Cheery's country living adventure

Cheery_Daff

It all counts RT! :T

Oddly enough, I planted a few (tiny) oak trees the other day - maybe I should look under them? Bizarrely a friend once moved into a new house - her young son was playing in his new room when he appeared holding a roll of notes saying 'I found these under the floorboards' (!) There was several hundred quid there! They did make inquiries, but it was never claimed, so they got to keep it

Anyway, onwards to day 6..

Cheery_Daff

UFM Day 6

So, day 6 is all about organising your finances

- tracking spending
- knowing monthly net income
- knowing net worth
- calculating savings rate

Tracking spending
We use YNAB, and I love it :j Even worth paying £3.30 a month for in my opinion (although I wouldn't recommend paying to anyone in debt!). New budget for the new year set up and I'm being diligent about reconciling every few days. Got records going back about 3 years I think which is useful!

Knowing monthly net income
Yep - this is primarily my wages and I know how much they are Mr Cheery's income is more variable and often in cash - it stays out of the main bank account and I don't keep minute track of it at all. It's mostly used for food and his personal spends (which are very minimal, I've never met anyone so abstemious)

Knowing net worth
Hmm... I confess I have absolutely no idea I've never really felt like it was a thing I needed to track... Let's see...

HOUSE
We paid £425000 for the house :eek: and mortgage is now around £208000, so that's about £217,000 there.

PENSION
Hmm. Mr Cheery has a local government pension, but stopped paying in about 7 years ago when he stopped work. Theoretically he could claim (early) now but there's no earthly point while I'm earning so unless anything changes, we'll wait and claim it in 9 years when he's 65. Apparently there's a lump sum - we have a statement somewhere but I don't want to get too sidetracked tonight so will look on Admin Tuesday From memory it's around £25,000 lump sum plus about £10,000 a year (although that might have changed by then).

I have two pensions - one with the scheme I was under with my old employer - I only worked there for 5.5 years, and not all of it full time. I paid in about 7% of income, employer about 13% I think so it accrued nicely. Just tried to check but again they want all manner of login details that I don't have to hand - a job for another day.

My second one is my current one, and again I can't get in without finding login details in my work email (not logging in there until I absolutely have to!). Been paying into that for 3 years now, I pay in around 10% of salary, employer around 16% so again it's building up nicely (or at least I hope it is!!)

I'm only 38 so won't reach official state pension age for another 30 years or so :eek: by which time there will probably be no pension, or the age will have been raised to about 90 :eek: However, I do NOT intend to be working until I'm 68 if I can possibly help it!

Would be lovely to be in a position to pay off the mortgage sooner rather than later (it's got 24 years left, so I'd hope we'd be able to pay it off in 20, and it would be lovely if we could do it in 15 or even less!) Then we could live frugally off Mr Cheery's pension until mine kicked in and we'd be able to live the life of riley as OAPs :rotfl: :rotfl:

Thinking about it - I'll likely still be working full time in 9 years, so we'll very likely be able to throw all of his at the mortgage... So paying it off in 15 years suddenly seems a little more realistic.... :eek:

OTHER NET WORTH STUFF
We have less than £10,000 in savings :eek: (sounds like a lot to my old self but we're not adding to that right now, and that is also paying for the floors joists etc to be fixed, and it would only take the septic tank to fail, and us to have to replace both cars etc before things started looking ropey - so counting 'savings' in the net worth calculation feels a little precarious!)

Ok, actual net worth calculations still don't feel particularly relevant But maybe when I've actually done some calculations they will! :j

Savings rate
Well, at the minute we are basically adding NOTHING to our savings each month :eek: Clearly we need to sort that out! Once we've paid out for the floor joists work to be done that's it for major expenditure (the planned kind anyway) so we'll work on building emergency fund back up.

I have a very generous sick pay policy through work so I'm less worried about an emergency fund in case of being ill - but I'd feel happier having enough there to replace cars, boiler, septic tank etc if necessary...

So there we are - nothing conclusive right now But a promise that I WILL dig out all the pension details this month and figure out where we're at :j

rtandon27

Wow Cheery - that is quite some post - you've put a lot of thought into your Net Worth calculations - well done you!

We were chatting in the abstract about NW on KC's tread, and now that I see your workings written out, I've got a bit of a solid framework to start from - many thanks!:D

Cheery_Daff

Ha, you made me laugh RT - I haven't actually done much calculating and still have literally no idea what my net worth is :rotfl:

I was reading this...

http://www.mrmoneymustache.com/2015/01/26/calculating-net-worth/

But given I have no loans except the mortgage, and no income except my wages & Mr Cheery's income, I ignored most of the complex bits :rotfl:

I'm going to go back and read KC's thread again - I'm a bit fingers-in-ears about net worth if I'm honest As I'm so far from retirement age I can't see how it helps me to know it, especially when the vast bulk is either in the house I live in and am not going to sell, or pension pots I can't cash in for another nearly 20 years

However, knowledge is power as they say so it's about time I figured it out!

Karmacat

Cheery_Daff wrote: »

UFM Day 6

Knowing net worth
Hmm... I confess I have absolutely no idea I've never really felt like it was a thing I needed to track... Let's see...

HOUSE
We paid £425000 for the house :eek: and mortgage is now around £208000, so that's about £217,000 there.

