Hurray for Emergency Funds!

As some readers may be aware, I’ve never had an emergency fund.

During the ‘dark old days’ when I wasn’t in control of my finances, whenever there was an emergency, out came the credit cards and I just got into more debt.

When I eventually paid off my debts, I still didn’t build up an emergency fund – I used credit cards again, only this time, at 0% with plans to pay them off in full before the 0% ran out. It’s worked for me for the past 5-6 years.

So it did kind of surprise me that most PF/FI blogs I read advised building up an emergency fund equivalent to several months of your salary (some even recommending 6 months!). The more I read, the more I warmed to the idea of building such funds, so as one of my goals for 2016, I set a target to build an initial pot of £1k by the end of the year.

I know £1k isn’t much, but I have to start somewhere. In fact, at the end of December 2015, I had a starting emergency pot of £237.47.

The thing is, we’re still only in January and I’m having to dip into my fund already!

Emergency!

The other day, I broke part of a tooth (I was eating fish fingers and yes, they were cooked, which is what both my boss and my dentist asked me, haha!).

Fortunately, it wasn’t one of my front teeth, which would have been devastating but one of the back ones.  However, I needed to get it patched up quickly or risk more damage being done to the tooth.

The cheapest option to sort it out was £222.50 and that’s NHS price! The days of free dental treatment on the NHS while I was a student are long gone!

If I wanted it done on private healthcare, the cost was in excess of £600… I of course went for the more reasonable option!

teeth

The work’s not covered under my company medical policy because it’s classed as ‘cosmetic’.  I have a dental plan where I can claim back around 50% but it takes a while for the claim to be processed, so I’m most grateful to dip into the emergency fund to pay the dental bill in full.

I do make an effort to look after my teeth – I always attend my twice-yearly check-ups, use an electric toothbrush, floss fairly regularly and even use those funny little inter-dental brush things that dental hygienists recommend. My diet these days is pretty ‘teeth friendly’ too, ie plenty of calcium and I don’t tend to snack on sweets or chocolate.

Unfortunately, I have to admit that I wasn’t so great looking after my teeth when I was younger, had a far greater penchant for sweets and chocolates than I do now and by the time I was a teenager, I had a mouthful of fillings.

I now have the task of dealing with the expense of maintaining the repaired teeth which will continue to suffer from wear and tear as I get older.

This has really convinced me of the importance of building up an emergency fund to cover things like this, so I’ll be making all efforts to balance investing with saving into the fund this year.

I did consider setting up a ‘Teeth Fund’, but that sounds too much like I’m saving up for a full set of dentures – really, I’m not that old or there yet, haha!

Anyway, fingers crossed no more mishaps before I get the emergency fund topped back up!

January 2015 Savings + other updates

As I didn’t start my blog until April 2014, this is my first January savings update.

However…not quite the best of starts:

Yes, I’ve fallen at the first hurdle, managed a savings rate of 48.9%, which is still a good attempt but not quite getting to my 50%! I’m still suffering a little from the over-spending in December, have really tightened the purse-strings this month (not a single social outing!) but still fell a little short. Still, 11 more months to go to bump up the average!

The above saved was boosted by £44.12 from TopCashback*, £54 boiler service cashback, £20 football predictions winnings, £7.37 Orange mobile refund and £100 rent received.

Future Fund and Net Worth

I’ll still be detailing my Future Fund and Net Worth on a quarterly basis but here are the basic numbers.

Future Fund is now standing at £34,952.16, a decent jump from the end of the year due to favourable markets.

Net Worth is £91,019.25, an increase of 2% from last month.

Dividends

I received £5.31 from De La Rue and £3.80 from GlaxoSmithKline.

So the £9.11 received this month is already close to the total dividends from shares I received for 2014 (£9.59)!

Shares and Investment Trusts

No new shares purchased this month but I’ve updated my portfolio here.

