what to do with your money, invest it (including in real estate) and the chance of not getting the outcome you hope for or anticipate, is the risk.

In daily life, we all take risks all the time based on previous experiences and on trends that we know from others. It’s rarely possible to eliminate risks, rather, you can aim to mitigate them. Risk is also about balance. I cycle home from work (well, I did in those halcyon days when we left the house) even though I know cyclists are 15 times more likely to die on their journey than car drivers. Side note: cyclists are so well looked after in Denmark that the stats might be different here but I couldn’t find them. But I take into account the health benefits of regular exercise in the fresh air, and I mitigate other risks by wearing a helmet, having lights, and only cycling in bike lanes.

I am too risk averse to cycle in a short skirt, but this is a great route: Photo by Febiyan on Unsplash

Before investing, it’s good to understand your attitude to risk. Financial advisors have a nifty little questionnaire they use to assess your risk appetite, but you can do a lot of that analysis yourself by using the following questions:

  1. What can you afford to lose? If the answer is ‘none of it’ then you are going to be looking at some very conservative approaches. This is a good question to help work out a sliding approach to investments, where you safeguard what you absolutely cannot lose in cash or bonds, then portion out other percentages in increasingly high risk investments. There are funds that will do this for you as well: Vanguard’s LifeStrategy funds for example are staggered so as to offer a simple option for people in different phases depending on how close they are to retirement. I also ask myself this question every time I invest, especially in non-traditional areas. When I invested in cryptocurrencies for example, I only put in what I could afford to completely lose. My tolerance is more around ‘potentially losing my ability to go on holiday that year’ rather than ‘potentially losing my house’. Naturally the answer overall will also depend on where you are in life, and relates to question two:
  2. What are your goals and timings? If you are about to retire and need a guaranteed income, aggressive risk taking is unlikely to be for you. However, I invest my personal pension for example in relatively high risk investments because I can’t take it for another 20 years. If you are likely to need you money at a specific time, such as if you are saving for a house, then you’re less able to accept the risk of a volatile stockmarket. What this means basically is if you have to pull your money out at a particular time, there is a chance that particular time might coincide with a period of poor performance and you would make a loss. If you can wait for your money, you are much more able to tolerate risk.
  3. What is your own personal risk appetite? I think I’m quite a risk taker. I’ve lived all over the world, sometimes leaving at short notice, with small children in tow. But I definitely find that as a single parent with, as mentioned, no Plan B, I can be somewhat risk averse when it comes to money. So don’t be surprised if you find that you lit-party-girl sense of self isn’t the one holding the purse strings – and let’s be fair, this might not be a bad thing.
Sometimes it’s the risk which makes it fun. Photo by Valentín Betancur on Unsplash

But when the markets went into freefall in 2020, what I thought I discovered was that my risk tolerance on paper was much greater than in real life. I’ve reflected on this a lot since then, as I tweak my FIRE plan, and I am not sure that was accurate. Rather, my risk tolerance during my first financial shitstorm, was pretty low. But having lived through it, and seen that what feels irreversible very rarely is, has built another layer of confidence that I don’t think I would have got without the experience. In other words, you gotta be in it to win it.

But its easy to only consider the risk of taking action, rather than the risks of inactivity. As Tim Ferriss says, “Risk is the potential for an irreversible negative outcome”. And that is what can paralyse us in terms of decision making: the idea that the negative outcome is permanent. I remember being about 13 and choosing my GCSE subjects, and feeling for the first time that I was making an irreversible decision which would set the trajectory for A Levels, university, job – basically my whole life until death. I’ve made many, many switches since then, but that feeling of taking a giant pair of scissors and shearing off possible futures, is something which I still get when making big decisions. And since my decisions now impact on my kids, sometimes making decisions can feel impossible.

And sometimes, we can get caught up in fear spirals, and chalk them up as ‘balancing risk’. Tim Ferriss also has a great series of pieces on fear-setting as risk management: taking time to walk through your concerns and really understand ‘what is the worst that can happen’ can give you new insights onto what is holding you back. Every decision has to be a mix of not just financial, but mitigating the risks of living a half life – not FOMO, but really missing out on showing up as your full, amazing self with all the passions and gifts you come with – are real.

I kind of hate the phrase ‘living my best life’ mostly because it sounds so InstaSmug, but I think that’s what risk management really boils down to. Look at all the aspects first, not just the finances, and trust your judgement.

Love Life, Love Oprah: Photo Credit

Buying a house is a great example of this. I am in the process of buying a house based on a relatively simple set of calculations about rent vs mortgage+costs. But I am sunk into a total spiral of worry about all the things which could go wrong and, frankly, just what an enormous amount of money it seems. I keep coming back to two things: one is the calculations I made on affordability, stability of my contract etc; the other is the risk of spending another £120,000 on rent which I feel would be better somehow in my portfolio. And again, risk balancing isn’t just the financial – I want to have somewhere I can paint, and plant trees, and feel at home. If the flipside of the risk is that I am responsible for the whole thing then hopefully my research, pre-purchase survey, and emergency fund, will get me through it. Fingers crossed, anyway!

