Getting back in the budget saddle

I missed posting last week, mostly because I was nestled in a shame spiral about my spending – fun! Self reflection is always challenging, for me especially when it’s something I think I am doing well at. I started this blog from the perspective of ‘I am largely sticking to my budget’: ‘I am in a good place and want to get better’: ‘I’ve a five year plan and few doubts.’

O. M. G.

So it’s partly been the habit-trashing of COVID and the change to being without additional help from my family, contact with friends, or regular travel with work. But it’s also been just taking my eye off the ball. I realised last week that I don’t really track my budget any more as I am spending, something which happened when I started using my Danish account instead of my Monzo card which tracks all spend for you against a pre-set budget. Instead I review spending a few weeks after month end, and it becomes an inventory of my stupid.

After some initial reflection last week I concentrated on getting the two gnarly issues sorted from my budget. The first was getting a realistic view of the utilities budgets. In Denmark, there are no price comparison websites and few options when it comes to utilities providers. A proper review of these costs show I spend £405 per month on utilities – almost £5,000 per year, and significantly under what was in my original monthly budget. I also looked at kids clubs and holidays – action there is TBD since the options range from cutting it altogether to reducing it significantly, and this can only be done through more of a lifestyle prioritisation exercise. It will also depend if my parents can help out with holiday childcare again post-COVID – whatever post-COVID looks like…

It was also useful to give myself a break and think about self-talk on these issues. I love Brené Brown and she has some great advice on money and shame. It’s important to note that as a single mum, whilst I can have conversations with others, I am responsible for all the decision making – and praise or blame. And personally I find that the FIRE community can be quite light on failure, sending you back to Dave Ramsay if you get stuck in early stages. However, since shame spirals are characterized by feeling like everything compounds the original feeling, I can also believe this is my perception. With that said, I’m sharing the tips I found most relevant:

  1. Show yourself compassion. Interestingly Harvard Medical School’s paper on self compassion covers a lot of the micro-habits I have been trying to put in place recently – from journaling to meditation. The tips about ‘comforting your body’ also opened up other ideas. As Jen Sincero says, we can treat our bodies like a windsock flailing behind our brains, doing ourselves harm but also missing opportunities to improve and support ourselves in simple ways.
  2. Be courageous. For me undertaking the calculations and spending reviews – then sharing them on this blog, are courageous. To be even more so, I need to start tracking spend during the month to look it in the eye on a regular basis, and be brave enough to stop spending, say no, or course correct.
  3. Celebrate the small wins. This I really struggle with. Some of the small wins are really small, and when they turn into habit I don’t appreciate them anymore. Examples like packing lunches for work, cycling to the office, choosing free weekend activities and so on don’t get noticed. Here I need to create small goals such as no-spend days – or indeed just sticking to the damn budget for things like eating out – and celebrating those.

So – aluta continua! How do you keep going when things aren’t going well?

Image credit: https://alchetron.com/A-luta-continua

Budget Review: August 2020

I already wrote about spending during the summer holidays (June and July) so this post covers August. My plan is to look at September in the coming two weeks, then that ties up quarter three.

It is completely obvious to me that I am behind in my budgeting – that’s one of the reasons why it’s taking me so long to prepare and post my monthly budgets. There is definitely something where the thinking about FIRE and feeling like I am On A Path means that I don’t actually need to do anything else. I wrote at the start of this blog about being Fake Frugal and I am sorry to say that I am definitely still in that place.

I *do* reuse teabags – but I also spend on my kids extra-curricular activities without thinking twice. Image credit: Ray Massey | Getty Images

Looking at my numbers for August, I was justifying all the overspends. Oh – it was my birthday! Oh – it was my best friend’s 40th and a rare peaceful moment during COVID so I flew to the UK. Oh – my daughter made the swimming team so I had to pay the fees. I spent HOW MUCH? Oh dear…

 Monthly Plan Actual
Charity £                   30.00 £                           83.15
Insurance & utilities £                277.00 £                         914.22
Childcare £             1,000.00 £                     1,000.00
Groceries £                300.00 £                         546.92
Holidays £                300.00 £                     1,960.52
Transport  £                300.00 £                         307.71
Entertainment £                200.00 £                           81.91
Eating out £                175.00 £                         328.98
Rent  £             1,500.00 £                  1,500.00
Family  £                         586.67
Personal care  £                         117.53
Shopping  £                           16.57
Clothes  £                           60.50
 TOTAL £                 4,082.00 £                     7,504.68
OH MY DAYS WHAT DID I DO? August spends.

What are the lessons here?

