January 2020 – Frugirl Finance

My financial philosophy in life is simple: live below your means and save the rest.

But I am not one of those people who ascribe to a completely monastic lifestyle by scrimping on basic necessities. On the contrary, I am a fully-fledged person with (sometimes expensive) hobbies, interests, and a penchant for high quality food and life’s best pleasures.

But I am also cognisant of the fact that I am saving for retirement at a rate that is perhaps far more aggressive than that expected of my contemporaries.

How best does one reconcile living life to the maximum on the barest of minimums in this situation?

I don’t know how best one should do it. But I know how best I do it … and that is through a well-thought out budget that makes provision for what will truly add value to my life and eliminating everything else.

Below is a breakdown of my monthly budget, which I will stick to to achieve the goals that I set for myself in 2020, but which, I hope, will allow me to live the life I deem valuable, meaningful and intentional.

You will see that I have not attempted to economise on many things: my rent, for instance, could be lower than the 36% of my income that it already is. And I have been quite generous with my provision hobbies and productive activities like language learning.

MONTHLY BUDGET 2020

FIXED INCOME
Monthly take home pay (net of tax and pension deductions): £3275

OUTGOINGS
Monthly auto-savings and investments: £1500
Rent, council tax, bills: £1180
Phone bill: £10
Contact lens: £20
Physiotherapy and massages: £110
Chinese and Japanese lessons: £90
Transport: £30
Ice skating: £15
Hiking: £20

Left to spend: £300
Of which the breakdown is roughly as follows: £150 on groceries, £100 on socials and eating out, £50 on other discretionary spending.

All in all the breakdown looks like this:

You will see that there are a lot of unusual categories in my budget. Language lessons, massages, skating, hiking take up a massive portion of my non-rent spending. I could easily cut those out and funnel the extra change to going out or shopping.

But the idea behind an intentional budget is to spend only on things that add value to your life. These activities add value to my life: massages are a great way to condition my body, skating/hiking is a great way to spend time on physical activity with others, and language lessons have been such a great way to engage in productive hobbies. The £235 I budgeted for these activities alone bring far greater rewards to my life than their monetary worth.

And you? What do you deem worthy in your life to add to your budget?

With love,
Frugirl

If I am being honest, this blog should have been made years ago, when I first came to know about personal finance. But here I am now, ready to use this space to record my journey towards financial independence.

2020 expenditure

My total expenditure for 2019 was £27,105.29.

This was way higher than it should be, not least because it was massive increase from my 2018 expenditure at £18,000.

Not that it was a justification or anything, but I did have a few obligatory big ticket expenses in 2019 (moving home, paying for my mother’s holiday in Scotland and attending a childhood friend’s wedding in Cambodia), but in all honesty, I had spent the vast majority of 2019 spending way more than I should have, on things that I didn’t need.

Some of my biggest unnecessary expenditures were the following:

Clothing: £1200
Amazon: £2017.62
Skincare: £317.26
Work lunches and snacks: £1522

Here’s the worst part – I don’t even know what I had spent half those things on! I remember donating at least half of the new clothes I had bought simply because I didn’t end up liking them, buying stacks and stacks of pantry items from Amazon that later went to waste, and buying endless skincare products that I was only going to use a fraction of. And not to mention the work lunches … I ended up buying salads and Leon lunch boxes even on the days I had brought lunch to the office.

Rampant overcomsumption. That has to stop.

In 2020, I will try to reduce my yearly expenditure to £20,000.

Low buy 2020

2019 was an odd year for me.

On one hand, it was the year I was introduced to living more sustainably, mindfully and frugally. It was the year I spent watching homesteading videos of families growing their own vegetables in their own backyard, the year I tried to practice slow living, the year I tried to make lower-waste switches and being the kind of person I would be proud of.

On the other hand, it was also the year I was fighting to stay afloat at my new job, the year I faced unprecedented challenges at work and at home, the year I was at my lowest point mentally and physically. It was the year I adopted incredibly unhealthy coping behaviours, like binging on junk … and binging on clothes.

It was undeniably a remarkably challenging year in the sense that I was trying hard to live according to my own values, but it was also the year my behaviours pointed me to the very opposite direction.

In an attempt to reclaim my 2020, I am going to try a low-buy year. in which I will only buy things that add value to my life.

2020 savings target

Four goals:

This is the year I am going to try to max my ISA allowance.
£25,000 total savings: with my current income projections, I think this might just be possible.
45% savings rate pre-August, 65% savings rate post-August (when I am due to get my pay bump).
£55,000 net worth: I haven’t yet decided if this is going to be an all-in or base figure, but there is something rather symbolic about seeing the big five-oh, so I’m excited for that.

Other goals

My biggest non-financial goal for 2020 is to improve both Chinese and Japanese to a B2 level.

But my my biggest goal for 2020 is ENJOY LIFE!

With this, I end my first ever post on Frugirl Finance.

I wish you all an incredibly prosperous and equally meaningful 2020.

With love,
Frugirl

Month: January 2020

Creating a budget that works for you

Financial Goals of 2020