2020 Spending Reviewed & The Covid-19 Factor Means Nothing is Normal

It is that time of the year again when I share how much money we have spent in the last 12 months, revealing our spending habits in all their profligacy. I divulge our expenditure for interest and accountability, as we aim to stay within a budget. Our spending is peculiar to us but any comments are gladly received.

Our budget remains at £27,000 a year for the fourth year running. This is now below the average UK household spending. The headline is that despite the strange year we have had our outgoings for 2020 came within budget [hurrah], although the headline doesn’t tell the whole story. As I said last year, our annual spending seems to go up and down like a rollercoaster, with alternating frugal years and expensive years. Sometimes it is our campervan that costs us a lot of money but 2020 was a year of home-making and healthcare.

It is just over twelve months since we moved to our Morecambe bungalow. The home improvements that are included in our 2020 spending are all things we would expect to carry out more than once in our [expected] remaining lifetime. These purchases include a new bedroom carpet to replace the grotty brown carpet from the 1980s that came with the bungalow and could tell a tale or two; new furniture to replace some that was second-hand 36 years ago, a new sofa bed [as we thought we would have visitors!] as well as smaller items like paint, varnish and brushes. More expensive home improvements which we consider one-off items are kept separate. So, on top of the budgeted expenditure in the usual categories, in 2020 we spent £13,300 on new windows and doors, resurfacing the drive and a new kitchen.

Not unsurprisingly our 2020 spending reflects the Covid-19 factor. The breakdown shows that we had less opportunities for experiences and spent more of our money on food in supermarkets and local shops.

Essentials – total £9,833 [38% of total spending] [2019 £7,721 / 35%]

Food – £4,703 [2019 £3,491] – In my experience food prices have increased in 2020 as we haven’t eaten anything different or developed an expensive taste in anything. We will have spent more as we have eaten mostly at home [sitting eating around a friend’s dining table is a distant memory]. We continue to use discount supermarkets for the majority of our shopping and generally cook from scratch.

Utilities, insurance & service charges for a 2-bed 57.2 sq mtrs [615.7 sq feet] bungalow – £4,463 [2019 £3,974] – The various lock downs and restrictive tiers mean who have been home more than ever and so using more gas and electric. Council tax and heating for the bungalow are both more expensive than the flat, but we no longer have service charges to pay. The improvements we have made to bring our bungalow into the 21st century will help save money on utilities.

Our health [including tai chi classes] – £667 [2019 £256] – There has been very little spending on tai chi classes in 2020 and this is mostly some expensive dental work and new specs.

In theory this is the minimum we need to survive a year, although it would be a strange year when we didn’t need / buy some stuff.

Stuff (electronics, newspapers and other kit) – £7,175 [27% of total spending] [2019 £3,151 / 14%]

Household spending [everything from glue, newspapers and books to hiring a sander, plants for the garden and parts for the bikes] – £6,189 [ 2019 £2,300] – Wow! We have clearly had too much time for DIY and nest building this year! In 2019 we were moving house and the only DIY we did was freshening up the paint for the sale of our flat. This is a big category, with furniture, carpet, cushions and pictures on the walls all thrown into it. I am uncomfortable buying stuff and we try and source antiques / junk / second-hand items when this is practical. Bargain purchases this year included an Edwardian What Not [yes really] for a kitchen wall to contrast with the shiny white units for £30, second-hand lined curtains for the large living room window for £25 and some second-hand cushion covers for £5.

Clothes & accessories – £986 [2019 £851] – I have never gone down the route of a clothes buying ban, preferring to stick to buying what I need, as something wears out. Pretty much all the clothes we bought in 2020 were hard-wearing hill walking kit and probably not most people’s idea of clothes shopping. I needed new boots, we bought new waterproof trousers, a fleece, wellies and some comfy walking shoes; these were all replacement items. Where we could we bought second-hand items, for example a men’s winter coat on Ebay was just £24. Even when you buy quality items they don’t last forever but our walking gear gets plenty of wear; my previous boots had walked a lot of miles over six years.