Stay courageous: I almost didn’t share this budget because I spent almost double my already healthy budget. But what’s the point in making it all look easy when it isn’t?

Stay grateful: I wrote last week about gratitude and first off, I am grateful that I have the income where I can do this and not be in debt. But I need to also stay grateful and focused about what else I have planned for my life – early retirement, more time with the kids, and not working a job to pay for things I am only barely aware of.

Work with what is real not what you wish is real: The old phrase ‘champagne tastes, beer budget applies to me, but Denmark costs, UK budget. An example is that I’ve worked really hard on grocery spends – shopping in budget supermarkets, meal planning, cooking from scratch, and going in with a list – but I can’t get it down to my original budget. Whilst I could probably tweak it some more, I don’t think it’s going to be at  £300. I make packed lunches for all of us five days per week, and this saves eating out money but eats into (see what I did there?!) grocery spends. Ditto on utilities – I thought this was based on the real costs but there have been a couple of things which were news to me during our first year. If I am not working to a realistic budget then there is no way I can even try to succeed. So it becomes an exercise in futility.     

Action has to follow intention – regular, conscious action: I have known for a while that I need to spend some time setting up all my spreadsheets so that they are meshed together. Where I have money budgeted monthly but to be spread out over the year (e.g. I pay my car insurance annually but budget monthly) including holidays, I can’t tell at this point if I have stuck to the budget (clue: probably not).

So – on we go. Better to be honest and look it in the eye than write nice posts about intentionality without tackling the basics! As we head into the last quarter of the year, I need to look at the budget again, particularly annual costs and things like putting ceilings on kids’ extracurricular activities. Aluta continua!

Getting intentional: maximise time, and other limited resources

So I feel like I haven’t posted much recently about actual finances, and I promise to come back to it – I’m finishing off a review of my September and Qtr 3 total spending, and will share more detail and reflections on that in coming posts.

I also firmly believe that the FIRE discussion is about so much more than finance: it’s about working out what matters in life, and how to live consciously. Paula Pant is a total star in helping think this through and her Afford Anything podcast is regular inspiration to me. As she says, “You can afford anything but not everything”. Anything which is a limited resource – so yes money for sure, but also time, focus, commitment – needs to be managed conciously in the way which gives you the best version of yourself.

Paula asks two questions and uses these as a way to dive deeply into a range of subjects. Recently I found myself going back to these:

  1. How can we make smarter decisions about our money, time and life?
  2. How can we align our daily behaviors and habits with the lifestyle we
    value most?

Whilst question 1 is something I spend a lot of time on, question 2 has been more lacking. There are moments, as in my exploration of my Beauty Habit where it has come more to the forefront. In addition to asking the question “Do I need to spend money on this? What does it add to my life?” I also asked “How does buying this align to my beliefs, about the planet, and about how I value myself?”. But building this question into a more regular habit is trickier.

I’ve talked about two books recently but they have really shifted things for me in the past few months: Make Time by Jake Knapp and John Zeratsky is first. There’s a lot of information in this excellent book (and blog) and to be honest I have acted on maybe 10% of it. Key things have been under their pillar of ‘laser’ intensity – getting rid of white noise. So I have trimmed through email subscriptions, apps, meetings (blimey I wish I could do this with more meetings, but working out what would be career limiting, and seeing how to model and incentivise keeping meetings to an essential minimum with my team). Basically decluttering the things which take up my time when I don’t see the value. Make Time also talks a lot about highlights which speaks directly to where I struggle in reaching my goals: finding the activities which fall between long term goals and short term tasks. Spending a few minutes in the morning planning a highlight around these activities, even if it’s focused time with my kids, means that I start the day with something in mind that really matters.

The other book is Personality Isn’t Permanent by Benjamin Hardy. The style doesn’t always gel with me, but the overarching message does – that we are not locked into being “who we are” and that the actions we take today, however small, really do build the futures we want. If we are unintentional, then we can also create futures that we DON’T want.

Today really does create tomorrow – Image from Benjamin Hardy’s Blog.

As with many others, Hardy talks about journaling and setting goals daily. I’ve always totally believed in this idea but never found the time or motivation to do it myself. I read lots of brilliant things about Morning Pages, but the caveat that these should be THREE pages of longhand thoughts ensure that I never felt I could fit it in. Taking the ideas from these two books I started a practice last month:

  1. Get up 15 minutes earlier. For me this is 05:30, which is early but the fact that I only had to add 15 minutes makes it less painful.
  2. Take a shower, and get dressed.
  3. Go downstairs and before doing anything else (even turning on the coffee pot) sit down at the table.
  4. Meditate for 5 minutes. It’s not a lot, just a little deep breathing, a little silent prayer.
  5. Write however much I want in my journal. It’s been about 1 page per day so far. Start with gratitude – what am I thankful for?
  6. Then write a highlight and some goals for the day.
  7. And when it’s done, turn the coffee on and go about my day.

