Rather a lot of restructuring happened this month. The back-end of the spreadsheet (snippets of which I share each month, below) saw a major overhaul. There are three main “tracking” sheets: cash flow through the main current account, household income & expenditure and net worth. I created a Google Form which allows me to input all income and expenditure (actual net gains and losses – transfers from one account to another, e.g. investments, don’t count as net gains or losses) as and when they arise into a worksheet. The ‘income & expenditure’ worksheet then uses some rather fancy – if I do say so myself – ‘Query’ code to automatically populate itself at the end of each month, categorising money into the correct ‘month’ column and the correct ‘category’ row.
The aim is for the spreadsheet to be as hands off as possible, but there are some limitations. The Net Worth worksheet requires manual inputting because there’s currently no way of automatically collecting information on account balances from online banking (this is possible in the US, I believe, but regulations in the UK are a little stricter). As a result, finding the balances of the couple of dozen bank accounts we have between us requires physically logging on to each account – an unavoidable chore! Word on the street is that banks might soon start offering APIs which allow read-only access to this information, so hopefully I can wangle that in the future to automate more steps.
Another big change this month is that I finally got cold feet and jumped into equities. Now that this year’s finances are pretty well known, I felt like I could look ahead and see how much money we have available to lock away. A monumental moment, because, in theory, the next time we touch that money is when we retire, if all goes well(!) This level of forecasting was facilitated by my upgraded ‘Life Planner’ worksheet. Each row covers one year, and in each year I input either historical or forecast data about income, expenditure, mortgage capital repayments and annualised return on investments. To complete the forecasting, we’ve made a placeholder assumption that we’ll get a 75% mortgage on a £350,000 house roughly around half way through our 3rd year of work (Jan 2021). With all the numbers plugged in, I can see that we will have surplus cash after the deposit + fees of ~£40-50,000. Hence, I feel that we can now aim to put ~£40,000 in equities before we buy a house and still have enough left over to actually carry out the move, thus minimising our exposure to cash, which , as an asset, has very poor return on investment at the moment.
If that doesn’t make much sense right now, not to worry, because the numbers are liable to change as they get refined with every passing month. For now, we can focus on August:
A big hitting month as it’s the start of a new financial year – I’ve made the executive decision to name 1st August as the start of the financial year as that’s when we will change jobs, and therefore salaries, for the next 5+ years.
A double-dose of NHS bursary, along with the anticipated grand-parental contribution and a random gift from them, too, helped us to a record monthly income of just over £5000.
Income from interest remains strong. Much of that – ~£150 – is coming from Lendy (12%), with the rest coming from Ratesetter and a host of current account monthly rewards.
Misc, this month, comprised of a tenner for giving blood, £40 for filling out an interminable survey for a scientific study on sugar intake, and a marvellous £28.18 profit from 5 free spins that Paddy Power gave me out of the blue! Nice to see the crooked gambling companies still handing out money.
With record income comes record expenditure, I’m afraid. August/September are usually big spending months mostly because there’s a few big annual bills to pay: TV Licence (£147) and annual line rental (£197.88, will go through in September).
There were a couple of funner purchases, however, in the form of a decent quality rain jacket each (£142.97 total) in preparation for Scottish elective next February. With a bit of luck, it’s the sort of purchase that should last years into the future, so no point in cheaping out. I’ve also bought a few sets of train tickets in advance because we are up and down from the south coast again for a couple of months.
The final killer that I’ll mention is driving: 12 driving lessons and booking up the test does not come cheap these days. Pretty much 95% of my driving is now already accounted for, pending any failed tests, so this cell should mellow down a bit from now on.
“Saved” nearly £3,000 this month, but really that needs to be spread out over the next few months, so it’s not a very useful metric until we start earning a regular salary.
Net worth hits new dizzying heights this month, with the forecasts estimating it peaking just above £60,000 for the next two months before dipping back down again until we get a salary.
As mentioned, the big change here is the introduction of “Market Investments”. I’ve made the educated decision to get into the market now because my latest round of forecasts demonstrate a surplus of cash by the time it comes to whacking down a house deposit. There’s another £1650 available in this year’s budget which will find it’s way into Vanguard in September. To keep things simple (and after much research, beyond the scope of this summary) I’ve elected for Vanguard Life Strategy 100[% equities] invested in a S&S ISA directly with Vanguard as they offer the lowest fees for their own funds. Really, the next time this money comes into my hands, will in theory be when we become FI.
FI progress hits 5.82%.