What is your attitude to risk? And how does it impact on your decisions? Look forward to hearing from you!

Valentine’s Day Massacre: The financial inequality of single parenting

In my last post I promised to come back and reflect specifically on financial inequalities that face single parents. Being a jolly sort of soul (and, obviously, single), Valentine’s Day seemed like the perfect time. I considered doing a post on self-care and self-love and how this relates to FIRE, but whilst it’s great to work on being positive and hold yourself to account, sometimes it’s necessary to look at structural inequalities and burn. it. all. down.

This isn’t a post about how hard it is to do all of this on one income, though that’s true. There are more single people in the world than ever, around 45% of the adult population in the global North, and there is evidence that they are happier than married counterparts. I am not an evangelist for the single state – indeed I would be happier in a commune than living alone – but I do sometimes imagine what I could achieve if I was part of a couple with the added energy, income, time and other resources and it makes me dizzy.

There’s a lot of love out there, even if you’re single. Duh. Photo by Paweł Czerwiński on Unsplash

So no, it’s not just jealousy or the basic ‘2 incomes is better than 1’ point. In the UK and many other countries, ‘couple privilege‘ is a real thing: outside of the obvious difference in having two incomes, there are tax privileges to having a spouse for example. There are a myriad of hidden costs to being single, from holidays to supermarket norms, not to mention the cost of housing and how single people are viewed as a greater risk in terms of accessing a mortgage.

In addition to this, for single parents there are punitive financial measures specifically designed to impact on us. Don’t forget that our current Prime Minister called the children of single mothers “ill-raised, ignorant, aggressive and illegitimate” (ironic given his contribution to the creation of single mothers). And don’t his policies show this belief. Changes and restrictions in benefits (most of which are not actually spent on ‘dole scroungers’) including family benefits are pushing single parent families even further into poverty. The British charity the Child Poverty Action Group have talked about the ‘war on lone parents’ and cited evidence that current policy really does try and make it harder for single parent families, presumably as a deterrent for the terrible mess we make of society.

Research in the UK shows that this approach has been so successful that it is not possible for a single parent on median earnings to reach a decent minimum living standard. Indeed, the gap between earnings and costs are getting worse thanks for austerity and benefit cuts, and price rises. For lone parents working full time on median earnings, the shortfall has risen from 6% to 16% in the past ten years.

In 2019, the overall cost of a child up to age 18 years (including rent and childcare) was£185,000 for lone parents (up 19% since 2012) and 151,000 for couples (up 5.5% since 2012). A greater cost, on half the possible income. It feels hard because it IS hard.

Maybe we should be angry instead of ashamed. Photo by Miguel Bruna on Unsplash

In a previous job where I was posted overseas for a British company there were significant benefits available for a spouse that I was unable to tap into for either of my children’s secondary parents – their father, or their grandmother. These benefits included the cost of flights to spend time with us, or if one of them had wanted to live with me, pension contributions. I lost out on around £20,000 per year because those benefits could only go to someone with whom I had a very particular intimate relationship. I felt totally judged by 1950s hetero normative rules: you can have the money if you still go to bed with the person with whom you had children, but if not, forget it.

The attitudes here, both in the treatment of those on benefits and low wages, and those of us in a much higher tax bracket, are unite by the same message. You have failed, and you should be ashamed.

And we are ashamed. Parents who have to bring up their children on the bread line already feel like they are failing without being told. A New York Times article talks about how normal this all is. Whilst being frugal, getting a side hustle and so on are the building blocks of FIRE they are also par for the course when making ends meet. It’s the same shame that stops people asking for help; stops them checking to see if they have the benefits they are entitled to, or asking for adjustments to working hours. It’s the same shame that in my own petty way, stopped me from questioning why I was paying 50% of a bill where I was clearly not benefitting from 50% of the purchase.

I am blessed to be able to bring up my children without stinting – on luxuries as well as the basics, where we are frugal it’s out of choice – but I am also constantly anxious about what happens if I can’t work. We don’t have a second income to lean back on. We don’t have a plan B.

Lessening that anxiety is one of the reasons that financial independence is worth so much as a single parent. There are loads of brilliant exes out there who co-parent and equally share the financial burden but I can honestly say that I don’t know any of them myself. When you have sufficient issues with someone that you made the enormous decision to break up your family, relying on them financially can be challenging however easy it is. Sometimes the plan B just isn’t possible.

But sometimes, we also need to think about how society – and communities like FIRE – can help us create new plans. Love is so much more than just romantic: for our kids, for our community, our planet and each other. Happy valentine’s day to us all.

Love one another, wherever you are at. Photo by Priscilla Du Preez on Unsplash

Budget Check-In: January

In the spirit of trying to be more self-accountable, here are the monthly figures. I have to say I feel quite proud of having actually engaged with the budget during the month – I do realise that’s the point, but as noted I have tended to treat my spending tallies more as a summary of mistakes rather than something I can use to tweak behaviours and get back on track.