It’s a small practice but I feel the benefits. Best of all I don’t even think about doing it now – days I have slept a little late (or had one glass of wine too many the night before) or woken up with a ton of urgent work to get on with, I still do it. And I definitely feel the benefits.

What are your small tweaks which are making you edge closer to your goals?

Beauty and cosmetics spending, the personal assessment

Last week I wrote a post which has been on my mind for a while about spending on cosmetics and the beauty industry, and how this relates to my financial independence journey.

There are some great bloggers working on the intersection of FIRE and working toward zero waste: I particularly love Tread Lightly, Retire Early. For me, so much of FIRE is about living consciously and thinking always about what matters: and there are a lot of intersections there with low waste or environmental living, where ‘what matters’ includes a bright future for everyone on the planet.

So: having thought about this in general, I completed an inventory nothing that this is the slimmed down version – when we moved to Copenhagen last year I probably got rid of half the total stash. Then I thought about how it applies to me and came to the following conclusions:

  1. Beauty and cosmetics can constitute clutter – just because it’s potentially useful, doesn’t mean it needs to be taking up space. I did an inventory of everything we have in the house, and it’s A LOT. I’ve been on the MumsNet ‘beauty hoarders’ threads and whilst people encourage each other to use up products, there is a definite sense of ‘so we can go and buy more’ (and this isn’t me knocking the lovely people on it, it’s just I find the threads give me more ideas about things I could buy rather than really knuckling down to buy less). As an expat I got into a habit of buying things I might not be able to find, and schlepping them about with me. That’s a lot of extra effort, packing boxes, money spent on shipping and all the rest of it.
  2. I have a lot more than I think. After realising that it can be clutter, the inventory showed me that we have A LOT of stuff. Looking at blogs etc on this issue I realise it’s a lot less than other people might have, but that’s not the point – for my needs and wants, it’s too much (see the EIGHT pictures above – do I seem to have a worry that Dove deodorant will never be available again??)
  3. Telling yourself ‘ah I’ll use it all, no bother’ might be right – but only if you then stop buying stuff. I will use all those 11 deodorants, but in the meantime I surely don’t need any more. My weak spot is travelling and forgetting something, then buying it again (hello both the deodorants which were bought to come in under the 75ml limit for hand luggage). Which reminds me of:
  4. Stupid spending rules are stupid. In the same way that food eaten off someone else’s plate still has calories (sigh), cosmetics bought a) in the airport b) in a country where they are cheaper than where you live, or c) on a three-for-two offer , is STILL spending. And if you don’t need it, you don’t need it. When we lived in DR Congo where paracetamol were $20 a pack it made sense to buy a lot of packs for 40p when I was in the UK. But that approach has become a habit which needs breaking.
  5. There are other ways to treat yourself. I definitely link buying luxury cosmetics to treating myself in such a small way that the spend doesn’t matter. This is obviously nonsense – I would never apply the same logic to a diet and a doughnut. I love this post about the treat yourself culture, and am actively looking for alternatives that really do make me feel better.

Finally, I kept track of everything we used as a family for three months. All the plastic waste is below and it’s so much less than I thought. 1 each of shampoo, conditioner (and a 2in1 which has been on the go for about a year), shower gel plus my son’s shower gel, deodorant, face wash, moisturiser, toothpaste and (plastic free) cotton buds. There are also a couple of minis which have been lying around and got used up because I had in mind to finish them. My conclusion – this represents the stuff that I use. The other millions of things, aren’t really essentials, and are therefore things I could live without.

Not that much? This is about £20 worth of stuff. But the plastic will still live on for decades…

A final word here on beauty advent calendars. A huge box of my stuff is from these advent calendars, where you open a door onto a mini product for every day of advent. I loved the idea of them – a chance to try out new things, and see what else I might enjoy, plus that feeling of ‘treating myself’ every day for what can be a difficult month. But the number of things I have left is a testimony to how little I need this and the most basic analysis tells us that both financially and environmentally these can’t be a good idea. This year my kids are making me a picture advent calendar instead – and if I really miss it, I can just choose something from the existing box of unloved miniatures.

Ethical living and FIRE

I had a question from a reader about my ethical stance to investing and thought it was such a great question I would focus on it for this post. This will focus on my personal experience, with the next one focusing on the background to ethical investing and some things to think about.

