To say that I am relieved January is over is an understatement. I can’t recall a more miserable month in recent times. I spent the first half sick with a very bad cold and then chest infection requiring me to take time off work. Not something I felt good doing during my probation period, but it was all fine as I passed.

Not only did I have to make my salary stretch from 19th December to the 31st January, I had to pay all sorts of annual subscriptions and bills from Christmas. Combine that with money spent on some home improvements (laying a new floor in the bathroom) and you get to squeaky bum time on my bank account!

To add to the misery I had to say goodbye to my lodger who is also a good friend. He was harshly laid off by his employer just before Christmas. Not only will I miss his company, but I will also miss the extra money!

I must admit I felt like I was undoing a lot of good work done on reducing expenses over the past year. However, today I looked at my expenses and they were below my income (I was expecting them to be way higher). I’d not blown the budget on eating out (in January at least), and my savings rate was at a respectable 44%.

I think the problem is psychological more than financial. Because I am taking advantage of the UK’s generous tax break for saving into a pension, my take-home pay is reduced substantially. If I was putting in the minimum I would have £4374 a month take home, but I’m only getting £3641 due to my pension contributions. I was banking on another £500 from my lodger, taking me to £4874. So I’ve effectively taken a monthly pay cut of £1233.

Although it feels like I am struggling, I have to remember that I’m putting away £933/month plus another £373 from the taxman (reclaimed later), and £333 from my employer without doing anything. That’s a total of £1640/month.

I am also owed £400 expenses by the company which has also stretched finances a bit.

The great thing is because I have an emergency fund, I had no worries and could easily have dipped into that should I have needed some money. And I have to remember how much better my position is now compared to 12 months ago.

I am debt-free (save my mortgage), I have increased my net worth by 22% (£60K) and I have a job paying £10k more.

I was beginning to think I was being too hard on myself because I didn’t add to my ISA. Well, who cares?! I’m putting away £1640 which is frigging awesome. As soon as I get the £400 expenses I will shove that in the ISA. Bingo.

Message to self: be kind. There is more work to do but I’ll get there.