About to end! Photo by Glen Carrie on Unsplash

I have been tallying up my budgets weekly and found it really helpful. It also takes such a short time, and removes The Fear of having to suddenly spend four hours pulling it together at the end of the month.

So, how did I do? Not badly in some ways but not great in others:

  • I spent 95% of my monthly planned budget, or £4,414 out of a planned £4,645. In some ways this is great since it’s under budget – but looking across the lines it’s clear I should have spent even less. Some annual costs (such as kids’ extra curricular activities) are budgeted for monthly but I didn’t spend anything this month, meaning in theory that at some point I will overspend if I don’t pull it back from elsewhere. I spent quite a bit on gifts but January is birthday heavy for us so this one should work out.
  • I still spent 150% of my grocery budget. This is SO ANNOYING – I was at almost exactly £400 on 30th January but we had a birthday dinner to host today so I went crazy in (the most expensive) supermarket. I knew as I was doing it that I was already regretting it. Something to continue working on, clearly.
  • We hadn’t planned for the impact of Brexit. I feel like, in the words of Lily Tomlin, it’s going to get a whole lot worse before it gets worse, but the immediate impact was that we couldn’t watch the telly. I might appreciate that this is small beans compared to, well, so many other things, but – the telly! We normally watch Prime, through my UK account, and pay additionally for some channels. 1st January – nada. I spent a frustrating amount of time trying things out (turns out you can’t get Brit Box in Europe, since apparently it’s only available in Anglophone countries) and did the single mum thing I hate – asked One Of The Dads to help since technology is a Boy Thing. Shakes fist at self. So I ended up buying an Apple TV box, cancelling my Prime subscription and trying HBO Nordic. We don’t have terrestrial or cable TV so I don’t mind paying for *something* but this was not budgeted for. It turns out my mum also won’t be able to send over gifts for the kids (or me) in the same way, so watch this space for the reign of terror which begins when I run out of marmite.
  • The kids’ schools are closed since Christmas and after a few weeks my son started to get neck pains. So whilst we had laptops from last time, my shopping-general budget took a hit to buy mice/keyboards/ whatnot to set him up, and a webcam for us both so we can use a proper monitor. I managed to find an old monitor and some bits and pieces, and we asked first on the local freebie marketplace, but still had to fork out.
  • There are still some things I haven’t budgeted for. Almost the entire ‘family’ spend this month was on helping out a very old friend. I can afford to do it, and he has done the same for me in the past, but it wasn’t anywhere on the list.
Item Monthly BudgetSpent Jan% of monthly budget
Childcare costs £         1,100.00 £             790.5472
Car (insurance, tax, petrol) £             125.00 £                99.5080
Charity £                66.67 £                25.6338
Eating out £             120.00 £             104.2287
Entertainment – subscription £                50.00 £                72.77146
Entertainment £             100.00 £             340.09340
Kids – extra curricular £             250.00 £                        –  0
Family £                50.00 £             170.39341
Groceries £             400.00 £             597.15149
Holidays  £             300.00 £                        –   
Insurance £             200.00 £             127.8764
Personal care £                30.00 £                47.02157
Shopping – general £                25.00 £             165.37661
Shopping – gifts incl birthdays £                58.33 £             167.97288
Shopping – clothes £                29.17 £                        –  0
Rent and Bills £         1,700.00 £         1,638.5796
Transport £                41.67 £                67.46162
TOTALS £   4,645.83 £   4,414.5595%
Enjoy the little things – like British TV? Photo by Brigitte Tohm on Unsplash

With that done, what did I save?

 Monthly PlanJanuary% of plan
Mortgage Capital  £                    865 £                    865100
Mortgage Overpayment  £                1,250 0
 Emergency Fund  £                    10015001500
ISA £                1,25050040
Kids savings £                    248248100
SIPP £                    300300100
  £   3,148.00 £   3,413.00108%

This went pretty much to plan. In January I had to move my house deposit over to Denmark and I lost some money in transaction and exchange rate costs. I also need to now boost my emergency fund as I’ve taken it down to £4,000 (or one month’s expenses). It’s definitely not enough in these uncertain times, so rather than focusing on my usual goals I need to spend a few months getting that back up to at least three months’ worth.

Overall I saved 44% of my income, and spent 56% which is a little better than planned.

Given the overspend in some areas, February should be a month of clawing back – though it does include half term holidays… Watch this space!

How did your January budget go? Feeling in good shape for the start of 2021? I’d love to hear from you!

PS – if you like British TV and don’t feel like your life has enough dystopian fear in then I highly recommend Years and Years (I am not paid for this – it’s just the best thing I’ve seen in a while. Terrifying).

Frugal challenge: the grocery budget

Ah food. Pancakes with sugar and lemon on a Sunday morning. The smell of roasting chicken with garlic and thyme. An apple so crisp it’s like cracking ice. Watching a movie with your arm sunk up to the elbow in a bag of Cheetos. Heaven.

