What defines a good month?

Very safistied with April and May but …

Mr Lyn and I close our “book” on a monthly basis. And you ask me, what is that? It is our favorite ritual to evaluate how we are doing.

This is how it works: We grab a beer and sit on the sofa. I have the expenses in front of me and Mr Lyn has our financial plan open. We record our expenses line by line, commenting on the charges we see in the bank statement and classifying them. In addition, we see how we did it versus budget and how we are doing with regards to our investment objective. And if we still have energy, we play with future scenarios.

We closed May when I wrote that I was very happy with our first months. In April we saw a change in our more “superficial” expenses and in May we passed the 70% savings rate! We could’t believe it. We were already going for the second beer, we had to celebrate.

Just when we were finishing and taking a look at the projections, we saw that June is full of expenses.

… June didn’t look so good

We know that in June our expenses will go back to high levels. It´s been a while in the plans, we saw it coming. But I did not want to accept it.

And seeing the June forecast I was overwhelmed. I got blocked. I began to feel guilty for all those plans we had.

“Why would I have said yes? Now this trip screws up the saving rate for the month”.

After two months of “good results” I was not willing to face a bad month. And the simple fact of thinking about it like “a bad month” is a problem.

Because what is a bad month? Who defines a bad month? If I tell you what I did in June, maybe you tell me it’s wonderful. But at that time I could not see the positive, I only saw expenses and red numbers.

The first quarter of the year was very busy, so during April and May asked for was calm. We went out to dinner sometimes, some day trip to leave the city, etc. But all low-cost and alone plans (just Mr. Lyn and I), in which we find it easier to control spending.

What happens in June?
And now June arrives, here are our top 3 extra expenses:

  • Trip to London with friends.
  • I’m 30! And we celebrate it by spending a weekend with the family.
  • Purchase two tickets to the US for the second half of the year.

At first glance, you could say: of course your expenses increased! And there is no denying that they are good plans. But when looking deeper, you can see (I hope) that it is not a total waste.

London. I’m dying for that weekend. We are meeting 5 friends who were super close to us during our Master’s. Now we are all in different countries and we have been planning the reunion since January. The flights were cheap because we took them in advance, and we did not pay for accomodation because we are all going to invade the house of the ones who live in London. Will we spend more than a normal homey weekend? Of course, London is expensive and we will go out to eat and drink. But overall we are trying to control our expenses when possible.

My birthday. Our families have been supporting us all our lives, and especially in recent years when we got into the adventure of the Master’s. They always support us, unconditionally, although many times they don’t agree with our decisions. So we wanted to thank them in a special way. And for once we’ll be the ones inviting. So with the excuse of my birthday we rented a house for everyone and a car to spend the weekend with the family.

Flights. This month I got confirmation that in the summer I will go to the US to work on a project for 6 months. Mr Lyn will stay in London, and we’ll cross the Atlantic to see each other when we can. So as soon as we have the dates clear … we will buy the flights! It is an important expense but we want to buy them in advance to try to get a better price.

Is June a bad month or is it a wonderful month?

Are these expenses totally necessary? No. Should I feel guilty for this month? Neither.

The road to IF is a long-term path, and for me it would not be sustainable if we cut off all “unnecessary” spending and maximize savings to the extreme. It’s about changing your habits and spending consciously.

Mr Lyn and I have many friends scattered all over the globe and we are aware that to maintain those relationships we’ll have to spend money. So we will continue making trips and reunions, but we will choose them more carefully.

And after this explanation and reflection, my conclusion is that June was wonderful. We will not save a lot, but I hope to be in line with the plan. And most importantly, enjoy each moment to the fullest and collect memories  that last for a lifetime.

What made June wonderful is that it is special, is that we do not do this every month. But when we do it, we do it with pleasure. Because it’s worth it for us.

Tip: plan your extra expenses

We have an annual budget that helps us to have our feet on the ground.

For example, the extra expense of celebrating my birthday was in the budget. We took this into account when we set the investment objective for this year. The same with travel expenses to see each other while living apart. We knew it was going to be a year living apart and the extra expenses were in the budget.

Planning this way we avoid a lot of frustration. The extra expenses are conscious and planned and do not impact our investment objective. In addition, it helps us to keep the expenses limited. If it’s not in the plan … it’s hard to make room for anything “big”.

We are already starting to plan 2019. There is still a lot of time but we already have a couple of weddings and other large expenses confirmed. As soon as we know that we will have something special, we include it in the plan, so we can count it when establishing 2019 targets.

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