After sharing with you all our monthly results, I want to take a step back and look at 2023 as a whole. I present to you, Lazy FI Family’s 2023 annual results.
I already share with you our personal life updates every month. For that reason, this post will be more number-focused.
Let’s dive in.
2023 Annual results- Income
Our income grew by 13.96% in 2023 compared to 2022.
That definitely improved our 2023 annual results.
I am quite surprised by this number because Lazy FI Mum was between jobs for a few months but in 2022, she was on maternity leave for a few months, which kind of nets off.
So how did our income grow?
Salaries
When I say salaries I mean net salaries + employer pension contributions+ employee (our) pension contributions.
I explained why I include the pension contributions as part of our income in the “How to calculate your savings rate” post.
Lazy FI Mum’s salary (+pension) increased by 60.55% (boss!). This is due to her new job (since mid-2023), which came with a big salary increase
My salary (+pension) increased by 1.10%, which is pretty boring.
Other income
Child benefit
As a reminder, we get full child benefit. This is thanks to the method I went through in the “How to increase your child benefit with pension contributions” post.
Our “child benefit” line grew by 17.68% mainly because it’s the first full year my son was around.
Other (Side hustle + gifts + other)
As you know, I teach (mainly Excel). 2023 was great but still brought in less money than in 2022. However, we did receive some monetary gifts, more than in 2022. In total, our “other income” line grew by 4.25%, pretty stable.
We also had a few more “other income” items like cashback from American Express, you can read more about this here:
Our experience with a cashback credit card
2023 Annual results- Expenses
Our income grew by 13.96% in 2023 compared to 2022 but our expenses also grew. In 2023, our expenses grew by 12.72% compared to 2022. Interestingly, there isn’t one or two categories I can point at that caused most of it. Maybe the kids (my son being in nursery for a full year).
Time to look at the main lines that make up our expenses.
Housing (mortgage/rent) and bills
As you may remember, we live in a shared-ownership property. This means we used to pay a mortgage (only the interest part) and rent. Since we bought 100% of our flat (the official term is “staircasing”), we pay no rent. This section includes our mortgage, rent (when we used to pay it) and other bills.
First of all, I know there’s an energy crisis and energy prices are crazy. We are very fortunate to have listened to Martin Lewis’ warning. We fixed our tariff before the end of 2022 for 3 years. Our energy bill barely increased this year.
In addition, we fixed our mortgage in 2022 for 5 years before the interest rates increased (pure luck) when we bought 100% of our flat. With the addition of ground rent, the expense stayed pretty much the same.
In total, our “Housing (mortgage/rent) and bills” line decreased by 1.05% in 2023 compared to 2022.
Mystery dining
As I look at net amounts (how much I paid minus how much I got reimbursed), the amounts are tiny, less than £300 per year in both years.
If you have no idea what Mystery Dining is, here you go:
Mystery dining- How to eat out for free
Going out and eating out
in monetary amounts, our “going out and eating out” line grew by 44.58% in 2023 compared to 2022.
That’s a huge increase (from a % perspective. From a monetary perspective, it’s not that big).
The explanation is simple- we went out more. I’m happy we did that.
This is made of days outside of London, family meals out or times when I didn’t have time to cook because I was teaching Excel during my lunch break (I can assure you I earned more than the cost of that food).
Actually, there’s one more reason- lunches at work. Sadly, we went into the office more times in 2023 than in 2022 (you’ll see that clearly in the Transport category later).
Children
Each child has their own line but I will combine it here for you. It includes only expenses that we can easily separate (clothes, childcare, furniture, toys etc. but mainly childcare). Their combined line does not include groceries as it will be too time-consuming to separate their items. It also excludes any travel fare we pay for them, which goes to the “holiday” line.
Our “Children” line increased by 55.32%, which is not surprising considering our son was born in 2022, another kid equals more expenses (and joy). In 2022, he was only in childcare for a few months (offset by some gifts we got for his birth), but in 2023 it was a full year of childcare.
In monetary amounts, this line is huge. The increase in this line explains 90.17% (!!!!!) of the increase in our expenses, crazy.
The good news- it only gets better from here, in 2023 our daughter turned 3 so 2024 is gonna be very low for her and in 2025 our son will turn 3 so another decrease, woohoo.
Cleaner
Yes, we have a cleaner. The FI police didn’t arrest me for this last year but I’m still waiting.
This line is totally worth it in our opinion. Not only do we have a cleaner, but our spending on a cleaner increased by 20.78% in 2023 compared to 2022. In monetary amounts, this isn’t a significant amount.
Furniture/ electronics, clothing, and misc
Our “furniture/ electronics, clothing, and misc” line increased by 14.00% in 2023 compared to 2022.
This is almost all due to a one-off voluntary payment to HMRC to cover Lazy FI Mum’s gaps in her National Insurance record. It’s worth checking if you have gaps.
Voluntary National Insurance: Overview – GOV.UK
Groceries
Our “groceries” line grew by 28.62% in 2023 compared to 2022.