Also known as The Giant Budget Sink Hole.

Food matters to me. It makes me think of family, taking care of my children, and warm hygge home making times. I always cooked with my granny and my mum, and as kids we had to be able to prepare one meal a week for the whole family by the time we were 9 years old. This is something I do with my own kids: it makes no sense to raise children who can’t feed themselves! Plus then I get a night off.

With my ethical hat on I also care about where food comes from and that that does to the planet, as well as to our health as a family. The debates during Brexit about food standards have been divisive (Brexit topic shocker!) but also showed me how little I had appreciated the standards in place for animal welfare and ethical consumerism. The desire for cheap food, without caring where it comes from and any longer term impacts, opens up some terrifying options for dystopian future, and I say that in a time which sometimes feels more like dystopian right-now than anything else. In Margaret Atwood’s novel Oryx and Crake, she introduces ChickieNobs: the delicious, easy pieces of chicken we love to eat so much grown in a lab without the need for actual animals. That novel was written eight years ago – last year, start ups were raising hundreds of millions of dollars to do exactly that through the growth of ‘cultured meats‘.

In spite of all that, I would be pretty happy to arrive at *this* party. Photo by Spencer Davis on Unsplash

All this to say, when it comes to food, as with all aspects of FIRE, it really matters that it’s about value and not just price. This year, I want to commit to making more conscious decisions about food. I was raised a vegetarian from birth, and stayed that way until I was 26. So a lot of our meat consumption is about ease, and about having one fussy child who is vehemently anti-vegetable. And laziness on my part. But I’m increasingly aware of the need to do better in this area, and how the small choices I make contribute to my own FIRE journey and to my footprint on the planet.

But I also think of myself as someone who is frugal with food, and that just ain’t so. In 2020 I spent £6,160 on groceries plus £2,100 on eating out. I am so, so fierce about not eating out that I am frankly astonished at that last figure: I go for dinner with friends maybe once or twice per year, and whilst we do have a take out pizza once a month the bill is usually £30 a time, so the rest is a mystery. This year I budgeted £4,800 for groceries, so savings are going to have to be made. It took me a while to get to a realistic grocery budget, but it will take a while for it to stick. I love Mrs Smart Money’s guide to setting a grocery budget, and if you are looking for inspiration, do read about her no spend year and how she slashed her spending on food without losing out on quality.

We already shop at discount supermarkets: in Denmark that means LIDL (and my mum and I talk on the phone about whether they have the same things on offer in the UK as here. Rock and roll): and Rema 1000. These are so much cheaper than the fancy supermarket, and I am also not tempted by the delicious bouji foods which are on offer there.

Ideally following the shopping list rather than just staring in surprise at the receipt. Photo credit

The building blocks of cutting food spending seem pretty easy, but, like any diet habit, it’s about how much you stick to them and whether you have emotional splurges:

  1. Meal plan. This is the most important thing, because the shopping and preparation all stems from here. Who is eating at home and when (in 2020 and, seemingly, 2021 this is a trick question since the answer is ‘all of you’ and ‘all the time’). What are the things you like to eat? How are you going to get your five-a-day? From then, the questions are around how you can stretch out both the food and the preparation – things like roasting a chicken then using the cold leftover meat the next day or two; or cooking a basic batch tomato sauce which can then be turned into spaghetti sauce, pizza sauce, or the base for a chilli. I have been meal planning for a while, but I am still terrible for thinking ‘ooh I don’t feel like that any more, let’s have something else’. Practice makes perfect.
  2. Stock-take and write a shopping list: When you have meal planned, break it down into the ingredients you need for the week. Then check your cupboards/fridge/freezer and check you have what you need. Are there things you’ve not included but need to check, like coffee? I have a page up on the pinboard in the kitchen where I write staples like this, or flour, oil and so on Write them all down in a list which is easy to use, organised by the shops if you’ll visit more than one, then by aisle if you can remember such things.
  3. Batch cook, or batch prepare: Batch cooking is now so well known that there are whole books about it but it’s basically making things in big enough quantities to freeze additional portions and basically create your own ready meals. It’s just as much hassle and time to prepare five portions of something as it is one, and it usually works out much cheaper. Every week I make a basic roasted aubergine and tomato sauce every weekend (don’t tell my daughter it has aubergine in, fur would fly) and use this as a tomato sauce base. My top tip on batch cooking is to label everything properly, otherwise Freezer Surprise will be a regular on the menu: and freeze it in portion sizes so you don’t have to defrost and potentially waste a whole load of goodness.
  4. Batch prepare: In an effort to increase my vegetable intake, I make a dry coleslaw mix (basically just the vegetables) using the food processor, every week. This week I grated up carrot, beetroot, celeriac and spring cabbage and have used it in a standard salad, in a salmon poke bowl, and with mayo as an accompaniment to a sandwich. I also do things like prepare roasted chicken for use in lunches.
  5. Enjoy yourself. Yes we’re budgeting (and trying to save the world) but food should also be a pleasure. Make things you like to eat. Find a time when the planning and shopping works, involve the kids in talking about meals they look forward to, and involve them in prep. My son and I make a cake every week as our treat for the week, usually one for home and one with the same mixture made into cake bars for school. Then I batch cook/prep in a two-hour window at the weekend when the kids are playing or with friends, and I listen to an audio book. It genuinely feels like a pleasant time, much more so than trying to slam a meal together at 17.30 on a work night. Some people prefer an evening’s cooking with a glass of wine – it’s all about what works for you.
This week’s cake (and a reminder to remove the Christmas table cloth): Victoria Sponge.