PENSION
I have two pensions - one with the scheme I was under with my old employer - I only worked there for 5.5 years, and not all of it full time. I paid in about 7% of income, employer about 13% I think so it accrued nicely. Just tried to check but again they want all manner of login details that I don't have to hand - a job for another day.

My second one is my current one, and again I can't get in without finding login details in my work email (not logging in there until I absolutely have to!). Been paying into that for 3 years now, I pay in around 10% of salary, employer around 16% so again it's building up nicely (or at least I hope it is!!)

Those are great figures - and now I see the women around me (and it *is* mostly women) whose lives are much, much easier because they have regular incomes from pensions.

I'm only 38 so won't reach official state pension age for another 30 years or so :eek: by which time there will probably be no pension, or the age will have been raised to about 90 :eek: However, I do NOT intend to be working until I'm 68 if I can possibly help it!

Would be lovely to be in a position to pay off the mortgage sooner rather than later (it's got 24 years left, so I'd hope we'd be able to pay it off in 20, and it would be lovely if we could do it in 15 or even less!) Then we could live frugally off Mr Cheery's pension until mine kicked in and we'd be able to live the life of riley as OAPs :rotfl: :rotfl:

Thinking about it - I'll likely still be working full time in 9 years, so we'll very likely be able to throw all of his at the mortgage... So paying it off in 15 years suddenly seems a little more realistic.... :eek:

Oh my word ... and that last little paragraph is why this stuff is so important, I think - just in sorting it through in your own head, you've found a way thats probably completely doable of shaving ten years of your MFW date. Ten years! Fantastic!

rtandon27 wrote: »

Wow Cheery - that is quite some post - you've put a lot of thought into your Net Worth calculations - well done you!

We were chatting in the abstract about NW on KC's tread, and now that I see your workings written out, I've got a bit of a solid framework to start from - many thanks!:D

It's great, isn't it. I've felt quite ambivalent about putting the exact figures out there in the way that Cheery has - maybe just because I'm at the other end of the process ... I still haven't laid out my stuff, though, not even for myself. More to do. Thanks Cheery, it really is a good example.

Cheery_Daff

Thank you I never know whether to put actual figures or not (you'll notice I didn't post either of our incomes or actual savings...). On the one hand, most of you don't know me in real life anyway and even if you did, does it matter?

On the other hand, this stuff does feel private and people do judge other folks don't they, especially on the internet So I completely get why you might not want to share exact figures. I was clearly just in an overshary moody :rotfl: and I don't actually KNOW most of my figures anyway :rotfl:

As for paying off the mortgage with Mr Cheery's pension - well, an 18 year age difference has got to have SOME advantages, right?! We could only afford this house cos he worked and paid off a 25 year mortgage, and then I was near the start of my career to take out another one. We've actually never both had a full time job at the same time as ge left his while I was still doing my PhD :rotfl:

Just goes to show there's no point comparing to other people's slightly bizarre circumstances :rotfl:

shangaijimmy

I'm really enjoying your musings through the monthly challenge, especially yesterdays financial ones. My plan was once i got a handle on reducing the mortgage for a few years then i would start throwing some of these savings at investments for getting an 'income pot' to allow us to go part time at 60 and delay drawdown of the big pots. This overall plan is now 4yrs in and the next phase of investment and mortgage will be starting in April.

I have an easy to use networth spreadsheet that i can forward on. Without getting bogged down with exact figures it gave me an idea of the areas to consider for planning.

Busy_Mee1

Really enjoying your UFM musings Cheery. Thank you for sharing

Cheery_Daff

Thank you lovely people Shangaijimmy yes please do share your spreadsheet if you can, that would be really helpful

The more I think about it, the more I think it's worth sorting this net worth malarkey. If (and it's a big if, although more doable now I've realised the dates of Mr Cheery's pension) we do pay off the mortgage in 15 years, I'll be 53 won't be claiming my pension at that age, but our expenses would be much reduced and hopefully I'd be able to go part time. But it would be lovely to have the option to give up entirely at that point if I wanted to - so we'd have to do as you say shangaijimmy and hace a pre-pension pot of dosh to draw from...

More pondering to do...

Later though - I'm back at work today and having a super productive day today so must get back to it now I've had my freezer soup lunch :j :j

Karmacat

Cheery_Daff wrote: »

Thank you I never know whether to put actual figures or not (you'll notice I didn't post either of our incomes or actual savings...). On the one hand, most of you don't know me in real life anyway and even if you did, does it matter?

On the other hand, this stuff does feel private and people do judge other folks don't they, especially on the internet So I completely get why you might not want to share exact figures. I was clearly just in an overshary moody :rotfl: and I don't actually KNOW most of my figures anyway :rotfl:

Good points! I have had a bit of a taste of the judgement, which is disheartening, even though I was one of the crowd that got pension rights taken away at fairly short notice for such things, it's just not pleasant.

I'll tell you what I've realised is especially helpful in that UFM Day 6 post of yours - sharing the *process* of finding it all out! It's not magic, it takes work. And then you have to think about it, as you've been describing you and Mr Cheery have done.

As for paying off the mortgage with Mr Cheery's pension - well, an 18 year age difference has got to have SOME advantages, right?! We could only afford this house cos he worked and paid off a 25 year mortgage, and then I was near the start of my career to take out another one. We've actually never both had a full time job at the same time as ge left his while I was still doing my PhD :rotfl:

Just goes to show there's no point comparing to other people's slightly bizarre circumstances :rotfl:

There's no "normal" any more