Thursday, 24 March 2016

How I got on with my goals in February

Here is the first of my monthly updates where I provide a review on how I'm getting on with my goals for 2016. This post is reporting on my progress as things stood at the end of February this year.

1. Experience the joy, satisfaction and contentment of living with my partner (TheBF) for the first time
  • Accepting suitable offers for the sale of my house and TheBF's house, with both proceeding to sale completion - We received an offer for the asking price on TheBF's house so that's fantastic. I accepted an offer on my house, only to find out a week later that my buyer's house sale (without which they could not proceed to purchase mine) had fallen through. So 1 out of 2 properties on the way to being sold by the end of Feb. It's progress but with 1 step forward 2 back it seems!

  • Finding a new house to buy with TheBF which meets all our purchase criteria
    - We have not found a house to buy yet, but by the end of February we were hunting in earnest and had several viewings lined up

2. Gain the freedom to choose what I use my time for, removing the necessity of doing work that does not inspire me simply because it pays the bills

  • Pursuing financial independence - Good progress on this one...
    • Create a 2016 financial plan/budget [by February 29th 2016]   {DONE}
    • Create a "FI before 50 Roadmap" containing steps I need to take to become Financially Independent before the age of 50 [by March 31st 2016]   {DONE} - both of these plans can be found here
    • Follow the 2016 financial plan/budget - Achieved for February! My target income per month is £3,332 and somehow I managed to hit this with 8p to spare (£3332.08). Target savings were £1,000 into the Freedom Kitty (I achieved £1,048.22) and £2,000 into the Personal Pension (I achieved a whopping £3,000). So I over-achieved on both of these!

  • Researching alternative options for spending my time which could eventually help to replace my current mode of work
    • Create and maintain a blog site to track my goals and interact with the online community
      • Research suitable blog site & how to use it, and set-up blog {PREVIOUSLY DONE}
      • Deliver at least 1 post per week on average - Achieved for February! Even though I started the blog on 12th February I managed to publish 4 posts, so ahead of the game ever so slightly on this one
  • Research new alternative sources of repeat income
    • Generate at least £1 this year from a new source of regular income - I've not managed to get any new forms of income yet, though I have been doing some research into possible income sources

3. Become a better person by the end of the year, than I was at the start of it. Can be measured in terms of knowledge & skills gained, health & fitness improved, relationships circle expanded & strengthened, internal beliefs challenged & reviewed, positive habits created

  • Completing a personal development challenge with my sister (100 day challenge or something similar) - My sister bought a book for me called The Magic* by Rhonda Byrne this month. I've previously read her book and watched the DVD of The Secret* which I found fascinating, it really changed my outlook on life, particularly with the insights into the power of positive thinking. My sister tells me that The Magic includes a 28 day programme to follow so this is likely to be our challenge for this year - still to be decided!

  • Reading at least 6 new books - Until this year I've been really lapse at reading books. This year I'm trying to read a minimum of 15 minutes per day. My first book for the year is The 4-Hour Work Week: Escape the 9-5, Live Anywhere and Join the New Rich* by Timothy Ferriss. I'm about half way through it at the end of February, so a little behind target but hopefully I can catch up over the coming months

  • Losing 10lbs in weight by the end of July and maintaining the weight loss through till the end of the year through good diet and exercise - I'm afraid I've failed fairly spectacularly at this goal so far, I've just not been giving the pursuit of weight loss my due attention. This needs to change! I'm hoping to pull some motivation out of the bag for March

  • Going on at least 12 planned "date nights" with TheBF in 2016 - so far this year (by the end of Feb) I've arranged 2 date nights. The first was a trip to the cinema to see the latest Star Wars film followed by a cheeky dinner at Nandos, the second was to the Tamworth Snowdome where we had dinner and then went tobogganing - so much fun! We've also done a third date night which TheBF arranged where we went for cocktails at the casino then to the cinema to see Deadpool (which I'd highly recommend if you haven't seen it already)

  • Going on a family holiday to France where I can spend quality time with TheBF, my parents, my sister, brother-in-law and niece - this is now booked for the summer, looking forward to it already!

  • Researching and booking a mini-cruise with family - I made a start researching mini-cruise options, and started a spreadsheet to keep a "possible" list. However I've not completed this and still need to discuss with family whether they even want to go on one!

  • Introducing a routine of regular meditation
    • By the end of the year, I will be meditating a minimum of 3 times per week - Since I've not been in a contract during February I've had more time on my hands, so I've made a start with meditating but it's not up to 3 times a week yet. I've been using guided meditations on spotify and youtube as I find this works best for me

* affiliate links, if you purchase through these links the cost to you will be the normal Amazon price but I will earn a small commission for directing you to the product

4: Use my unique personal skills and abilities to help others achieve happiness.

