Category Archives: Crisis

October 2023 Savings, plus other updates

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A blur of a month.

Work continues to be really busy. I’ve now met my new boss and getting used to working with her. I have a load of holidays to use up before the end of the year and sorely in need of a break (late nights starting to take a toll), but need to balance hitting deadlines with resting my brain. A few long weekends should hopefully help.

My niece and nephew were up for half-term, stayed mostly with my sis but I had them for a weekend. I did take a day off work to take them to Arcade Club,  four floors of arcade machines and games consoles. We were there for nearly 4 hours so it was well worth the money, and yes, I really enjoyed myself too, reliving my misspent youth!

My teenaged self’s idea of heaven!

Anyway, how did I get on this month?

I saved 14.1% of my net salary.  The above includes £62.35 from doing Prolific surveys.

Shares and Investment Trusts

I just topped up existing investments.

Current share/IT portfolio can be found here.

(Entire portfolio here)

Future Fund 

OOF! The biggest drop of the year for me – I’d been oblivious to ‘market noise’ as been too busy to check my accounts, so was a little shocked to see this when I ran the numbers. Still, it’s already started to pick up in November but as at the end of October,  my Future Fund ended the month plummeting 4% down to £224,414. 

Just have to keep calm and carry on investing.

Dividends and Other Income

A fairly average month for dividends.

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Le rêve est mort?

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After a lovely relaxing holiday in August, I was brought back down to earth and reality not by my brimming work inbox but by an email from my current mortgage provider, reminding me that my fixed rate mortgage deal was due to expire and to consider their current mortgage product offers. If I did nothing, I would automatically revert to their standard variable rate of 8.4%, so doing nothing was definitely not an option!

Their deals were not pretty – they were all variable apart from one 2-year fix that was offered at 6.4%.

Whilst I’d been preparing myself for a big jump in interest rate (from the now almost mythical 1.25% I’m currently paying) by playing around with mortgage calculators, checking affordability and such like, it was jarring to seeing the numbers in black and white. I see now that I’d been somewhat optimistic with my calculations and wishful thinking about interest rates dropping. Or that getting my LTV down would actually make any real difference.

I contacted an independent mortgage adviser, one recommended by a friend who had just recently herself remortgaged.

Unfortunately, the best 2-year fixed rate deal would have resulted in me paying nearly an extra £300 per month for my mortgage (a 55% increase!) so I had no alternative but to look again at my current provider’s offers, where at least there would be no arrangement fee, nor would I have to provide all my financial info again.

Their best offer would increase my mortgage by £240 a month (a ‘mere’ 44% increase), a 2-year 5.30% variable rate. With the rate being variable, this might go up, so I could end up paying that extra £300 (or more), but there’s also a chance that this extra could decrease a little, if/when the interest rates fall. I’m more inclined to think (and will take the gamble) that they will likely drop, though by very little and certainly not in the short term. I reckon in my lifetime, <2% mortgage rates will be consigned to history, we’ll look back and think of ‘the good old days of borrowing’! At least we’re not back to the double-digit rates that my parents were paying for their mortgage.

I still have a month to go so I haven’t signed up to anything yet, but not sure I want to leave it too late in case even that offer I’m considering is withdrawn.

How will this affect me?

Despite shouldering all financial burdens on my own, I’m in a fortunate position in that this not-insignificant (to me) increase to my monthly mortgage payments still isn’t going to result in my struggling to keep up with payments, getting into arrears, having to choose between heating or  eating, resorting to food banks or pay day loans.

But it’s enough that it’s probably going to have some impact on my every day lifestyle; how much I’m able to put aside for my social life, holiday funds, house repairs, emergency funds, overpaying the mortgage.

Ultimately, how will my increased mortgage payments affect my ability to continue adding to my FIRE savings/investments and advance towards my goal (shifting goalposts notwithstanding)?

I’d like to think that I’m quite mentally resilient, of  stoic-ish nature but I can’t deny that increasing costs in pretty much everything have been causing me a bit of worry, about my plans, about the life I lead.

For the first time in a long time, since my debt paying days, I’m considering running a proper budget, tracking all my spending to the penny.

It’s not a task I relish, in fact, it fills me with dread and I could almost sense a small cloud of doom and gloom coalescing above me.

