Eleven months down, one to go!
Finally, as mentioned in April’s savings rate challenge post, I hit one of my financial goals in early May – I now have 6 months’ full pay saved in my emergency fund! Boy, it’s nice to hit this one. It’s interesting how achieving a goal like this significantly reduces your stress levels.
Having reached that particular short term goal, my next planned step was to smash the living daylights out of my mortgage; however, with the recent reductions in interest rates to next to nothing, and the corresponding reduction in the price of ETF shares, I’m now trying to decide whether to split my focus between extra mortgage repayments and getting my investing off the ground. No firm decision as yet, but it’s food for thought.
Regular readers may recall that I had some excess mortgage payments absorbed into my loan by ME Bank at the end of April. Having contacted them to discuss my options, I’ve decided to make one of my accounts an offset account and keep my Mojo there. It was supposed to take two weeks to get organised, but I’m still waiting almost four weeks later – a query logged via the online banking mail got a response saying they’re swamped with requests and processing is taking longer than normal. Still, I have enough that I won’t be paying interest on much of my loan balance, and I’ve calculated that I could potentially pay it off completely in four years or less if I direct my ‘fire extinguisher’ savings to the loan as well (plus a little extra).
So, how did May go? To be honest, not as well as I thought it might. I took my car in for servicing and it needed a couple of things done, so that was over $1000 more than I was expecting to spend. However, the elimination of some really annoying vibration inside the cabin after a mount was replaced was definitely a plus – it had been going on for a couple of years and was really giving me the irrits! I also needed new glasses (nearly $500 because I needed new, lighter-weight frames as well as new lenses), and I paid the bill for the termite inspection and pest treatment from April. I also splashed out on a few more clothing items and a few bits and pieces for home. I think I just lost a bit of focus this month.
All up, outside of the car maintenance expenses, the household, personal and discretionary categories were the problem children, although the personal expenditure was almost completely offset by an under-spend on groceries. I also scored a small bonus in May – a $200 credit on my electricity account as some government assistance (I think it was due to the COVID-19 pandemic), so that was nice to receive and helped out the budget for the month a little.
Overall result
Normal scheduled savings were 34.49% of income, but net cash flow ended up at almost -27.19%, leaving a rather sad-looking 7.3% total savings rate for May – my worst result so far. 😦
FIRE for One 