The focus of this month has been frugality and also financial independence (FI). I have been reading books and blogs and listened to lots of podcast episodes for inspiration and guidance. It has lead to a couple new actions for saving and managing money but also noticing what we were already doing frugally. I’ll take you through the steps that we took this month.
I first needed to get an overview of expenses. To do that I got the app Tink which tracks all your accounts so you get a very good overview of your spending. Since it also tracks retroactively too I could get a picture of past expenses too. I can really recommend the app for an easy way to track expenses.
Figuring out monthly spending
Me and Mr. LIL looked at our income and our fixed monthly expenses like internet, rent, electricity, phones and so on to figure out how much we had left after all our expenses and food were payed. After seeing that number we decided to accelerate our mortgage payments. I also created an excel sheet with all the data so we can make graphs and see our spending and saving each month.
Index funds and saving
On all frugal/FI sites index funds get mentioned as the way to invest and accumulate your money over time. I already have invested in index funds but I set up an automated payment each month that invest my money for me in my chosen index funds. I also automated my payments to my savings account so that I “pay myself first” and not just what gets left over each month gets saved.
After doing all of the above the next step was look at all the expenses that weren’t fixed. I looked into areas of spending like transport, food, health, beauty, eating out, activities etc for the past couple of months. I then thought about what can be eliminated entirely, what can I substitute, what can I reduce and what can I insource. Because of my buy nothing new goal (that I’ve kept to successfully!) a lot of things won’t be bought at all but I’ll share some examples of things we do and will do in the frugality area:
- Hair cuts. Since I’ve decided to grow my hair out and I wont get it cut and I will start trimming Mr. LILs hair now and then so he doesn’t have to get his hair cut at a salon as often.
- Food at work. Previously I bought food at work a couple times a week because the price was acceptable but now it’s gone up and I’m doing the frugal year so I’m going to only bring food boxes (which Mr. LIL already does).
- We haven’t eaten out. We’ve kept to the not eating out resolution (read more how much you can save in my post here).
- I have borrowed books instead of buying them.
- I haven’t bought a monthly card for public transport (870kr) and instead I have been biking more. I’ve seen that this pays off during the last couple of months since I’ve been paying 400-600kr per month for the trips I take.
To summarize this month I think I’ve put down a good foundation for this year of frugality. Also finding out and getting immersed in financial independence is very exciting. Who knows if that’s the path we’re going to take but with more money comes more freedom to do what we want. It will be interesting to revisit the area in a couple of months and see how well we have done.