May 2021 Budget

May has definitely been quite an eventful month.  Lockdown has been eased but the weather has made it difficult to go places, rain has had a bit of an effect on my earning potential, I finally bite the bullet and after months of umming and ahhing ordered the fabric I wanted to make my trousers, the scary tax returns were done, we've moved into the land of birthdays and all the spending that goes with those, and I finally got my first Covid-19 vaccine (always good).  Some of these have had a bit of an effect on our spending and earning for May.

As always let us start with the good.  I still have my £1000 emergency fund and no debt sitting on my credit card.

We've also managed to continue putting money into our sinking funds for car repairs and Christmas, as well as actually putting away £401 into our savings account this month.  Most of this money actually came from the money I had put aside for taxes over the last financial year but then didn't need to pay.  As it was savings any way I just transferred it straight into our savings, which was a nice little outcome and means that we are almost halfway to completing our savings goals for the year.

I also put £225 into my pension which I'm very proud of and means I'm on my way to completing that goal for this year as well.

We are still spending quite a bit of money on food and household products, but looking back at previous months that spending has reduced quite a bit.  So, whilst it's not great it is going in the right direction and that's what I'm focusing on at the moment.

I've also decided to add some more lines to our budget to give us a better idea of where exactly the money is going and what we need to work on.  These are take-away which has actually turned out to be quite high, birthdays which won't really change much but is still good to have it out of our general spending category, and wedding spending as we are getting to the point where we're starting to spend money on this and it'll be good to keep an eye on it.  We don't actually have a budget for this last category, but we should probably do a bit of research and make a decision on it so it doesn't get too out of hand.  Not that it's going to be a particularly pricy wedding anyway.

One thing that has gone up quite a bit this month and of which I have no control over is fuel costs.  This is because it depends entirely on the location of my worksites.  I just have to hope that we get some sites closer to home soon and this will then reduce that number significantly.  There's also been some additional money spent on doing sightseeing things in May and that's absolutely fine.  We decided right from the start of the year that we didn't want to save money at the expense of not seeing the area we are living in at the moment so, as long as it's not getting us into debt, we're going to keep doing that for the rest of the year.

I suppose this month could definitely be classified in the 'could do better' category.  It wasn't a complete failure and we have done better this month than in the last few.  However, there is still room for improvement when it comes to unnecessary spending as earning potential is all down to the whims of the weather, and that's what we'll be working on in June.  How exciting.

April 2021 Budget

I was hoping that as a big chunk of our expenses for April came out in March, that we would have a good month this month for savings.  Unfortunately, that didn't actually turned out to be the case.  Entirely our fault as we've been a little bit spendy this month.  Admittedly some of it has been on things we're going to use for activities that will cost us nothing in the future, but it still feels bad seeing them laid out in our budget and we can't put it all down to that.

Starting with what went well this month.  I still have my emergency fund sitting in my savings and haven't built any more credit card debt, with the balance staying at zero.

We've also put aside the £65 and £45 for the Christmas and Car Repair sinking funds we had planned for this year.

I was also able to put aside the £225 for my pension, which I was a little worried I wouldn't be able to do this month.

Unfortunately, we didn't put any money into our six-month savings fund, probably because we spent a little bit too much on snacks and buying ourselves goodies of the other kind.  Admittedly our savings do look a little worse than they actually are as our rent came out of the money we keep in the joint account to ensure we never get overdrawn and which I include as part of our six-month savings funds.  However, there definitely should be more in there had we been a little bit better behaved.

Despite me saying last month that we needed to do better on the spending when it came to groceries and, if I am honest, household items, we've actually spent more this month.  One of the biggest problems is the fact that, now that everything needs to be brought by card instead of cash, it's not that easy to see exactly how much of the money is going and all too easy to just keep spending on the  snacks.

The same is also true when it comes to additional spending, especially on take away food and maybe, just maybe some eat-in food now that we can do that again.

