Financial Independence update: July 2020

This photo is our first journey outside of our region taken a couple of weekends ago. It marks our move onto the terra firma of ‘the new normal’. This month I also reach this blog’s One Year Milestone! Whoo-hoo. I’ll reflect on the bigger picture stuff in the year reflection to follow soon, but hope you don’t mind me indulging also in a fairly brief month-end update…

So, the ‘new normal’ partly explains my noticeably reduced savings rate this month, but at 71%, still surpassing my aims this year. So, I’m happy with that. We went on a brief impromptu overnight hotel break and the change was SO good. (It was the most spontaneous suggestion ever made in the history of knowing Mr Firelite! I must’ve looked in a rut!) I did some clothes shopping for myself (fun, but alas no changing rooms open!) and Junior (needed). One thing I learned in lockdown is it’s not worth scrimping on kids’ shoes! A sturdy looking pair of trainers from Tesco bought specifically for nursery completely died by day 16 even with reduced garden play (due to social bubbles and cleaning). Anyway, on our little trip, we had a couple of great pub/restaurant meals and managed a quick sneaky drink in the hotel bar once Junior fell asleep in the pushchair. It was like a mini holiday! Being in a hotel room was just so nice. It was so worth it!

Probably our biggest cost this month (and unanticipated at that) was £180 for having our chimney pointed. It’s one of those situations where your next door neighbours’ has a leak, they get their side of the chimney (of the semi-detached house) pointed and said leak continues. We, on the other hand, have no leak. We surrendered to the neighbourly thing to do despite seeing my SR fall before my very eyes, lol. I know we’re lucky not to have to stress about money. We’re yet to ascertain whether next door’s leak is fixed.

The other main cost this month was – no, not wine at home (that consumption went down to zero, honest!) – but social gatherings, especially Ubers there and back (when I’d have taken more buses in the past) soon add up. Did a bit of a city centre bar crawl on Friday – good fun (and the first in 4 months!), but friends and acquaintances were a bit too lax past 11ish and seating around a single table was quite snuggly, so I’ll probably not be making that a regular thing (even if I could). It’s very hard to back away from a hug!

Given that a new quarantine rule has just come in for Spain returners, it looks like that’s definitely off the cards for us! A double blow is expecting to see my On The Beach shares plummet haha. We have a week off work in August, but no idea what we’ll do. As the weather seems everything but predictable, we may hedge our bets on a long weekend in Wales (for the beach) and a few days elsewhere.

Equity wise, I added £2000 into my Vanguard funds (£1400 US Equity Index, £300 Japan and £300 Europe excluding UK) and £100 into shares/fractional shares via Freetrade (buying more in SSP [airport food outlets], Alphabet [Google], and Renewables Infrastructures Trust. At last, I plan to start a Vanguard regular contribution now the property deposit is sorted, probably something like £1k a month. That’s 41% of my net salary (+ pension contribution). Then, will I be part of the FI mainstream?! 😊

The big news this month in the property world is the time limited stamp duty reduction! My brief excitement soon crumbled, as the financial benefit is very limited for wannabe property investors at the low end of the market (i.e. me), yet demand is surely swelling. I personally don’t feel comfortable competing with first-time buyers who are desperately trying to get on the housing ladder. On top of that, rental demand is probably lowered in cities and around student areas in the (almost?) post-Covid reality, making it a riskier investment than in normal times. I did not ever imagine thinking that way! The upshot is my property search is on hold for now. So, genuine question: Do I stick the 35.5k deposit in Premium Bonds?

Just over £7k of my fixed rate savings matured this month. I put £1k in Junior’s account, £1k in Premium bonds, and am in the process of working out what to do with the rest of it – the only certainty being that I won’t be reinvesting in fixed rate savings! Over time, I’m considering investing a goal percentage directly and ethically, such as a couple of Abundant investments. Note that they are high-risk though compared with index funds or savings accounts, and not very liquid. But unlike most ethical funds, it does mean directly helping to do my bit. This was my conclusion previously and also recently, on reviewing the Vanguard ESG (ethical, social, governance) funds, as much as I like the idea.

I guess surpassing £110k is not a specific milestone, but it’s good to be another tenth up in the direction toward £200k! How has your month been?