So – how do you keep your grocery budget down? I’d love to hear your tips!

Happy New Year #2. Budgets

In preparing for 2021 I spent some more time on my budgets. I’ve written about where I underestimated my 2020 budget before, and I have added in those changes – both the unknowns (utility bills) and the real underestimation (groceries). I also spent some time thinking about what matters to us as a family and where else we could make compromises.

This led me to some interesting conclusions. One of the things I love about the FIRE movement is that you tailor it exactly to you: your own wants and needs; what you find important now and in the future; and the options you see for your coming years. For me personally, I am always juggling compromises. If I want to work, I need to have childcare and the most likely thing is that I am going to pay for it. If I want to work in my chosen field then I have to travel, and have childcare which is available overnight and for days at a time. And so on and so forth. Setting budgets though helps me to think about those compromises and priorities, and how to get a balance that works for myself and my kids. I find it really empowering because it’s taking an intentional approach to money, and matching my actions to my aspirations.

Photo by Kelly Sikkema on Unsplash

So for 2021 these are the things I am not prepared to compropmise on:

  • Childcare. We have a nanny who has been with us since my youngest was 3. With the pandemic and lockdown, I haven’t been travelling and haven’t needed overnight care etc in the way I usually do. But I still need childcare and value the care and engagement we get from our nanny, so this won’t change even though with all the additional costs (health care, insurance, travel) it’s not cheap.
  • Kids’ clubs. I was quite shocked about how much these are in Copenhagen, and I’ve gone back and forth about the right balance. Since my kids are only young once and working means I don’t have time to e.g. take them swimming every week, I have decided to keep this in but limit it two two per child. This means they get to see friends, do sports (and lots and lots of dance…) and keep broad interests whilst ensuring I am not going crazy on this budget line.
  • Holidays: I’ve kept in a decent line for this in 2021, though I hope it will be less since we have some vouchers from holidays we couldn’t take due to COVID which have rolled over to this year (well, fingers crossed that this happens and we don’t roll them over whilst staying at home FOREVER).

So what is the budget? It’s very similar to 2020’s actuals – a budget of £ 4,645 per month or  £ 65,618 over the year. The breakdown is planned as below – this is an average over the year where some costs are annual, and some come out in specific months etc:

 Annual PlanMonthly Budget
Childcare costs £              13,200 £            1,100.00
Car (insurance, tax, petrol) £                1,500 £               125.00
Charity £                   800 £                 66.67
Eating out £                1,440 £               120.00
Entertainment – media £                   600 £                 50.00
Entertainment – going out £                1,200 £               100.00
Kids – extra curricular £                3,000 £               250.00
Family £                   600 £                 50.00
Groceries £                4,800 £               400.00
Holidays  £                3,600 £               300.00
Insurance £                2,400 £               200.00
Personal care £                   360 £                 30.00
Shopping – general £                   300 £                 25.00
Shopping – gifts incl birthdays £                   700 £                 58.33
Shopping – clothes £                   350 £                 29.17
Rent and Bills £              20,400 £            1,700.00
Transport £                   500 £                 41.67
TOTAL SPEND £         65,618 £       4,645.83

To be honest it still feels like a lot.

However, the planned savings (shown below) mean that it would be another year where I spend 60% and save 40%. Again, this doesn’t include anything pre-tax, so money paid for health insurance, or my employer pension to which I pay around £17,000 per year:

Photo by sydney Rae on Unsplash
 Annual PlanMonthly Budget
Mortgage £            10,310 £                    865
Mortgage Overpayment  £            15,200 £                1,250
 Emergency Fund  £               1,200 £                    100
ISA £            20,000 £                1,250
Kids’ savings £               2,976 £                    248
SIPP (private pension)  £               2,400 £                    300
 TOTAL SAVINGS £ 41,776 £    3,148

This would put me on track to finish paying off the mortgage on my UK home by the end of 2022, earlier than I had planned, and to max out my ISA as well as paying into kids’ savings and a personal pension. So even though the spending is quite high, I am definitely working toward my financial goals.

The one unknown is housing. We’ve been looking to buy a home here in Copenhagen which would suck in savings (though this would become equity) and reduce monthly outgoings. So far, we have put in an offer and lost out on one home and we have an offer under consideration this week (please cross your fingers for me!). If we can’t find something by about March I will look to rent, since we have to be out of this rented house by July.