If we pulled back on the spending on groceries, household, and personal items then we could easily money aside into our savings, possibly around £400 a month.  We just need to think of a way of keeping an eye on our spending that we can both see and make use of, and isn't as fiddly as pulling up an excel sheet every time.  Possibly an app in the future, but maybe just pen and paper for now.

Financial Fitness: Sorting Out my Pension

 

Pension are one of those important things that people regularly tell you that you're supposed to have and start as soon as possible.  Of course I didn't do that start as soon as possible thing, mainly because I worked a lot of part-time jobs and didn't feel that I was earning enough to be able to afford to do so and, of course, there was that idea that I had plenty of time.  However, it's never too late to start and thankfully I'm not quite at the half way point of my earning life so I decided, whilst I have some extra time on my hands, I would get it sorted now and go from there.

The first thing I needed to do was work out exactly how much I would need to aim for by the time I retire.  There's a variety of advise about this, with some people saying you should aim for around 70% of your annual income, which you then times by the number of years you expect to be alive, whilst other recommend just times your current earning by ten.  So that gives me a range of £170,000 to £230,000 by the time I'm 68.  Should be interesting.

I also checked the Government website and found that at the moment, based on what I've contributed through my National Insurance, I'll get £100 per week and, based on an estimation on what I'll contribute up to when I retire, I'll get £175.  All good to know.

I am lucky to have this state pension, unless that changes in the next thirty years, and a few of the companies I worked for did start a work place pension for me, one of which I carried on contributing to when I could until Covid happened (Nest if you're wondering, and no I'm not sponsored).  I decided to not go with a completely private pension scheme, it was all so complicated when I looked at it, but decided to keep with Nest as it's government based and, therefore and hopefully, government protected.  I wasn't sure if these previous pension schemes still existed and, if so, how much was actually in them.  Now that I had given myself an idea of how much I needed to put aside (all be it a rather large range) I needed to find out about these other private pensions and the plan was to combine them into one.  When I had previously looked at this, and then run away in fear, I am pretty certain that the Government was able to help you with this by using your National Insurance Number, but this time they just seem to give out contact details for the different pensions schemes.  So I went through my employment history and contacted those I knew had at least started a pension for me.  I knew that in most cases these would have been closed when I left the organisation, as I wouldn't have been there long enough, and the money returned to me.  However, I wanted to double-check that this was the case.  There is still on company I'm waiting to hear back from, but all the other pensions have been accounted for (I hope) and consolidated into one place.

Now that I have everything in one place I can see where I am and it's not a great place, my pension pot is not large, but it's not as bad as I thought it was going to be.  Using the Money Advise Service, and based on the idea I'd be able to pay £250 a month into my pension pot from now until I retire, I should be easily reach the £12,600 per annum which is 70% of my annual income.  I also did a little checking on Nest as well and, also based on the idea that I'm able to put aside £250 a month towards it, it came up with a pension pot of £156,000.  This amount is a little bit less that was I was wanting to aim for.  Funny how they have both come out differently, but it's good to look at non-the-less.  If I'm honest I could probably live easily off those amounts, but it would be good to have extra so that I can have a much more enjoyable, relaxed retirement and I can't really rely on the Government actually giving me the pension stated.

One thing that keeps popping into my head when I think about my pension, and which has nothing to do with the panicked thought about how little I'm putting in, is where the money is going when sitting in that pot.  After all, pensions are little lumps of money we give these organisations to, hopefully, grow by investing into companies and organisations.  I want to make sure that mine aligns with my ethical beliefs and doesn't support companies I don't agree with, such as arms dealers and tobacco companies, whilst supporting things like renewable energies.  Luckily, my pension was quite easy to switch to the 'Ethical Fund', but I know that other pensions aren't as open or easy to select and that might be something you want to think about.

There is one other thing I do need to think about here, and that's the fact that I'm still not earning at the moment and am, therefore, not able to contribute to the pension as I would hope.  This means that when I do finally start earning, and to get to the amount that I'm hoping for, I should actually be putting in around £300 per month as soon as possible.  Something to really think about when I come round to trying to work out my budget for 2021.  I'm wondering if I should start posting about my monthly budgets on here. What do you think?