So much has been going on, I don’t even know where to start. My spouse was diagnosed with an auto-immune disease just before his 40th birthday. The implications of his disease means that he will likely have mobility issues down the road, and now our financial independence has taken on a completely new dimension, as it needs to include him working from home or working part time or not working at all. Of course, it also has implications for medical related expenses, though because we are in the UK, these seem manageable for now. We are both still digesting what this means and how it’s going to change our lives and when. But it’s made getting into better financial (and physical) shape even more pressing.
As a warning, this is going to be a boring post because it’s really a post about taking stock. But, boring posts are good; it’s really through the drudgery of setting actionable plans where great things can unfold.
In the meantime, I finally sat down and calculated our net worth. We are at about -10,000 pounds, which is much better than where we were at when we started this “journey.” I put journey in quotations because I kinda hate this self-help language, but whatever. This number, whilst still negative (ha, take that UK integration, I used whilst), puts us in a much better place than before I started this blog. We still have a lot of debt (education debt, some consumer debt, etc), but we also have some savings now, which we have never had. I also think its good to have some information about people who are starting their path to FIRE relatively late and don’t have a bazillion dollars in savings. Maybe it makes it more real, I dunno.
The big changes are with both of us working for now, we are paying debt consistently, contributing aggressively to an ISA (so much so that things are a bit too tight come the end of the month), and also paying off the mortgage. While half of our mortgage is going to interest every month, the other half is going to equity. This is a big plus for us.
And yet, there are still setbacks. That bump down in December is additional consumer debt of me buying my parents a smart phone (they don’t have one) and replacing my husband’s smartphone as Christmas presents. I would like to learn better how to allocate spending for these types of things (we have upcoming citizenship / ILR related expenses of near 10K pounds in the next two to three years that I have to figure out how to save for). Each month is still tight, but we are definitely doing better than before. I think next year we will cross that 0 line with ease.
Okay, as I said, this post is mostly about taking stock so I had a look at what I had as goals for myself a year ago and here they are (from December 2018):
- Buy an apartment hopefully by May with at least 5% down (we did this, we bought a cute, 2 bed Victorian semi-detached in a great location in the town we already lived in, not in the city or the country, much to the dismay of both of us. We also qualified for only a 5% down mortgage. Other people don’t recommend you do this. It was okay for us because we could handle the mortgage with only one income if necessary)
- Save more for retirement (switch to employer matched plan only) (we did this, first by saving just over 10% of one of our incomes into Vanguard but now, saving 13% of our combined after tax income plus 5% of pretax income in pension retirement contributions (him) and 9% of pretax income in pension retirement contributions (her). My ultimate goal is to save an additional 500K to our pensions before 65)
- Keep paying off my student loans and credit card debt every month (we are doing this, still have credit card debt of 4K and need to bring this down).
And my 40 buy a house and take care of me plan:
- I will spend no more than 25 pounds a week on groceries (family of 2) (we didn’t do this, and it was not reasonable)
- Go on a 6 months buy nothing and no credit card spend hiatus (we didn’t do this. I am still thinking about doing this)
- Keep the following exceptions -> I will not fire the cleaner (this we kept)
- I will get a haircut and some low-maintenance balayage (this we kept and I may go up more, maybe 4* a year)
- I will spend on health personal exercise partner/trainer (this we kept and it turns out given the aforementioned health issues, this was the important investment we actually made)
All and all, I think we did really well and I would give us four stars or maybe 4 coins. I used to have an economics college professor that would give you coin stickers if you got 100 percent on his quiz. I think we got 100% on this year’s quiz and we are in a position to better take care of ourselves financially and health wise thanks to this. I am grateful for these actions! ❤
So, moving forward, I think the financial goals for my 41th year are to:
- Get us past the 0 line, into positive net worth territory
- Move to a no balance monthly paying off relationship with credit cards
- Keep saving into retirement as aggressively as we can
- Keep paying off debt consistently
- Work harder at finding and building community
- Build a budget app based on what is helping me succeed and also help to improve financial literacy more broadly