  • Offering tips, support and conversation online through my blog, social media accounts and getting involved in the FI and Personal Development communities - I've set-up a twitter account for Organised Redhead (@OrganisedRed) to allow me to follow the stories of others, I'm also building up a reading list of FIRE blogs I like to visit where I will be endeavouring to be an active participant in the conversations that take place in the comments sections

  • Offering tips, support and help offline through any face-to-face opportunities should they arise, (meet-ups, coaching, training, speaking engagements) - I didn't have any particular opportunities to help anyone "offline" in February - though in January before I finished my last contract I did help coach a couple of fellow colleagues with their respective plans for buying a first home and getting out of debt

  • Supporting my chosen charities through a spread of donations totalling £350 this year - I'm on target to achieve this goal, I've donated £63.68 by the close of February. Most of my donations are automated so this goal should almost complete itself by the end of the year

And that's it for my February update! Overall I feel good about the progress I'm making. Since moving home this year is such a big endeavour, my primary focus will be spent on achieving that. Hopefully later in the year I'll have more time to focus on the other goals to try to get as many DONE as I can.

Did you make goals for 2016? If yes, how are doing with them? There'll be another goals update soon for how I got on in March [*spoiler* there's some news to report on the house move front!]

Saturday, 19 March 2016

Featuring on Canadian Budget Binder

Today The Organised Redhead is appearing in the Making a Difference (MAD) feature on Canadian Budget Binder. Every Saturday Making a Difference showcases a personal finance blogger, this could be from anywhere around the world.

If you have a personal finance blog and would like to be featured you can contact Mr. CBB and he will explain the process to you.

Please do check out my "MAD" feature HERE (it's just over half way down the page) and indeed the rest of Mr. CBB's great site.

Thursday, 17 March 2016

Introducing my new feature: Life's Simple Pleasures

I'm a firm believer that happiness can be found in the little things in life. From time to time I'm going to be featuring reflections on life's simple pleasures as part of my blog. My personal view is that when we focus our attention on appreciating these small things, we can experience a more peaceful, contented and ultimately happy life.

I do hope that you agree and perhaps can find happiness or inspiration from the little things I showcase here.

Oh and I'd absolutely love to include your simple pleasures as part of this feature! Please let me know if you have an idea that I can share and I will happily include your guest post, or even write about your idea if you'd prefer not to do a post yourself.

The key here is that no thing is too small! Anything goes!

So without further ado, here is my simple pleasure I'm delighted to share with you today...

Have you ever pondered the great delight that a hot drink can bestow?

Call me British, but for me my simplest and happiest of pleasures is in drinking a wonderful cup of tea. The most uplifting hot drink of the day for me is that very first cup of tea in the morning. I pop the kettle on, make my brew, feel the steam rising onto my face, and take my first, long sip - it's almost impossible for me to do this without saying "aaaahhhhhh" afterward, and I always experience a feeling of utter bliss as I relish that moment of complete contentment.

For some, the drink may be a steaming hot coffee, be it latte, cappuccino, flat white, or espresso to name a few. For others still, a hot water adorned with lemon, lime or orange. Then of course there's the delights of hot chocolate or malted drinks such as Horlicks and Ovaltine (other brands are available!). Seasonal drinks such as mulled wine, mulled cider or gluvine are yet more examples of the wonders of heated beverages which can light up (and heat up) our lives.

If you think about it, hot drinks are there for us through the many ups and downs in our lives. During the darkest and saddest of times, when people come together to support each other, one of the common denominators that people can bond over is the desire to pop the kettle on and share thoughts over a cup of tea or mug of coffee. A good strong coffee has brought many a student through a late night vigil endeavouring to meet an assignment deadline. A very British "High Tea" has become a social phenomenon that people use to celebrate any number of special events - I've attended these for baby showers, hen do's and indeed my very own 40th birthday celebration last year. Then of course there's the after dinner coffee, a perfect close to many a social occasion such as weddings, anniversaries or just dinner out of an evening.

A few years back (2011 to be precise) I watched a highly entertaining television series: "The drink that speaks for modern Britain". I loved watching as James May and Ozzie Clarke travelled all over the British Isles visiting vineyards, distilleries and breweries sampling the drinks on offer with lots of laughs along the way. As their adventure drew to a close they sat outside their caravan discussing all the drinks they'd sampled, trying to decide what the winner should be. It feels quite apt to finish this article using the words of James May as the program drew to a close...

James May:
“Do you know what I think? I think there is one drink that genuinely invigorates this nation. It allows no hindrance to its enjoyment on the basis of class, or race, or education, or income, or geographical location. It gets things done, it’s something that unites the people of this nation, and it’s something that other nations in the world simply don’t get. There is one drink. Do you know what it is?

