Enjoying Life on a Shoestring Budget – Feb 2019 Update | FIRE Journals
February was a great month. Not just because I got my savings back on track, but because I got to travel abroad for the first time. Me and my partner got to travel Indonesia briefly after a year of saving , and I’m happy to report that we had the time of our lives without the use of a single credit card or loan.
When I talk to people who have returned from travelling abroad, a good deal of them seem to have financed their whole trip on debt. I can’t think of a worse thing to spend someone else’s money on, apart from gambling. You end up paying such a huge amount in interest back to the bank and stay in debt for years (potentially) just because you lack the patience to save your own money.
Me and my girlfriend were able to save $200 AUD a month each, and that was on top of my own personal retirement savings and debt reduction. It took us about a year and we had to be selective about where we’d be going and what we’d be doing, but the money we saved went a long way in Indonesia.
On several occasions we were able to hire a dedicated driver for the whole day to take us wherever we wanted to go and it only cost us about $50 AUD. To get the same kind of service in Australia it would cost hundreds.
We also had a lot of great experiences that didn’t cost much at all, like snorkeling through the coral reef near the island of Nusa Lembongan, or visiting the sea temples on the island of Bali. The biggest lesson I learned out of my experience was that even on a below-average wage, I was still able to save money toward retirement but still have money left over to travel and have great experiences.
Rethinking Work & Retirement.
During the last few days of our trip, we met a German couple who were on a one year sabbatical to enjoy life and surf. When I asked them about this, they said it was very common in Germany for people to take a year off from work and still have their jobs waiting for them when they returned home.
While this isn’t common in Australia, it reminded me of a book I read years ago called “The Joy of Not Working: A Book for the Retired, Unemployed, and Overworked,” which really turns the idea of work on its head. I was able to dig the book out of my collection when I got home to Melbourne and have started reading it again.
In Australia and particularly the US, we’ve come to glorify the ‘hustle’ and working really hard, often defining our lives by our vocation or employment. I highly recommend grabbing a copy of this book and reading through it as it turns a lot of those ideas on their heads.
February FIRE Update.
Now for the update on my finances. I had a good month compared to the previous month. With my debt reduction and savings contributions I was able to increase my net worth by $795.91 for the month of Feb, all while enjoying life on various islands in Indonesia.
I was able to save $351.47 from my normal wages, although I only earned $2.51 in interest due to the emergency withdrawals I needed to make the month prior (see my previous FIRE Journal entry).
Mutual Fund Investments.
Although I still haven’t resumed contributions into my mutual fund, the value of my holdings has continued to increase with the market rebound, increasing by $165.47 in value from the previous month.
Debt Reduction: Personal Loan.
My Personal loan has continued to reduce steadily, still just making the minimum payments for now but that will be changing from next month.
Debt Reduction: Other Debts.
My tax debt and traffic infringements continue to reduce at a steady pace. Between these 2 debts and the personal loan debt I have reduced my overall debt by $276.47 net (accounting for fees and interest).
February Net-Worth (excl. Superannuation)
With my savings contribution of $353.97 (including interest), my debt reduction of $276.47 and the increase in value of my mutual fund holdings by $165.47, my net worth (excluding superannuation) has increased by $795.91 for the month of Feb. This is a $587.79 higher increase than the month prior so I’m happy with the result.
Final Thoughts For February 2019.
One thing I hadn’t really been keeping track of properly until this month, was the increase to my net worth.
I would be focusing on the amount of savings I was building and feeling disappointed on how little progress I felt that I was making. But when I took a step back to look at my overall net position including debt reduction, it presented a much more positive picture.
In Feb, my savings grew by $353.97, but my net-worth increased by $795.91. I continue to keep having these small revelations and learning these important lessons each month on the way to FIRE.