The Piano Diary

glass_half_full

Dear diary and all,

Did the meter readings today and the direct debit has reduced from £359 per month to £274. So a reduction of £84 per month. There are few costs going down at the moment so that is something to celebrate.

May was the first month trying to live on OH’s salary for ongoing expenses. This was partially successful. Some areas of spending which are outside of running costs, eg holidays and related are coming out of savings. We both spent more than our budget on clothes for holidays. We went a bit over on eating out as well. We will need to trim back if we are not going to deplete the savings too much. On the holiday front, we have book a cottage in Scotland for a week in August and invited along DS and GF. It will be nice to spend some time with them. As a result of the holidays, savings are down to £20k. I would like to keep savings above £15k if we can as a buffer. I am ok with spending some savings since we need a break and it helps with recharging the batteries.

On the pension front, the stock market has been falling since the start of March. Overall the movement has been:

£280K + £9K invested (£4.5K per month) - £8k capital reduction = £281K. Need to keep plugging away. The good news is that the £9K invested in this period will have bought at lower prices. So when the market recovers it should show in the overall value of the fund.

Lovely weather at the moment and the Ashes are just about to start so looking forward to the summer.

savingholmes

Well done on the investment.

It will get easier to adjust your budget over time.

glass_half_full

Good morning diary and all,

Woke up early and couldn’t get back to sleep so have brewed some coffee and come downstairs. Its interesting how small movements in the markets translate into significant amounts of money. Of course its just maths but a 1-2 % move is changing my total fund by £3-5K which seems like a lot of money to me. The performance of the funds and shares in the portfolio seem to be really polarised ie some increasing in value significantly and some dropping. One of the shares I bought, after climbing for several months, promptly dropped 10% immediately after I bought it. Anyway, overall there seems to have been a bit of a small recovery so the total is back up to £285k. I know it isn’t a good idea to follow the ups and downs too closely because these fluctuations are normal and what seem like large movements in the short term are masked over the long term.

A decision seems to have crystallised in my mind over the recent days. I was saying to myself that I will give up my current job when the fund reaches £400k, but I have decided that I will go regardless in April of 2025 at the latest. It is interesting how more settled I feel in my mind having made that decision. I realised that it isn’t just about the money. Of course the money is important, but I am confident we can manage even if we end up with less. So finishing in April 25 means giving notice at the end of February 2025 so I actually have a date on which I will give notice which is February 28th 2025. Knowing this date seems to be helping me to deal with things a lot better. I’m trying to look after my mental and physical health and work life balance. I realise now that my job has for too long been the priority and I have put myself second.

We are off to Park run this morning and then I have a 10k race tomorrow which I am looking forward to. Its going to be hot so need to make sure that I don’t overdo it

South_coast

Wow, fantastic decision. I am so excited for you 😀! 

savingholmes

Congrats on making the decision. It will be here in no time.

glass_half_full

Dear diary and all,

The car has just passed its MOT for £100, £40 for the MOT itself and £60 for a small repair required to get it through. This car is 7 years old and has 75,000 miles on the clock. I checked how many miles people think this car should last and the opinion seems to be that it could potentially last 200,000 to 250,000 miles. We are doing around 9,000 miles per year, so it could last another 14 years. I would like to run it for as long as possible, as it is (so far) cheap to run and very reliable. Does anyone else run their cars for a long time and if in the end you change it then why do you change it? For me, the last car was just too unreliable and was starting to cost a lot to keep it going.

savingholmes

I think you reach a natural tipping point with a car when the cost to repair is more than the cost of replacement. That's typically been when I replace... You'll know when you get there.

glass_half_full

Dear diary and all,

I realised last week that I was approaching the 5-year anniversary of this diary so I thought I would take stock. When I started this diary on 28th June 2018, we had a mortgage of £80K and I had a DC pension of £140K. My goals at the time were to pay off the mortgage in 5 years and to aim for financial independence in 5-8 years.

In the end I paid off the mortgage in around 3 years (July 2021). Since then I have been focused on building up my pension fund.

The paying off of the mortgage was enabled by two windfalls/inheritances which totalled £100k.

So the simple maths for the mortgage has been

-£80K + £100K (inheritance and windfall) = £20K. We have around £20K in savings and we have also spend around £15K to 20K on the house since then, so not too bad, I can see where the money went.

The pension fund now totals £285K. I checked my records and I have saved £100K into the DC pension since June 2018 and so the simple maths on this says it has also grown by £45K in capital growth.

Broadly speaking I should be on track to achieve a form of FI by April 2025, so broadly in line with the original time frame, albeit at the end of it (7 years) rather than the beginning (5 years).

Current performance of the funds / shares could be better. With inflation currently around 6.5%, then a return of at least that is required to avoid a drop in value. At the moment, it feels like pouring water into a leaky bucket. As quickly as I am paying it in, it is falling in value.

On a more positive note, I guess its interesting to take a step back over a 5-year time frame. I tend to get fixated on the minutiae and the day-to-day fluctuations. But its good to see that over the longer term we have broadly stayed the course. 

 

savingholmes

Fantastic progress over 5 years. Sad that you lost someone - but good that their legacy helped you practically. A lot of commitment on your part to growing your pensions too.

glass_half_full

Dear diary and all,

The funds have recovered a little. The SIPP is still down overall by 1.6% and £3K so a value of £186K. The other fund is worth £104K as the June £5k investment has just gone in. So the overall total is £290K. The SIPP hasn’t really performed this year so far. Hopefully things will pick up in the second half of 2023. I might make some switches in the funds in the SIPP but I will wait until it has recovered to the original invested value.

Looking back over spends in YNAB over the last couple of months I can see that overall spend has been creeping up a bit. I think the reason has been buying one or two electronic gadgets and items which were wants rather than needs. Need a bit of a reset going forward to avoid allowing the spend levels to drift too far out of kilter. We are coming up to a holiday period so need to make sure we budget for our spends during this time. We usually end up spending a bit more on eating out etc so just need to keep an eye on that. Two and a half weeks left to go before our first week off for the summer.