Once the housing is exactly known I will tweak the budget. I do feel like we could save more, and will keep coming back to the budget throughout the year to see what else we can trim away. Either way, we’ll keep on enjoying the free pleasures in this life, and the knowledge that we are trying to live mindfully. What’s your plan for 2021 and how are you going to stick to it? Let me know!

A beautiful (free) day out walking in the snowy woods in what we hope will become our new neighbourhood ❤

Happy New Year #1. Intentions

Woohoo, it’s here! After 2020 lasting for what felt like 91 years, 2021 has rolled in.

Truthfully though, in reviewing my 2020 I feel extremely blessed by how much I managed to drive forward on most of my goals. I fully recognise and appreciate how much of this was down to luck – to being in a stable job, to having found FIRE and got myself set up with an emergency fund which took the edge of the panic, and to being in a country where the approach to managing COVID was fast and easily understood.

Photo by Annie Spratt on Unsplash

But I’m still excited about 2021 even though I absolutely hope that it is better for most people – and for humanity and for the planet. This is part one of two New Year blogs: this one covering intention setting, and the next one outlining specific FIRE goals for next year.

So where to start. A recent New York Times article suggested that people should aim small for 2021. Lots of commentators agrees that small is beautiful – in an interview with Glennon Doyle she talks about how small goals are easier to work toward, and easier to build into your life with grace ad confidence rather than creating new ways to beat yourself up about. Around 80% of people don’t stick to their New Year’s resolutions, so it’s clear that another approach is needed.

Focus on intentions before goals

So before getting to goals I want to focus on intentions. Goals are future focused, and brilliant for laying out a vision and planning how to get there. That’s a really important task, and with the small-and-kindly mantra above, it really works for me. But setting intentions are about mindfully living in the now. It’s the idea of setting out how you want to behave, to feel and to approach situations which you can come back to easily and often if you feel you’re veering away from your true north.

Photo by S O C I A L . C U T on Unsplash

Intentions are simpler to come up with than goals since they are a heartfelt statement about who is your authentic self. Who is the real and brightest version of you? How would you need to show up each and every time to be that wonderful true self? Intentions are ways of nudging yourself gently back into that space. The fact that this is the space from which you are more likely to be able to achieve your goals is also great news!

And as I’ve written about before, so much of the FIRE movement is about mindfulness and living with intention. By taking time to think about who you are and what you want, the decisions you make are part of actively engaging with every aspect of your life.

Intentions 2021

So, what are my intentions for this year? I have focused on areas where I feel that I don’t ‘live my truth’ – where I get narky, stubborn, or downright unhelpful. These are all things which make me feel worse too, and where I spend valuable time and energy stressing about how I should have done things better. I’ve written these all in the present tense so they are immediately real and actionable at any moment.

  1. I treat myself with compassion and forgiveness, gently recognising and letting go of any shame.
  2. I nourish myself and others, my community, and the planet, by proactively being an active participant.
  3. I value and am grateful for the past that got me here, but I know I don’t live there any more: I am free to move beyond my past, with love.
  4. I easily and graciously give and receive love.
  5. I take each situation and each day with openness, courage and kindness, and amplify others doing the same.
  6. I take time to be and express gratitude and to celebrate myself and others, remembering that ALL of this is a miracle.

So – what do you think, is it worth setting intentions? And if so, what are yours?

2020 Inspiration List: books, blogs and more

With a huge thank you to everyone in the FIRE community and beyond who has shared their content and ideas this year. Staying in touch with the community has been even more crucial than before, since isolation has often felt very much like being cut off from everything and everyone. Carrying on with the journey and its ups and downs has only been possible thanks to those brilliant folks, as well as to others who are working on thoughtful, gracious approaches to how we can live more intentionally. Do let me know what I’ve missed or what has inspired you this year – I would love new ideas!

Proper Books

So I read a lot – as a single mum, once the kids are in bed my time is my own (however knackered I am). I listen to a lot of podcasts and audiobooks as these are great for when I’m cleaning / cooking / doing chores: but I read every night as part of my sleep routine. I seem to have an awkward addiction to old detective novels <twirls Poirot-like moustache> but I try and make time for inspiring media as well. These days when there is so much bad news as well, it’s nice to have something which makes you feel better rather than increasingly dystopian, so I’m sharing brief highlights from this year. I also read the Handmaid’s Tale and Oryx & Crake – both of which I recommend without hesitation but since I had nightmares for a week after each of them, you might want to read them *not* during global meltdown.

Quick note on links – I have tried to use independent bookshops here but these are of course available elsewhere.

Personality Isn’t Permanent: Benjamin, Jr. Hardy

Not FIRE related but a brilliant book about exploring limiting beliefs. The main idea is focusing on your ‘future self’ and directing your energy to this future. This is based on anything being achievable, and the things, or characteristics which you think might be holding you back are eminently changeable. I am not sure there is anything new here, but it is well explained and organised, with key points such as ‘just do it’ – taking action, and ‘forcing function‘ whereby humans can adapt to just get on with something, learning and becoming richer from the experience.