Bills, Bills, Bills

I have some unavoidable and quite significant expenses looming on the horizon, costs that I can’t really put off much longer or ignore.

In no particular order of urgency (since they all need sorting out):

1 – Dental costs – that private dental referral from March has finally come through and they called me to make an appointment. I’m no longer in pain but still can’t really eat on that side of my mouth. £99 paid in advance just to see the consultant and then, he will diagnose whether I need root canal treatment or extraction. Cost estimated to be around £1-£1.3k.

2 – New Glasses – my prescription has changed these past couple of years, so I need to get new glasses to avoid eye strain and headaches. Cost estimated around £350-£450.

3 – Car repairs – the advisory issues flagged up in my MOT need to be sorted as I don’t want them to balloon into reasons for my MOT to fail (and for safety reasons, as one of the issues was to do with my brakes). My air con isn’t working but I’m deeming that an unnecessary nice-to-have right now. Cost of repairs quoted at £700. I also have a slow puncture. Every week or so, I need to check the tyre pressure and pump up the tyre. That will cost another £100-140.

That cloud of doom and gloom continues to spread over me…

Lifeline

The other week, I got a last minute “quick catch up” meeting invitation from one of the big bosses in the US, my ‘interim boss’ since my previous boss had left at the end of July. I thought (with some relief) that the meeting was probably going to be news that his replacement had been found.

Only it wasn’t that – I was being given an unexpected pay rise.

I had already received a performance-related pay increase earlier this year, so I was rather speechless to get this extra increase on top!

The reason? A ‘reward for continued excellent services’. Okaaaaay…

Well I didn’t want to question it so just mumbled, “Wow thanks!!”

My mind was reeling (in a positive way), however at the same time, my chimp brain couldn’t help but negatively wonder what this actually meant. Did it mean that they weren’t going to replace my boss and that I was going to be given extra duties? Was something else on the horizon that would affect my workload and this was a sweetener to keep me happy?

Anyway, two days later, I was notified that my new boss had just accepted the job offer and would be starting in a couple of months – hurray!

Four days later however, I found myself part of a new project team, to help with the integration of a recent company acquisition. Looking at the project plan, I have been assigned a lot of tasks so my workload will go through the roof.

Is it bad that pay rise or no, I would have still signed up for the extra project tasks because that’s just the kind of ‘worker bee’ I am? More fool me, perhaps.

I’m really grateful for this extra pay, which won’t quite cover the entire monthly mortgage increase but will give me a lot more breathing space, makes things more manageable and me less stressed about it.

Annoying that in more ‘lower interest/lower inflation’ times, I would just be throwing the extra into my ISA or SIPP and not succumb to lifestyle inflation but I don’t have a lot of choice right now.

So in answer to the title question of this post, “Is the dream [of FIRE] dead?”, I’d probably say “Pas encore!“.

Onwards and upwards as always!

[Note, for those interested, I am still learning French via Duolingo! 431 days and counting!]

 

Getting Smarter With Money

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A recent post on Monevator gave a review of Eat The Rich, a 3-parter on Netflix which documented some of the insane and crazy events in 2021 around the GameStop meme stock, events which momentarily shook the US hedge funds industry.

Straying outside of my usual dystopian/sci-fi/zombie TV comfort zone, I binged all the episodes and found it quite entertaining, although those ‘rappers’ got far too much airtime in my view.

During the whole wild rollercoaster trading period of the GameStop, I did jump on the bandwagon briefly with a small investment gamble but far from revelling in the excitement and willing it to ‘go to the moon’, I just wasn’t cut out to embrace the ‘cult’ and I sold as soon as I saw a bit of profit.

I even joined r/wallstreetbets, the reddit forum where members shared their massive wins (and losses) to see what it was all about. I’m a gambler at heart but what people were doing there, some throwing their life savings at the meme stock, was just foolishly reckless, although some appear to have made a lot of money, probably from the alleged ‘pump and dump’ strategy employed by same.

After watching the last episode of Eat The Rich, my eye was caught by another ‘similar’ programme, Get Smart With Money, which had the blurb: “Financial advisers share their tips on spending less and saving more with people looking to take control of their funds and achieve their goals.”