Some readers may recall that I discovered an investment trust, that I’d forgotten all about, which I’d originally invested in back in 1997.  Investment trusts haven’t really been a part of my investment strategy, but then again, neither were individual shares until recently.
I’ve decided to add a couple more investment trusts (including some exposure to real estate investment trusts, or REITs) into the mix for more diversification. I shall be reporting dividends paid along with the dividends I receive from my shares. ITs invested in updated here, along with my shares.

Last year, I received a dividend of £9.38 from my Aberdeen Japan Investment Trust.

As with shares, investment trusts will just make a small part of my investment portfolio, the bulk of my money still remaining in mostly index trackers.

Non-Financial Goals Update

Food/Groceries Budget – I spent £92.31 this month, averaging £23.08 per week, so comfortably under my budget.

Cooking Recipes – I learned 1 new recipe this month, making my own low-carb pizza. Can I just state here (since my friends  have berated me!) that a ‘recipe’ in my eyes is something I’ve gotten out of a cook book and yes, low carb pizza was in there!  Ok, not exactly gourmet but it’s something I can add to my easy-to-cook list! I’m going to be adding some really ‘simple’ recipes – there are some things that I just don’t normally cook!

Yoga/Pilates classes – I’ve been carrying a slight muscle injury to my right leg so have been unable to stretch it properly and consequently, not done anything here, so an epic fail, but I’m going to try to play catch up over the coming months…

Rubik’s Cube – I’ve been doing the puzzle most nights and am now able to complete it with instructions, which in itself is progress! I’ve probably learned about 2/3s of the sequences (or algorithms as they are known) off by heart – that last lot may take a bit longer!

My progress so far!

Library Books – I borrowed and read one library book this month.

So in a nutshell, this is how I’m doing against my goals:

A mixed month, with successes and failures but at least some progress!

Hope everyone else had a good January!

[* Referral links]

November 2014 Savings & Other Stuff

My salary this month was a little higher than usual as it included the £360 Health Rebate from work for my gym membership.

Instead of just saving half of it, I’ve invested all of it, which has enabled me to get an all time high savings rate of 56.3%! Woo hoo!

The amount saved was also boosted by £20.07 from Inboxpounds*, £1.25 win from Searchlotto, £33.37 mortgage protection premium refund I mentioned earlier in the month£6.13 reviewing music on Slicethepie* and £100 rent received.

My average savings rate is now at 46.19% – I’m not going to hit my target average of 50% as I’m unlikely to save over 80% in December but I think I’ve made a good attempt in my first year of saving/investing.  I’m quite confident I’ll hit that target next year!

Speaking of goals, one of my goals for 2014 was for the value of my investments portfolio to reach £22,000. As of today, the value of my investments was £23,902.56!  Sorted :-)!

Grocery Spending

So I’ve set myself a budget of £25 per week for my food/grocery shopping as this is one expense which I feel that I have the most control over. Here’s how I did this month:

7th Nov – £20.03
14th Nov – £30.93
21st Nov – £23.99
28th Nov – £21.79
Total Nov – £96.74

Average per week – £24.19

25% was spent on meat or fish and 25% was spent on fruit and veg, so better on the fruit/veg front compared to last month. Still spent 11% on snacks so need to continue to work on that! 

Splurge next Month

I’ve already been spending more than usual (on my credit card) as is typical for this time of year. While I’m being quite generous buying things for friends and family, I’ve resisted the urge to buy a single thing for myself…so far! I’m not going to abstain completely, but whatever I buy, it’s not going to be anything expensive, unlike some gifts I’ve bought for myself in the past!

Black Friday came and went without me buying a thing, I just didn’t feel like getting caught in all the hype and madness. Perhaps I’ve missed some great deals, but perhaps I haven’t. 

I’ve got a day off work tomorrow to do some actual shopping in the high street – I reckon I won’t last very long before I get fed up and go home!
[*referral links]

Food / Grocery Budget

Unlike many PF bloggers, I don’t meticulously document my spending, nor do I even have a proper budget.

