Reducing the discretionary spend – July 2020 results

Can you hear the cackle of evil, witchy laughter in the distance? I can! It’s the Ghost of the Past Financial Year giving me a razzing.

Yep, July was a significant failure in the ‘reducing my discretionary spending’ challenge. However, it did bring into focus something that I kind of knew already, but to which I hadn’t paid much attention – I find it way too easy to find an excuse to spend money on things that I probably definitely don’t need to spend money on.

July was my birthday month, and I know I used that excuse to spoil myself here and there. While individual amounts weren’t excessive, they certainly added up at the end of the month. I took myself away to the Sunshine Coast hinterland for a few days for my annual birthday trip (only intrastate – no COVID touring happening here, folx!). Considering my original plans involved a ten-day trip away, I got away with a significantly cheaper holiday than I had expected (I was going to go to Warwick for the Jumpers and Jazz in July festival, but it got COVID-cancelled). I also visited a winery cellar door, so naturally I had to buy some wine! 😜

So much for making myself up a reminder sign! However, the only solution is to move forward and aim to do better. (If I’m honest with myself, the sign has actually stopped me from cheating a couple of times, so I just need to be more intentional about this.)

I am budgeting again this year, but I’ve made considerable changes to my approach. This year, I’m doing an ‘all in’ budget – measuring against my gross income, and incorporating tax paid, salary sacrifice into superannuation, insurance premiums inside super, plus my regular savings and expenditure. My spreadsheet is seriously impressive, even if I do say so myself. I’ve also re-jigged my categories (utilities are now under Household, for example), and the discretionary category has gone, but specific line items – especially those problem areas – are contained elsewhere under more specific categories (so eating out/takeaway is now under ‘Food & Groceries’). I also now have a travel category, which I didn’t have last year (not that I needed one last year, since I didn’t go away). It’s a bit more work, but it should be an interesting experiment to do it this way. If it annoys me too much, I can always go back to just measuring what actually comes in and goes out from my take home income.

One thing that I am a little excited about is that towards the end of August I will have enough money in my offset account to completely offset my mortgage, so I won’t be paying any interest after that! Woohoo! I’ve also calculated that if I use my ‘Fire Extinguisher’ account to hose down the mortgage debt, I should have it paid off by late 2023. This would cross off my medium-term goal. I’ve been tossing up whether to kick off my investing instead, but the mortgage bugs me way too much; I’m really feeling the need to get rid of it as soon as possible. Seeing as retirement is (hopefully) about twelve years or so away, I just don’t want to still be paying a mortgage by then.

So, that’s where things are at for me at the moment. It feels a little weird, actually – having finally reached the top pay point of my rank, my fortnightly income will be the same across the entire financial year. The past couple of years I’ve been eagerly anticipating each pay rise and have had to fiddle with the split across my ‘buckets’ as things changed, but now… everything is set and it just rolls along without me paying any attention to it. I think I’ve hit that point where chasing FIRE becomes, well, boring. But that’s probably the best place to be. 🙂