financial independence

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Mothering Sunday: the financial impact version

/ Gracie Sunderland

Aw, happy Mothering Sunday! This week I am full of exhausted rage, and wanted just to focus a little on what it feels like to be a single mum, and why generalised negativity from society, the media and government policy is harming this generation of children.

First though I want to recognise that Mothering Sunday is a day which can set off lots of different emotions depending on your own particular track and relationships, but either way, it’s getting warmer and hopefully you’ll have something nice on this weekend.

Being a mother is a privilege and a joy, let me say that first off.

But it is also bloody hard. It’s hard for everyone, even those who have a partner. As we have moved away from traditional societies (and in fairness all the rubbish things that they required), the safety nets of support have been removed.

The invisible workload of mothering (yes, mothering rather than parenting, unless you are a single dad – recognising it and owning it as gendered is a feminist position) is exhausting. There is a great post from 2018 called ‘the invisible workload of motherhood is killing me‘ which, of course, I only just found time to read because I am too damn busy. Its is an accurate and helpful portrayal of what parenting looks like – and it’s just the day to day of parenting, not what it looks like to be trying to reach FIRE, or date, or anything else at the same time.

Motherhood is in any case fraught with issues. There have been a host of articles about how fatherhood has changed during the pandemic and how dads are starting to appreciate the ‘whole’ of parenting. But this is against a background in which women are expected to take the domestic burden (unless someone chooses to step in), and in which those dads have been able to refuse to engage until they were locke at home as well. Women are expected to work as well, though by the time a woman’s oldest child is 12 she is likely to be paid one-third less than male counterparts. These days, with the cost of living crisis and lack of affordable childcare, so many low income families are struggling.

Triple chocolate brownies, the Mothering Sunday gift my 12 year old son made me ❤

The cost of living crisis disproportionately impacts women. Women consistently earn less than men across their career, which also impacts their pension and retirement years.

On my FIRE journey, earning less, and being responsible for each and every cost in the home, has a significant impact on the timeline, and likelihood of becoming financially independent. It’s not like there aren’t exceptions of course. But the system is stacked against single mothers, and in my experience, also has no sympathy for us. The impact of these collective issues on generational wealth cannot be ignored and it’s likely that our children will also struggle, however hard we try.

I was particularly triggered this month by an article about the failings of the Child Maintenance System which is a UK body aiming to ensure that children’s costs are fairly shared after divorce or seperation, and that any alimony is paid in a timely way. To quote the article – 90% of single parents are women… Half of single parents and their children are consigned to life below the poverty line, a penury that 60% of them would escape if fathers paid the maintenance due. The comments on the article went in to the predictable bun fight about access and custody arrangements, as well as not really understanding that maintenance is for the children, not the ex-spouse.

So in addition to the structural arrangements in which I earn less and have more responsibility, I am also supposed to do it alone since the legal system really doesn’t give a shit about holding both parents to account for the financial side.

I would be furious, if I wasn’t so tired.

I have been hyper-aware this week of why I am overwhelmed. And it’s two things – first, the sheer magnitude of All The Things. Work (so, so much work), kids, feeding everyone, administration of the home, family and friends, and anything I need. Secondly, it’s the constant mental engagement – the ‘invisible workload’. Planning, organizing, working around, being in communication, trying to soothe, calm, engage, nourish and play. I have been dating someone who does not have children, and whilst he very loving and caring, he cannot even begin to fathom what responsibility and busyness looks like in my world. That makes me just try to hide it all so he isn’t bored or put off: and that becomes something else I have to be responsible for.

But you know what – parenting absolutely remains a joy and a privelige. I would just enjoy it more if I wasn’t expected to run on empty all the time. Big up all my single mamas this Mothering Sunday. I see you.

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What do you actually need to retire on?

/ Gracie Sunderland / 1 Comment

Last week I wrote about how my net worth is now $950,000, and how I was feeling about it. Do come and join me on Insta where I tell the same stories but with a lot fewer words, and with photos of Barbies. What’s not to like?!

This week I want to talk through what the limitations of my net worth are. Not because I’m ungrateful or want to scare off people who are much earlier on in the journey, but because there are impacts to how we organise a portfolio which means that net worth doesn’t necessarily tell the whole story in terms of what I need to retire on.

So let’s go back to basics. The FIRE approach to early retirement takes as standard the 4% rule: basically, you need to save 25 times your annual financial requirements, then you will be able to withdraw 4% each year in a way which will keep you going for at least 30 years.

