hi all, very happy to join the community.
this is my attempt to put my financial life in order, educate myself and track progress. if time permits, i hope to post once / twice a month with updates on expenses/earnings and building my nest egg. it'd be great to hear your thoughts/advice; surely with your help the road to financial independence can be shortened.
little about myself:
turned 30 recently, have a lovely wife, at the moment we live in london (neither of us is from here, however). both of us are working. challenges we face are similar to other young couples living in london, ie., high costs of rent/mortgage, high costs of transportation. we'd like to have a baby in the near future, and are dreading the associated costs (nannys or childcare are very expensive here, we do not have family here to help out with a baby). currently our expense breakdown is as follows (for those in the US, multiply the below by 1.5 to get a USD equivalent):
GBP 1000 -> mortgage
GBP 200 -> ground rent/service charge for flat
GBP 130 -> council tax
GBP 260 -> transportation (monthly passes)
GBP 30 -> internet
GBP 150 -> water+electricity+heating
This gives a total of GBP 1770 for fixed expenses only, which is quite steep, but there is little room to really decrease any of the above substantially (or maybe we just don't know how). our focus at the moment is to cut down on variable expenses such as food, going out, travelling etc. last year we averaged about GBP 1500 per month on those, and that does not include a few several rather high one off expenses (i don't want to list these, let's just say we really want to forget the financial lunacy of last year and be more responsible going forward). our goal is to limit the variable budget to around GBP 800 per month, travel less (some travel is unavoidable; we will likely visit our families, and they live far far away), not go out as often, don't spend on any unnecessary items. ideally we'd cap our expenses around GBP 2600-2900 per month, and save the rest, with a goal of building a nest egg large enough to cover our expenses under 4% SWR by the time we turn 40. hopefully by that time we'll be able to eliminate our mortgage, hence, our monthly expenses would be closer to GBP 2000 per month (or a bit more, depending how many babies we make). we do not really want to retire, but rather have the freedom to explore other life paths that are maybe more enterpreneurial/risky, or perhaps take extended time to travel and then settle into an exciting alternative career.
in terms of current assets - we are starting from a rather low level; thus far we've been paying off USD 70k in student loans (almost done, ~USD 5k left) and saving for a downpayment. goal for this year is to kick it into overdrive with savings, which is one of the reasons for starting this journal.
have a great (and cheap) week everyone, i'll try to give more detail next time.
plee
plee's journal
-
Gilberto de Piento
- Posts: 1949
- Joined: Tue Nov 12, 2013 10:23 pm
Re: plee's journal
Welcome! Nice job on the student loans. 
february update
i've been bit lazy with regards to posting in the journal, but quite the opposite in terms of financial planning.
some progress this month towards finally being debt free (aside from mortgage) - only 4k USD student loan left (down from 6k earlier this month) - plan is to eliminate that completely with upcoming tax refund (who doesn’t love those).
that aside, we've been trying to evaluate our monthly expenses, and see how we can cut these. mortgage/tax/ground rent/service charge can't really be tinkered with (unless we move), so our goal would be to use less water/electricity. we already have one of the cheapest internet plans (GBP 30 per month) and mobile plans (GBP 12 per month each), we don't do TV/netflix, or anything of that sort, so nothing to cut there. i'm flirting with the idea of getting a bike, given the weather in london is improving - hopefully i can implement that within a month and save GBP100 or so in commuting costs per month. initial bike investment would probably be around GPB 200.
we have cut down on eating out significantly. we used to get lunch at work, but after doing the math we realized it came close to GBP300 (!!!) per month (around 45 lunches per month between me and DW, at 6-7 GBP per lunch). at the moment, most of our sunday is cooking for the week, and we tend to get away with GBP 60-80 per week for all the groceries we need (that includes breakfast, lunch and dinner). there have been weeks where we got away with much less, say GBP25, but these typically involved 2+ days of eating lentil soup. in general, however, we spend around GBP20-25 on meat, GPB 25 on veggies; and then every now and then we top up on condiments (olive oil, butter, spices, etc.) and staples (rice / lentils). overall, GBP400 per month seems to what covers our food/drink needs comfortably.
