The road to financial independence

My Financial Diary – An Introduction

I created the website and online tool The Budget Planner back in 2008. The reason for building it was twofold; 1. To move my excel budgets into an online space where I could access them wherever I was and 2. To gain experience of building and marketing websites. Nine years on, I have a fulfilling career in digital marketing and have been using the website practically everyday since launching it. I’d now like to take the site and myself further so I’m introducing my financial diary and some new goals.

New Goals

My new goals are namely to share how I use The Budget Planner to manage my own finances with the wider world and secondly to use the site to help me become financially independent within the next 10 years. By financially independent I mean to have enough money saved and working for me which will generate a large enough income for me and my family to live from. I don’t necessarily intend to retire in 10 years time but it would be great to have the ability not to have to work, should I so wish! I intend to meet these goals by creating a financial diary.

Where Do I Start?

In order to get to where I want to be in 10 years time it’s important to look at where I am now. And so without divulging every little detail, here’s a brief look at my current position:

    • 34 (nearly 35) years of age
    • In a long-term relationship but not married yet
    • No kids but hope to someday
    • No other dependants
    • I have a shared mortgage with my partner:
      • 17 years remaining
      • Circa £70,000 left to pay
      • House value approximately £160,000
    • No credit card debts or loans
    • 2 cars in our household:
      • 1 paid off in full (5 years old – out of warranty)
      • 1 on pcp, £95 per month until December 2017 (2 years old – covered by warranty)
    • £11,000 in savings (joint savings)
      • £5000 emergency fund in an easy-access online account earning 1.16% pa interest (will be moving soon)
      • £1000 in a Peer to Peer (P2P) account earning 3% pa interest plus £100 welcome bonus
      • £1000 in another P2P account currently earning 8.3% plus £50 welcome bonus
      • £2000 in a bog-standard savings account earning basically nothing! Waiting to be invested in another P2P account and spent on home improvements
      • £3000 in a terrible ISA again earning basically nothing. Waiting to be spent, possibly on a wedding!

Monthly Spendings

To help build the picture I’ve detailed our regular monthly spendings below which give a picture of how my financial diary currently looks:

      • Mortgage £462
      • Gas/Electric £61
      • Motoring Costs (exc insurance) £254
      • TV (Licence & Now TV) £19
      • Broadband & Calls £50
      • Council Tax (Mar-Dec) £111
      • Food £300
      • Gym £34
      • Contact Lenses £25
      • Language Course (Nov-Apr) £46

We generally pay for insurance products in a lump sum. This includes 2 x car insurance, travel insurance and home insurance. I prefer to do it this way than to pay extortionate interest rates insurance companies charge.

I’ve also omitted from this list our water bill which we pay quarterly although I am going to setup a monthly direct debit shortly as paying monthly is a pain. The quarterly bill comes to around £100 so monthly it will be £34.

The items marked in blue above are shared bills and so are split 50/50 with my partner. All in all, my monthly outgoings, excluding savings come to around £825. I will then typically have around £200 leftover to spend on myself for things like meeting friends and buying clothes. Anything else is then put into savings.

So that’s me (and a bit of my partner) in a nutshell. You’ll notice I’ve not stated my current earnings. I’ll be honest, I’m not 100% comfortable sharing this info just yet but maybe I will share in a future financial diary if I think it’ll be useful. What I will share is the fact between myself and my partner, we are saving between £1000 and £1500 per month. Not all of this will be invested, some of it is used to pay for holidays, home improvements, annual costs etc…

The future

I don’t yet know the amount I need to save in order to be financially independent in 10 years time but I intend to provide an update each month on where I am with my spendings and savings which I hope will give me a clearer indicator over time as to how much I will need.

These updates will also include details on how I put my money to work. At the moment I am doing a lot of research into peer to peer lending (which I will share with you in the future). This is giving me much higher returns than traditional bank savings accounts but can come with additional risks. I would also like to start investing in stocks and shares, but at the moment I don’t feel confident enough in my knowledge to start this. I will also investigate investing in property. Again, I’m not fully confident in my knowledge to do this, neither do I have sufficient funds to make a purchase but it will hopefully become part of the journey and I’ll include it in a future financial diary.

I’ll also be reading lots of blogs to find out what other people are doing. I’m really interested in the concepts of frugal living and passive incomes so I’ll share with you anything I’ve learnt and put into practice.

There we have it. Where I am and where I want to be. I hope you will join me in this journey and I hope my experiences over the coming years will help some of you too. Please feel free to ask any questions or make any suggestions on my finances in the comments section below.

I will add one final word to this introduction to my financial diary. I fully understand that I am in quite a good position with my finances and in no way is this post or series intended to highlight my good fortune. Until recent years I was not always so privileged nor was I debt free. I hope by writing these posts I can help anyone who is in the situation I was as well as working towards my new goals for The Budget Planner.

Time to get started…

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