Experiences – £8,226 [31% of total spending] [2019 £10,952 / 48%]

Holidays [our favourite spending line] – £2,834 [2019 £3,601] – The reason for this reduction in our holiday spending in 2020 is obvious and it isn’t because I have lost my wanderlust! In the north-west of England we have had travel restrictions for over six months of the year. We did get away a few times in the first three months of the year before the three months of lock down. We spent July taking trips to the Lake District, got to France in August and [after quarantine] thankfully managed to travel to Scotland in October. We have also paid for a holiday in a self-catering house in Scotland that has been moved to 2021 [fingers crossed].

Restaurants & cafes – £1,309 [2019 £2,418] – Despite using local cafes and restaurants when we can this year and having more takeaways than we would normally do to support local businesses this is much lower than normal. It is not particularly the food I miss, what I have really miss is seeing friends. In a normal year there are two old friends we would meet about eight times a year for drinks and a meal at a cost of about £500. Chatting over Zoom, although cheaper, hasn’t been the same. Interestingly, the reduction in our eating out spending is more or less off-set by the increase in our food spending.

Running the campervan [servicing & insurance etc] – £2,093 [2019 £1,931] – Last year I wondered if our six year old Renault Master was saving up some expensive repairs for 2020. It hasn’t done too badly but needed some essentials like tyres and brakes replacing as well as the usual servicing, insurance and road tax.

Diesel for the above ‘van – £1,227 [2019 £1,500 ] – We certainly haven’t put the miles across Europe on the campervan we would normally do.

Tickets for concerts, football & attractions – £403 [2019 £941] – Well what do you expect as for much of the year nothing was open. Live music is just a distant memory and the last football match we went to was a Morecambe FC match last Christmas. We have supported some arts events by buying tickets for online events and visited some RSPB reserves when we could.

Public transport costs – £360 [2019 £561] – Again, the pandemic effect has kept us at home much of the time.

Giving – £937 [4% of total spending] [2019 £654 / 3%]

Gifts & donations – £937 [2019 £654] – Another discretionary spending line that we try and keep under control but in 2020 we felt a need to be more generous. Many charities needed additional funding as events and places were closed and during the first lock down we sent cheering-up parcels to friends, as well as the usual birthday and Christmas gifts.

TOTAL SPENDING FOR 2020 – £26,171 – Despite all the home-making we have done in 2020, we have stayed within our £27,000 budget. Hurrah!

Over my four years of retirement we have spent an average of £25,351 a year.

Our expenditure doesn’t all come from our savings. As well as my side hustle travel writing income [reduced in 2020 due to Covid-19], in 2020 my small NHS pension began. This is based on my many years of part-time and full-time NHS work and is the equivalent to 12 years NHS service. These both help to reduce what we take from the ever-diminishing savings pot. For me, saving for early retirement was never just about giving up work, it was also about us having the financial resilience to survive whatever ups and downs life threw at us.

2019 spending £22,478 / year: Our most frugal year & below household average

05.29.2019 Eshaness (1)
Is there a pot of gold?

2019 has been an unusual year with no trips abroad in our campervan and a house move.  We have stayed alive and healthy and we spent two months touring Scotland in our campervan, learning to love that country even more and visiting Shetland for the first time, leaving a little bit of our hearts there.  Financially it has been good too.  We have stayed within budget; in 2019 our household spending was as low as £22,428.  The ONS calculate that the average household in the north-west of England spent £26,062 a year in 2017-2018.  Of course, this average will include large families and single-person households, households that have expensive hobbies [like a campervan], those who are home all day and people who have little money or are super-frugal.  Although we don’t consider ourselves to be average, we generally aim to spend less than this average.  I had hoped that our frugal fail in 2018 was a blip [we spent over £28,000] and it certainly seems that we have got back on track in 2019.

annual spending graph
Our household spending from 2010 to 2019

Despite the rigour of my spreadsheets, our annual spending creates a graph that looks like a roller coaster and this does make a bit of a joke of the budgeting we do.  Over the last nine years our spending has ranged over £6,000 from £21,972 to £28,107, not allowing for inflation.  All this information really tells me is there are expensive years and cheaper years and that our budget for 2020 of around £26,000 doesn’t look too unrealistic.  What is interesting is that our 2019 spending of £22,428 is our next to lowest spending year [and a rough online inflation calculator suggests that £21,972 in 2011 is now the equivalent of over £27,000] so for us 2019 has been a frugal year.

