2021 Q2 Update

I’m back with a little bit more detail this time around. 🙂 Still trying to work out the best way to track my categories, where the heck some of this money went, and how it all adds up in my plan!

This is all quite difficult to track in a blog-friendly format, it turns out. I track my budget already in three places: Starling (my bank app), Excel (my big-picture view), and a budgeting app (my medium-term outlook that bridges the gap between those two).

I’m going to try to align individual spending categories across all these formats and then hopefully by next quarter I should be able to give figures by category, since I find that the most interesting part of the blogs I read.

So for now, headline figures.

2021 Q2 net worth: £13,487 | +£902

Currently included: cash, cash LISA, S&S ISA, SIPP, car estimated value and outstanding loan balance.

Still spending money on replacing and upgrading things as needed, but that’s slowed down a lot in the second quarter since the biggest house moving expenses are over. I’m also continuing to overpay on the car loan and underestimate its value so that the two roughly cancel each other out.

My emergency fund is a disaster, but I worked out why. I pay for medium to long-term-ish expected expenses from it, like annual insurance payments in order to save on them, but I don’t keep very good track of the household items that will need replacement and subscription/annual payment timings.

After spotting a clever system online, I sat down and worked out such a solution for myself. I eventually worked out that I need to pay £81.29/week (if a car replacement fund is included), or around £40/week minimum, into some sort of household maintenance pot. So I’ve set that up and currently I’m going to try and aim for £200/month into that pot. It’ll be a bit messy when annual subscriptions come out that I haven’t saved for all year, or if my long-suffering microwave takes an eternal holiday sooner than I hope… but eventually it should start to work itself out.

In case you’re curious, here’s my math:

Honestly, it was a bit of silly spreadsheet fun but also a good exercise in thinking about what I own and what I might need to replace when, as well as seeing the annual cost of subscriptions! (And I immediately remembered I just bought an OS Maps subscription, so add 50p to the top line total…)

It also nudged me to start a list of stuff I don’t yet own but will need to buy when I buy the house, since my rental is mostly-furnished. I’ll need to budget for that when house hunting looms closer. Appliances in particular will be a fun shock to adjust to.

The LISA is officially full, government bonus and everything, so I opened a premium bonds account. The first draw is August, and I’ve planned the colour-shifting wrap for my Tesla when I win the jackpot. In the meantime I’m going to try to shift my concept of emergency savings: my brain feeds on specific and separate mental pots which are an accounting hassle. Instead, I’m trying to dump my extra house deposit savings AND emergency savings into premium bonds, and keep myself from dipping into emergency savings as much as I currently do.

I suspect I’m underpaying myself a little bit, since the money does seem to vanish too quickly. Realistically my cost of living is around £2200/month all-in; I keep trying to make £1800/month work, then dipping into emergency savings. It’s still a worthy exercise for now because it’s making me really stop and think about spending much more.

Upcoming in the third quarter:

—Lots more camping! I’m waiting as much as possible to buy more gear. The expensive stuff is bought, but I’m missing a few key pieces, mainly clothing. I’m being very intentional with my plans for layering to see me through all the weather conditions on the fells.

—Actually cooking more. It’s not that I don’t have time to. I don’t have time not to. The costs are invisible and long-term, whereas the price is visible and short-term, but I’m seeing the effects of not taking downtime in subtle but scary ways. I’m forcing myself to take time off.

—Since I’m paying into a maintenance pot now, that’s less money to pay into the emergency fund. Since I’m not counting on paying those expenses out of it and I now have premium bonds, I’m all right with that. (Technically, the ISAs could be emergency funds, but in my mind once money goes into the Hotel LISA, it can never leave 🙂 )

Progress will probably be slow, but it should at least be consistently upward. By the end of the quarter, I’d like to reach £2K split between my S&S ISA and SIPP (long-term accounts) + £3K in premium bonds (bringing me to £13K in house deposit savings) + £1K in the cash emergency pot.

I’m interested to see whether keeping my visible emergency fund much smaller makes me spend differently, rather than relying on being able to transfer money over. Already it does seem to have an effect. “Out of sight, out of mind” describes me. The key is leveraging that for me… combined with time.

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