Retire early (living off savings)
Discussion
DoubleTime said:
Anyone who thinks you cannot live a great lifestyle on 15K per year lacks serious imagination.
You're retired FFS. You are no longer restricted to the UK shores (if that's what you have been conditioned to think all your life).
Be dynamic. It's a BIG world out there with LOTS to offer. Enjoy it.
Can't really agree with you at all. Although I travel a lot in the BIG world that doesn't mean to say that everyone wants to do the same. If people are happy within their own regular lifestyle/family and are enjoying life I would have thought that £15k per year was more than adequate.You're retired FFS. You are no longer restricted to the UK shores (if that's what you have been conditioned to think all your life).
Be dynamic. It's a BIG world out there with LOTS to offer. Enjoy it.
My main concern with moving to a different country as I get older would be health care (although the NHS is struggling these days anyway).
Having said that, both of my neighbours retired to Thailand in their 50s. They even had houses built out there - they did have Thai brides though which may have helped.
Having said that, both of my neighbours retired to Thailand in their 50s. They even had houses built out there - they did have Thai brides though which may have helped.
S6PNJ said:
What does anyone use as a budget planning tool? I use this one which seems to cover most things. I have an off-line version but I can't find the link to it at the moment. Any other suggestions for good budget planners?
I have my own spreadsheet.It's split by month and I just copy and paste from my online banking then match up the spend to specific categories.
It took many years of using and refining to get it to where it is but it covers pretty much everything. It has my monthly budget, highlights anything over spent in red so I know right away if someone is overcharging me or I've bought too much booze on my monthly shopping, etc. It breaks everything down into car/house/personal spend/other (shopping, childcare, etc.)
I have a good salary calculator sheet. You put in your salary and it works out all your tax, pension contributions, takes into account higher rate of tax, etc. It also has a projected salary bit so you enter what payrise you expect (say 3%) and it calculates all the details including the difference between current and proposed after tax, etc.
What I've discovered from this is that
a) I'm a nerd.
b) I have far too much time on my hands.
c) My financial adviser loves me and pretty much everything he needs for reviews is there in a simple to read format.
toon10 said:
S6PNJ said:
What does anyone use as a budget planning tool? I use this one which seems to cover most things. I have an off-line version but I can't find the link to it at the moment. Any other suggestions for good budget planners?
I have my own spreadsheet.It's split by month and I just copy and paste from my online banking then match up the spend to specific categories.
It took many years of using and refining to get it to where it is but it covers pretty much everything. It has my monthly budget, highlights anything over spent in red so I know right away if someone is overcharging me or I've bought too much booze on my monthly shopping, etc. It breaks everything down into car/house/personal spend/other (shopping, childcare, etc.)
I have a good salary calculator sheet. You put in your salary and it works out all your tax, pension contributions, takes into account higher rate of tax, etc. It also has a projected salary bit so you enter what payrise you expect (say 3%) and it calculates all the details including the difference between current and proposed after tax, etc.
What I've discovered from this is that
a) I'm a nerd.
b) I have far too much time on my hands.
c) My financial adviser loves me and pretty much everything he needs for reviews is there in a simple to read format.
Lord.Vader said:
Are you able to share the spreadsheet?
I need to start doing it as I am massively overspending at the moment but I don't know where, well I do, but I want to track it! My bank (Commerzbank) has this feature on their internet banking but I can't mess about with it.
If you give me some time I'll copy it and take off the password and change the figures (to hide how much I really spend on booze!) It's specific to me so you'd need to do some changing to match your own data but it shouldn't be too hard fathom out. Most of it is calculated. I need to start doing it as I am massively overspending at the moment but I don't know where, well I do, but I want to track it! My bank (Commerzbank) has this feature on their internet banking but I can't mess about with it.
I'll try and add some explanations as to how I use the Jan to Dec sheets too.
toon10 said:
If you give me some time I'll copy it and take off the password and change the figures (to hide how much I really spend on booze!) It's specific to me so you'd need to do some changing to match your own data but it shouldn't be too hard fathom out. Most of it is calculated.
