It's the final countdown...£10k to go

t2rry

what's becoming a fairly regular single monthly update to aid with my thoughts and potential decision making:

I found an extra £150 this month to put to savings at signature item 2, so instead of needing £490 in addition to regular savings during the year to hit target, I now only need to find £340 extra.

That would seem like a snip but it's all very up and down at the moment with house progress.  I actually have another £1,250 set aside that *could* go into the savings target, could go into replenishing the EF as per signature item 3, or it could go towards the house fund, which is currently empty.  I've really ramped the house fund DOWN a notch this year in favour of regular savings but it's proving trickier than I thought for the funds available to keep up with progress.  Realistically that's where the cost of living is showing because that's the first allocation of funds to reduce when the energy bill remains at painful levels (we now owe our supplier about 2 months worth and I'm just hoping the weather turns so we can start to eat into that deficit with the much lower summer usage we usually have) or general spending remains so much higher than we are really used to.

We should both be due a pay increase imminently but realistically that won't scratch the sides of what feels like an ongoing deficit (even though it's not really a deficit because we are saving each month, it just feels like it).

Maybe I should ease the automated savings for a bit and get a healthier and longer lasting slush fund in place rather than scraping the barrel for that every month and finding it lacking

t2rry

One more payday and I'll have over 50% of the £15k savings target for the year.  That's looking good especially after a month where I tried to stop £500 of my automated savings going out due to expenses this month (home insurance and a holiday both this month) but failed as it was too close to the DD date.  It has meant I've had to fiddle the budgets around and I'm pretty close to having found that money elsewhere, so keeping me on track for the savings.

I'm starting to sell some of the things we brought with us in the move that we, after 2 years in this house, now appreciate we really aren't going to use or just don't go anymore, so that's helped and I'll try to do some more to bridge the current gap.  Worst case scenario I have to steal around £150 from next month's budget, which isn't the end of the world.

The additional £5k I think I'll start to save towards soon, we have had pay rises confirmed which should bring an additional £200pcm between us moving forward so that's not insignificant.  For now I'm planning for that extra to go to the house fund, which we've struggled to keep buoyant since I've redirected the majority of our disposable to automated savings, just for a few months I think, to give us a buffer back as it's just a perpetually empty well at the moment and we have plenty to finish off (ideally before the end of this year).  After that I might open another 7% regular saver for it to go to.

It is the only benefit of not getting pay increases in line with inflation, we've had to suck up the extra living costs for so long that any rise feels like 'extra' when actually at best it puts us back to where we were a year ago.  Good psychological trick but I'll take it!

t2rry

I've just discovered that child benefit lands on 22nd May so that's me back in the black for the month.  

Conscious spending for the rest of the month pending holiday (about as cheap a holiday as can be done these days with 4 people)

t2rry

so we managed a holiday for 10 days (abroad) for £1800 all in: flights, insurance, days out, food, travel to & from the airport etc:  I think I'm pretty happy with that, we didn't think too much about spending whilst there and that part came in at less than we've spent historically in that same timeframe so feeling good about it despite it having given my spreadsheet quite a shuffle over the last couple of months to account for it.  We would like another before the year is out but we'll keep an eye out for reasonable costs and if we can't justify it, we won't.

Still on savings track for signature item 2 - now at 49% of that target and half way through the paydays of the year so it's pretty much spot on target, I just need to let the automated savings continue and find a small top up at some point.

House has slowed due to disposable income as previously mentioned but there's enough to keep us busy whilst not spending and it will all get done, just maybe at a slower pace than we've achieved previously but for the last couple of rooms, that's fine.

We are due to get a one off payment each in this month's pay on top of the pay rise, I've worked out after tax & NI, we should clear over £3k from it and I think I'm going to put that straight to signature item 3 as that's a really good chunk of it.  I have thought about putting this to the house but I'm not sure, so it'll go to replenishing the EF and if I change my mind in a few months then fine, but I'll certainly take a few months to let the budgets settle after the holiday months and the upcoming pay rises first, which I've already earmarked for replenishing the house fund for a while.

I've spent a lot of time this year starting to understand our pension situation(s) and I think I am finally getting my head around a lot of it.  I'm starting to pull together a timeline for when we'll be able to access all the different pots and what that means for our annual income at that point.  We will be comfortable once we can access our workplace pensions even at current worth (as in, not including the years we have to add to them) as they already total more than our annual expenditure on home and bills (very aware of inflationary impact).  The part I am going to start working on is how we bring our retirement dates forward, so plugging the gap between when we WANT to retire versus when we can access the current pensions.  I have a SIPP already but haven't ever concentrated on it much and I will do moving forward now, without a goal at present because if I think about how much we need in additional pension pots to retire around 60, it's terrifyingly large so I'm just going to contribute when I can to begin with, with a more targeted approach when we a) have finished the house and b) have emergency funds and slush funds enough to feel secure in them.