Make Time: Jake Knapp & John Zeratsky

I read this after hearing an interview with the authors on the Choose FI Podcast – and found that there was tons of simple and immediately actionable advice. After reading, I immediately reorganised my phone so that time-wasting apps, what the book calls ‘infinity pools’ are either deleted or much harder to find. I also used it to plan out a morning routine which I have stuck to since August: mindfulness, gratitude journaling, and planning out a highlight and simple goals. The value from these changes is immeasurable, and there is more to pick up each time I read the book.

The Unexpected joy of the Ordinary: Catherine Gray

This book really resonated with me. Gray works through the miraculousness of every day life, echoing the idea that comparison is the thief of joy, and investigating evidence about what really makes us happy. Considering how modern life is making us increasingly anxious and depressed, this book invites you to consider a simpler, more mindful way of living in which we are ready to jump off the hedonic treadmill.

Free online content

I continued to devour blogs and podcasts this year, finding regular inspiration and ideas from others on the same path. In particular:

  • I have loved A Purple Lifes incredible blog over the past years, and since she hit early retirement and quitting her job in 2020 I wanted to celebrate her here, and share with you to see what a journey looks like from start to realising-its-not-a-finish.
  • I also love Our Rich Journey. This year they moved to Portugal as a family with two kids similar in age to mine – something we would love to do as well. Their advice is simple and actionable, and their energy is infectious (awkward choice of word for 2020 but I’m gonna stick with it).
  • Financial Independence Europe has a special place in my 2020 heart since I made my podcast debut there this year, but it’s also chockful of relevant advice in a movement which can feel very American. They have episodes on all subjects to do with FI and just with living different, intentional lives.

Other stuff

I watched The Biggest Little Farm on an aeroplane back in February when such things were possible, and loved it (the irony of enjoying a film about conscious care for the earth from my high-carbon plane seat notwithstanding). It’s a story of a family choosing a different life after they lost their jobs, and bought and brought back to life an incredible bio-diverse farm.

Share what inspires you

I’d love to hear what you enjoyed in 2020, or things to add to my reading list for 2021!

The Red Briefcase: 2020 spending review

‘It’s the most… wonderful tiiiime… of the yeeeeaaaar’ <sings>. Hannukah is just finished and we are heading into Christmas, both of which we love. And we’re up to the end of year spending review, which we are *hoping* to love.

2020 has been quite the year, hasn’t it? I am writing this whilst we are in self-isolation (again) and trying to enjoy ourselves without all the usual festive celebrations of friends, family, and going out. It is particularly hard this year since we can’t travel and it’s just the kids and I far from home. In spite of that I know we are in a much, much luckier place than others with a stable income; living in a fantastic country; and in a house big enough to play, work and study in for weeks at a time. At this time of gratitude and miracles, I am definitely counting our blessings. But this post is also about counting our income, outgoings and savings.

It hurts me to share any space with Britain’s Chancellor of the Exchequer Rishi Sunak but that red briefcase is the traditional home for the spending review going into the UK parliament. No comments here on that budget. (Photo by TOLGA AKMEN/AFP via Getty Images)

So what was the plan?

I set my plan for spending and saving back on January 21st, the first blog post here. Below is the actuals and percentages. Overall I spent around £65,000 this year, £15,000, or about one-third more than planned.

Item Monthly Annual Actual % spent
Charity  £              30  £              360  £          830.00 230%
Insurance  £            277  £           3,324  £       3,324.00 100%
Rent and utilities  £         1,500  £         18,000  £     20,098.77 112%
Childcare  £         1,000  £        12,000  £     21,939.86 183%
Groceries  £            300  £           3,600  £       6,160.68 171%
Holidays  £            300  £           3,600  £       1,910.71 53%
Transport   £            300  £           3,600  £       2,723.52 76%
Entertainment  £            200  £           2,400  £          917.20 38%
Eating out  £            175  £           2,100  £       2,006.95 96%
Family       £       2,986.73  
Shopping      £       2,090.63  
TOTAL  £         4,082  £         48,984  £     64,989.04 133%

What the reckoning showed me, once I got over feeling queasy, was as follows:

  • I radically underestimated some areas – I had no budget for shopping (clothes, gifts, personal care), for example. I also hadn’t understood some of the bills needed to be paid in Denmark (hello surprise £ 1,000 utility charge that I thought was part of the water bill!). I also spend 180% of the grocery bill, and whilst some of this is just poor planning and shopping, it is also clear that costs here are much much more than the UK given that I still shop at LIDL.
  • Whilst COVID didn’t impact my income, it meant that there were significant spends on unplanned areas such as holiday childcare when plans to have my parents come and stay (or the kids go to them in the UK) had to be put on ice – I spent 170% of childcare and holiday budgets due to these changes. Some of the grocery spend was also COVID related: at least now I have long-life milk and a lot of pasta and rice in the hold!
  • The uncomfortable truth is that I budgeted without working on a frugal plan meaning that I consistently didn’t hit targets because I have been using the budget as a guide and not as a plan. I added a budget line of ‘family’ then just added in everything which might upset the budget lines elsewhere, but of course the overall overspend is the same.

