financial independence

on 2018: our financial year in review

2018 was a good year financially. Having got back to the UK in late 2017 from living abroad, 2018 was our first full year back and we were looking forward to getting our heads down and saving hard for a house deposit. Looking back, we saved and side hustled our behinds off to move closer to our short term goal of buying a house. We also finally opened our Lifetime ISA’s and managed to fund them for 2 tax years, which was a boon in terms of the government bonus. I’m still to be convinced that LISA’s will hang around on the market, but whilst they’re there, we’ll keep getting our bonuses.

This post is all about numbers and percentages, so without further ado, let’s dive right in.

expenses

Our yearly spend was £52,450.16, averaging out at £4,370 a month. If you fancy having a read of 2018’s monthly spending reports, they’re listed on a handy page here.

Housing was our biggest expense at coming out at almost half our yearly expenses at £21,132. I will be so glad when we buy a house and we can start paying down a mortgage rather than paying rent to someone else.

side hustle income

We stepped up our side hustle game in 2018 and made an extra £4,307 on top of our regular salaries. This was from a mixture of selling things on Ebay and Gumtree (not an awful lot), market research, surveys, TopCashback and matched betting. I don’t think we’ll make as much in 2019, mostly because the bulk of that side hustle money came from the lucrative matched betting sign up offers which we’ve now completed. We’ll do what we can though and all extra income will help with the house savings.

interest and dividend earnings

We’ve had money in a few different places this year. We’ve not added to our investment accounts (apart from opening and funding LISA’s with two tax years worth of money to get the government bonus) and just kept those ticking over nicely. We have the bulk of our savings in cash in the highest earning easy access savings accounts we found on the market over the summer (we have the Cynergy Bank (what used to be the Bank of Cyprus) and Goldman Sachs Marcus account). At the end of 2017 we put £25,000 in a one year fixed rate bond as that had the highest interest rate going at the time (1.8%) and so that’s just matured and we’ve stuck that in our easy access savers. We want fast access to our money with no penalties for withdrawing as it’s our house purchase money and although we still have about a year’s worth of saving to do, we want the money where we can get our hands on it fast if we do see a dream house and want to pull the trigger and buy. So we’ll keep it in the easy access accounts throughout 2019 too. Our cash house savings at year end stands at £80,000 and we’d like it ideally to be £120,000 before we buy.

In 2018, we recevied £4,000 LISA bonuses (2 accounts, 2 tax years putting money in in March 2018 and April 2018), £694.83 in interest from our easy access savers, a regular saver we both did and our fixed rate bond and £1,877.38 in dividend payments bringing the grand total to £6,572.21.

savings rate

Our savings rate without passive income was 51.4% overall for the year.

With passive income it was 55.8%.

net worth

And last but not least, net worth. Our net worth growth over the last year has been 26.8%

(Net Worth = Assets – Liabilities)

We started the graph from 2010 as that’s where our data begins (translation: the data we can still find!). I really love looking at this graph and can sum up the years as following;

2010: The end of 2010 saw us in a negative standing due to our liabilities (student loans) being more than our savings.

2011: We saw a rise in the first half of 2011 saving for our wedding & honeymoon, then a dip into the negative (we were -£1000 down after getting back from honeymoon) and then getting back on the straight and narrow.

2012: Began a major concerted savings effort to move house so our net worth steadily increased.

2013: Moved abroad in the second half of the year & our savings rate slowed down to reflect this.

2014: Additional savings plateaued into non existence due to the move abroad with our initial decision to put major saving on hold and to put more of our money towards travelling.

2015: Our household income took a healthy boost due to a new job for me and a promotion for Mr NC. Our spending was still very high though.

2016: We decided to start our journey to FIRE and our savings shot up.

2017: We decided to move back to the UK but before we did so, we went travelling for 4 months, hence the massive dip you see.

2018: A busy first year back home, with lots of catching up with people and trying to sort out health issues which meant our spending was a bit higher than I’d ideally like but we still managed to save a lot.

And there you have, our 2018 financial year in a nutshell. Pretty proud of us for what we achieved and really looking for more of the same in 2019. Let the saving continue!

–NC

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