March 2022 was a very unusual month and so I don’t think there is much to learn from the numbers. Instead, the lesson I learned is that life sometimes takes unexpected turns.
I saved 60% of my income in March. A good result as I expected the savings rate to be much lower. March was very unusual so I think I will just leave it at that and not spend more time analyzing the numbers.
Instead, I’ll spend a few minutes contemplating my amazing network of family, friends, and country.
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At the end of February I was diagnosed with a serious illness. I’m fine now and except for some hospital checkups the illness should not affect me anymore. But the experience naturally shook me. I had surgery early March and spent most of the month recovering and visiting the hospital.
Looking back I can only be grateful for the great support my family and friends provided. This post is supposed to be about financials but that was not the support I needed. I’m lucky to be in a position where money was the last thing on my mind and financial support was not something to worry about. Instead I received psychological support that I will forever be grateful for.
Money was never on my mind as I live in Denmark. And that means free state-of-the-art healthcare. This is not something I usually think about (which is wonderful), but when lightning strikes it is a blessing to be taken care of without worrying about bankruptcy or insurance claims.
This month showed me how quickly things can turn. I was doing just fine and then suddenly one day I wasn’t. I think there are two lessons in this that relates to my financial freedom journey:
1) Safety Margin
I recently read a post from Mr. Money Mustache about safety margin. The essence is that safety margin is a balance. Too much and you can’t do anything because it will be a risk to your margin. Too little safety and you will be in trouble by any unexpected expense.
Why have a safety margin? Because life. My recent month is a good example.
In relation to my journey this is more or less what I am building up right now. My safety margin. Instead of spending money as it comes in I save some of it. And I also work on lowering my living costs. Another way of increasing my safety margin. And if things go really bad my country provides a safety margin too.
But at some point I have to find my acceptable level of risk. If I don’t I’ll just end up working forever, building up a bigger and bigger margin. And for what? I’ll never be certain and so if that I what I try to chase I’ll never get there.
This is a topic that I have debated internally for a while and it is causing me to reflect on some beliefs I may no longer agree with. In many ways I may already have enough safety margin to take more freedoms. But fear is holding me back.
2) The Grand Plan
… has to be flexible. Whatever ideas and plans I had for March (and some of my plans for the rest of the year) went out the window on a regular Thursday in February. And I was lucky. It could have been much worse.
It can feel good to plan and scheme about things in the future but in reality we just don’t know what will happen. Look at the last few years. COVID, war, supply chain delays. Do you really think you can predict what will happen in 6 months from now?
My journey has been lose and flexible from the start. My goal is to build more financial freedom. And that’s it. I don’t have a hard retirement deadline, monetary yearly goals, or any of that stuff. All I have is a direction. And these monthly updates are my map and compass. I check in and see if I’m still heading in the right direction.
Some may disagree with this approach and require more solid goals. And that can work too. But a Grand Plan won’t. In reality we have very little influence over our future and I believe it is better to accept that than try to work against forces beyond our control.