Hi all, I just wanted to share the progress made in the first half of 2016. The year where I really took a firm grasp on my finances and started documenting and perusing my targets and ambitions with more passion and hunger than ever before. The first 6 months of the year have gone by extremely quickly, and as I write this we are already in August. But lets see, what happened in the first 6 months of 2016!
The most important parameters I judge progress on are SR (Savings Rate), Net Worth and Expenses per month. The reasons for this are fairly straight forward, SR is very important for many reasons, net worth increases again are important especially if considered as a % of annual expenses, and Expenses over the time period are also important. You might ask why I think expenses are worth considering if we are tracking SR and Net worth and you would have a point, but the reason I do is due because you need to manage expenses to allow SR in constantly increase if you income is going up, otherwise a £100 bonus one month would quickly be spent and your SR would not increase. I like to look at an bonus income as a figure which should be treated like anything else, you can spend a portion of it, but you should be aiming to save a % of it which is higher than your current SR to allow your SR to constantly increase. I will explain my methodology on this in greater detail in the near future.
I am VERY happy with how the first 6 months of the year went in relation to my Savings rate. It increased significantly on 2015 and was a fantastic average. I hope to keep my SR at this level for the remainder of 2016.
From 01st Jan 2016 to 31 June 2016 my average savings rate was 63.6%
This was based on Total income on £18,599.57 and total expenses of £6,770.35
As you can imagine, having maintained an average SR of 63.6% over the 6 month period my Net worth increased nicely as a result.
It increased from £15,214 to £27,710 over the first 6 months of 2016. Or £12,196 in total.
In total I spent £6,770 in the first 6 months. I had a target expense of £1200 per month for 2016. For the first 6 months I managed an average of £1,111 per month of expense. A good start.
So it has been a good start to the year and progress is good so far. You may be wondering how I have achieved this, the answer is simply keeping track of what you are spending, Trimming down wasteful expenses and saving everything else. Obviously trying to increase your income along with decreasing your expenses will be the best approach. Above all, you need to have a passion and a desire to do it, and if you want to keep it up long term you have to have fun along the way. Yes I could have saved an extra £1000 in the first 6 months of the year by spending LESS time socialising, less holidays and less fun, but i would have thrown in the towel at some point and gone back to my old ways. Finding you balance is key! You will find out what really makes you happy, and what things are worth spending money on.
Best of luck to you all in the second half of the year, you still have time to make a huge difference to your life this year so don’t be afraid to jump in and follow your odyssey.