Tracking Expenses to the Penny

The thought of tracking expenses to the penny always struck me as being way to strict and burdensome. I remember when I read the book ‘Your money or your life’ which talks about doing exactly that as part of its FI strategy that it wasn’t for me and even though I’d like to budget and know fairly accurately what I’m spending that it was a step to far.  I can’t really recall what specifically changed my mind or made me give it ago in May 2015 but since this date I must be honest, I haven’t looked back.

Pre FI Exposure

I have been budgeting probably since 2011 which was pretty much before I had a full time job. I tracked my incomings and regular bills but I never tracked my actual expenses when it come to what I called disposable income (money left after standard bills) or exactly what I spent on food or fuel. I simply recorded the direct debits so I could see if anything increased on a monthly basis. I would know that I roughly spend £100 on fuel for example and £120 for food and that with my regular direct debits/static bills that I would have £200 disposable income left or £50 a week to spend on daily activities/outings and spends through out the month which could include a book or a game etc.

As I knew I would have £50 a week on average, I would loosely spend accordingly. It was easy to know if I was spending more or less as I had no real savings so all I had to do was look in my wallet and at my bank balance and I’d know if I had overspent or not. During this time, I used my credit cards now and then for big purchases but always tried to pay back the balance over a couple of months. The largest balance I ever had was £2200 from the time I went window shopping at Comet and bought a £2000 TV :o.

To the Penny

As I mentioned in the intro, I decided to start tracking all my expenses down to the penny in May 2015 as part of trying everything I could to help move FI closer to being a reality. To be honest and even to my own surprise, I found this rather easy and not burdensome at all. I actually enjoyed doing it! I liked keeping my receipts and working out what category to put things into.

I still use my monthly budget which is simply an evolved version of my older budget spreadsheet that provides me a rough idea of how much I expect to spend in categories such as Food and Fuel which aren’t completely static but now on my expenses spreadsheet I record exactly what I spend for each which allow me to see if my budgets are realistic or not as an average cost per month.

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Gratitude for being on the Path to FI

I gave a fair bit of thought as to what to call this article. Some of the names that I thought of were “The privilege of being on the path to FI” and “The Good fortune of being on the path to FI”. I settled on Gratitude instead as for me this allows for appreciating the luck, good fortune and privilege of being on the FI journey whilst not making it seem like it was all random without any effort and awesome work from yourself included.

My Buddhist background

After graduating Uni I had a gap year, and during this year I got heavily into Buddhism after reading ‘The Art of Happiness’ by the Dalai Lama. Over the next couple years, I studied Buddhism very closely and read countless books on the subject, I even went to see the Dalai Lama in Manchester as well as going to a couple of weekend meditation retreats. I will no doubt do a future article on my experiences and thoughts on Buddhism but it’s worth clarifying that I was only ever interested in Modern Buddhism (no literal rebirth, Karma, nirvana) and that I don’t consider myself a Buddhist anymore. I mention this however as I am no doubt very influenced by much of what I learnt and am still very grateful for some useful ideas/practises I picked up during this time. This has no doubt informed the creation of this article.

So what do I mean when I talk about gratitude about being on the path toward FI. I simply mean acknowledging, appreciating and being grateful for the good fortune, privilege that you have for being on this path towards FI. There is no doubt that some people will feel that they are independent and are completely self made. They have put all the effort in, worked two jobs, learnt about how to achieve FI and have been disciplined throughout the process. Other people who are not pursuing FI could for sure be in the same position as me if only they tried harder, retooled, got that degree, worked day and night to start a new business etc… Now I believe that the above sentiment is indeed true up to a point and that you can be a relatively independent person but that this is in no way the absolute truth. There is so much more at play, so much that we have no control over.

Now all of what I state below is meant to be the generalities, it’s all about probabilities. A person born in a country without many freedoms or options to a poor family with an abusive relationship with parents still could end up on his path. But I would argue it is much less likely.

Time period & Country you are born into

I feel very fortunate to have been born in this time period that we currently live in as a well as a modern free country (relative yet again). We are performing so well on so many different quality of life metrics and things keep improving. This is not to deny problems and areas where there is decline but I feel so fortunate to not live in a world dominated by superstition, unequal rights, real poverty etc. Just having access to the Internet, a warm house with running water and a hot shower is bliss. We have so many luxuries available to us and countless activities you can partake in in the modern world many of which we of course naturally take for granted. Having this setup as a foundation for which to build FI on is the take home here, we live in a time period and country where FI is a possibility for probably more people than it ever has been at any time before.

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Going on Holidays

I thought it would be nice to make a short post while chilling in the lobby of my hotel during the final day of my lads holiday outing to Amsterdam. It’s lovely just to sit back on a nice sofa with gentle music playing. Watching people and the world go by… it feels like it’s been hours already but that’s another side effect of being in the dam :D.

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Pre FI Aware Days 

Some of my most fondest memories come from going on family holidays when younger. The feeling of just being on holiday where most of your daily worries can just be parked or put on hold for a week or two. It’s interesting when your entire surroundings change for a period of time. I love that nothing NEEDS to be done but there are always things to be doing on holiday even when that includes specifically not doing anything at all. I used to look forward to my yearly big holiday which included Florida or New York at the time. I would spend a fairly large sum of money and take lots of spending money too. I usually paid for the holidays in full on CC and then would pay them off over several months. 

Since learning about FI

I for the past few years have gone to European destinations at least once a year. I always look for a good deal, go on a weekday etc. I certainly have not lost the joy of looking forward to and of being on a holiday but the days of multi thousand pound holiday are things of the past for now. I much prefer to go to 3 star if I can help it rather than a 4 or 5 although right now I am sitting in a 5 star lobby due to an irresistible deal… To try and be as efficient with money as possible though – I use a Revolut card so I can get the best travel currency exchange rate and withdraw from cash points without being charged (£200 limit a month). I get travel insurance for like £5 online and I don’t waste money on drinks/snacks that are charged at ridiculous prices. I find a supermarket and get better priced goods or simply take bottles of water out with me to help save.

I am certainly not a complete spendthrift though. I enjoy eating out, paying for experiences and activities out. I had a Chinese massage and speedboat ride earlier.. I did the speedboat ride first hehe. As of now, I still have only spent £250 over 5 full days though, so not bad. Money well spent for me. Maybe what makes these holidays even easier for me to justify is that they are still coming out of my matched bettings winnings and the next 4 or 5 holidays are already covered :D.

Local trips & Staycation

I have recently been going to more places in the UK itself and have recently gone on many day trips to Liverpool and Manchester etc. I definitely don’t need to go abroad just to have a good time. I have had many staycations during he last few years also. It’s interesting how sometimes I get a strange reaction from people at work when I tell them I am not actually going anywhere on holiday but simply am having a staycation. I even had a two week staycation a year or so ago where I wanted a 2 week kind of trial of being FI to see how I would find it – it went well albeit two weeks simply being used mostly to relax from having worked for so long.

So do you all still go on holidays? Have you reigned it in completely or do you still have a guilty pleasure of a traditional holiday that can’t budge?

Chris – The FI Journey