Yes ma’am! Photo by Precondo CA on Unsplash

There has been a huge amount of discussion on this in the FIRE community and outside. The 4% rule comes from the fairly standardised view of return on investment in the stock market. The S&P500 for example has an annualised return rate of 7.5% over the past decades. So if you assume inflation gobbles up 3%, you’re left with 4% that you can withdraw before impacting on the capital.

Right now, there are commentators noting that the 4% rule might not work as well in future, as the stock market goes into a period of instability (or, you know, total global apocalyptic meltdown). Others point out that, on balance, the markets always right themselves eventually. At the point of drawdown though the issue is this – if you are retired and you need to spend out of your portfolio, you can’t wait for the market to resettle, and you can’t withdraw based on an average. So if you need to take money at a challenging time when the markets are down, you will either only be able to take out less, or it will diminish your capital.

As an aside, if you are new to this journey you really don’t need to know everything about the stock market but you might want to explore a little – I love Paula Pant’s recent basics guide.

Enjoy yourself! Either by talking about the stock market, or by planning your fantasy life when you retire. I know which I prefer… Photo by Jay-Pee Peña 🇵🇭 on Unsplash

(Side bar – I do my financial planning in GBP£ but calculate my net worth in US$ because it looks better. I know, I know, the games we play with ourselves…)

The reason this matters is because it has a significant impact on how much you need to save in the first place. I worked on the basis that I need £30,000 per year to live on – there are a lot of assumptions and years of budgeting behind this, but broadly, it works. Which? have a fascinating annual survey of how much retirees spend annually, and they calculate that £31,000 per year is enough for a single person to have a ‘luxury retirement’. But this assume the person is older, without the need to financially support children or their own elderly parents. It also says that spending on food and drink dramatically decrease and let’s face it – that’s not going to be me.

To withdraw 4% and have this be £30,000 per year in retirement, I would need to save 25 times that amount. So 25 x 30,000 = £750,000 ($975,000), which is very close to where I am. Using a more conservative approach would suggest using the 3% rule instead, or saving 33 x 30,000 = £990,000 ($1.23m).

There are lots of caveats to this in terms of how you do your planning and what it means, but it is also a stark reminder of where the mindful money aspect comes in to play. It sounds obvious, but the more you want to spend in the future, the more you have to save now. This also means looking at paying down debt, or paying off your home: basically balancing your expenditure with your planning.

Gather up your courage and do your calculations. Big Shaq is with you!

That means that the first and most important step is to know your numbers. Next week I will walk through my portfolio and some of the challenges in calculating an early retirement age, especially around accounting for defined benefit pensions, and deciding how to treat buying a house vs renting, as well as understanding what each of these options means in your planning.

Until then, I hope you enjoy working through some of your numbers. I’d love to hear from you, here or on Insta, about how it’s going and whether there are any more hacks and ideas I can help with.

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How reaching $1 million net worth (almost) feels

/ Gracie Sunderland / 2 Comments

Don’t forget to join me on Insta! Loving the conversation and energy over there.

So I have missed writing this blog for two weeks. This seems like pretty poor form, especially so early in the year, but honestly it was an act of radical self-care. I was in Kenya for work and took some time to connect with friends and loved ones, and really think about where I’m going. It also made me look back on where I have come from, so this post explores some of the feels I’m experiencing about getting so close to another net worth goal and what it all means. TL:DR – it’s not what I expected.

Lots of people are finding things hard at the moment. The world is (I was going to say ‘feels’ but let’s cut to the chase) unstable and scary; we’ve spent two years away from normal connections; the cost of the day to day is soaring – basically, it can feel like we’re all screwed.

View from my window this morning. No matter how bad, the sun still rises.

I’ve written a lot about gratitude but usually as more of a warm fuzzy rather than an actual practice. But gratitude is the antidote to stuckness, anxiety and fear, so when it feels like the world is screwed it’s the obvious place to go. Then someone on my Facebook asked – is there even any point starting a FIRE journey after 40? After taking a minute to feel sad about all the limiting beliefs society and ourselves live to, I had to answer HELL YES. And it also made me take time to be grateful for how far I have come, and how I now get to encourage others.

