Bad news re what I spend

justme111

lisyloo wrote: »

Bills sound high excluding food.
Have you shopped around for your utilities?
House - I think most people would look to get their house in shape pre-retirement and would reduce the discretionary spending.
Frivolities - £172 is a lot to spend on presents for friends. If you are on a fixed income you’ll look to reduce this and probably look to spend more time with people rather than money. For example if you like historical houses/gardens then you might buy an annual NT membership, or visit garden centres or cafes or go for walks. People cut their cloth to suit.
Untrackabke - if you are serious about it then find a way to track it better, there is a lot of technology available although paper and pen is also good sometimes. The only way to know where it’s going is to track it.

Annually can work out better as there is always a lot of monthly fluctuation.

Yes I don't know what is happening with water - checked for leaked- looks like there are none. We are with South West water. May be it is that daily dishwasher. We are quiet cavalier with electricity and commited to a warm home - temperature about 21 degrees everywhere always - I hate it being cold around and other members of household are similar. Presents - those are 2 items that will help them with work and I knew which ones and where to buy while they have no access to neither provider no the information I had - they live abroad. Yes I know presents don't have to be expensive to be good, I have been known to give a love you more spray painted on a sheet as a present or cut pieces of A4 paper stapled in a little book with nice references written and drawn- I still enjoy buying expensive stuff as well if I think the person's eyes are going to light up opening it. I know I will cut it to my cloth, , it's just that as it is now that cloth is bigger than what I thought it was..
Yup , I have ideas about where untraceable goes - I am just not bothered with tracking it as it does not change the overall pattern.

crv1963

justme111 wrote: »

But how could it be my true figure if my present lifestyle includes expenses that get my figure far higher on other months? The number is what we need to fund current lifestyle and includes many high ticket items.

You seem to be mixing budgets, capital costs with revenue costs. For instance cars- purchase cost 20k, replace every 5 years, so save 4k pa for this or 400pm (give yourself a break of two months a year!), running costs tax fuel etc 300pm= 3600 pa. So in the budget you have the ongoing costs and the savings into a capital spending pot. Repeat for white goods, so maybe new white good pa at say £500= save 40 pm into the capital pot.

Work out what you spend on presents pa then divide by 12 and either spend it that month or save it. I do a bit of both I buy as I find and put away for peoples presents, so I buy spirits when they are on offer in the supermarket and put them away, I may only save £5 a time but buy 12 bottles a year and that is £60.

Try breaking the budget down as follows-

Essentials- Bills, food etc

Wants- Presents, cars etc

Would like- second holiday etc

Everyone budgets differently, but unless you separate essentials from wants/ would like you'll wonder where it goes. So if 1600 pm for two months covers your essentials then the rest is lifestyle choice, which is great if that can be sustained in retirement. If it can't then you either need to work longer, save more or cut costs somewhere.

We really went to town on our costs- cut utilities by changing provider etc, looked at holiday costs, foods bought etc. We don't live a frugal life but we saved literally 100s per month, which now goes into savings so we can afford to retire earlier with the same lifestyle.

By changing one off capital costs to their own pot you can put aside each month a set amount, then when something needs replacing it doesn't come out of a particular months income or revenue.

I'm fortunate that I can work overtime, which I do but with the aim of saving for specific items, this months payday the overtime was used for white goods, next paydays overtime is for a shed. These are as we prepare to retire, and avoids taking money from our "capital savings pot". I never include overtime in my income or revenue stream as how much or when it is available is not in my gift to anticipate.

System

You do appear, if I may sound a bit rude, to be in denial over the difference between luxuries and basic necessities. Like most people I meet, you come over as totally hooked on all the conveniences and expenses of modern life, and don't want to face that these are probably unaffordable by most pensioners.
There will be some fortunate ones - those in well-paid state-sector jobs with indexed pensions. Successful business owners or high-paid private sector workers who have put a LOT aside into pensions over many years. And those fortunate to have good luck or a windfall and able to make good a lifetime of low pension provision.


I think there are two ways of reckoning up expenditure versus income.
1) is the easy way, if you are lucky. You don't need to work out what things cost. You just look at your present situation, assuming it is balanced, and estimate a) what you won't spend on retirement b) what extra you will spend on retirement, and apply those + or - to your current income. That is what you need as retirement income. You either have it or you don't.


2) You work up from absolute basics, starting from nothing, and working out what you would need to carry in your pocket in order to survive for a week. Multiply by 52 and add on say £1000.


So you might have two figures - high = £27,000, low = £10,000.
Decide which you want, and save to be able to achieve it.


But at the moment you don't seem to be in a deciding frame of mind, more one of making excuses.

justme111

lisyloo wrote: »

House maintenance, clothes, teeth, glasses are not one-off expenses they are on-going.
You do need to have a budget for all these things.

Does your partner pay towards the upkeep of the house or are you supporting a family sized home on your income?
If it’s the later then that would explain why your outgoings are high.

