2 Steps Forward, 1 Step Back – Jan 2019 Update | FIRE Journals
4 months ago I decided to start doing something about my finances. In December of 2018 I started documenting my progress in what I’ve come to call my FIRE Journals (FIRE is short for Financially Independent, Retired Early). It’s now 2019 and I’ve just recently returned from a trip to Indonesia with my partner, we had an amazing time but it’s meant that my journal update for January is late so I’ll be doing a quick recap of my progress.
January was challenging as I had to dip into my emergency cash reserve which set my savings progress back by 2 months. However, after reviewing all my stats I realised that my overall net worth still improved from the previous month due to some personal debt reduction and also a rebound in the stock market which increased the value of my investments.
This was an important lesson for me to learn as I was initially disheartened at seeing my cash savings decrease and feeling as if this was a much bigger set back than it actually turned out to be. If you’ve read my first journal entry from my FIRE journals, you’ll know that although I have saved up a modest amount of money in mutual fund investments, in terms of emergency cash reserve I was living life on a financial cliff. Starting to put focus into building up this cash reserve proved to be very important as I needed new glasses and because of my unusual eyes, the bill was a lot higher than I was expecting.
If I didn’t have that emergency cash reserve I would have had to borrow money in order to pay the bill, thus increasing my debt. And considering that my overall net worth still improved from the month previous, then overall I’m still making progress towards my goal of financial independence.
News Update: Playing With FIRE trailer released.
I was pleased to discover recently that there will soon be a documentary released on the FIRE Movement. Although some of the people in this trailer seem a bit cult-like in their dedication to this growing movement, I’m also glad that it is gaining momentum.
Hopefully more and more people learn about it and apply the principles in their own life. You can check out the trailer below:
My January 2019 Update.
Since this is just a short catch up on my January results, I’ll jump straight to it. Here’s the snapshot of where my finances are at now as of January.
My Cash Savings progress was the only thing that went backwards for January due to an unexpectedly high bill to cover new glasses. As I’d mentioned in my previous journal entry, the account I’m using here is the Rams Saver, with a current variable interest rate of 2.80%.
Mutual Fund Investments.
Next up was my Mutual Fund investments. As I’m still focusing on building my cash reserves, I haven’t made any further contributions to my Colonial First State fund, but due to the stock market rebounding over the last month the value of my fund has still increased.
My debts have continued to steadily decrease and I’ve never been behind on any of my payments. At the moment I’m only making the bare minimum payments, however I will be attempting to refinance my personal loan later this month to another lender with a much lower rate. This other lender also has a redraw facility available on their personal loan products, which means that if I pay extra, then those extra repayments will still be available for me to take back if needed.
This presents an opportunity to adjust my strategy and put all my cash savings into the personal loan account. The benefit of doing this is that I’d save much more on interest charges than I’d earn on savings interest payments, yet still maintain access to the funds for emergencies.
This will be subject to credit approval so I’ll make an update for the Feb journal entry.
January Net-Worth (excl. Superannuation)
Overall, my net-worth increased by $208.12 for the month of January (excluding superannuation), even though I had a setback in my cash savings progress.
Final Thoughts for January 2019.
It’s important to recognise your progress, even when you experience setbacks. It’s often not as bad as you’re making it out to be. Like my experience here, when I actually got over the disappointment and just looked at the results, I realised that I was actually doing a lot better than I thought I was.
In my next Journal entry I’ll be discussing my trip to the islands of Bali and Nusa Lembongan in Indonesia, and how you can still enjoy life even while saving for financial independence.
Saving money doesn’t have to be boring. It sometimes requires some sacrifice, but it doesn’t need to feel like you can’t enjoy life. That’s what we’ll be discussing on my next journal entry so be sure to subscribe to the mailing list to make sure you get it!