Financial Update #3

Me and Mr LIL are on a journey towards financial independence (read more on my frugality page). I love tracking progress therefore calculate how much of our goal we have reached every month and I post about it on the blog three times a year (read more on our financial update page).

It has been a full year since we started to track our money which means that we now have a good picture of our financial situation and how much money we spend on average on different categories. We have a postive net worth since we have more assets than liabilities and over the year we have increased our net worth with 27,2%! We have done this through investing in our money making machine and paying down our mortgage.

Our average savings rate for the year has been 33,6% which is just over the 30% that we have aimed for this first year. Since the recommended savings rate is usually 10% – three times that amount feels like a good start. We also don’t count the money that we are saving for our trip to Japan and our wedding in our savings rate since it is just delayed consumption. If we included travel/wedding savings we would have a savings rate of 47,7%.     

In August we hit our first milestone which is having a years expenses in our money making machine! Hipp hipp hurray! We have reached 5,54% of our money making machine total sum and we started at 2,45% at the beginning of the year. So even though the market has been going down the last couple of months we are making progress. Allthough we don’t get upset about the market going down since our strategy is very long term – we just keep investing every month and for our sanity we don’t pay that much attention. 

This is our money making machine progress in percent

At the beginning of the year I created a budget and now that we have a full years worth of data I compared the averages in each spending category. Our spending was very close to the amounts that I had budgeted. The costs that are fixed amounts aren’t that hard to budget but the costs that vary from month to month are harder but since we kept close to the budget I don’t have to adjust it for next year. For example I budgeted 5000kr for food and drink for the two of us per month and the average came in on 5106kr (if it seems like a lot the explanation is that food and alcohol is expesive in Sweden and we also highly value eating healthy, organic and natural food so that considering I think 5000kr is good).

So this was the financial wrap up of 2018, it will be interesting to see what 2019 brings since we will be able to save a lot more after we move to the tiny house and when we no longer need to save for the wedding!

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