April has been the worst month on my financial independence journey (yes, I changed the name from “financial freedom journey” to “financial independence journey” as it is more used in the PF community). It is fun how I in February wrote an article about why you don’t need things and now have spent more on things to our new house than I had ever imagined… I guess I am still learning, and saving is easier said than done!
What happened in April?
This is not going to be pretty. I am quite embarrased to say that my savings rate for April has been at the lowest point ever at 8%.
The one and only reason for this is costs associated with moving houses. I had agreed to spend some money up front on furniture for our new apartment, so I knew that my savings would take a hit. On top of this, I also made a miscalculation and thought that I had already put some money aside that I had not.
Whatever the reason, I am not going to retire early if I continue with a savings rate at 8%. On the good side, we have almost bought everything for the apartment now, so I will not continue spending money on furniture in the coming months.
This, I did not manage to reach two out of three of my targets from last month regarding:
- Blogging frequently (minimum one post per week): I fell one article short, but it is simply not good enough
- Don’t let moving costs go out of hand: Furniture and moving costs became far larger than expected, but now I am looking forward
I did, however, succeed in engagaing with the personal finance community. In fact, I found out that there is a lot of people interested in personal finance in Denmark, including a few great blogs like FireDK (in English) and Frinans (in Danish). I’m planning on arranging a meet-up for all of us in the coming months as I believe we can benefit a lot from each other’s experiences.
How am I tracking on my early retirement goal?
My take-home income was 32,953 DKK (4,707 USD), which is a bit higher than usual since I got an extra ‘vacation pay’, and my savings rate was 22%.
My current assets are:
|Assets||1 May 2017 (DKK)||1 May 2017 (USD)||1 April 2017 (DKK)||1 April 2017 (USD)|
You might notice that I have added a new line item this month; home equity. Since I am now owning a house, I have decided to include all loan repayments (excluding interest and other fees) as a saving. I know that there’s a lot of controversy in the community, but since I am going into my house purchase with the expectation of gaining 0% on the house value, I consider my repayments a less liquid savings account with money I will get if I ever sell the house.
My total assets including pension of 198,622 DKK (28,375 USD) was an increase of 3.8% up from last month.
The total assets excluding pension of 107,284 DKK (15,326 USD) at April 1 was an increase of 2.1% up from last month. This means that I managed to save 2,512 DKK out of my take-home pay of 32,953 DKK, which equals a savings rate of (2,521/32,205) = 8%.
I won’t even start calculating how long time there is until retirement with a savings rate of 8%, but doing the calculations and writing about it here is enough motivation for me to try even harder. My target savings rate is 75%, which will enable me to retire in 7 years and being financially independent.
I guess the road towards early retirement will have ups and downs – this month was definitely a bump on the road, but I am as motivated as ever to get going!
Focus areas for the coming month
For the coming month, I will be traveling quite a while and going to a wedding overseas. This means that I expect costs associated with this (bachelor’s party, wedding present, flight tickets, hotel, etc.). I will do my best to keep the costs low and try to do as many ‘free’ activities as possible. My focus areas for the month will be to:
- Write an article once a week
- Engage in the personal finance blogger community
- Control travel costs
I hope to be able to achieve a savings rate of approximately 40% this month due to the travel costs that will have an impact on it.
Favorite posts of the month
I have managed to read a few masterpieces this month. If you are interested, you should consider checking these out:
- Becoming Minimalist wrote about the joy of living within your means. There’s a lot of great quotes in there, but I like the summary of what being debt free feels like: “It allows me to sleep better, carry less stress, and live a more calm, relaxed life.”
- ThinkSaveRetire (Steve) wrote an article about what they are doing post-retirement. I think it is a very interesting read and makes me look forward to retiring myself as well
- Physician on Fire wrote a great piece on whether you should pay off your mortgage (or other types of debt) or not – and why he did
That’s it! Thanks for following my journey!