What does it mean to be ethical and to be striving for financial independence? How can I get the best returns for my money whilst not investing in things that I don’t believe in? How can I be working toward a better life for my children if on the other hand my money is supporting companies who are destroying the planet our kids will inherit?

Money or green things??

In terms of my own experience, when I was growing up my mum always invested ethically as a family. Well, my family had such huge issues with supporting companies that didn’t align with our values that we didn’t invest at all. Instead our money went into Credit Unions, until Triodos Bank opened in the UK in 1995. With changes to a) my ability to make my own adult decisions and b) the massive increase in ethical investment options, I’ve certainly moved on from that approach.

The ethics of investing – and daily life – are very much part of the road to FIRE for me. Being intentional with money is the first step on the path. What do I want? How does that translate into the decision I am going to make about spending money on this?

Regular daily practice of FIRE, and of ethical living, is about buying less – not about ‘doing without’ but recognising how little most of us really need to add to the things we have to live comfortable, fulfilling lives. There is a link to the zero waste movement (which was again something we did as kids, but was more due to a ‘being broke’ movement). Buying things to use briefly then throw away should be inconceivable, but it’s shockingly common place. Planning meals means we create less waste, as does actively packing leftovers for lunches at work, keeping small vegetable leftovers in the freezer to make soup, and (trying at least) to grow our own. Hand-me-downs, buying second hand, and borrowing things like tools or occasional sports gear from mates or co-ops, all mean fewer things to buy.

Ethical decisions are in all aspects of our lives [Photo Credit]

In the ever-inspiring Your Money Or Your Life, the authors encourage you to question yourself before every purchase not just whether you need something but whether you can take care of it, get value from it, and lovingly pass it on once you have finished with it. These remain great questions, and are easy to ask. If I do need to buy something, how do I plan to dispose of it? What will the impact of that be on the environment, and on me and my time?

In terms of investing, I do invest in ETFs but the solutions here feel imperfect. I have the majority of the UK funds in my ISA in this fund which is available on Fidelity in the UK and is listed as an ethical fund though a quick glance at the top holdings reveals some of the challenges in ethical investing (come back for the next blog post for more on this). I hold my emergency fund in Triodos Bank, which doesn’t have a significant range of products but is best for me for savings (rather than investment).

As ever, I should think it’s abundantly clear but the caveat here is that I am not a financial advisor and share this personal information as food for thought only.

There are so many other aspects to living well whilst living ethically that it’s a topic I hope to come back to. How do you manage these concerns in your FIRE journey? Would love to hear from you!

Courage: beginning!

First up: I’m thrilled this week to share my first ever podcast. I was interviewed by the fabulous Financial Independence Europe podcast, who kindly offered to talk to me about my journey to FIRE as a single parent. In spite of spending a lot of time thinking ‘surely nobody will be interested in this?! Surely my story is too boring / unique / specific / shameful to be relevant?!’ Then I thought about taking the path of courage, one where I dare to be different, to stand out. And I’m really glad I did!

I very much enjoyed the opportunity to talk about my journey, and maybe encourage others in a similar predicament to get started. You can listen to the podcast episode here and do sign up to the FI Europe podcast, it’s one of my go-to listens.

An attitude of gratitude – grin and bear (market) it

Just a month ago I was jauntily planning my future, posting about dreams of building on my small but proudly created foundation. Since then the Bear Market and general chaos-fest of COVID-19 has arrived, and my savings have lost almost 25%. I wrote last week about carrying on with good habits: this week we are on lockdown from schools, the office and all public institutions are closed, and the world feels like it holds a number of possible, uncertain and potentially Armageddon-esque, futures.

So, what are we to do? Other than keep on keeping on?

For this week, I am going to concentrate on all the other things. Firstly, counting my blessings. Yes, I am somehow supposed to home-school the kids whilst continuing to work from home full time. But what is also true is that I will get to spend some much-needed time with the children; that we are well resourced (internet, craft supplies, a garden etc) to manage this.

I also recognise how lucky I am to have a job. I spend a lot of time fantasizing about living with more freedom and growing my side hustles, but right now I am just glad to have a job with a great boss who understands my circumstances and can be flexible whilst I juggle working and having the kids at home. And whilst I appreciate you can never rely 100% on employment, right now I am pretty damn glad to be here.