Oz Clarke:

James May:
“It’s a cup of tea isn’t it? A cup of tea is the drink that speaks for modern Britain."

Can a mug of hot coffee, or a nice cup of tea bring you the same pleasure as it does me? Do you have a simple pleasure you'd like to be featured? Please let me know in the comments or using the Contact form in the right hand sidebar...

Thursday, 10 March 2016

Income, Expenses and Savings for February

Each month I will be publishing the following regular progress updates toward achieving my second goal for 2016 which includes the pursuit of Financial Independence:
1. Portfolio Value and Net Worth as it stood at the end of the previous month
2. Income, Expenses and Savings achieved for the previous month
3. My Investing Choice for the previous month's savings

This post covers point 2 above: Income, Expenses and Savings achieved.

Income - Feb 2016

I work as a freelancer (in project management within the I.T. industry). This involves carrying out contracts for my customers which tend on average to range from 3 to 12 months in duration. I operate through a Limited Company and invoice my clients on a monthly basis, who then send payment to the Limited Company's business bank account usually 1 month after being invoiced. I then receive a monthly salary from the business account, supplemented by dividends based on current profits.

At present the only other regular income streams I have are interest on my current account (the Santander 1|2|3 Account) and cash back for certain* direct debit payments made from that account. I'm particularly keen to find and experiment with new sources of income this year, so hopefully I'll have more to report on this in the coming months.

In January I sold my flat which had been vacant for some time and I'd been paying all the utility bills. The power company sent me a refund in February for the amount I'd overpaid by at the point of the account closure, so I've classed this as income.

Looking at my FIRE Targets for 2016, I'd specified a personal income target of £3,332 per month. I'm not kidding! I can't quite believe it, but I've pretty much hit that target on the nose for this month and I have to say I'm delighted with that.

* The Santander 1|2|3 account offers 3% AER (variable) interest when the balance on the account is above £3,000 (on balances up to £20,000) as well as cash back for selected monthly direct debits (1% for water, council tax and Santander mortgage; 2% for gas & electricity; 3% for mobile, phone, tv & broadband). More details and the terms and conditions about the product are available on the Santander website. This is not a referral or affiliate link, this is provided purely for information purposes only.

Expenses - Feb 2016

Just taking a look at the list a few thoughts spring to mind:
  • No council tax this month. This is because the direct debit scheme calculates over 10 months not 12, with no payments in February and March
  • One of my two cats was ill requiring 3 trips to the vets resulting in a spend of £202.42 ouch! Luckily I have a Savings Stash which paid for this (see below) and he's now fully recovered, poor thing
  • Holidays & Trips - I really enjoy reading the Financially Free By 40 site. Huw who writes the blog arranges 3 weekend meet-ups a year for like minded UK individuals and calls these "FIRE Escapes". I decided to go along to the next one for 1 night hence the £32. I've also got a friend's 30th weekend coming up in April which needed to be paid for this month. I've helped arrange some of the transport for this and one of the ladies is paying me her train cost in March (£27.10) so I'll see this returned as income next month!
  • It's really important to me to send birthday & anniversary cards/gifts. It's something that I've always done and am hoping I'll be able to continue doing while still being able to achieve my desired savings rate. This year I decided to get REALLY organised and make a list of all the cards I need for the rest of the year and buy them all in one go to take advantage of multi-buy savings. I spent £53.38 on this which felt like a lot of money for cards, but this would have cost a lot more if I bought cards on an ad hoc basis throughout the year
  • I've enlisted a conveyancer for my house sale (which unfortunately is stalled at present, more on that in an upcoming post), and this required a £50 payment for initial costs
  • The majority of my spending is paid using my cash-back credit cards, hence it's really easy for me to work out my expenses at the end of each month. However I do still like to make sure I always have a small amount of cash in my purse (normally £10 or less) and I don't always remember to note down what this gets spent on. I will try to be better at this in future months, but £40 doesn't feel too bad - I suspect I probably bought dinner one night with some of it!

For many years I've had a system where I put aside an amount of money each month to cover future bills and expenses (to help prevent nasty surprises further down the line which could risk putting me in debt). The expenses highlighted in yellow fall under the categories covered by my "Savings Stash", whereas the rest of the expenses are simply covered by my monthly income. The totals for this break-down as follows:

Savings - Feb 2016
If I take the expenses paid for by my monthly income and subtract these from my income for the month I can see what I've got left to move into my Savings Stash and Freedom Kitty:

As you can see the overall percentage of my income I've been able to save this month is 49.24%. However, the percentage I've been able to save into my Freedom Kitty is sitting at 31.46%. It's really the Freedom Kitty percentage which is the important one, because money in the Savings Stash is just to cover expenses spread throughout this year rather than for future use.