There is always a point to taking control of the things in our lives within our grasp. Being mindful with money – or work or whatever – instantly converts those thoughts and activities to a meaningful engagement with the world. It sounds obvious but getting intentional about your decisions and actions really does make a difference. It is so easy to float about thinking you will get around to something, whilst all the time you are building up a life you don’t want. So – being intentional will positively impact your life, regardless of whether it equates to your FIRE goals.

In preparing to reply to her, I checked my numbers – and realised I am at $950,000 – so almost $1 million net worth.

mmmmmhhhhmmmm

I mean, I pay close enough attention to know I was heading there but changes in the housing market in particular have really made a difference.

Ironically, my first thought was – I thought it would feel better than this.

Hear me out. I worked my backside off to get here, and I really am grateful. But perhaps there is something about having an iconic goal, and one which is actually a proxy indicator rather than the goal itself, which doesn’t feel that special? It might also be hedonic adaptation – if I went from zero to this, perhaps the feels would be different? Or perhaps I’m just an asshole.

I will run through my numbers properly next week but I also note that this net worth is not enough to retire early on: or at least it isn’t in the portfolio I have which is very largely pensions and real estate. What it does give me though, is a sense of achievement and possibility. What I need to guard against now is the hedonic treadmill and striving for more and more. And also against being ungrateful to the point that I don’t even smell the roses.

And I need to get back to what really matters. My two weeks away highlighted to me that I am less prepared to keep waiting and making compromises than I have been to date. Hoping to pile up some more money when it isn’t even making me happy – and I have enough to be financially secure to the point where I can think about taking risks – is starting to feel like the wrong bargain. But that feels like a success. I started this journey wanting to make FU money. Maybe I’m just a lot closer to saying FU.

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New Year 3: Paying yourself first

/ Gracie Sunderland / 2 Comments

Firstly – huge thanks to everyone who has joined me on @brilliant_ladies_money over on Instagram. It has been eye opening for me to post every day over there, and really inspired me to connect with the FIRE community in another way.

Secondly – I know we are getting close to the point where you have to stop saying ‘happy new year!’ January has been smoke this year and it’s almost done. But I wanted to carry on with the series about planning for your money, and to talk about the step after you work out your basic outgoings.

Last week I shared how to audit your fixed costs: all the money that you know for sure has to be made and spent to keep the wheels on. This week I want to introduce the idea of paying yourself first. Basically, this means mentally going straight from fixed costs to your saving goals, instead of going to work on your discretionary spending budget.

It can be hard to start, but waiting for things to sort themselves out is harder. Photo by James Lee on Unsplash

There are a couple of caveats with this. If you are living on the breadline or only just making ends meet each month, then this method is not likely to suit you. I really want to recognise that so many people are struggling in these hard times: the impact of prices hike in the UK where the rising cost of living is now a crisis for people who are at the ‘normal’ end of the income spectrum is shocking. I will reflect on this – and how to cope – in future posts, but for now I just wanted to recognise what is going on in the world. Secondly, if you have struggled with controlling your spending in the past, you might be better off working to a zero-based budget to tighten the reins. Again I will talk to this in future posts, but for now I wanted to reflect on how I am planning my own money for 2022.

Working out how to ‘pay yourself first’

You know when you get paid, all those good intentions about saving or paying off extra debt seem to get pushed to one side? Bills get paid, the monthly take away gets bought, and then things just sort of slide. And this happens over and over again, even when people’s incomes increase.

This is often down to two things: hedonic adaptation, and Parkinson’s Law. Together these basically mean that as you make more money, your perceived needs and wants expand; and if you have money to spend, your needs will expand to spend it. The only way to overcome this is to be mindful with both your money, and your wants and needs and plan accordingly.

Get that pot ready! Photo by Towfiqu barbhuiya on Unsplash

Set your self payment plan

Once you have worked out your fixed costs as a percentage of your take home pay, you then know what you have left to play with. In my case I spend 65% of my income on the fixed basics, leaving 35% for everything else – whether that’s groceries, holidays, or savings.

For the last few years, I have been trying to save 30% of my income. Since I pay a healthy amount into my pension pre-tax – the equivalent of 15% of my post-tax income – this has been easy to surpass. But in 2022 I want to consciously try and save 20% of my take home pay. Realistically this will mean cutting back in terms of spending. But for me the mental exercise of setting saving goals and sticking to them is more doable and inspiring than setting a tight budget and then saving what is left. They amount to the same thing, so it will depend on what turns you on as to which is useful.