I have been thinking a lot about people who don’t have this security – the small business owners who can’t open during COVID restrictions; the almost 1 million people in the UK who are on zero hours contracts who won’t get paid if the can’t work. Drops in the stock market and a huge rise in financial uncertainty is likely to hit charitable giving and make 2020 bumpier than it is already. One in 50 families in the UK uses a foodbank (with numbers continuing to increase) but if donations significantly slowdown then foodbanks will be unable to cope and help people in need. Already vulnerable populations are likely to be the hardest hit, so as well as counting my blessings, trying to keep the kids calm (and doing something that isn’t watching TV or shrieking) I’ve donated to Age UK.

Stay healthy and happy, people!

Perchance to dream…

Sometimes the daily grind of being a full-time working single mum can mean that I can feel that I don’t deserve to dream big – I can barely make it to bedtime without letting something drop. And when I read financial independence blogs about ‘living on one partner’s salary whilst saving the other’, it seems so unlikely that it’s a path for me. But this blog is born out of hope, and out of the belief that if I can have got this far, then frankly anything is possible.

So – what is the dream?

If my year of avid podcast listening to the FIRE (Financial Independence Retire Early) crew (more on the background and where to find inspiration – and, let’s be honest, advice about how to do things properly, later) I found two key starting questions:

Why do you want this? What’s your goal?

Yesterday, the fact that my day in the office was rough enough to take the skin off my nose, was enough for me to want to have F-You money. As J L Collins notes in that article, “I may not have known what it was called, but I knew what it was and why it is important.  There are many things money can buy, but the most valuable of all is freedom.  Freedom to do what you want and work for whom you respect”. F-You money means the freedom to make choices; to take time out before burnout, to spend time with my kids when they need me, to pursue other projects. It means taking a job because I want to, not because I have to in order to get the bills paid.

Right now, I can’t see a way on one income to become totally FI. I don’t know if that’s just me being a weenie, or if there is some rational logic in there. But I know that working toward having enough financial security to make different work choices would transform my life, and in working toward that – taking control of my money and making it work for me – is a great place to start. And a place which makes me feel less like a rabbit-in-the-headlights who has to do all or nothing.

How do you think you’ll get there? The five year plan

My five year plan feels ludicrously ambitious (though when I look at FIRE extremers it looks more like someone saying ‘I’m saving up my 20 pence pieces in a jar!’ and blogging about it). A lot of these goals are based on a long back-story which will come in other posts, but for now I want to put these out there. By July 2024 I intend to:

Be mortgage free. I have been overpaying for a while and have £78,120 left. I will also be debating (at length, probably) the reasons to overpay a mortgage rather than invest given low interest rates – and how this relates to my risk tolerance as a single parent.

Have enough in pension funds to bring in £12,000 per year. I paid in two year’s pension contributions at 23-24, then nothings for 12 more years. Partly this was due to free-lancing/taking time off to have kids/being broke, but I could kick myself. More on the detail of this to come, but the figure is based on the small defined benefit pensions I have and pension calculations rather than a ‘sum in the bank’.

Have £120,000 in low cost index funds. This is the combination of my current savings nest-egg – £40,000 – plus maxing out the £20,000 tax free stocks and shares ISA contribution per year.

Achieving these goals means saving about 40% of my income.

So, there are the reasons, and the ambition. Next week, the plan of how to get there.

Wait, what? Handbags?

The idea of the Brilliant Ladies’ Handbag Club comes from an all-women group I used to attend. It was created to help women set and achieve their goals, from cleaning out the attic to getting their start-up on the road. That group was called something else, but my then 6-year-old son renamed it to the BLHC, because just attending made me brighter, happier, and more focused. Since then, I have focused on working out what I want to do with my one wild and precious life – and it turns out the answer isn’t ‘work for a salary’. It probably isn’t ‘do yoga on the beach’ either to be fair – but wouldn’t it be great to choose?

I love the image of the handbag: full of useful tools; creative things like books, postctards, dried out daisies, and colouring pens; somewhere to dive in and finding things I didn’t know were there but turn back up just at the right time. My handbag always has nourishing snacks (and plenty of sweets, because you never know – also spare underpants, because you never know) to keep you going on the way. And a phone and a list of contacts in case I get lonely on the journey.

I’ve spent a year diving into a brilliant community around FIRE (financial independence, retire early) and whilst it’s becoming more diverse, as s British single mother there is only a small amount of it which resonates – which feels like me. So the Brilliant Ladies’ Handbag Club is an online place for me to chronicle my journey, reflect and store all the nuggets of wisdom along the way and share them with like-minded people. If you’re interested in FIRE; taking control of your money, even when things get tough, and in doing so stick it to the consumerist man; dreaming and building a different life; or just looking for some company, then come on in. Amongst the sweeties and the underpants, might be your tribe.