This household spending does gloss over the £36,000 plus that has disappeared from our savings and been spent on our recent house move and the improvements to bring our 1960s bungalow into the 21st century.  It seemed fair to leave out these one-off costs as they would have massively skewed the figures but it also seemed best to fess up about this spending here.  Of course before we took the plunge of moving we did the sums and, although when our pensions start paying in 2026 we will have considerably less savings in the bank, we felt it was an outlay that was manageable … but time will tell.  The move became essential for our well-being and we are reasonably comfortable that we will have enough of an emergency fund to take us into our old age.  Who knows what will happen with the cost of care by the time we are in our 80s and whether we will need any.  We certainly won’t have much money spare for anything expensive but we live in hope that a fair system will be in place by then.

Our own expensive hobby of running a campervan and having lots of holidays continues and this is generally our downfall.  If we never went anywhere our spending would be much lower!  Everyone spends their money in their own way, this is how our 2019 spending pans out:

Essentials – total £7,721 [35% of total spending] [2018 £9,654 / 34%]

Food – £3,491 [2018 £3,870] – This is an essential but also an easy area to control and after the shock of 2018 we have been careful to use the cheaper supermarkets.  We cook mostly from scratch, including making bread, only ever buy what we need and rarely waste anything.  We now have a garden but don’t expect to start growing food, as this doesn’t really work with taking a long holiday.

Utilities, insurance & service charges for a 2-bed 58 sq mtrs [624 sq feet] flat for 10 months & a 2-bed 57.2 sq mtrs [615.7 sq feet] bungalow for 2 months – £3,974 [2018 £4,841] – We have been home more than previous years but try and restrain our use of the heating and water.  Our bungalow is more expensive to run in terms of utilities than the flat, despite good insulation, so watch this space for 2020.  But a big plus of not living in a flat is that we no longer have service charges of over £1,000/year!  On the flip-side we are now responsible for the upkeep of our four walls and roof, not to mention a garden, this feels a bit daunting just at the moment.

Our health [including tai chi classes] – £256 [2018 £943] – We had no expensive spectacles or dental work this year, hurrah!  We were lucky to find another reasonably priced tai chi class in Morecambe, at £3 each a week this is manageable and we can afford to attend regularly.

Stuff (electronics, newspapers and other kit) – £3,151 [14% of total spending] [2018 £3,333 / 11%]

Household spending [everything from glue and newspapers to parts for the bikes and a new kettle] & miscellaneous un-identified items – £2,300 [ 2018 £2,364] – We are a long way from a no-spend year on stuff but I’m relieved that this spending line is similar to 2018 as I thought that moving house might have spiralled this into another realm as we splashed out on new [to us] curtains, gardening equipment and a Remoska oven.

Clothes & accessories – £851 [2018 £969] – I am really pleased this spending line is lower than last year, particularly when I take into account that over half of this is accounted for by new waterproof jackets.  We took a deep breath and bought quality so hope they will last for years and years – maybe until we die?

Experiences – £10,952 [48% of total spending] [2018 14.095 / 51%]

Holidays [our favourite spending line] – £3,601 [2018 £4,681] – Our holiday spending is less than other years as [thanks to the house move] we didn’t get abroad but we did spend a fantastic two months touring Scotland.  Factor in the cost of the ferry to Spain in 2018 [about £900] and this line would have pretty much stayed the same; the ferries are really the biggest chunk of our holiday costs.  We spent only 108 nights away in our campervan, less than previous years [again due to the house move] but campsites in the UK are often more expensive than mainland Europe.  We took ourselves off for 10-days during the house buying process and returned to a pile of paperwork waiting to be signed, after that we hardly dared venture away.  This does include a splash-out weekend in a swanky Lake District hotel to celebrate a significant birthday.

Restaurants & cafes – £2,418  [2018 £2,963] – This is another chunk of spending that we can keep under control if we need to but we love meeting friends for meals out and sitting in friendly cafes.  So I am surprised [and pleased] this spending is lower than in 2019 as we seem to have been out with friends on plenty of occasions … but the numbers don’t lie!