Since I started this blog around 6 months ago, payments for most of my investments and savings are automatically taken out of my bank account the day after I get paid.  


I then live on the rest.

If there’s any cash left over after food, bills, expenses and entertainment have been accounted for, this will also go towards my investments and savings – this is when I see whether I hit my 50% savings rate or not!


Why no Budget?

The last time I kept to a proper budget was when I was neck deep in credit card debt and was trying to pay it off….slowly. And it was slow – I had no MMM, no helpful PF and FI blogging community to help me out and keep me focused. I was distracted and didn’t see paying off the debt as a priority.  As a result, I was carrying the debt for pretty much 15 years until I finally cleared it 5 years ago.
I’ve thought about keeping a budget for this blog, as I see how it works so well for many bloggers, but I can’t bring myself to do it. I now realise that it’s because full-blown budgeting still gives me negative memories of when I was in debt, even though this time round, it will be for something positive, ie saving towards financial independence and early retirement!
However, there is one thing I think I can budget for which doesn’t seem to give me negative vibes though – food (grocery) budgeting!
Food 

For some reason, budgeting for my food shopping doesn’t remind me of the dark old days of debt but actually reminds me of my good old days as a university student, when I was balancing what I could spend on food with what I could spend on alcohol and going out! My student days still rank among the happiest of my life. I mentioned in No More Waffles’ blog that when I retire, I’d like to ‘live like a student’ again, ie be free to do what I wanted, with the world at my feet, only with a lot more money this time round and no living in mouldy student digs, haha! 
Anyway, food shopping….

I only ever do one shop per week, visiting two supermarkets, Tesco and Aldi on the same day/ evening. If I run out of anything during the week, then I do without until it’s time to shop again.

According to my credit card statements from earlier this year (not counting the time my family were over), I was spending on average £40 per week on groceries.  That’s a lot for one person, especially as Laura at No More Spending spends only around £200 a month and she’s feeding a family! Although I guess alcohol probably pushed the costs of my shopping up.

I’ve never been one to waste much of what I buy, I use the freezer a lot to manage my meals and dislike throwing away food – but spending £40 just shows that I’m obviously not shopping as smartly as I should.

So what would be a good food/grocery budget?

I thought I’d track my supermarket shopping in October, so that I could work out what an average weekly spend should be for me. I was also going to shop carefully, making a shopping list for what was needed each trip, cut down on the snacks and cut out the alcohol (I have my homebrew now of course!).

My shopping will be for all my meals at home and the packed lunches I take to work, plus the usual household stuff. 

October Food/Grocery Shopping
Ok, so here’s my spending:

3rd Oct – £29.11
11th Oct – £21.90
18th Oct – £16.45
24th Oct – £19.95
31st Oct – £21.68
Total Oct – £109.59

Average per week – £21.92

Wow, big drop from £40 as I didn’t just throw whatever in my shopping trolley!

Analysis

Of the £109.59, 25% was spent on meat or fish, while 20% was spent on fruit and veg, which doesn’t sound too bad, but maybe it should be the other way round.  16% was spent on dairy products but I still spent 11% on snacks – I think I can cut down here.

October happened to be a month when I didn’t need to replace things like washing liquids, cleaning products etc so on those occasions, I’m likely to go over my average spend.  In order to account for that, I think I’m going to try aim for a budget of £25 per week, or rather £100 over 4 weeks – see how that goes for a few months.

All in all, a good exercise, one that I should have done a while ago – saved around £70-£80 this month compared to my usual shop according to my credit card statement.  I found that shopping with a list meant that I spent less money as I only bought what I needed and I spent less time wandering up and down the aisles wondering what to buy.

In theory, saving on my shopping should make it more feasible for me to get a 50% savings rate or more….let’s see if this actually happens!