goal for the next month is to keep track of expenses. this might be relatively tricky as we are on a cash system nowadays (we pretty much retired our credit cards). perhaps we can test mint (or rather money dashboard here in the uk), but i noticed we tend to have more discipline when we see cash evaporating from our wallets. in any case, we’ll do our best to get some data points on spending. another goal would be to reread jacob’s book. i read it a year ago or so, i feel like it’s time for a refresh.
after we have the saving part covered, i will need to study up on investments. that will probably require more effort compared to keeping a tab on spending. for now only my retirement funds are invested (low cost tracker funds, mix of equity, bonds and money market; haven’t really put much thought into allocation so might revisit). i’d be curious and grateful to hear from folks in UK and US as well on how they allocate their savings. i was thinking something along the lines of having 30% in real estate (probably some REIT funds until enough saved for a downpayment), then 30% stocks, 30% bond leaning income funds, rest in cash/gold.
have a great week everyone
some progress this month towards finally being debt free (aside from mortgage) - only 4k USD student loan left (down from 6k earlier this month) - plan is to eliminate that completely with upcoming tax refund (who doesn’t love those).
that aside, we've been trying to evaluate our monthly expenses, and see how we can cut these. mortgage/tax/ground rent/service charge can't really be tinkered with (unless we move), so our goal would be to use less water/electricity. we already have one of the cheapest internet plans (GBP 30 per month) and mobile plans (GBP 12 per month each), we don't do TV/netflix, or anything of that sort, so nothing to cut there. i'm flirting with the idea of getting a bike, given the weather in london is improving - hopefully i can implement that within a month and save GBP100 or so in commuting costs per month. initial bike investment would probably be around GPB 200.
we have cut down on eating out significantly. we used to get lunch at work, but after doing the math we realized it came close to GBP300 (!!!) per month (around 45 lunches per month between me and DW, at 6-7 GBP per lunch). at the moment, most of our sunday is cooking for the week, and we tend to get away with GBP 60-80 per week for all the groceries we need (that includes breakfast, lunch and dinner). there have been weeks where we got away with much less, say GBP25, but these typically involved 2+ days of eating lentil soup
. in general, however, we spend around GBP20-25 on meat, GPB 25 on veggies; and then every now and then we top up on condiments (olive oil, butter, spices, etc.) and staples (rice / lentils). overall, GBP400 per month seems to what covers our food/drink needs comfortably.goal for the next month is to keep track of expenses. this might be relatively tricky as we are on a cash system nowadays (we pretty much retired our credit cards). perhaps we can test mint (or rather money dashboard here in the uk), but i noticed we tend to have more discipline when we see cash evaporating from our wallets. in any case, we’ll do our best to get some data points on spending. another goal would be to reread jacob’s book. i read it a year ago or so, i feel like it’s time for a refresh.
after we have the saving part covered, i will need to study up on investments. that will probably require more effort compared to keeping a tab on spending. for now only my retirement funds are invested (low cost tracker funds, mix of equity, bonds and money market; haven’t really put much thought into allocation so might revisit). i’d be curious and grateful to hear from folks in UK and US as well on how they allocate their savings. i was thinking something along the lines of having 30% in real estate (probably some REIT funds until enough saved for a downpayment), then 30% stocks, 30% bond leaning income funds, rest in cash/gold.
have a great week everyone
Re: plee's journal
Hi. Sounds like great progress already - especially on those loans.
I'm in London, with very similar "fixed" expenses. Lowering transport costs is my current target. If you were to cycle, would you do the entire journey? How long would that be? I'm a little far out (north London outskirts) which is making it especially expensive and also more challenging to substantially reduce. Cycling the whole journey would be three hours/day...
I'm in London, with very similar "fixed" expenses. Lowering transport costs is my current target. If you were to cycle, would you do the entire journey? How long would that be? I'm a little far out (north London outskirts) which is making it especially expensive and also more challenging to substantially reduce. Cycling the whole journey would be three hours/day...