Financial Independence

DerekTheWeather

Confession time, we need an outsider's perspective.

This year has brought about some significant changes to our household. At the start of 2020 myself and my partner (both in our early 30s) were at the peaks of our respective careers and were loving life with our 1 year old and a happy, healthy lifestyle.

Having been thoroughly chewed up and spat out by the events of 2020 we now find ourselves in debt, with a significantly reduced combined salary (£30k, down from £70k) and having both lost our dream jobs and been diagnosed with depression. We are now working in jobs we are not enjoying and have totally lost our mojo.

It's put a lot things into perspective.

Due to a recent loss of a close family member (thanks again 2020) we've been told we'll be receiving £30k in inheritance. Half of this will go to clearing our debt, and as much as possible of the rest will go in to the mortgage. We have £150k outstanding on our mortgage (£200k house) so this wont make much of a dent but given the change in perspective we're now looking to adopt some FIRE style techniques to scrimp and save as much as we can in order to clear the mortgage and get ourselves to a space where we can feel comfortable having now totally lost our way in our careers.

So, I guess the question is what would you do in this situation? There is a massive temptation to quit our current jobs, despite that being ridiculous but we don't know how else we can get out of this rut. We know that whilst FIRE sounds great, the reality is it just doesn't work but we figured that doesn't mean it's a bad tactic to use right now!

Also, I should say: despite being desperately unhappy, we still count ourselves lucky and know that our problems may seem trivial to some.

thegentleway

I would look for a career. Early 30s is still young. Plenty of time to learn skills/train/educate/invest in yourself and look for a meaningful job you enjoy. 

FtbDreaming

£30k still isn’t bad for a family of 3 to manage off. There’s 5 of us on £26k. As PP said you can retrain for something else or hope that when this awful year is out of the way you can find your way back to your previous career path. 

I deffo think you should clear your debts with the inheritance but I don’t know if I would throw the whole of the rest into the mortgage at once. I’d keep some back as an emergency fund and make smaller monthly overpayments then when you get back to your previous salaries you’ll have more to play with. 

Good luck anyway and FIRE is deffo a good goal to keep you focused 

lulabelle1

Sorry to hear about the terrible time you’ve been having. 

I’d clear debts and put the remaining money aside in an emergency fund. I would aim to have 3-6 months of expenses in an account which is only ever accessed in case of emergency. 

Once the emergency fund is established I would then look at mortgage overpayments and investments (sipp/isa). 

It’s been a truly awful year but maybe you could aim towards your dream jobs again next year once things start to get back to “normal”.

keep your chin up, onwards and upwards.

btw, I’d highly recommend a site/blog called the escape artist if you’re interested in FIRE. It’s a more realistic stance and with loads of useful information that might help you.

caeler

I'm sorry to hear you have had such a bad 2020.  Things can only get better!  Hopefully the job market will settle so have hope there will be opportunities to apply for in the new year so make sure your CV is ready to go and register on some job sites.  I think it sounds like you both need to look after yourselves, your mental health has taken a kicking so I think you should considering finding some techniques that will help you take a breath maybe also try and find some fun things to do as a family.  You might always find this thread cathartic that you are now coming up with a plan and taking control.  Good luck.

QueenJess

I'm sorry too that you've had a bad year.  So many people have been adversely affected this year.

I would advise not doing anything in haste.  I understand you hate your jobs (and I know exactly how that feels), but don't rush into anything.  I would advise clearing debts and setting aside an emergency fund of at least 6 months (personally I prefer the comfort of 12 months in these uncertain times).  The mortgage isn't the biggest priority first and if you change your mind you can't get that money back.

Have a think about what you really want to achieve/what you want to do with your lives first.  Do you want to seek out a new career, do you want to retire early, do you want to have a career break altogether for a year etc etc?  The answers to these will then drive what you do next money wise and will give you something positive to aim for.  FIRE or FI is difficult without having some sort of vague plan on what you want to do.

I would advise having a look at the monevator site on FIRE too.  It sometimes gets very detailed, but there is some really interesting analysis regarding where you put money after emergency funds and debts.

savingholmes

I agree with the other posts. Clear you main debt. Look at what made you get in debt in the first place and change your habits. Then leave the rest in an emergency fund for now. This year has shown how important an emergency fund can be. Next year - or I think worst case the year after things should improve. Even now there are still a lot of jobs advertised. There might be more competition but there are still opportunities. Are there any things you could do as a side hustle or freelance to boost your income on top of your day jobs?