Monthly Net Worth Report #2 July 2018

Hello again and welcome to another monthly update!

The first formal month of this journey has been a good one! This blogging game is certainly a daunting task to get off the ground but a very enjoyable one at that. I’m learning something new every day and trying my best not to get distracted too much by the latest fancy plugin or theme. The weather here in the UK has been exceptional and my eldest two children have finished school and nursery for the summer holidays so its going to be all systems go for a while keeping them and the little one entertained.

Net Worth Report

What Happened In July?

I had three goals for July:

  • Evaluate how we can lower our car expenditure going forwards
  • Look to optimise other aspects of our spending
  • Continue to learn the essential blogging skills and make improvements to Pursue FIRE

Car Expenditure

As I briefly touch upon in last months post, we have been somewhat guilty of lifestyle inflation and the ‘buy now pay for it later’ culture that is so endemic in our society. With us, this has centered mostly around car ownership.

With a young family, we require a fairly large family car that can accommodate three young children, all of which are currently in car seats and will be for the next several years. This significantly limits the choices available and so a year or two ago (pre FIRE mindset) we opted for one of the few 7-seaters on the market that can fit three children (in their bulky but necessary child seats) across the middle row.

It seems the vast majority of 7-seater cars (in the UK at least) cannot realistically accommodate three kiddies across the middle row, which forces you to utilise one of the smaller rear seats in the boot. Not all bad you might say, but with these seats up you lose most, if not all, your boot space and we were keen to avoid having any of our kids permanently sat in the boot area sitting amongst any luggage we might be carrying and in the dangerous ‘crumple zone’ should we get rear-ended in an accident. 

With that in mind, the choice is then essentially a toss-up between driving something resembling a mini-bus or a stylish (but expensive) premium family SUV. I think you can guess which one I opted for 😉  

As lovely as it was, my FIRE mindset now knows that there are significant savings to be had, especially given our decision that my wife would not be returning to work. It is, therefore, necessary to look at switching out of the premium solution (bought new and financed) and seek a good quality second-hand solution that we can purchase for cash, and thereby get ourselves out of the perpetual cycle of car finance, and regular upgrades.

This is something we will definitely be doing in the next month or two, once I’ve carved out a few weekends to do the rounds at the local garages to engage it the cat-and mouse-game of part exchanging and securing a good all round deal. 

We also have a second car which I rely on as part of my rather gruesome daily commute. That too is currently on finance, and while it is significantly less of an outlay than the family car, it still adds up. Here too, a switch is in the works once the higher priority switch of the family car is completed. All of this will require making a sizeable dent in our savings, but eliminating the debt is a top priority. 

Optimise Spending

In terms of optimising our spending, this is really a daily endeavor rather than a one-shot solution – I’m always thinking of ways to streamline our finances wherever possible :-). Three things of particular note that we have recently introduced into our budgeting framework include:

Culling Unnecessary Accounts

Over time we have amassed a number of different accounts. Some are legacy accounts from before we were married; a number of joint accounts and some more recent additions too. All of this felt very inefficient, especially when trying to track and monitor our spending.

So I’ve been busy moving any legacy balances out of the unused accounts into our main accounts and either closing those accounts down or (at the very least) taking the cards associated with those accounts out of reach so that we don’t get tempted to use them and muddy our financial tracking month-to-month. A bit like having a clear-out of the house from time to time, clearing up your financial infrastructure also feels good! 

Segregating Bills From Spending

In another related step, we have made a very conscious and deliberate decision to segregate our bills and expenses from our daily discretionary spending. Essentially, we now have one joint account where all of our direct debits and other expenses are managed (things such as mortgage, utility bills, insurance etc) and my main salary also feeds straight into this account.

Importantly, we don’t spend on this account (the cards are not in our wallets). By subtracting the essential expenses from the income received, this gives us a very accurate picture of what is left to be directed towards discretionary spending. That figure is then transferred out to a second joint account where all of our spending for the month is done (the likes of food, shopping, petrol, eating out, kids clubs etc)

Bank Account Structure

To make the task of analysing where our discretionary spending is going, we have also been testing out some of the new digital challenger banks in the UK, including Starling and Monzo. Run entirely from your phone, they offer many advantages over traditional banking such as being able to instantly categorise your spending, allow you to group them into different groups of your choosing and provide insightful dashboards and visuals of where your cash is being spent.

We have really loved them both and there is not much to choose between them in all honesty. We slightly favored Starling and have opened up a joint account with them where each of our spending is tracked instantly. This means either of us can, at any point in time, see an up to date visual of what we have spent, where we have spent it and what we have left for the month. In my opinion, it is a very transparent means for a couple to be on top of their shared spending and be mindful of exactly what decisions have been taken. 

I also really like some of the budgeting apps available on your smartphone. Yolt is one I like in particular as a means to aggregate several accounts together to get an overall look-thru picture of incomings and outgoings. 

I’ll be writing more about Starling, Monzo and Yolt in the future as I think they are great tools for anyone looking to get on top of the daily flow of money into and out of your accounts.

Blogging Skills

In terms of blogging skills, its probably bending the truth to say I have any as of right now, but I continue to make small, if not insignificant improvements. I’m slowing getting my head around the various parts of the process but I know that it will take me a long time to be really on top of it. Time is at a premium with a young family so as long as things are improving month-to-month I’m happy with that. Blogging is going to be a slow-burn but enjoyable process nonetheless.

Net Worth Snapshot

Right, let’s take a look at some numbers for July. Below I break down my current financial assets as at the end of the month and compare these to last month totals:

Pursue FIRE July

There was not a lot of movement over the month. Overall, my total net worth edged up 2.3% to £522,707 (an increase of £11,930). Excluding property, it was a 2.7% increase to £288,623 (an increase of £7,541).

The bulk of this uplift was driven by my pension account. On top of the monthly contribution that goes in (around £850), the returns from my investments were solid, adding several thousand more to the pot. Elsewhere, things ticked along as expected.

A quick look at the year-to-date picture shows that my total net worth has now advanced 9.7% for the year (+£46,137) and, excluding property, that’s an overall increase of 12.3% (+£31,669)

Focus Areas For The Coming Month

In the coming month, I will have three main focus areas, either side of a family holiday:

  1. Finalising the first car switch
  2. Continue to learn the essential blogging skills and make improvements to Pursue FIRE
  3. Try and get more content up on the site!

Thanks for taking the time to read

Until next time!

Dan

Do you have any comments, questions or tips for me? Please let me know by leaving a comment below

This Post Has 2 Comments

  1. If you like the dashboard approach I use moneyhub across all my accounts including pensions invesments and bank accounts. There’s some that don’t link (i do p2p) that you have to do manually but otherwise its really useful. Also tracks spending

    1. Thanks for your comments! I have played around the MoneyDashBoard, and indeed pretty much every piece of budgeting software out there (YNAB etc), yet I always seem to return to a trusty spreadsheet as its the only way to fully customise to your exact needs. Increasingly though, I’m enjoying the added functionality of the challenger banks (Monzo, Starling etc) as they do a great job at aggregating money into clearly define categories and it saves on a lot of the admin. Other services like Yolt are great for that too

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Hello and welcome to Pursue FIRE. My name is Dan and I am the owner and author of all content on this site. I am passionate about personal finance and look forward to engaging with you.
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