This month saw my welcome return to the warmer climes of the £100k+ club! This was partly due to an over £2k improvement in my index funds (now at -7.03%) and partly due to my savings rate: 77% is out of all my non-tax income, or 81% of take-home pay. Woah!
If I seem overly self-satisfied, then hell yeah, probably I am! I gotta take what I can get at the moment. [In case I’m reading back in future: We are still in lockdown, but hi!]
Savings and refunds
My SR was high given that opportunities to spend are reduced dramatically during these times. My SR would’ve been even higher, skimming 80%, if my annual Amazon Prime fee hadn’t been taken, which is one of those legacy costs that didn’t move to the joint account when we opened it. Mr Firelite still pays for internet though, so I’ve got the better deal!
In fact, we are shovelling away that cash! The double whammy of birthdays this month (mine and Junior’s) barely touched the sides cost-wise. And beyond the FI piggybank, my £243 childcare vouchers remain unspent, and we have a bit left over in the joint account which we both put £300 into monthly for joint/family purchases. These are ‘banked’ for a later date. Our grocery shop which had some luxuries (in a two-notches-up sense) at the start of lockdown has settled down somewhat (we’re due a frugal post soon, right?), and take-aways are now a once weekly special event in Household Firelite. 🙂 Who’d have thunk it?
Our rebooked flight to France was cancelled, which had kinda been our hope when we rebooked. With a refund due (I hear there’s a long wait), my savings rate for Jan will be 72%! Also heard a local festival was cancelled yesterday but this will be just a small refund.
In all, I have reached an over 70% savings rate for 3 of 4 months this year! Compare with last year’s average of 54%.
As planned, I topped up my FTSE All Share and Pacific ex Japan funds by £1k, but I did this by selling some of my Global Bond Index fund. While I hadn’t considered doing that when I first wrote this post, I noticed others had been switching bonds to equities, and given the current situation of economic insecurity and lockdown possibly lasting a lot longer, I decided to do this myself. I’m still open to buying more further down the line (without selling bonds) if other funds sink down to bargain levels.
I haven’t made the precise calculations, but the recent purchases have decreased my average unit cost, since in the large scheme of things I’ve previously bought at a high, having invested only since July 2019. Despite the recent rebound, the 3 green dots on the graph (of the FTSE All Share) illustrate that I got these most recent units at a good price.
My concern now is rebalancing as I have 20% of my equities in the UK, when I really would like my equities to represent world market capitalisation only somewhat tilted to the UK (e.g. 10-15%). I’m sure that will come in good time though.
My main aim has been to save cash for a property deposit AND I’m not really looking at a 10 years+ time horizon for FI. That’s why I moved away from setting up a monthly contribution into my Vanguard ISA. For now.
But there’s now an added concern to maintain liquidity due to possible job insecurity. Eek. Yes, my University is expected to lose 20% of income, so I’m just waiting to see how that plays out. Ironically, I may end up having that ‘midlife gap year’ despite recently changing the tagline of my blog!
Having said that, I currently have my eye on topping up Developed Europe, as the Covid-19 curve is flattening in a number of European countries. It’s currently still -11% despite some rebound. However, I realise that anything I put in I must be willing to wait for the growth.
Avid followers (!) will have noticed I opened a Freetrade account. Just for a bit of fun really. Only putting in a max of £100 a month. B&M is doing pretty well (+4% in the last 7 days), a buy on the basis that we may hit a recession, a time when discount retail do well. B&M is my not-so-secret frugal indulgence (an oxymoron, I know)!
I’m excited to be updating my blog to give it a new lease of life. I’ve made a categories page to make my posts more easily searchable, and a ‘more about me‘ page for those interested in the person behind the blog, which I’m often interested in when I read FIRE blogs. I’ll be updating my other pages gradually, including my Life Design 2, my updated FI plan.
Like others, I’m getting into the swing of lockdown life, but I don’t know how others are managing to work full-time and look after little ones! While I catch myself getting jealous of others’ free time, I remind myself the grass is always greener on the other side.
I’m grateful for some things: (1) I’m saving loads! (2) I’ve not really put on any weight (not actually confirmed this, but my clothes fit fine); (3) I feel my relationship with Firelite Junior has got closer in these last weeks; (4) My personal income [for now] remains the same and I still have work tasks to do that I deem to be worthy and important; (5) We are making really good use of the house and all its contents, including our extension. I even planted my first new plants ever in the garden this week. And of course, we are healthy.
Someone reminded me of the importance of having something to look forward to. My previous goal of going to Asia before Junior starts school is no longer on the horizon. I’d been talking about that since Junior was born pretty much, so I’m not sure what to replace it with. I guess just having a day out in the local area with people milling about and without worrying about the virus sounds pretty good right now! Eating in a restaurant, seeing friends and family, browsing in non-food shops… *sigh* What risky fantasies!
Thanks for reading. What recent tweaks have you done to your equities? Are you looking to decrease your average unit cost? Have you had to change your goals for this year now due to Covid or your financial situation?