Monthly savings report: July 2019

Updated September 2019

Whilst everyone is enjoying the hot Summer weather at the pool or beach, it is time for the monthly savings report July 2019. July had its ups and downs weather-wise and the same is true for my finances. I was on holiday for two weeks this month, visiting my family in Germany. We had over 39° Celsius so not that I wanted to go anywhere! Anyway, now I am back at work and it is time to crunch some numbers. If you are interested in how I did last month, last month’s savings report is here.

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How to calculate your savings rate

To calculate my savings rate, I have always simply multiplied my savings with my income and divided by 100. I have never bothered to take into account my pension. After reading up on the subject, I found out that the vast majority of people add their workplace pension. Hence my new formula is as following:

(my savings + my pension contribution + employer pension contribution) x 100 / (total take-home income + my pension contribution + employer pension contribution)

Because my expenses stay the same but my income and savings increase, my savings rate will appear slightly higher than before. On the other hand, it will be more comparable to that of other people. I have recalculated my savings rates for the past months:

• April 2019: 61.7%
• May 2019: 58.3%
• June 2019: 57.0%

This looks like I have made great progress towards financial independence and early retirement (FIRE), when in fact, I only changed the calculation.

Monthly savings report: July 2019

Goals checkpoint

My goals for July 2019 were to enjoy my holiday and sort out my German private pension.

Enjoying my holiday was not a challenge but I definitely had trouble with this pension! In the end, I just canceled it and am now expecting my money back (minus the not neglectable fees). Despite having paid in for a number of years, overall, I will still make more money by transferring the money to an account with lower fees.

If you have any such dubious pensions or other savings accounts, I highly recommend checking the associated fees. Even if you pay an exit fee, it may still be worth it to transfer the money to a better account.

Monthly savings report summary for July 2019

Income

My total income after tax in July 2019 was £2,692. Apart from my regular salary, this is made up of my matched betting profits, blogging income, and fund growth as well as interest. As I was mainly abroad this month, I only made £265 from matched betting. Additionally, I was gifted £45 by my family.

Expenses

My total expenses in the savings report of July 2019 were 1,121. Rent, as always, is the biggest expense but at least it includes all utilities, council tax, and Wi-Fi. Despite having spent two weeks at my mother’s place and essentially eating for free, I still spent a lot on food. This is due to me bulk-buying certain items in Germany as, let us be honest, food in the UK is not nearly half as good. I also brought biscuits and stuff back as presents for friends, but Monzo just categorised it all as “food”.

As you can see from the graphs, I modified my expense categories. I have combined many of the smaller categories to make the graphs cleaner. For example, I calculated that I spend, on average, £3 per month on phone bills (I mainly use Wi-Fi). Hence, I put my phone costs in the housekeeping category (formerly “food”). Petrol and travel have been combined to form the transport category as I mainly travel by car. Health now includes my gym membership. I introduced a new category which I called “one-off expenses”. This includes bigger expenses such as car repairs and blogging expenses (this month I paid for my Tailwind account). I will label these expenses individually in my spreadsheet.

My yearly payment contribution flows into a separate instant-access saving account. I use this money for expenses that only occur once a year such as my car insurance, flights to visit my family and insurances.

To create these graphs, I used Microsoft Excel and data provided by Monzo. Monzo is a genius mobile bank that automatically breaks down your expenses by category. Saves me a ton of work! If you follow my link to sign-up, you will receive a £5 bonus.

FIRE fund

Last month I mentioned that I had a private pension policy which I did not fully understand and had the document at my family’s place. I have now cancelled this pension due to its high fees. Despite paying in for years, only £2,000 was left after deduction of all fees. This highlights that you really have to be careful when taking out a pension (or insurance) and should not solely rely on the advice of family members. In any case, I will invest the leftover money otherwise and have added it to my FIRE fund. This gives my FIRE fund a nice big growth of 42% this month.

My Vanguard fund, invested in the FTSE Global All Cap Index Fund Accumulation, has done exceptionally well. Since its inception in April, it has grown by a stunning 14%. I am so happy I overcame my fears and decided to invest.

Apart from my Vanguard fund, I also have £1,000 invested with Ratesetter for 14.9% interest. If you are interested in opening an account with Ratesetter, you can get a similar rate using my link. Brickowner currently have a similar offer (invest £1,000 get £50) when you sign-up with my link. Brickowner’s return is worked out different to Ratesetter and depends on the property you invest in. Please note that while these are great offers, it involves peer-to-peer lending and as such comes with the risk of losing money.

Goals for August 2019

In August, I want to restart matched betting properly. I also want to focus on building my Pinterest account as I was really successful with it this month and Monethalia got a lot of traffic from it.

My August 2019 Savings Report is available here.

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Jennifer