Saving 20% as standard

I calculated that I have £7,500 as monthly take home with £2,538 left after fixed costs. This means I should be saving £1,500 per month. Currently I do the following:

SIPP personal pension £    300.00
ISA savings £    500.00
Children’s’ ISA £    200.00
Children’s’ Junior Pensions £      50.00
Emergency fund top up £    100.00
TOTAL £ 1,150.00

I also overpay my mortgage by £500.00 a month which goes mostly to capital so I count that in my mind when I think about savings.

Planning for the future. It looks beautiful. Photo by Dawid Zawiła on Unsplash

So with a total of £1,650 I am at my 20%. I am fine with keeping to that amount but I will review whether I should be paying off my mortgage or focusing my savings in a different way this year. I will talk more in future about options for savings and investing, and how to make those precious parts of your income work for you.

Next week I will talk about the spending part, and ways to look at how to best use the rest of my income. There are lots of ways to do this which facilitate planning for bigger or less regular costs like holidays or repairs. But once my savings goals are set, I feel much more in control.

Let me know how your financial planning is going! And good luck with this exercise, I hope you found it useful.

Radical subversion: radical self care

/ Gracie Sunderland / 2 Comments

This week I was very much enjoying Tanja Hester from Our Next Life’s piece about whether it’s ‘Time to Retire FIRE’. Whilst she has been one of the founding parents of FIRE and feels much more of the social movement than someone like me who is on the periphery, she made a lot of interesting points.

Firstly, she examines how FIRE has been taken over by some loud voices who are really about making a lot of money as quickly as possible, and points to the proliferation of expensive courses, often run by people whose sole credential is that they say they don’t need to make money. Secondly, she gives a timely reminder about why so many of us got into FIRE in the first place: not to make as much money as possible, but as a way out of a capitalist system which isn’t working for most people.

For me, FIRE is both an act of radical suberversion and of radical self care.

I have a long term vision, but it’s the journey that matters...

Radical Subversion

So – the evidence suggests that the system we have currently is unfair. The poor are getting poorer whilst a tiny number of rich people get richer. The UK seems to be a post-apocolyptic hole in the ground where we can no longer even talk about whether children should not be hungry without it being seen as a political hand grenade rather than a discussion about basic humanity. The pandemic has knocked a lot of things over the edge, and there seems to be a lot less compassion about as well as a lot less money.

I’m not an anarchist, and I’m not anti-wealth – one of my favourite people is a ‘wealth manager’ and I don’t like him any less for it. But I need to find a way not to just criticise a system which is devestating to so many, but also to live on the outskirts of it. For me this means: mindful spending and engagement with how I use my money; making that money as ethically as possible; opting out of capitalist competitive fuckry; and using my finances and my other resources to make the world better for other people. I am hardly living in a commune and weaving lentils, but there is an extent to which I am able to opt out, and ironically part of that opting out means having enough money to make different choices.

If you’ll excuse another music moment, Sauti Sol start off by singing about wanting to be rich then move into wanting to be free, to be remembered, to be in place. If you remove the money from that equation, the dream remains.

Enjoy the small things….

Radical Self Care

If you grew up broke like I did, then you know the impact of financial stresses. I’ve written before about the relationship between money and mental health but there is a bone-cracking exhaustion about constantly having to think about money, how the bills are going to get paid, and what’s in the fridge. I suspect that benefits levels in the UK are set at a level where people can just scrape by but to do so takes up so much energy that we don’t all rise up and burn. it. down.

I get fed up with the idea that self care, especially for women, is about going for a massage. Surely the idea is that you really, really take care of yourself? And this means creating a solid foundation on which to do all of the other things that are important to you. If you are financially secure – not rich, but secure and confident in your own knowledge – you are free to make choices. You can choose when and how to work; the kind of relationships you want to have, with who and when; how your children are brought up; and how you bring your light to the world.

What could be more radical than prioritising yourself and owning your decisions so that you can shape your own life and the world around you?

I don’t have any great insight into what’s happening to the FIRE movement, I think because I found the part of the community that really speaks to me, and it’s like having an extra group of mates who understand you and cheer you on. But if you’re new to these ideas, I strongly recommend thinking about what brought you here – and where you want to go.

Thank you fortune cookie!

