single mum

Playing the long game

/ Gracie Sunderland / 1 Comment

A lot of working on finances is about playing the long game. What do you want now, vs what you want later? What does choosing to spend that money – on a latte, a pair of shoes, more expensive rent – mean for the future?

For me it has also been about learning patience. Being able to create new habits, and do the same good things day in and out even when I feel like I really deserve a break. Making daily good choices: packing a lunch for work, checking bank balances (but NOT my savings – more on this later), looking up free events so I can take the kids out at the weekend without blowing the bank.

The monthly good choices are easier because they’re automated: bills, savings, mortgage over-payments, pension – they’re good habits because I don’t get a chance to overthink them. There’s lots of good information about automation in the FIRE movement: as the Mad Fientist says, “Figure out your investing plan… then take yourself out of the equation as much as possible so that you don’t get in your own way”.

Photo by Elena Koycheva on Unsplash

They are good habits that have taken a while to form, and I will talk about how in coming posts. This week I have been reflecting on them in the middle of the stock market freefall where my savings (that I have proudly scratched together in the years before my salary increased) lost 10% during about ten days. I know, I know – they’re only losses if you realise them by selling out too early. And you should only invest money if you plan to spend it in a long enough time frame to see it through ups and downs.

So I have tried to add some more good habits. Leaving the money alone, not even opening the lid to peek in and see what’s going on. Carrying on investing and saving, and planning for a brilliant future – even if this week it feels a little bit further away.

Perchance to dream…

/ Gracie Sunderland

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.