Household Budgeting - how much does it cost you to live?

newja

I'm female, single, no children, 55 later this year and looking to take early pension benefits from my Final Salary Pension Scheme (32 years of non-contributory accrual), SIPP, AVCs and Money Purchase pots.

I've made a move into my "forever" 4 bed newish detached home (or until I want to downsize) in the last 3 years, which I own outright and have over the last 6 years have been recording every penny that I have earned and spent and, if spent, what I spent it on. I have no debts apart from a PCP car credit scheme which will be renewed every 3 years. I have not worked for 12 years due to arthritis and at the age of 50 my PHI income ceased with a lump sum payout from my employer which has been "wisely" invested along with other savings along the way.

My budget has turned into a superb spreadsheet which is actually rather more like a diary!

2017 cost me £20,000. I am budgetting £26,000 for 2018 (allowing for my retirement present of a cruise and some home improvements) with, in todays' terms £24,000 in 2019.

I have read references on here to other people doing similar budget exercises and wonder whether they have become something of an obsession with them too?

I have read reports of individuals living on anything from £12k a year to £40k!!!

Does anyone else want to share their annual budget costs or processes and any experiences of how they may have gotten it wrong , and why, so as people like me, about to embark on such a big step in their lives :beer:, might anticipate something we have overlooked?

enthusiasticsaver

We recorded our spends for two years before taking early retirement at 58 and have continued since retirement. We reckoned we needed £2500 net per month to live comfortably. No debt or mortgage. Out of that £2500 we allow £250 per month towards home repairs/maintenance although we have other savings for large projects. £350 per month for holidays and weekends away. £300 to cover the costs of running two cars and £200 each personal spends for hobbies/clothes. Our direct debits to cover utilities come to around £500 per month, food is £250 per month and the remaining £450 per month covers entertainment, gifts and annual bills.

That is for a modern detached 4 bed house and 2 adults.

So far we have managed to live comfortably on the £2500 per month which comes from DB pensions and investment income without touching our savings.

kidmugsy

newja wrote: »

2017 cost me £20,000.

I have read reports of individuals living on anything from £12k a year to £40k!!!

I've never bothered to calculate our cost of living; before we retired I did know it roughly, though, from those years when we saved nothing, implying that we'd spent all our post-tax earnings. For retirement I was therefore able to guess we'd probably spend about £30k, maybe a bit less. We are less extravagant on the car front than you which is just as well because we've had to spend a bit on the house.

I've just opened a 0% credit card so that we can spread expenditure out more evenly over a couple of years.

PasturesNew

When I retire it'll be on the state single person's old age pension, which is about £7,500/year, plus council tax if you've got no savings. That'll do, it'll have to.

I own my own little house, a 2-up-2-down, which will take some maintaining over the years, so I'll have to be saving up to replace the boiler and fix the roof/bathroom/kitchen out of that.

I expect to be running a small car too, as I've always done.

Looking forward to the money rolling in without having to do anything except stay alive (that's the difficult bit though ... I don't think there are choices over that bit).

Xbigman

Hoping to retire in two years. I'll own my home and my budget would be around 5200 p.a. Don't drink, don't smoke and ride a pushbike. That budget gives me £100 spending money a month, which is plenty. I also plan to have about 20,000 that will be my emergency fund.
When the state pension turns up in 12 years time I don't know just what I'll spend it on.




Darren

Mnd

We are aiming to have £2k net a month..we are having a practical experiment now as I've retired and I get 600 a month pension, my wife is 58 and nett brings in 1550 a month, we save some of that (500 generally)
We also get income from solar panels and interest from savings. Est 200 a month
We have no mortgage or debts, and have 2 holidays a year, and run 2 cars.
We also have a decent amount saved (by our standards, not comparable with some on this forum )
We both are on track for full state pensions, higher than that in my case.
I will also be prepared to use equity release if we get to that stage (sorry son!)

newja

enthusiasticsaver wrote: »

We recorded our spends for two years before taking early retirement at 58 and have continued since retirement. We reckoned we needed £2500 net per month to live comfortably. No debt or mortgage. Out of that £2500 we allow £250 per month towards home repairs/maintenance although we have other savings for large projects. £350 per month for holidays and weekends away. £300 to cover the costs of running two cars and £200 each personal spends for hobbies/clothes. Our direct debits to cover utilities come to around £500 per month, food is £250 per month and the remaining £450 per month covers entertainment, gifts and annual bills.

That is for a modern detached 4 bed house and 2 adults.

So far we have managed to live comfortably on the £2500 per month which comes from DB pensions and investment income without touching our savings.

Interesting to see just how similar the budget is, bearing in mind I am accounting for just me!

newja

kidmugsy wrote: »

I've never bothered to calculate our cost of living; before we retired I did know it roughly, though, from those years when we saved nothing, implying that we'd spent all our post-tax earnings. For retirement I was therefore able to guess we'd probably spend about £30k, maybe a bit less. We are less extravagant on the car front than you which is just as well because we've had to spend a bit on the house.

I've just opened a 0% credit card so that we can spread expenditure out more evenly over a couple of years.

Yup, I am extravagant on the car front and that will be the very first thing to be reduced as/whem the need arises. I currently pay £370 pm for one that sings and dances but know that £150 pm could get me something equally functional!

A_Nice_Englishman

I'm single, 58, retired, own my house outright and am probably over-frugal!

Household bills £250 pm
Food and other supermarket items £100
Eating / drinking out and other entertainment/hobbies £100
Annual holiday £500

Now the indulgences

Main car recently bought for £16,000 but should last me 16 years.
Insurance, servicing, VED £40
Fun car owned outright.
Insurance, servicing, MOT, repairs £60

Logically, I should not run a car at all and use buses, taxis or hire cars.

I saved hard when working so plenty set aside for house repairs and any other unexpected expenses so I don't budget for these.

Income from pension & investments deliberately kept just below the income tax threshold.

Surplus about £500 pm. Perhaps I should be on a site called monespendingexpert.com?!

chile_paul

There is a very long and detailed thread on this topic in the Pensions forum which might be of interest

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