No less than the stars

/ Gracie Sunderland

So I haven’t written for the last two weeks, which is bad because part of my commitment to this blog was about learning to – well, learning to commit I guess, which might not be my natural talent – but also about engaging with the practice of writing rather than focusing on outputs.

I have been super busy with work and was assuming that was why I hadn’t written, but being super busy with work is a) normal and b) an unacceptable excuse. I loathe competitive busy-ness and everything that comes with it – the toxic showboating; the tedium of having someone spend time that could have been better spent doing the damn thing telling me why they can’t; the letting people down and excusing it away.

Anyway: safe to say that it wasn’t work. I’m not sure at this point what kind of internal transformation is going on but I feel like a snow globe that has been shaken up, and I’ve been busy in anstonishment that my soul is dancing in the glittering starlight.

ALL the glitter: Photo by Luke Besley on Unsplash

I spend a lot of time thinking and writing about how to get through challenging times: the small habits, the next right step, the power of faith and of looking back at where you have come from to really understand how high the mountain was that you just climbed. I know – from my trust in God but also from the data – that brighter days are coming. But I cannot tell you how astonishing it is to find that brighter days are actually here, and I am not sure quite how to react.

Everything I profess to believe, though, tells me to be grateful for it but maybe not be surprised. And not to freak out when something feels too big or good to be true any more than I should freak out when the bad stuff feels overwhelming.

In the words of the Desiderata ‘You are a child of the universe no less than the trees and the stars; you have a right to be here’. I fully believe this but I would take it another step – you are no less because you are the stars. Science (actual science, not The Lizard Times) agrees, saying that ‘almost all the elements in the human body were made in a star and may have been through several supernovas‘.

Reach for the stars because you are the stars: Photo by Phil Botha on Unsplash

What does it mean (and indeed you might ask, why is this relevant to a blog on FIRE? Though if you are asking that I cannot imagine it’s for the first time…)?

You don’t know what is coming to transform you, nor what you will look like after you’ve been through the fire. And transformation comes in all kinds of guises: from lightening bolts to erosion: from a life-changing medical diagnosis to unexpectedly and outrageously falling for someone.* You can plan for things but you can’t control it all. Yes there is data, both yours and that which comes from research or the world, your friends, the internet or whatever, but it won’t all be applicable. And even if you can know how things will work out, you can’t know what your own metamorphasis will look like. You just have to trust in the process.

So what it means is: I am not afraid. I’m not afraid or ashamed of the bad days, and I’m not afraid of being transfigured by the bright lights either. I can know that God created me and I will go back to Him: the circle never deviates from being a circle, things just look different depending on where you are. All you have to do is turn your face to the stars and marvel. That’s where you came from. Imagine who you might become.

*All examples in this blog are completely random

Health, happiness, peace and prosperity – L’shanah Tovah!

/ Gracie Sunderland

This week we celebrated Rosh Hashanah, the Jewish new year. It celebrates the day the world was created, but also the time of year when G-d writes our fate for next year in the Book of Life.

It’s basically a period of reflection – what did you do in the last year? How did you act and was it in alignment with your values and what you want to see in the world? What do you want for the new year, and how to you acknowledge and make amends for – or repent for – times you weren’t so great in the past?

L’Shana Tova!

The thing I love is that after this process, we all get given another chance. In the 10 days between Rosh Hashanah and Yom Kippur (or the Day of Atonment) there is a time for reflection. Whilst the idea of repentence in a spiritual sense isn’t for everyone, the concept of recognising what we have done wrong, and trying to make amends, is very much part of human transformation. From religious practice to the 12-step programme, asking for forgiveness and making changes are a valuable process.

It got me reflecting on how transformational it can be to forgive yourself. In the FIRE space, as in life, so much of the focus is necessarily on changing behaviours. Whether it’s looking at what matters in your life and trying to live from that place, or finding small habits that you can integrate in to your life, it requires change that starts with you.

Forgiving yourself for whatever has gone on previously can also be a way of taking back your agency and a sense that you are actively participating in everything going on around you. I don’t mean a sense that you control everything, but being able to make changes requires a belief that you are not just being buffeted by the waves.

But forgiveness is more than that. Forgiveness for me means really accepting where I am, and working from that foundation. Or in the words of Lily Tomlin, it means ‘giving up all hope for a better past’.

We have all reached our financial, social and emotional state based on previous circumstances, and our own decisions. I have written a lot about structural inequalities so it’s not like indivduals are equally able to create their circumstances, but we are all players in this game.

