After writing my savings strategy post and thinking about long-term goals, I was starting to feel very excited about eventually becoming debt free. I kept imagining what financial independence will feel like and was feeling super motivated to get us to debt-free status. But when I put together my net worth update for this month, my motivation took a nose-dive. A few things happened that put me off track and it felt like in the short-term nothing was really happening. Here are the figures:
Our net worth at the end of May 2017 was £63,637. This is £25,641 higher than last month, but only because I added in my husband’s personal pension (SIPP) worth £26,090. Taking out the pension value, our net worth actually decreased by £448. Short-term debt increased by £22 because I refinanced our second loan for a lower interest rate and ended up taking out a loan for a slightly higher amount than what was due on the previous loan. I put this increase into savings, but it does not feel nice to see a debt balance increase, whatever the circumstance. Add onto this the financial fiasco with British Airways last week and the payment of quarterly MBA fees of £2,030 this month and, well, the combination just makes me feel like I am crawling slowly towards financial independence rather than running towards it.
To help me with motivation, I am going to set some mini-goals for the rest of 2017. I am hoping that with these short-term goals I can see more visible progress towards our overall strategy. My goals will be:
- Increase our net worth each month, by any amount
- Make £50 per month from side income (e.g. matched betting, freelancing, etc.)
- Spend £400 or less on groceries and toiletries each month (previously we spent £500 per month)
- Make an over-payment to unsecured debt each month, whatever amount
I will update against these goals each month now until the end of the year.