I was surprised to see that FIRE ‘celebrities’ such as Pete Adeney (aka Mr Money Mustache) and Paula Pant (of Afford Anything blog/podcast) were involved.

Have to say that I quite enjoyed it, in a confirmation bias kind of way, I guess. I didn’t learn anything new, but it was good to follow the progress of the people taking the ‘advice’.

The Guardian didn’t give it a very kind review, but I guess that’s to be expected. As you can imagine, the documentary was squarely aimed at folks who aren’t having to choose between heating and eating, who don’t see Martin Lewis as a messiah – it’s for people with some means to improve their finances if they only had a bit of guidance and know-how. The concept of FIRE is extremely niche, as you can see from the comments section whenever there’s a FIRE article in mainstream press.

Living Costs

I don’t think I’m going to be in any real crisis due to higher living costs but that doesn’t mean I’m going to be unaffected by the increases, so I need to do what I can to keep my costs down.

I started drafting this post when Kwasi was in charge, but nothing’s really changed for me with Jeremy’s mitts on the nation’s purse-strings.

With food prices going up, every other grocery shop is now just a top-up, ie main shop in Morrisons or Tescos one week, basket top-up shop in Aldi the following week. I’m not sure why I haven’t been doing this before, I’m just shopping for me so I don’t need to buy a trolley-full of stuff every week. This has made me use up what’s in my cupboards/freezer rather than keep the cupboards brimming and has reduced my average monthly food shopping bill.

Been doing more batched cooking with a mix of winter-warming soups and stews on the menu and only planning on using my oven at weekends.

Previously, my energy direct debit had been £67.74 a month. With the Government energy subsidy, my new DD will be £21.66 so my bill has pretty much gone up by the expected 30% (without the subsidy). I still have a credit balance of around £150 which I will just leave there as that will be eaten up when I do eventually turn on my heating (holding out for November no less!). Much as I’m tempted to invest the £40 odd I’m ‘saving’, I think I’ll be putting it to one side, especially as government help is now only until April 2023, not the two years as promised previously.

A couple of my friends are tightening their budgets as they have one eye on that ‘C’ word – yes, I mean Christmas – so one of our planned social outings has been cancelled, which is fine by me as I’ve had to fork out on some unexpected work-related costs recently.

Death Pledge, aka Mortgage

The one expense that I might get anxious about is my home mortgage – I only fixed it for two years so my 1.25% runs out the back end of 2023.

Why didn’t I fix it for five years? Well, how was I supposed to know that rates would shoot up like they have, I thought I’d be able to get a better five-year deal when my two-year expired! Oh, the things we would do in hindsight!

I wish this was a chart of my investment portfolio, not of interest rates!

I’ve done a stress test on my mortgage and the numbers suggest I can live with an interest rate increase of up to 8%.

Beyond that, my standard of living would start to go downhill, and I’d have to dial up the frugality, cut back on the nice-to-haves, go majorly into frugal nun mode.

I’m caught in a first world dilemma – carry on throwing my spare cash (assuming I’ll have spare cash after all increasing costs) at the ailing stock markets so that I can continue to build my pot and aim for FIRE and hope/wait for a recovery? I have faith that it will recover…

Or throw the spare cash at my mortgage as overpayments, to cushion the blow of increased future interest rates/pay off my mortgage quicker?

Note – my FIRE plan does not include me being mortgage-free from the outset, it’s always been part of my retirement budget.

Anyway, with no overpayments currently being made, all things being well, by the time my two-year deal comes to an end, I should be at 60% LTV, which usually unlocks deals with better rates.

However, we know that things are not going well, that UK house prices are likely to fall drastically and assuming my property is revalued when I come to remortgage, (although I’m not sure if this is still the case if I stay with the same provider?) there’s a chance I might not get the coveted 60% LTV.

So, throwing more at my mortgage could be worth it, but even then, I’m not sure I can pay off enough really in one year to make a real difference.

As with many things in my life, I’ll probably just do something in the middle, not committing to one or the other, just muddling some sort of balance which I’ll be mostly comfortable with, and which will allow me to sleep well at night.

What are people doing to cut expenses/keep costs down?