For me, I have to keep working on a couple of areas. And it’s something that does require work, rather than being something which is a one off. As with everything there are complex emotions involved so sometimes a trigger sets me off. But the main things are:

  • Forgive myself for the choices which led to being a single parent. I know society blames single parents for pretty much all social evils, but I mean here being ok with the fact that this is where I am. Whilst some people, for whom I have huge respect, become single parents by choice, that wasn’t my hope. And a lot of our struggles are based on being a one-parent, one-income family. But forgiving myself means not hanging on to what might have been, and moving on in a way where I can appreciate the blessings of our set up intead.
  • Forgive my dad for the financial situation I grew up in. So this might be over personal but my parents divorced when I was young, and my father, who was financially abusive, managed it so we ended up with very little. We were made homeless after he sold the house out from under us, for example. Sometimes when I see well off friends being supported by their parents I get jealous: this might be equally true if we just grew up broke since generational wealth is such a key sructural factor, but the decisions my dad made definitely add a layer of bitterness. Forgiving him allows me to just move on from it all, and deal with the hand I was dealt – which is one with so many other privileges that are much easier to appreciate once I moved on from focusing on the past.
  • Forgive myself for other poor choices. Like, I wish I had started a pension as soon as it was an option. I could definitely have started saving earlier and more; I could have worked out how much work my first house needed doing and been better prepared. I could have consistently made healthier choices. But I didn’t, and so I have to work from here rather than ‘what could have been’.
In the words of Frozen, Let It Go. Photo by Brett Jordan on Unsplash

So – what is holding you back, and can you get past it with a bit of reflection and forgiveness? Maybe not, but starting from where you are rather than where you wish you could be might be a much more comfortable journey and one where you can also celebrate what you do have, and all you have achieved. I bet you are amazing. How can you love that about yourself?

Frugal back-to-school planning

/ Gracie Sunderland

Ah September. Even though here in Denmark the kids went back to school in August, this still feels like the real back to school month to me. I always love this time of year anyway, the slight chill in the air but the chance of gorgeous late summer weather, and that brand-new-start feeling.

But it’s also a point where it’s easy to rack up costs, so I wanted to share a few ideas about how to save money.

And off they go! Photo by Deleece Cook on Unsplash

1. Work out what you need

Sounds obvious, but check what you need before setting out to organise it. Look up your school lists of needs and supplies, and check if they are all needed at the start of the year. My kids’ school asks for some strange things like boxes of tissues (and I always think … really?) but they don’t need text books etc thankfully.

2. Shop at home first

A lot of the things you need you might already have, especially if you have more than one child. Especially stationery where I feel like I have drawers full of pens, crayons, rulers and whatnot. You probably don’t need to buy new lunchboxes or backpacks, especially if you had good quality to start with. I saw a post on a FIRE site about a woman whose 25 year old daughter still uses the backpack she bought her in eighth grade – now that’s getting your money’s worth.

3. Then shop second hand

I put posts up specifically on the school Classlist when I need items for the kids, on the grounds that if mine need it, probably someone else’s will have too. My big things in September are rain and winter gear, given that we are in Denmark, and I bought from Classlist last year and from eBay marketplace this year.

Not my kid, but this is what back to school might look like. Photo by Deleece Cook on Unsplash

4. Organise a swap

My son finally has feet bigger than mine, but he seems to go up a size every few months. Since he plays a lot of sport this means new shoes, PE shoes, football boots and rain boots every. single. time. I refuse to buy any of these new but was struggling to find them second hand, so I worked with the school sports co-ordinator to organise a swap. It was really fun – we had all the boys (and it was mostly boys) bring in their old sports shoes and take pairs in their new sizes. It wasn’t great for the eldest boys with the biggest feet, but it was great for everyone else!

5. Use it as a teachable moment

The first part of this is for you to not get caught up in the hype yourself – it really doesn’t matter what ‘all the other kids’ are getting or doing. But then make sure your kids understand this as well: not just that spending wisely is a good idea, but that spending wisely also means caring less what other people think. My son came home last year and told me he was the only kid with a second-hand laptop, and it was a good time to talk through our values on things like consumerism, brands, tech waste, and how we treat our peers, as well as money issues.