I'll try and add some explanations as to how I use the Jan to Dec sheets too.
I'll hold my hand up to being interested too - this thread has prompted a long overdue spending review, but to get a proper result, I'm going to need to pay a lot more attention to the monthly budget in order to maximise the savings we can make.I'll try and add some explanations as to how I use the Jan to Dec sheets too.
I should also say thanks to all the contributors - if I've taken anything away from the advice it's:
1) Everyone's different and "retirement" might mean stopping work, or simply leaving the higher paid, but stressful position for an easier/closer/more fun one. Preparing for and bringing that moment closer is what it's about for me. Figuring out "your number" is part of the fun.
2) Start today.
3) No, really. Start today. Compound interest needs a starting capital. Today. The Kate example on TEA really made it's point for me. In my late 30's, I'm going to have to work bloody hard to catch up as I've lost 20 years off the front end, and want to chop at least 10 years off the back end.
I've got my own spreadsheet (one sheet per year and one column per month). It started off with rows at the top for totals for different categories (eg food, car, utilities) linking to blocks of rows below where individual transactions went. It grew into a tool that lets me reconcile all my cards and accounts.
I've also used Microsoft Money for years - now on the free, but unsupported, 'sunset' version. This works pretty well and the ability to categorise spending (down to the last penny if you are that way inclined) is useful.
In the context of this thread, using tools like the spreadsheet or MS Money simply gave me more confidence in taking the leap to early-ish retirement myself, because I had a good idea what my 'core' spending was by being able to see how much my 'extra ordinary' spending was.
I guess I'm a nerd/saddo as well!
I've also used Microsoft Money for years - now on the free, but unsupported, 'sunset' version. This works pretty well and the ability to categorise spending (down to the last penny if you are that way inclined) is useful.
In the context of this thread, using tools like the spreadsheet or MS Money simply gave me more confidence in taking the leap to early-ish retirement myself, because I had a good idea what my 'core' spending was by being able to see how much my 'extra ordinary' spending was.
I guess I'm a nerd/saddo as well!
My spreadsheet is rather basic compared to the ones mentioned so far. A new one each year, and it simply tracks who I spent the money with and on what. No categorisation at all. It does round everything up to the nearest £10 though which means that when I balance my account I usually find a few thousand spare which is nice.
I've not previously tracked my cash spending (only the cash withdrawal goes on the spreadsheet) but I decided to start tracking cash spending this year too.
It means I can see what I've spent money on, bit it's generally too much hassle to work out patterns, so I just rest assured that I've spent too much on everything!
I've not previously tracked my cash spending (only the cash withdrawal goes on the spreadsheet) but I decided to start tracking cash spending this year too.
It means I can see what I've spent money on, bit it's generally too much hassle to work out patterns, so I just rest assured that I've spent too much on everything!
davek_964 said:
My spreadsheet is rather basic compared to the ones mentioned so far. A new one each year, and it simply tracks who I spent the money with and on what. No categorisation at all. It does round everything up to the nearest £10 though which means that when I balance my account I usually find a few thousand spare which is nice.
I've not previously tracked my cash spending (only the cash withdrawal goes on the spreadsheet) but I decided to start tracking cash spending this year too.
It means I can see what I've spent money on, bit it's generally too much hassle to work out patterns, so I just rest assured that I've spent too much on everything!
I'm with you, one can get too anal. If you need to budget on (for instance) booze consumed at home somethings wrong.I've not previously tracked my cash spending (only the cash withdrawal goes on the spreadsheet) but I decided to start tracking cash spending this year too.
It means I can see what I've spent money on, bit it's generally too much hassle to work out patterns, so I just rest assured that I've spent too much on everything!
If my annual expenditure comes in at there or there about's that's fine.
PositronicRay said:
S6PNJ said:
What does anyone use as a budget planning tool? I use this one which seems to cover most things. I have an off-line version but I can't find the link to it at the moment. Any other suggestions for good budget planners?