Running the campervan [servicing & insurance etc] – £1,931 [2018 £2,578] – I was excited to find that moving to Morecambe from Salford reduced our insurance costs on our campervan, although it is no longer parked in a gated car park!  2018 was an expensive year for our ‘van and in 2019 we didn’t take such a hit spending £800 on fixing things on our campervan to keep it on the road.  Our ‘van is almost five years old and has driven around 50,000 miles and among other things it needed new brakes and reversing sensors.  I think the ‘van might be saving everything up for 2020 though!

Diesel for the above ‘van – £1,500 [2018 £1,937 ] – This is lower due to reduced campervan trips and lower mileage through the year.

Tickets for concerts, football & attractions – £941 [2018 £1,114] – A cheaper year but we have still had lots of fun experiences seeing bands, going to the football and getting face to face with a pine marten.

Transport costs included buses, trains & parking – £561 [2018 £670] – My target to walk 2,019 km in 2019 kept this number down as I was constantly choosing to walk rather than take the tram or bus.  We have spent more for the last two months of the year since moving to Morecambe, as not wishing to pollute the world more than we need to we have taken the train to Manchester on all but one occasion.

Giving – £654 [3% of total spending] [2018 £1,025 / 4%]

Gifts & donations – £654 [2018 £1,025] – Another discretionary spending line and we can only hope our family and friends understand why presents, although still thoughtful, have been small in 2019.

TOTAL SPENDING FOR 2019 – £22,478 – staying comfortably within our £26,000 budget helps to give us some financial resilience for future years.

 

 

 

Achieving frugal minimalism? 2018 finances reviewed

Strathdearn day (2)

In 2017 I was feeling a trifle smug.  We had spent around £24,000 in our first year of retirement, way below budget.  That smug smile was wiped off my face earlier in the year when I reported that things were not looking so positive in 2018 and I was feeling a frugal failure.  With inflation I could have expected our spending to increase to around £25,000 in the year, instead it seems we were just saving up all our big financial hits for 2018.  In 2018 we were just average [2017 UK average household spending was £28,818).  This isn’t much comfort when we’re supposed to be being frugal and minimalist.  In our spending you won’t find any costs for haircuts, party frocks, frippery or pay TV, so what went wrong?  I’ve divided our spending this year in to essentials, stuff, experiences and giving.  The graph gives a summary.

Screenshot (1)

Essentials – total £9,654 [34% of total spending]

Food – £3,870 – We are two vegetarian who like to drink red wine and gin & mostly use the discount supermarkets.  I do know that wine and gin are not essential but we haven’t separated the costs of these from our supermarket shops during the year and together these probably represent about £400 of the total.   [2017 £3,612] 

Utilities, insurance & service charges for a 2-bed 58 sq mtrs [624 sq feet] flat – £4,841 – This year we have changed supplier for our gas and electric and moved to a cheaper mobile phone contract to save money.  The increase is only because we payed up-front for the gas boiler servicing to receive a discount  [2017 £4,621 mis-reported last year!]

Our health [including tai chi classes [?essential?]] – £943 – An expensive year thanks to some dental work [£235] and both of us needing new specs [£503] [2017 £376]

Stuff (electronics, newspapers and other kit) – £3,333 [11% of total spending]

Household items [including parts for the bikes] –  £2,364 – Although this category does include a multitude of things, including postage, one newspaper a week, books [often second-hand] and bits and bobs for repairs, it also includes stuff.  In 2018 we decided to buy a new laptop [£450] and one new mobile phone [£115], replace our ageing head torches [£70] and cycle helmets [£50]; although all replacing old and well-used items these are purchases that we don’t make easily and we had been putting off for some time.  [2017 £1,668]

Clothes & accessories – £969 – Whenever we can we buy second-hand clothing.  The almost £1,000 we have spent is mostly for replacements for walking gear that has worn out.  Even with the best quality clothing things don’t last forever and this year we have bought new walking shoes, trousers and rucksacks.  It is true that about £100 of this spending is for a couple of things that were bought because of a want, rather than a need.  [2017 £525]

Experiences – £14,095 [51% of total spending]

Holidays [our favourite spending line] – £4,681 – Despite being away on holiday for even longer, around 40% of the year [155 nights in the campervan, plus a couple of other holidays in self-catering cottages] we have spent less on this budget line in 2018.  Result!  The spending is mostly on accommodation and ferries and also includes £380 for a 2019 holiday.  [2017 £5,285]