Do you need a family sized home in retirement?
Can you afford it?

Almost everyone I know relies on the NHS entirely apart from some more wealthy relatives and even they only pay for test (getting diagnosed is usually the slow bit) and go back on the NHS once diagnosed.

You do realise that private health is going to be incredibly expensive as you get older?

So to count how much I spend on those things I am doing yearly tracking of spending as just one month here and there does not capture them be sure in my case they are not ongoing, I pay for them rarely.
Yes it's the latter. He pays 25% of bills that is it. I have no idea re how big house I would want in retirement - hopefully I will be able to downsize without feeling deprived for it. Yes medical things are an issue. Don't get me wrong , I am not averse to being treated in the NHS. Shockingly there are even no private options in many areas - no private GPs for example anywhere close to me. Do you know that GPs have about 7 minutes per patient during their working day? Some - I guess many - top doctor's do not have clinics privately at all. Insurances do not cover chronic conditions and do not cover emergencies - it looks like they don't cover more than they do ! Private healthcare in Britain is in rudimentary stage. I suppose one would try to combine NHS, insurance and pay as you go options depending on one's health, location , budget and knowledge.

justme111

Clifford_Pope wrote: »

You do appear, if I may sound a bit rude, to be in denial over the difference between luxuries and basic necessities. Like most people I meet, you come over as totally hooked on all the conveniences and expenses of modern life, and don't want to face that these are probably unaffordable by most pensioners.
There will be some fortunate ones - those in well-paid state-sector jobs with indexed pensions. Successful business owners or high-paid private sector workers who have put a LOT aside into pensions over many years. And those fortunate to have good luck or a windfall and able to make good a lifetime of low pension provision.


I think there are two ways of reckoning up expenditure versus income.
1) is the easy way, if you are lucky. You don't need to work out what things cost. You just look at your present situation, assuming it is balanced, and estimate a) what you won't spend on retirement b) what extra you will spend on retirement, and apply those + or - to your current income. That is what you need as retirement income. You either have it or you don't.


2) You work up from absolute basics, starting from nothing, and working out what you would need to carry in your pocket in order to survive for a week. Multiply by 52 and add on say £1000.


So you might have two figures - high = £27,000, low = £10,000.
Decide which you want, and save to be able to achieve it.


But at the moment you don't seem to be in a deciding frame of mind, more one of making excuses.

Phew , I have read your post first as if you were telling me it was me who was rude.:)
Exactly , I am not in a deciding frame of mind. I am far from retirement yet - due to both age being relatively young and not having money for it I am afraid.
I am just musing. You described well how to arrive at 2 numbers.I had a look at my life and realised that while I used to think the option 2 was achievable without too much effort I may be closer to the option 2 then I would have liked to.:D

justme111

crv1963 wrote: »

You seem to be mixing budgets, capital costs with revenue costs.e.

Whatever you call those components I need them to live my present life style. So altogether it still is my Number.
I do swaps of suppliers advertised on MSE. It would be a good idea I think to actually calculate how much each light bulb left on for one hour costs me - it could kick me into energy saving .

lisyloo

You can get meters that tell you how much you are spending.

justme111

Yes but I think they are a hindrance when changing suppliers which would want to avoid

lisyloo

justme111 wrote: »

Do you use it as a figure for sustainable drawdown , i.e. leaving more or less the original o7nt when you dead or you plan for a certain timeframe?

It’s a figure for sustainable drawdown.

I’ve just looked up annuities

https://www.hl.co.uk/retirement/annuities/best-buy-rates
And single life, level, no guarantee is 4.079, so very close, the biggest issue is that no RPI increase is going to have a big effect in 20-30 years.

You can see the annuity rates on that link.
Annuities give a guarantee to pay until you are dead so no issue with “the timescale”, but it means no capital left.

Most people these days opt for drawdown I believe, but it’s still useful for musing.

crv1963

justme111 wrote: »

Whatever you call those components I need them to live my present life style. So altogether it still is my Number.
I do swaps of suppliers advertised on MSE. It would be a good idea I think to actually calculate how much each light bulb left on for one hour costs me - it could kick me into energy saving .

I think that you need to form a realistic plan and implement it. If 28k is your number then plan to meet it. I was merely suggesting one way of looking at it.

You've identified your number, now identify how you'll achieve it. Turning the lights off is one option, but will it be realistic?

To change to reach a goal you have to be willing to make changes or you will not reach the goal. Making cuts in spending need not mean a reduced lifestyle, just changing a priority.

At present it would appear you enjoy what you have and do. That is good, but it also appears that every suggestion by posters are not possible for you. You say retirement is a long way off for you, so you have time to save but that can only start when you decide.

Some including us, decide what their retirement income should be and then test this while working by living within that income- saving the surplus to facilitate an earlier retirement date. If it means life is not comfortable enough then it will mean increasing the income level but working longer.

Earnings and spending capacity may be infinite for some, but not most. Length of life is finite. Enjoy life for the here and now, but do plan for a future too.