Simple Pound

I can’t believe it’s been another month. Admittedly a short one, but a full month nevertheless. In any case, the upcoming review was a good opportunity to sift through all my receipts from my trip to Malta a week ago and categorise them as usual in my oh so beloved spreadsheet.

The financial end result of that rather lengthy exercise was a decent 2.46% increase in my overall net worth which translates into a 1% step towards my next goal (as shown in the progress bar to the right). While this is certainly not bad at all, I have decided to grow my money a lot more aggressively than I used to. I’m currently saving 10% of my take-home pay at most, which is just not good enough if I’m seriously considering the purchase of a flat in London in a year’s time (and I am). Hence next month’s mission will be to bring my net worth from 38.5% to 40% of my current goal. In order to do that I will have to save at least double of what I used to. Wish me luck…

I have also taken the opportunity to review my first budget and check how well it actually reflects my needs (and wants!). This was part of an exercise to figure out where I could save more and spend less than originally thought. In the process, I have made the following adjustments:

• I have doubled my expected interest income as my original estimate was a far too conservative. Based on the initial figure, I would have managed to earn a year’s worth of interest within the first 4 months. This wouldn’t really encourage me to save more (since I could have comfortably met my target just by keeping my existing savings) and hence I have made it a little more difficult for myself. The reason I haven’t tripled it (as you would expect knowing that my initial figure would have been satisfied after 4 months) is that I expect the Bank of England to reduce interest rates further which in turn will eventually reduce the savings rates available in the market.
• I have increased my phone (i.e. landline) budget by £10 as I hadn’t really budgeted all the phone calls I would have to pay on top of our free evening & weekend package. Most of those additional phone calls are used up when I speak to my parents abroad, which is an unavoidable expense as I am fairly close with my family at home.
• My household budget was reduced by 20% after I realised that most of our major expenses for the flat should by now be dealt with and there was no need to mirror last year’s expenditure.
• The budget for council tax was increased slightly to allow for a potential rise in the rate that may or may not happen - better save than sorry.
• Based on the last two month’s pattern, I have increased our food budget by 20%. There are two things in life that I don’t really like to compromise on - one being how well I sleep at night, the other what food I eat. If our spending suggests that we need roughly £240 to £250 a month then so be it.
• I’ve reduced my clothing budget by 33% and even though this means I have overspent in the first two months of the year, I think it shouldn’t be too difficult to cut down there in favour of knowing my flat’s deposit is happily growing. Even after the cut, the budget of £1,000 is still fairly generous and should accommodate any major shopping spree
• My gifts budget was increased by about 25% as well given the amount I have spent in this category in the first two months of the year. What can I say, I’m just too generous

That’s it for this month’s reflections. As usual, I have updated the Progress and Best Of page for your information and entertainment…

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