The other thing I'm keeping a piece of mind to is the mortgage, it's not small! Though we have a really low fixed rate for another 3+ years but I would like to forward plan for when that rate comes to an end, one way or another.  So I guess at the moment, and for the foreseeable, we need to keep building those savings so we have options!

mark55man

Hi @t2rry

you are doing very well.  I agree that a timeline of when stuff becomes due - and loading with "now" money values and also "future" many values is a great start.  IMHO as a first glance ignoring inflation is OK so long as you are confident your pension will match it.  But ignoring extra years worked will leave you underestimating your income.

The only thing you can do with a SIPP is start!! and then build and let time and the tax benefits (especially if part is at higher rate) help you.  Some of the numbers you see for pots are so large because where they are the only source of income a cautious withdrawal of 3-4% is required so a pot at 25*annual needs is scary.  However if you only need to use the pot to keep you going a few years then its less frightening - although you may need to be more cautious with you investments.

Good luck on the house that's coming into focus as my next big thing to do.  

t2rry

Payslips are in and I'm pretty happy with my calculations for our lump sum payments, cleared well over £3k which is fantastic for us!

Big debate in my head over what to do with it, whether to lock it away or keep it fairly accessible.  We have a lot of house & garden stuff left to do so it's an ongoing balancing act as that pot has been empty for quite a while now so progress has slowed.  BUT we do have normal income that can be put to that so I think psychologically it's right to lock it away and keep the house pot more modest so we are mindful of that spending.

Realistically we have a FFEF anyway, it's just split amongst different accounts, but officially marking it as the FFEF I borrowed previously (as per signature item 2) means I'll have a push to properly put another £2k aside to fill it back up.

OH seems to be understanding how my mind works with all of this now, he always jokes to friends that we're always broke, but he's completely on board with the fact that feeling tight every month means we're less broke than we would be if we spent like we earn but the conversation about this £3k he found pretty straightforward and immediately said I should lock it away, consider it replenishment of the FFEF because psychologically that's the most productive thing for me, and therefore him too!

mark55man

t2rry said:

<..snip..>
OH seems to be understanding how my mind works with all of this now, he always jokes to friends that we're always broke, but he's completely on board with the fact that feeling tight every month means we're less broke than we would be if we spent like we earn but the conversation about this £3k he found pretty straightforward and immediately said I should lock it away, consider it replenishment of the FFEF because psychologically that's the most productive thing for me, and therefore him too!

Hi @t2rry - I think this quote wins MSE for the day.  I agree with locking it away.

t2rry

mark55man said:

t2rry said:

<..snip..>
OH seems to be understanding how my mind works with all of this now, he always jokes to friends that we're always broke, but he's completely on board with the fact that feeling tight every month means we're less broke than we would be if we spent like we earn but the conversation about this £3k he found pretty straightforward and immediately said I should lock it away, consider it replenishment of the FFEF because psychologically that's the most productive thing for me, and therefore him too!

Hi @t2rry - I think this quote wins MSE for the day.  I agree with locking it away.

Thanks Mark!  I honestly dread to think how our finances would look if we hadn't been 'broke' for the last 7 years! 

t2rry

I got caught by the new forum update mid-post.

It was a detailed one but I'll summarise:

1. I opened a new regular savings in OHs name to maximise the amount we're saving into top interest rate accounts.  We now have £1,300pcm automated.

2. Keeping a close eye on utilities in the coming weeks, really hoping we will start to see the effects of the energy reduction because our supplier is still telling us that £300pcm isn't enough, which is a little painful.

3. I'm starting to worry/overthink about future mortgage rates.  We're fixed until 2026 but I like to be prepared so it's another push to save as much as possible and, if we need to, have something to throw at the mortgage to bring it down. A pointless worry given the level of uncertainty but allowing it to give us the push, like a dangly carrot to work towards except instead of a carrot it's a hand grenade.  

t2rry

This week marks the end of the month for us, all spends in and accounted for and the end of the first month where I'm back to tracking our variable spending by category.

We spent (emoji denotes over/under budget - I was going to colour format but it doesn't want to work!):

   £723 on food (includes all supermarket spending so toiletries/cleaning/self care stuff too) 
  £75 on petrol 
  £109 on social (includes sports clubs for OH & kids)
  £95 on kids (includes school trips/treats etc.)
  £144 on clothes (includes sale spending for bdays & xmas gifts)
  £77 on other (this is otherwise unforeseen, collections at work etc.)
  £68 on birthdays

So more over than under but the unders were enough to keep the budget balanced overall and this as given me more understanding of our spending to transfer across to next months budget.

The food spend was disappointing, we had one takeaway this month and that was only for the kids, we had no big spends for anything in particular.  I'd really like to somehow get that down.  Otherwise pretty happy with everything, clothing seems high but there were 2 items needed that were allowed for in the budget setting and the rest really was future proofing xmas & bday spending. The clothes pot will likely stay high next month (and possibly the one after) as we have uniforms/new shoes/trainers for kiddos to buy ahead of new school year plus inevitably new winter coats too