March into April
Is it because I’m getting older that time seems to be speeding up? I can’t quite believe March is over and we’re into April, a quarter of the way through the year! My goals for March were:
- Car finance – look at my options as my car finance is nearing the end of its term.
- Emergency fund – how much do I need?
- Savings – how much should I be saving a month, including for retirement. Just how much will I need to live on when I retire?
So how did I do? Two out of three isn’t bad, and a couple of extra updates!
Car finance – There were two concepts that struck me when I looked into the options for my car: question whether you are borrowing for an asset that will increase or decrease in value; and net wealth. I worked out that by having bought my car new 3 years ago, I’m now £7,000 less well off. This is based on the total cost of the car over the past 3 years (£12,500) and the current value of the car (£5,500 because of depreciation), a loss of £7,000. It’s been lovely driving around in a new car, but I’m in a worse position financially as I borrowed money for an asset which is now worth less.
I’ve been reading a lot of blogs written by people who have managed to retire very early (in their 30s or 40s!), and it involves saving a LOT. The difficulty is that this means spending MUCH less! Depending on how far you choose to take this, it can have a strong anti-consumerist element, and has made me question my attitude towards buying ‘stuff’. Since I’ve been looking at my finances this year, my car finance is the first decision involving an item of large monetary value I’ve had to make. I concluded that re-financing for a newer model was unnecessary and based mostly on the pull of a wanting something new rather than good financial sense. I’m in a position where I’m currently able to buy my existing car, so this is what I’m going to do. Decision made!
Emergency fund – 6 months of expenses is what I decided I’m comfortable with. I just need to decide which savings account is best for the job.
Savings – I’ll blame that speeding time, but I’ve yet to work out how much I’ll need in retirement. This is partly because I’ve been side-tracked by the looming ISA deadline on 5 April, as I think I’m about to take the plunge into a stocks and shares ISA for the first time. I’ve been reading about fund platforms, active / passive index funds, fund performance, bull and bear markets, all topics I know a bit about in theory, but have found I’m looking at in a completely different way when faced with the prospect of investing some of my own cash!
Cheaper energy – the switching of energy supplier finally took place, and as of this month I’m paying £50 per month less (£600 per year).
Penny-day challenge – £44.65 saved so far!
Goals for April
- Retirement saving – just how much will I need to live on when I retire, and how much should I be saving a month?
- Request a state pension statement after the new state pension goes live on 6 April to see how much I’m likely.
- Invest into stocks and shares ISA – choose the best platform and funds for my situation
- Renew my focus on everyday spending – March has been an expensive month and I feel I’ve lost control of what I’ve spent a bit.
The new financial year started on 1 April – here’s hoping I can replicate some of my January enthusiasm for spending only on the essentials in the month to come!
Image: Pixabay: JonKline