I’ve spent way too long looking into this number and have no good explanation for why our groceries were so high in 2023. It’s not that we were 4 people for a full year because that would mean 2024 would be roughly the same. It’s November 2024 as I write these lines and our groceries are not as high as they were in 2023. I really have no idea how it was this high.
The change in groceries accounts for 29.55% of the increase in our total expenses.
For those wondering how this can account for 29.55% while our children’s line accounts for 90.17%, that’s because some lines went down (essentially accounting for a negative percentage). For an example of such a line, see the next category 🙂
Health
This is a gym membership (now cancelled), health insurance, home massages and osteopathy treatments.
Our “health” line decreased by 30.26% in 2023 compared to 2022.
While this sounds like a lot, there’s a simple explanation here as well.
As I shared with you in our November 2022 results, we bought Urban gift cards to use towards massages and osteopathy treatments (Amex offered 20% cashback, and we used it). Most of these massages and treatments took place in 2023, which is when the insurance reimbursed us for them.
Those gift cards explain most of the decrease in this line. The rest is actual health treatments (dentist etc.).
Transport
Our “transport” line increased by 24.63% in 2023 compared to 2022.
This is mainly because my employer insisted we come into the office a couple of times a week. It is virtually all TFL (94.48% of the 2023 transport expense). Nothing we can do about it.
In addition, it’s a very small part of our expenses as it only accounts for less than 6% of our expenses.
I also feel it’s important to mention that we don’t drive in the UK. Both Lazy FI Mum and I have our Israeli driving licenses but we don’t have English ones.
Holiday
This is where we spent a lot less.
Our holiday expense line decreased by 35.95% in 2023 compared to 2022. It also only accounted for 9.34% of our expenses in 2023 compared to 16.44% in 2022!
Let’s dive in and see what happened in this line
2022 holidays
In 2022 we had two visits to Israel and 2 visits to Center Parcs.
However (!), we need to look at expenses and not just actual holidays so…
in 2022, we paid for all of the above PLUS we prepaid for our Center Parcs October 2023 stay AND for our Flights for Israel in April 2023
2023 holidays
In 2023 we had 3 visits to Israel- 2 as a family, one visit to Israel just Lazy FI Mum and our daughter.
As I mentioned, one of our family visits to Israel already had the flights paid for in 2022, so the expense was much smaller in 2023.
However, if you think we’re done with this “cheating” (moving expenses from one year to the other), you better buckle up. In 2023 we also prepaid for some 2024 holidays: We prepaid for flight tickets to Israel AND for a stay in Center Parcs (our favourite 2 destinations as you can see).
The decrease in this line was intentional. We felt that although this is probably the most enjoyable line, it was ridiculously high in 2022.
Summary- expenses
You can probably tell by my language that I’m not worried at all about the increase in our expenses.
There are a few reasons for that:
- Our savings rate (see below) is above 50%, which is better than I could ever expect.
- A big part of the increase is due to prepaid expenses that relate to 2024.
- Our expenses increased by a lower percentage than our income.
2023 Annual results- Saving rate
We ended 2021 with a wicked saving rate of 51.82%!
At the end of 2022, I set our goals at 50%. We also set a target to be close to 50% so we’re not aiming for 60% or 70%, we’re aiming for 50% and the rest will go to enjoying our life. Saying that, 55% will be a new record haha.
2023 Annual results- Net worth (nominal)
In 2021, our net worth increased by 31.37%. The 31.37% is made of 2 parts:
- Our actual savings increased our net worth by 17.80%
- Our investments went up in value, which increased our net worth by 13.57%
A beautiful year of the Lazy FI Family and Mr Market working together.
You can look at Mr Market’s performance as a good thing (increasing our net worth). Alternatively, you can look at the bigger picture: We’re in a stage called the accumulation stage, which means that we’re still buying these ETFs, not selling them. You always want to buy when the price is low so if any market crash wants to come- we’re ready.
In addition, as you invest more money, the more control Mr Market has over your net worth. As our goal is to have more and more money invested, we’re happy to pass the control to Mr Market.
2023 Annual results- Net worth (real)
Reminder: I set our FI number (how much we need to retire) in July 2020 and update it every month for inflation (I use CPIH* index).
In 2023, the CPIH increased by 4.17% (130.0 / 124.8). This means the nominal amounts above need to be adjusted for inflation by dividing them by 1.0417, let’s do it.
While our nominal net worth increased by 31.37%, things got more expensive (by 4.17%), which means our purchasing power (our real net worth) increased by 26.12% (1.3137 / 1.0417 – 1).
As you can see, 2 factors are out of our control:
- The market performance (are our investments worth more or less this year?)
- Inflation (are things more expensive than last year?)
As these factors are out of our control, we’re left with only one factor which is in our control- savings, which was fantastic this year. I’m very proud of us for what we’ve achieved in 2023 and we also had lots of fun along the way.
That’s it for our 2023 annual results, see you next year.
Notes
*CPIH- “Consumer Price Inflation including owner-occupiers’ Housing costs”. As we are consumers and we do, partly, own our home- I think this is the best inflation metric for us. You can see the changes in the index here.
