FIRE - how low could you go

Workerdrone

KattoNS said:

Hey all,

My BF and I are in our early 30s and getting interested in the FIRE movement. 

We have a nice but modest home and have a low mortgage as 60% LTV. 

Our combined take home pay is 5000 per month ( we both contribute a lot to workplace pensions as get a high match so this is after workplace pensions) this includes health insurance. 

I think we could get our household outgoings to between 1.5k to 2k per month, leaving us 3k per month to spend/save/invest.

we are planning to invest 2k per month and have 1k left for socialising/hols/Xmas/gifts/savings for future children (trying to save about 500 per month for this) 

Our rough outgoings as below, does this seem like a decent plan. Any thoughts or things we haven’t calculated for?

mortgage - 400
council tax - 130
Bills (elec/gas/water) - 150
food inc pet food  - 300
Subscriptions Netflix/TV etc - 35
Petrol 150
Car Insurance (2 cars) 100
pet insurance 45
internet 25
rac 20
car tax 25
phones 70
Home insurance 30
cleaner 110 

This is not ‘lean’ per se, and we could save more of course by cutting subscriptions, cleaning ourselves, not spending much on fun money etc. 

How much have you restricted yourself to do FIRE? How much would you? 

If you are only spending £150 a month on petrol, then it sounds like you are doing a low mileage.  The £100 a month for insurance might be based on higher mileage. Perhaps try looking at your actual annual miles and popping them into the insurance comparison sites

relishy57

Ibrahim5 said:

Has anyone mentioned getting rid of the pets? They're unnecessary.

Bit harsh, pets  give so much pleasure, companionship etc. My opinion was that of work hard for a good number of years to hopefully give you a good standard of living when retired. But also to enjoy the fruits of your labour as you go along otherwise why did/do you work so hard? My husband passed away at 65 and didn’t really get to enjoy his retirement but we had some good times before this.  Memories which are treasured now. 

jamesd

KattoNS said:

How much have you restricted yourself to do FIRE? How much would you? 

I retired with around half a million investable plus mortgaged flat at 55 a few years ago after around ten to twelve years of investing 60%+ of my gross income, much in pensions. I didn't skimp at all, I just started with a low spending lifestyle and continued with it as pay rose after years of voluntary and other low paid work.

Low spending for me included never having learned to drive and no kids, both helping a lot! So did not smoking and not drinking much. For housing I didn't buy more than I actually needed, which was just a cheap one and a half bed flat in the lowest council tax band.

FIRE can be done in many ways, with the trade offs between current lifestyle spending and time to retire being some of the more controllable ones. Doesn't have to be done by skimping even though some would regard what some would call full spending and luxurious skimping based on what they are used to. Once you get much above subsistence levels to state pension plus say a quarter range you're into personal opinion about what is or isn't skimping.

On the investment side of things, you should really be learning about VCTs. These get a tax refund from HMRC of 30% of the purchase price and pay dividends tax free, also with no capital gains tax. You have to repay the 30% if you sell within five years. They invest in small to very small companies still in their fairly early development or growth stages, depending on the specifics of where the VCT has its focus. For you two they offer possibly better than pension tax relief (you can get the 30% repeatedly) when you can't get as much pension tax relief as others because you'll be needing to retire before you can get at pension money. VCTs have an availability season, with the greatest range appearing and sometimes rapidly disappearing in the late autumn and winter. By April most of the choice is gone though in February some years there can still be quite a good choice, though not of the most popular VCTs. Don't stick to one VCT, diversify a lot.

S&S ISA will also be important but I'd do that after getting a rotating VCT plan set up to use your whole taxable incomes and effectively eliminate most of your income tax bill..

jamesd

KattoNS said:

food inc pet food  - 300

For this bit you can usefully shop around and exploit bulk buys and home delivery services to stock up when prices are low, assuming you have the storage space. Lots of freezer space, say a big upright, can be handy for bulk meal prep and storage, also letting you keep plenty of frozen veg and whatever around, that's cheap and good.

Something that many might find easy and desirable is a bread maker, since that lets you have fresh bread in many styles at the price of flour, yeast, often oil and sugar depending on bread type, plus more fancy options. I have a nearly top of the range Panasonic model and while fairly bulky it's led to me doing no routine bread buying since I bought it. Unlike my previous RH model it hasn't failed once, in a wide range of room temperatures.

LV_426

Ibrahim5 said:

Has anyone mentioned getting rid of the pets? They're unnecessary.

If I so much as suggested that in our house, I'd be packing my bags

MallyGirl

ajfielden said:

Ibrahim5 said:

Has anyone mentioned getting rid of the pets? They're unnecessary.

If I so much as suggested that in our house, I'd be packing my bags

Whereas I would be packing theirs!
My dogs cost a lot in food, insurance, complementary meds and vitamins, running a bigger car, kennels when travelling. They give back so much more

LV_426

MallyGirl said:

ajfielden said:

Ibrahim5 said:

Has anyone mentioned getting rid of the pets? They're unnecessary.

If I so much as suggested that in our house, I'd be packing my bags

Whereas I would be packing theirs!
My dogs cost a lot in food, insurance, complementary meds and vitamins, running a bigger car, kennels when travelling. They give back so much more

They do indeed cost a lot, but what they give back is priceless.
However, if budgeting became an issue, some hard decisions would have to be made.

MallyGirl

That is true - they are an expense that needs to be budgeted for. I do get cross with people crowdfunding for uninsured vet bills that show they really shouldn't have taken on the animal in the first place.

hugheskevi

MallyGirl said:

Whereas I would be packing theirs!
My dogs cost a lot in food, insurance, complementary meds and vitamins, running a bigger car, kennels when travelling. They give back so much more

We found the perfect money-saving approach to Malamutes...we now look after our friend's Malamute most weekdays.

That just involves driving 1 mile twice a day to pick him up in the morning and return him in the evening, then no other costs asides from treats (he loves chestnuts)  We even look after him for a couple of weeks when his owners go on holiday, and he arrives with his own toys and food so that isn't any additional cost either.

Admittedly it all came about accidently through the website Borrow My Doggy - we used to walk him on a Sunday, but when COVID came round and we started to work from home we may as well have him with us rather than he be on his own most of the time with a dog-walker going round at lunchtime, especially as dog-walkers aren't too keen on Malamutes due to the size.

MallyGirl

I wish you lived near me!!