My 2016 FIRE Target was to achieve a monthly average of £1,000 into my Freedom Kitty, so I've had a good month toward this with £1048.22 allocated.

Since I've mentioned my Savings Stash, I thought it may be of interest to include details of this each month:

This may seem like quite a large pot of emergency reserves to be holding, however as a Company Director I have to complete a Self Assessment tax return each year and I'm holding the money I anticipate I'll need for paying my taxes in my Savings Stash. The Savings Stash also covers expenditures such as large car expenses, vet bills, Christmas, Birthdays, insurance as well as some savings for holidays and a new car.

So that's about it for my first month of sharing income, expenses and savings achieved. I hope it's been interesting for you, it's taken me a while to consolidate the information but I've found it a really worthwhile exercise and hopefully it will be quicker to put together next month. Thanks for reading and for all your comments to date, it's really encouraging to hear your feedback.

Do you hold an "emergency reserve" to fund future large bills and unexpected outgoings? If yes, I'm interested in your views on what you think is a reasonable size "reserve" in order to feel comfortable...

Wednesday, 2 March 2016

Portfolio Value and Net Worth - February 2016

Each month I will be publishing the following regular progress updates toward achieving my second goal for 2016 which includes the pursuit of Financial Independence:
1. Portfolio Value and Net Worth as it stood at the end of the previous month
2. Income, Expenses and Savings achieved for the previous month
3. My Investing Choice for the previous month's savings

This post covers point 1 above: Portfolio Value and Net Worth.

Portfolio Value - end Feb 2016

My portfolio includes the savings and investments in my Freedom Kitty as well as my Personal Pension, the combination of which make up my "FI Before 50 Roadmap".

Here is the end of month value of my Freedom Kitty:

This includes my regular £150 contribution to the ISA for February, but does not include any additional money I've managed to save during February - that will be invested in March and so will show up on the March Portfolio post.

As you can see, the current value of my ISA is less than the total amount I have invested so far (by £67). I think that the reason for this is due to the current state of the markets, though I also think that the fees involved with investing through St. James Place are playing a part. I'm a complete newbie to investing and so last year when opting to start saving into a Stocks and Shares ISA I chose St. James Place because I have no idea how to invest (and they already manage my pension). I am planning on reviewing my options for the 2016/2017 ISA year.

Here's how the Freedom Kitty is tracking for the year - I've set myself a target of £23,000 for this year:

Here's how the Freedom Kitty is tracking against the overall target of £209,590:

So I'm just under 5% of the way to achieving my Freedom Kitty target for 2016, and 0.5% of the way to achieving the overall target! Still a long way to go, but it feels great to have made a start, and even better to be tracking my progress on here.

Here is the end of month value of my Personal Pension:

At the moment the monthly pension contribution from my business account is £3,000. I have been out of a work contract since the beginning of February 2016 so there is a chance that the monthly pension contributions will be reduced from April if I do not take another contract until later in the year. This will really depend on my work circumstances. For now I'm making great progress with my goal to save £2,000 per month this year.

Here's how the Personal Pension is tracking for the year - I've set myself a target of £110,000 for this year:

So I've got just over 82% of the way still to go to hit my pension target for this year.

Here's how the Personal Pension is tracking against the overall target of £364,965:

At 23% of overall target I'm edging toward being a quarter of the way to my Personal Pension ultimate goal, that feels pretty fantastic. The money in my pension pot has been accumulating over time (to varying degrees) since I was about 25 which means it's had 15 years to reach its current value. Despite nearly being at a quarter milestone I need to continue to push for a high savings rate if I'm to achieve my goal of reaching Financial Independence in 10 years time.

Net Worth - end Feb 2016

I've included the outstanding balances on my credit cards in this calculation. I choose to use credit cards for my every day spending because I earn cashback on them and there is no annual fee (American Express and Barclaycard). I have direct debits set-up to pay these amounts in full each month, and once a year I get a nice little payback from them. I also have a Halifax Credit Card but this is only used when I travel abroad as it offers a decent exchange rate and no fees.

I've found it a really interesting exercise working out my Net Worth, it's something I've never done before so it's nice to know the current total. I've purposely not included any assets such as car, valuables or house sundries, it's really only the big or purely savings items I wanted to include. I'm happy with a current net worth of £225,225 and it will be interesting to see how this figure changes in what promises to be a year of change for me - selling my current house and buying a new one with TheBF.

Well, it feels like this has been quite a long post! I'm hoping that it's been interesting for you to read - I've certainly found it useful compiling it and I'm looking forward to seeing how the figures change each month.

Do you think this post has just about the right level of detail in it, or too much/too little? Is there any information I've not included concerning portfolio values which you'd like to see? Do you track your net worth? As always I'd love to hear from you and appreciate your comments...