6. Plan a budget for after school or clubs and stick to it

Extra curricular activities work differently in every school but dear lord they can add up to a huge expense. If you have to pay for extra-curricular activities, work out what you can afford and then be prepared to stick to it. I have various rules about clubs which the kids also clearly understand: if they sign up to something, you must do it for the period for which I have paid for it; they have to do at least one local club as well as those at school so they make local friends; and they have to do one thing which isn’t sports. But this is definitely the biggest expense for us in terms of new school year.

Photo by Oliver Hale on Unsplash

How has your back to school planning been going? I’d love to hear from you!

Budget Check In: May

/ Gracie Sunderland

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!

Budget Check In: April

/ Gracie Sunderland

Ah April! Season of – well, we’re in Denmark, so season of sunshine plus snow showers plus beautiful blossoms whilst still having to wear a scarf and gloves. Personally it has been a mixed month as well. My step dad had an accident and fell down the stairs, and whilst he’s fine apart from a beard full of stitches, it has opened up the conversations about how we are going to collectively support my parents as they move into their next phase of life. On the other hand, easing of some lockdown restrictions and a change in weather means I feel a little bit less like a rat in a cage. So overall, onwards and upwards.

The start of a new financial year – summer is on the way (sort of)! Photo by Waldemar Brandt on Unsplash

Budget wise, it’s been a mixed month. My daughter’s birthday is in May, and with the reopening of things – or at least the expectation of reopening – my thoughts have turned to booking in plans for the summer. So whilst I didn’t really overspend for April itself, I have spent a lot of money on May-July. We did have one day where the malls reopened, and we went shopping which is unusual. I felt so giddy: look at all the shops! Look at all the lovely things! What if we have to get stuck at home AGAIN and we haven’t bought knitting needles!? So we managed to spend about £60 with no plan. And then we went back to avoiding malls.

Item Monthly BudgetSpend April% of monthly budget
Childcare costs £           1,100.00 £       572.7152
Car (insurance, tax, petrol) £              125.00 
Charity £                 66.67 £          14.8822
Eating out £              120.00 £       167.57140
Entertainment – subscription £                 50.00 £          84.97170
Entertainment £              100.00 £          17.7318
Kids – extra curricular £              250.00
Family £                 50.00 £       183.85368
Groceries £              400.00 £       736.91184
Holidays  £              300.00 £    2,154.87718
Insurance £              200.00 £       127.0064
Personal care £                 30.00 £       231.84773
Shopping – general £                 25.00 £          60.12240
Shopping – gifts / birthdays £                 58.33 £       301.31517
Shopping – clothes £                 29.17 £          30.73105
Rent and Bills £           1,500.00 £    1,500.00100
Transport £                 41.67 £          87.80211
Utilities £              200.00 £       193.2297
TOTALS £        4,645.83 £    6,473.92 

So, once again I overspent my budget, spending £6,473 against a budget of £4,645:

  • The majority of the addition was holiday costs where I spent £2,154, making the non-holiday total £4,319 which I don’t feel too bad about. That is a LOT less than I spent last year because I wasn’t bounced into booking whatever holiday clubs were left. It covers six weeks of holiday clubs (three per child) doing a mix of swimming, football, trampoline camp and a STEM camp for my daughter which looks awesome. It also covers flights to the UK and a week’s Air BnB for me to go and spend some quality time with my friends which, let’s be honest after 14 months at home, I am desperate for. So I am pretty pleased. I will need to hire a car, and spend some other bits but that should be the bulk of the holiday spend. All in all though I definitely under budget for holidays and I will need to make a plan since I have spent the entire annual holiday budget.
  • I spent again on personal care including visits to the dentist for all of us. 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. For now I have lovely clean teeth and a sticker which says ‘I was brave at the dentist’.
  • I spent about £300 on gifts which is mostly for my daughter’s birthday, but included a few things for friends and family who are far away and having a hard time. I try to concentrate on being lovingly in touch with people by phone and message, but sometimes a little something in the post can make a big difference, so I am ok with spending money here.
Getting that giddy spring feeling. Photo by Alexander Schimmeck on Unsplash
 Monthly saving planApril% 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 saved the removal costs and some extra for getting things painted etc. So there is nothing amazing in terms of savings this month but 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%. In theory though I should be able to to save more over the coming months since those big holiday costs are paid out, so I will make a plan to do so. And head back toward more conscious spending once the thrilling spring feelings start to wear off.

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

More Copenhagen spring beauty. Come on, you feel it too!