Big House Purchase Post – Part 2

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[NOTE: this post is out now only because I’m still dithering over my 2022 goals!]

In part 1, I covered the financial aspects of buying my house. In this second part, I’ll try to cover all the other stuff, which isn’t really anything to do with FIRE but it all affects me and my FIRE journey, plus I need to get it off my chest!

Since money is such a big part of a house purchase, I apologise in advance for the few monetary mentions which will inevitably sneak in!

What?

When I first started house-hunting, I was looking for a 3-bed semi, with garden and a private driveway, and so it seemed was every other man and his dog at the time! Preferably in a cul-de-sac, which tend to be quieter and provide more privacy.

What I’ve ended up with is a two-up-two-down semi, with a garden, private driveway, in a cul-de-sac. 3 out of 4 aint too bad!

I am however not too far from a main road, so I can sometimes hear big lorries rumbling past, especially when they hit the potholes in the road, and am also near a railway, although the sounds of trains haven’t bothered me so far.

My house is not new and there are numerous things which need repairing and replacing. Unfortunately, several of these are not cosmetic (those were mostly sorted when I had the whole place redecorated and had new carpets fitted before moving in), and some of these things will cost thousands of pounds to sort out.

There have been essential costs/repairs I’ve had done since moving in which I hadn’t budgeted for (hello, emergency funds!) so it’s felt like I’ve been bleeding money recently, including today, when I had to pay to have 3 tiles replaced on my roof, casualties of the storm we had recently.

Where?

Another of my criteria when I was house-hunting was that I didn’t want to move too far away from where I was. I’m a creature of habit and I wanted as little change to my life in that respect as possible.

So it’s just as well that I’ve ended up in a house which is just 2 miles away from where I used to live!

Over the years, I’d driven past it on numerous occasions, never realising that I’d be living there one day.

I have to say that I’m pretty certain that had I not been working from home and been able to view the property at the drop of a hat, I would have missed the opportunity to buy it, so thanks COVID!

Just moving two miles away has had me crossing a border, into another council’s  borough, into another city even. Don’t get me started on the different coloured bins now for recycling – I have to keep referring to a post-it note before I throw anything away!

I am now closer to both my sis (only 5 mins drive away) and to my friends.  My gym is further away by a couple of miles but I can actually get there quicker as I can hop onto the motorway to reach it now. Manchester city centre is still less than 5 miles away, so still close by for social life and work (when I’m back in the office).

I also have a pub within walking distance from my house!  This wasn’t on my wishlist but something I always thought would be nice to have.  However, it’s been many years since I’ve been in that particular pub, so I don’t know what the clientele are like now, plus current climate has deterred me from just wandering in for a quick pint and a gander. More on that I’m sure at some point.

Sadly, I’m no longer within walking distance to a tram stop, so public transport will have to be the bus (unless I have time to drive to the tram stop I used to use); buses are not my favourite mode of transport, as I can’t read on them. This might be a time for me to finally embrace podcasts.

Neighbours, Everybody Needs Good Neighbours

“What are the neighbours like?” I had asked, during my second viewing of the property.

“Oh, they’re lovely!” gushed the estate agent.

“She would say that,” commented my sister afterwards. “Who knows, you could end up with nightmare neighbours!” Gee, thanks, sis!

Sadly, it was not just noisy, unfriendly neighbours I had to take into consideration for my house move; although my race and ethnicity has barely been an issue for me in my life and not even something I really think about, in the back of my mind, I couldn’t help but wonder how the people would feel about a non-white person moving into their neighbourhood.

How does one know what one’s new neighbours are like?

By speaking to them of course!

Prior to exchange, I drove over one afternoon to see if the neighbour was in. She was indeed and not only was she friendly, she invited me into her home for a chat!

Box ticked – PHEW! What a huge relief for me, but probably for her too, that she wasn’t  going to have a new nightmare neighbour herself!

Two days after I moved in, I invited her round for a cuppa. She’s now no doubt told the neighbourhood about me (she has various friends and family members living on the estate) which is great as it has resulted in a couple of others stopping to say hello and asking me how I’m settling in. I do think it’s worth getting to know neighbours, plus now, I have someone I trust to accept my deliveries when I’m not home!