This budget also doesn’t include – money to savings, pre-tax contributions to health insurance and pensions, or the income and expenditure on my UK property. So what did I save?

Mortgage overpayments £         11,576
 Triodos  £         11,000
Stocks and Shares ISA  £         11,673
Kids savings £           2,976
Pension (SIPP) £           2,900
 TOTAL SAVED / INVESTED £    40,126
Feel better about this bit!

So I spent 61% of my income, and saved 39%. Given the unexpected (or poorly planned) expenditures, I am really happy with that.

Celebrating with our amazing Christmas tree 🙂

Net Worth Snapshot

Confession time – previously I was calculating my net worth at the end of March, since the UK tax year ends April 5th. This means that I have the 6 month change, and the 18 month changes, which is useful but not quite the ‘end of year review’ I had in mind. In any case, here they are. The big additions from the budgets above is the employer contribution to pension.

 Value Dec 2020Value April 2020Value April 2019
 Pensions  £         163,540 £         134,240 £       105,675
 Savings  £           83,287 £           68,500 £         26,000
 House Equity £         343,000 £         323,223 £       304,000
 Emergency Fund  £           10,000 £           15,000 £           3,500
  £         599,827 £         540,963 £        439,175
Changes in net worth

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. Over this time, my house hasn’t increased in value, so any change is mortgage capital paid off. There were a ton of challenges or mistakes this year which I tried hard to put right – I pulled money out of the S&S ISA when I panicked back in March, and put £5,000 back in which has grown again with the shift in the stock market at the end of the year.

Either way this shows an increase in net worth of £68,000 over six months – an average of £10,600 per month, or £154,000 over 18 months, a monthly average increase of £8,500. That is incredible – and I know based partly on having a great salary and a lot of other privileges and benefits like having bought a home at a good time etc. But it’s something to be proud of, and to spur me on to a much tighter-budget in 2021!

How was your 2020?? And how is it making you feel as we head into planning and dreaming for the year ahead? I would love to hear from you!

Photo Credit/ Matthew Hoffman

Loving what is

With apologies to paraphrasing Byron Katie, I’ve been thinking a lot about ‘loving what is’. I am prone to envy – an emotion so toxic and at odds with my ethics that I rarely even admit to friends that I feel like this. In trying to unpack why I feel envious, and the impact it has on how I interact with others and live my own life, I keep coming back to gratitude.

And it’s a relief – it’s so much simpler to find ways to be grateful rather than trying to ‘stop being envious’. It struck me that gratitude is the only tool available for digging out the roots of envy and getting on with a positive life.

Say it loud!

In thinking about this area, I realised I have some limiting – and, frankly, horrendous – beliefs. I share them here not to totally put you off me (though I understand if that’s the case) but because recognising them is part of forgiving myself for feeling this way then weeding them out:

  1. I worked hard for what I have – others were lucky. This is not something I believe with any part of my rational brain, but I see thoughts based on this popping up when someone is doing well. This has been really stark for me with housing, partly because in the UK at least, people who were on the property ladder some time back, or had family support at a crucial moment, are in a position that nobody could get to starting from now. Our landlord recently told me that the house we rent from them (at huge cost) has gone up $100,000 in the last year. Whilst the system is stacked in a certain way, I conveniently forget the times it has worked in my favour.
  2. I deserve more. Oh dear. This is particularly toxic because at its core is dissatisfaction and lack of gratitude for where I am now. Which – whilst it’s not perfect – is ridiculous. My income puts me in the top 1% world wide. I am healthy and so are my amazing kids (touch wood) – and I have amazing kids. I live in the fifth happiest city in the world, one which is so safe that my 11 year old can go alone to hang out with friends. There is so much to be grateful for I am amazed that I can find the brain space to focus on the bullshit instead of weeping with happiness every day, but somehow it happens.
  3. It wouldn’t be like this if I wasn’t a single parent. I have a specially wide jealous streak for two-parent households where I compare their options (including to work hard, take breaks, have an income double mine because there are two adults in their household) which is also unfair. There are all sorts of reasons why people are where they are on their path, and all sorts of unseen compromises. I had to make the decisions which were right for my family, and manage the consequences instead of constantly thinking ‘what if’.
Recognition is the first step in resisting.

So why does this matter? Apart from it making me unpleasantly whingy (at least in my head) these kind of thoughts become limiting beliefs and it takes work to get over those. This has led to limiting myself – if I really believe that others are lucky and I work hard, why bother working hard? If I am ‘unlucky’ how do I believe that things are going to work out? Its also exhausting and boring to feel this way, and it makes me negative. Consciously hearing how these beliefs play out in how I talk to people, and interact with them, has led to some very uncomfortable recognitions about myself.

But happily none of this is ingrained – every day provides a chance for change and growth. Now that’s something to be grateful for!