The first month of my early retirement journey has been a mixed experience. I have managed to save some money, but not as much as I had expected.
My savings rate has taken a hit and is not on the level I had imagined. This is because of three reasons:
- I have had one-off expenses for our new house that will not reoccur
- I have made a few extra vacation plans and paid for the trip in advance
- I made a small error in calculating my total assets last month, which made them appear higher than they were (i.e. I had received a refund for corporate expenses before the expenses had been deducted from my account)
What happened in January?
I had three goals for for January:
- Follow my budget strictly
- Start becoming accustomed to blogging
- Watch out for costs related to moving houses and taking on a loan
Regarding following my budget strictly, I have monitored my expenses on a daily basis and I have really tried to apply the ‘need to have vs. nice to have’ mindset every time I have had to make a purchasing decision. All of my allocated accounts (i.e. food, entertainment, gifts, vacation etc.) have been in plus by the end of the month, so I have not been overspending.
I have not yet become accustomed to blogging. I have had a really busy month and have not found the time to do it, although I really wanted to. I know it is just a matter of prioritization, so this one will definitely continue into February. My goal is to set a plan and make an editorial calendar that I will stick to religiously.
Regarding costs for moving houses and taking on a loan, I managed to negotiate the fees for our housing loan significantly down. However, there are costs that you cannot remove once you take on a loan, so I did have some expenses to take on the loan. I know that we will have some more once we actually move. My girlfriend and I have also decided to use 13,500 DKK (1,928 USD) each on new furniture when we move, since we are moving from a 2-room house to a 5-room house.
In general, I believe January was a very interesting first month of trying to retire early and achieve financial independence, but I still have much to learn. I will share those learnings on the blog as we go.
How am I tracking on my early retirement goal?
My take-home income was 28,985 DKK (4,141 USD) and my savings rate was 27%.
My current assets are:
|Assets||1 February 2017 (DKK)||1 February 2017 (USD)||1 January 2017 (DKK)||1 January 2017 (USD)|
The cash assets of 56,148 DKK at February 1 means that I managed to save 7,768 DKK out of my take-home pay of 28,985 DKK, which equals a savings rate of (7,768/28,985) = 27%.
With a savings rate of 27%, I have 30.3 years until retirement. This is obviously far longer than I am willing to wait. My target savings rate is 75%, which will enable me to retire in 7.1 years and being financially independent.
Focus areas for the coming month
I still have many things to learn, but I have decided on three focus areas for the coming month:
- As last month, spend time on becoming accustomed to blogging and set up a strict plan to follow
- I am going on vacation in February for two weeks, so I will make sure to stay within the vacation budget
- Learn a new skill (I have for a long time wanted to learn more about Big Data, Advanced Analytics, AI, Machine Learning etc., so I will try to read a few books on the subject
Thanks for following my journey!
Do you have any comments, questions or tips for me? Please let me know in the comments!