August is over now and the expenses have been tallied up.
Another expensive month as we are preparing for the arrival of the Little Lady – kid number two.
Although that’s just an excuse as I need to blame something for the high spending this month). At least it’s an improvement on last month with a spend of £500 less.
Overall, we spent over £5500 – that’s a lot, too much certainly but in line with what was budgeted for the month:
- Childcare costs = £1,744
- Car Depreciation = £151
- Household Expenses = £515
- Mortgage Interest = £230
- General Spending = £2334
- Total = £4977 (less childcare = £3233)
- 6 Month average = £5210 (less childcare = £3490)
I am probably getting no sympathy from anyone on spending this much and then also aiming for Early Retirement. I know, I know – must try harder.
This month, there were some one off costs that should not be repeated (house costs) and also some birthday costs that are once a year. My predictions for this month are for a further reduction. Also, the Nanny will be going part time and possibly disappearing which will save an awful lot of money over the next few months.
This spending level is the high water mark and it should all be down hill from here. My wife is off work for a year on maternity leave so that should mean we cut down in work related expenses (which for example includes about £1 a day for petrol and more often than not £3.99 for a “meal deal” somewhere).
Finally some FIRE numbers for the month (and 6 month average:
- Savings Rate: 32% (32%)
- RIT Savings Rate: 21%
- Personal Withdrawal Rate (PWR): 7% (7.3%)
- Pre-Pension Funds PWR: 16.1% (16.9%)
Based on these numbers, I’m as far away from FIRE as ever. It’s a case of Ready, Aim, Fire to get ourselves in a position to pull the trigger. To retire on £5k a month even at a 4% SWR I would need £1.5m (around $2m), which I don’t have at the moment and it might take me forever to reach there. But on £2,500 a month at 4% SWR, I’m already there. The trick will be to reduce spending and that’s why I’ve gone through all my expenses over the last number of years and I’m analysing them for where we spend most money for least enjoyment/need. But that’s a story for another day
Thanks for reading,