Financial independence update: August 2020

This is where I got up to with my month-end update before work got busy pre-start of the academic year, Firelite Junior started school (shorter day than at nursery) and just as we were thinking that we might even have found a childminder, Junior came down with a bad cough! While said cough has improved massively 2 days later, we are now juggling work and childcare, we’ve not been able to get a test, so looks like we’re isolating for 14 days. For the second time during lockdown. So that’s where we are mid-September! Without further ado, here’s what happened in August – the idea of a beach filling me with nostalgia as I type!

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Digging for the elusive perfect local weekend break

I sense the first leaves are falling off the trees now, a reminder that my month-end update is overdue! Life is so busy at the moment, or at least, i’m finding it tiring. August included some fun things and a welcome two-week respite from Zoom work meetings. The breaks I’ve had in the routine has tended to make returning harder though, and I’m missing travel. But August for me was:

  • A few (long) weekend breaks staying in towns/cities around the north of England, centred around some kind of kiddie attraction (e.g. beach, dino museum, theme park – usually involving me running off to look at a few shops too) – a change is as good as a rest?
  • Eating out to help out – overlapping with breaks away has been a double bonus! Otherwise mainly family eateries in our local area (e.g. going out with Mr Firelite for lunch)
  • Some regular exercises to fix my sitting-too-long-for-work/post-pregnancy/age-related issues re core and flexibility: simple ab exercises (for separated abs, aka diastasis recti), flexibility (signed up to Gravity Yoga, which is fab), with the occasional YouTube dance workout in lieu of the absence of going out dancing these days! 😥

As a result of mainly the first two points, my saving (59%) has not been as good as the large percentages I’ve been knocking out in recent months (see table), which was really to be expected. September’s will be even lower when a few credit card payments for hotels are due! Having said that, we won’t be paying for nursery anymore (gasp!!) – which was over £400 for me, but I didn’t stop buying vouchers early enough so that won’t show til Nov.

Saving and investing

So, I put away £2k into Vanguard funds – US predominantly (making up 47% of my equity index fund portfolio), and I’ll keep at that level for a bit each month, the aim being to bolster up my equity funds. (Previously, my savings were diverted to saving a deposit for a buy-to-let property, and I have enough now.)

However, it’s worth noting that while many or most FIers stick most of their money into equities, I am more cautious in approach – partly because I may want access soonish so value flexibility (and don’t want to be at the whim of short-term stock market falls) but also while I do believe equities will continue going up the way they have historically, I’m not 99.9% certain of that, so I prefer to spread the risk.

I’d never formally worked out my asset allocation and what my ideal might be, so here it is. My feeling to aim for was something around a third equities, a third property, and a third everything else – mainly cash, but also bonds, peer lending etc. I say ‘feeling’ as I can’t say I have read much about this in recent times, so reading recommendations welcome. I am now including our equity (money) release from downsizing in future in my portfolio, a sizeable proportion, given that we had previously prioritised paying off the mortgage (and no, I don’t regret that at all, as it’s fantastic psychologically to be mortgage-free!)

Thinking of the bigger picture, realistically, we won’t downsize for at least 14 years yet (Firelite Junior may protest!), by which time I’ll also be able to access my pension early, which combined I hope/think will cover most of my spending requirements post-57, so my main concern is bridging the 13 years or so between now and then. If I manage to save £20k pa for the next 2 years of work, then my savings can cover the remaining 11 years at a spend of £14k pa. My spending is likely to increase a bit (or more) because we have a growing child in the family, but it’ll enable what is known as “Coast FI”. That is, I could either go part-time or find other work that’ll cover some costs, enabling a healthier and more balanced lifestyle and for me to pursue more creative interests.

Financial and non-financial goals

In my one year reflection, I said I’d decide some goals here so here are 3 financial and 3 non-financial ones:

  • To keep my average monthly savings rate above 57%
  • To buy or buy-to-let property or otherwise invest (e.g. in property investments)
  • To keep at my exercises (3rd bullet point above) – I used to be pretty flexible, never had backache – so seeing if I can make backache not the norm without giving up my job, and increase my mobility between my joints
  • To find a work/life/school routine that works for us: This sounds like a low bar, but if you have kids and you’re working full-time (but end up doing more than 40 hours a week) with no childcare and they’ve just started school, then you know what I mean.
  • To survive the next semester – see above, plus the impact of social distancing restrictions have on uni and the amount of new work we have to do.

Now back to the September version of me, the exercise one has currently gone out of the window already, but I’m seeing that if I’m dealing with the current situation, I hope that it means I will survive next semester! I just dread the cold, dark days, so I hope to find a solution to that to report on given we can’t go anywhere even post-isolation. I could do with a virtual reality holiday!

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