Spread sheet. Every fixed cost (ie bills) is a line item, with an annual cost. I have two additional columns which are headed "basic" and "luxury" the same annual cost get put into one or other of the columns. Each of those 3 columns is summed and divided by 12.
That gives me my current monthly spend, and potential minimum spend without luxuries (second car, Netflix etc). My basic spend is essentially what we'll need for retirement.
I have a seperate bank account that pays all my bills, so I just transfer the monthly amount in after I get paid, and it should pretty much be cash in = cash out, even if some bills are not monthly.
davek_964 said:
My spreadsheet is rather basic compared to the ones mentioned so far. A new one each year, and it simply tracks who I spent the money with and on what. No categorisation at all. It does round everything up to the nearest £10 though which means that when I balance my account I usually find a few thousand spare which is nice.
I've not previously tracked my cash spending (only the cash withdrawal goes on the spreadsheet) but I decided to start tracking cash spending this year too.
It means I can see what I've spent money on, bit it's generally too much hassle to work out patterns, so I just rest assured that I've spent too much on everything!
I've been using Microsoft Money for about 20 years - I can report exactly how much I spend on groceries, fuel, etc., and it's takes no time to update. Last week I got suckered in to taking an Amazon Prime Credit Card - when I did a report of the last 4 years in the US, I could see exactly how much I spent at Amazon.com each year and work out how much the cashback would be. I find it so useful, just wish they would continue to support it!I've not previously tracked my cash spending (only the cash withdrawal goes on the spreadsheet) but I decided to start tracking cash spending this year too.
It means I can see what I've spent money on, bit it's generally too much hassle to work out patterns, so I just rest assured that I've spent too much on everything!
I have been reading this thread for hours.thanks for everybody's input.
I posted that 15k/ pa. was dooable,on retiring, it is, but only if you have some backup for emergencies. Since retiring I have spent a lot on sorting my house,which is not included in the 15k..Both my cars l love driving, but they have almost no electronics and I can service them myself.one is slow and comfy ,one will out accelerate a 450hp 911.Both my motorbikes are old but suit me.you can live on a small amount if you don't need the latest thing ,but you need to know what you really want.
I have collected all the tools for servicing my toys which I enjoy doing. My wife works part time to fund the holidays that she wants ,and we both enjoy, but I would not choose to do myself.it all about what you think is necessary for you and your life.
This year's golf is no better than last years golf. They are both really good, but if you keep buying this year's best car ,you will spend a lot of money. If you really want to compete with somebody else , go kart racing and you will find you are not at the front.
I really believe that if you own your own house, and have two cars, this will be as good as it gets for normal people.
I posted that 15k/ pa. was dooable,on retiring, it is, but only if you have some backup for emergencies. Since retiring I have spent a lot on sorting my house,which is not included in the 15k..Both my cars l love driving, but they have almost no electronics and I can service them myself.one is slow and comfy ,one will out accelerate a 450hp 911.Both my motorbikes are old but suit me.you can live on a small amount if you don't need the latest thing ,but you need to know what you really want.
I have collected all the tools for servicing my toys which I enjoy doing. My wife works part time to fund the holidays that she wants ,and we both enjoy, but I would not choose to do myself.it all about what you think is necessary for you and your life.
This year's golf is no better than last years golf. They are both really good, but if you keep buying this year's best car ,you will spend a lot of money. If you really want to compete with somebody else , go kart racing and you will find you are not at the front.
I really believe that if you own your own house, and have two cars, this will be as good as it gets for normal people.
OddCat said:
Good grief. No mortgage, no kids, no holidays. Not wishing to pry, but on what do you spend £42k per annum ? Can you give a broad breakdown ?
Sure. We keep a very good track of the pennies. Broadly it is:4k on house related bills / utilities / council tax etc.
3k on house maintenance / decorating / gardening.
5k on petrol / insurance / servicing / maintenance for the cars.
2k on food and toys for the cats
12k for the weekly shop for food, soft drinks, household products, personal care etc
1k for media including broadband, TV, cd's books etx.
1k on daily contact lenses and opticians
14k on eating out and wine.
The last one is the overspend. Budget is 8k.
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