Failing frugality: Year two of financial independence

It is now over 18 months since I finished the nine-to-five and 15 months since Mr BOTRA last had any paid work.  At the end of 2017 I was feeling pretty smug as our spending of £24,000 in our first year of retirement was well under budget – clever us I thought.  Now it feels as if all manner of expenses were just waiting in the wings for year two.  We are just over half way through our second year of spending our savings and we are on target to spend £3,000 more than last year.  You may recall £27,000 was our budget for each year. What has gone awry?

The campervan

Just over £1,000 of our additional spending in 2018 has been on the campervan.  Our Devon Tempest is now over three years old and with over 30,000 miles on the clock has needed some TLC this year; two new tyres [it will need two more before the end of the year], new brake pads all round as well as general servicing.  The conversion has also needed a bit of work as we had to have the water level sensor replaced.  There have been other odds and ends such as a new kettle and replacement levelling blocks too.  This year has been spend, spend, spend on the ‘van.

Holidays

Holidays remain our priority.  As well as the usual costs for ferries and campsites we have had a long weekend in Milan this year for a significant birthday [not the cheapest city to visit and our trip cost just under £1,000] and we have paid almost £400 up front for a holidays for 2019.

Health

Our health is important but this has been the year we have both had to have new specs and Mr BOTRA has had some expensive dental work, totalling over £900.

Clothing

We wear everything until it falls apart and when it comes to gear we like to buy quality kit but with so much free time we are out walking a lot of the time and it seems that even quality gear doesn’t last forever.  This year we have had to replace walking shoes and other bits and bobs of clothing, pushing this budget line to over £800 already this year.  Last year it was much less, maybe next year it will be too!

Increased cost of living

We know the cost of food has increased in the UK and we have noticed this in our spending.  In 2018 we are spending an average of around 16% a month more than we did in 2017.  I don’t think we have changed what we eat or where we shop so this must be related to an increase in the cost of fresh vegetables and other staples.  In addition with the pound falling against the euro our supermarket shops on our holidays abroad have become more expensive.

Don’t panic

We monitor our spending so that we can keep it in check and avoid any problems but there are three reasons why we aren’t in a panic yet about this increase in our spending.

Firstly, we had given ourselves what we thought was a generous budget of £27,000 a year and we are currently projecting around that amount for 2018.  It could be that our first year of not working was particularly cheap and the budget we set was accurate rather than generous.

Secondly at the moment my travel writing income will more than cover the £3,000 projected increase in our spending for 2018 over 2017.

Thirdly, we have that emergency fund.  We are glad we saved what we needed and a little bit more to give us a cushion in the tough times.  This emergency fund increased last year as we spent under our budget and it increases every time I have a travel article published.  We don’t really want this to dwindle to nothing and hopefully it won’t.

Looking ahead

On reflection our campervan, our health and our trip to Milan together more or less account for the increase in our spending.  Only the wonderful trip to Milan was really optional and we won’t be repeating this in 2019.  We will keep monitoring our spending and see if we need to revise our budget and perhaps rethink some of our regular spending.  We have already arranged to switch our gas and electric supplier to save us a small amount and we have come up with some new water saving ideas too but there are others areas of spending that we could pull back on if we need to in the future to keep us on track.