The neighbours on the other (non-adjoining) side? It’s a rental property and although I’ve been told it’s a couple of beauticians/nail technicians who live there, I haven’t seen or heard a peek from them yet. Their garden (front and back) is a right mess though.

And the old neighbours?

The day before I moved out, both sets of my old neighbours had me round at theirs for a cuppa to say goodbye and in a lovely gesture, both gave me leaving cards and gifts – we had gotten to know each other more during lockdown and I will miss them.

Moving and Settling In

The day of the move (an Auspicious Day no less, something important to my family which I was happy to go along with), all went smoothly and as the removal van didn’t have very far to go, the whole process from loading up everything to emptying it all into my house took just under two hours! I was fully packed and ready the night before so there was no waiting time at all for them and they were really quick about their business.

As I wasn’t in a chain, I only moved bulky items, furniture and essential stuff – enough to fill the removal van but not to the brim! Since then, I’ve been back at the old house to pick up bits and pieces, things I want to keep but I wasn’t sure if I would have the space.

I’ve effectively downsized from a 4-bed house to a 2-bed (dropping three Council Tax bands in the process!) so wasn’t sure until I moved in and unpacked whether I could take all of the nice-to-have stuff left behind, or if they were destined for charity or the recycling tip.

In the old house, I used to make use of two of the spare rooms (for laundry and extended wardrobe purposes, ahem!), a study (for WFH), a shed, a utility room and garage.

Now, my spare room is the spare bedroom-cum-study-cum-laundry room and my shed will also have to store the things that I have in the garage, which has yet to be emptied – me and sis are putting this off til the last minute, probably will start panicking as the sale of the old house progresses!

Most things at the new place were set up easily, apart from my broadband, which inexplicably took a month to connect (fortunately I had use of a wifi mini hub so work wasn’t disrupted) and over 10 hours on the phone to sort out with BT, although they have given me a £20 credit because of my complaints…

I’m still trying to get used to buying my groceries from a different supermarket and actually miss my old Tesco’s, where the layout made sense (to me) so I could be in and out really quickly.

Morrissons on the other hand seems to be laid out to trap unsuspecting shoppers down random aisles, inviting and tempting me to make purchases I shouldn’t make, but I have to say that I do like their fresh meat and fish counters.

Forever Home?

I’ve lived here for less than a month so have no idea if this will be the case. I have however already planted some shrubs (shrubs I’ve dug up from the old place which won’t be missed!) which won’t mature for many years so that might be me thinking long term!

It still doesn’t quite feel like home yet; I can’t yet get used to how different it sounds from the old house, the different creaks and rattles. That said, my only restless night was the night I moved in, as I was sleeping in a ‘strange house’ – I’ve slept very well since.

A few friends (and colleagues) have asked for photos but I’ve declined – it’s my private dwelling and if I invite them round, they’ll see what it looks like. Only my family have seen photos of it (they obviously recognise all the furniture from the old place!), plus I did a little video tour to show them the size of the place – it was a very short video, haha!

After years of being used to living in a big cold house, I’m finding this cosy one a little on the warm side as it heats up really quickly when the heating comes on (my thermostat is set at 19 degrees). I’m sure I’ll get used to this and at least this means lower bills, a good thing with energy costs going up. The first thing I did when I moved in was get a water meter fitted as I saw that the previous owner’s water bill was more than double what I paid at the old house (including when sis and nephew were living with me!)

And that’s it really on my ‘home sweet home’.

Aptly, this pic shows the 3 new tiles I got on my roof!

I do hope that as time goes by and I settle in some more, I will stop possessing this  ‘critical eye’ as I can’t help but see things which need doing up around the place.

How long until I will stop this ‘seeing’ and just start being content to just live with these imperfections, so I can maintain my focus on FIRE?

I guess it’s just as well that I’m not one of those types who strives to maintain a beautiful home with all the mod cons, fit to grace the front cover of ‘Ideal Home’ magazine, otherwise my FIRE plans would be well and truly stuffed!

I have a couple of friends who do have such wonderful and beautiful homes, but they’re also the ones who mysteriously claim that ‘their house is their pension’, whatever that means.

In any case, I’ve banned myself from going to B&Q for the rest of the month and I think I need to do the same for the Amazon website!