Restaurants & cafes – £2,963 – Only a tad more than last year [2017 £2,864]

Running the campervan [servicing, insurance & parts] – £2,578  – a big increase on last year [2017 £1,636] all due to replacing brakes and tyres, failures in the air conditioning and power steering and a bit of wing mirror jousting.  What a year!  Readers might not agree that the costs for our campervan come under experiences but for us this is an important part of our lifestyle and so this is where it fits best.  Friends might be surprised that I didn’t put it under essential spending!

Diesel for the above ‘van – £1,937 – the price of diesel has increased and we drove more miles in the Blue Bus this year, particularly on our trip to Croatia [2017 £1,641]

Tickets for concerts, football & attractions – £1,114 – Wow!  We must have been to a lot of events this year!  Tickets for the football have increased in price and in Croatia we visited more paying attractions than we might have as we’re unsure whether we will travel so far again.  Although this is experiences, rather than stuff, this is definitely an area we could try and make savings in 2019. [2017 £633]

Public transport – £670 – We don’t use the campervan around Manchester and cycle and walk to do things or visit friends but sometimes [if it is raining/cold/too far] we take the tram, the bus or the train [2017 £517]

Unknown spending – £152  – [2017 £81]

Giving – £1,025 [4% of total spending]

Gifts & donations – £1,025 – we buy our family and friends birthday presents and buy Christmas presents for a shorter list [2017 £1,173]

TOTAL SPENDING FOR 2018 – £28,107 [2017 £24,196]

I’m pleased to see how much our spending is weighted towards doing things, rather than buying stuff so perhaps a tick for being minimalist if not uber-frugal.  Despite having a year that has still been a bit heavy on replacing things 51% of our spending has been on our own version of enjoying life.  We have a plan to cut down our spending on stuff in 2019 and I hope spending only 4% on giving make us look frugal rather than mean as I’d like this to remain this low.

It is impossible to make any conclusions from one year and averaged over two years our spending of £26,152 a year still seems fairly low.  This year has shown us how important over-saving or over-estimating budgets is for planning to live without any earned income.  After this expensive year my travel writing income is becoming essential, rather than extra cash.

Having spent more than our original budget of £27,000 our future annual budgets have been increased to reflect this.  We’ll see what 2019 will bring and try hard to have a low-spending year but at the moment we have no need or plans to go back to the nine-to-five!

£24,000/year budget for two people who are on holiday for 1/3rd of the year: 2017 finances reviewed

P1010172
Another thrifty year

This is our first year of retirement so we are interested to see how the spending has panned out for us with no income compared to our budget when we were both working.  I did consider not sharing our review of our 2017 finances as I am not sure how interesting or useful this information is to others.  Everyone’s situation is so different, people have different priorities, hobbies and needs.  So is it really helpful to know that two people with a campervan-habit living in a small flat in Salford need around £24,000 a year to have a good quality of life?

We are really head-over-heels to have come well within our budget of £27,000 a year.  We always knew this was a generous amount but it is good to have it confirmed in hard figures.  I don’t think we will slack off the budgeting in 2018 as we like the idea of having a good financial cushion for any future problems.

All that said, here are the numbers:

Holidays [our favourite spending line] – £5,285 – for this we have been away for over a third of the year [118 nights in the campervan, plus a couple of other holidays in self-catering cottages] [this amount includes £1,000 for two 2018 holidays] – a bargain!

Food – £3,612 

Restaurants & cafes – £2,864 – [this spending increased in 2017 in part due to better tracking of where the money has gone]

Running the campervan [servicing & insurance etc] – £1,636

Diesel for the above ‘van – £1,641

Gifts & donations – £1,173

Tickets for concerts, football & attractions – £633

Other household spending [including parts for the bikes] public transport & miscellaneous – £2,271

Our health [including tai chi classes] – £376

Clothes & accessories – £525

Utilities, insurance & service charges for a 2-bed 58 sq mtrs [624 sq feet] flat – £4,166

TOTAL SPENDING FOR 2017 – £24,196 – comfortably within our £27,000 budget.