FIRE Girls Pension Diary - Aim High & Dream Big

Firegirl

Great to read about everyone’s different approaches to shared finances. Just shows that there’s no one size fits all. Guess you have to be sure you’re happy if the relationship doesn’t go to plan.  My poor DH wouldn’t have a clue what I have in my pension, but under no circumstances would I ever do anything that wasn’t fair to us both as we’ve built everything we have from nothing together. I hope to live a long and happy life with him anyway. Were a good team.

Interesting about financial planning coming to people at different ages.  Best thing is for young people to be informed about the basics when they get a job….like to take up company matching for a pension, even though retirement is miles away, boy does it creep round fast   Also pay attention to fund choices.

I’ll be getting my kids to get a LISA as soon as they are 18. Great motivator for them to save for their first place. I am not living with 40 year old children  Saying that though my door is always open….see back tracking already!!!

Really excited as my son who really didn’t know what he wanted to do had now decided on electrician and maybe electrical engineering.  So happy for him because he was always a wee bit worried he didn’t know what he wanted to do. He is a thinker and then he suddenly decides and just gets on with it so it’s great.

Slight tangent here!  Have a good evening everyone 

enthusiasticsaver

Good that your son has decided what he wants to do.  My husband was an electronics engineer. He has spent his lifetime taking things to bits to find out how they work.  Luckily he can put them back together too. 

QrizB

Firegirl said:

Really excited as my son who really didn’t know what he wanted to do had now decided on electrician and maybe electrical engineering.  So happy for him because he was always a wee bit worried he didn’t know what he wanted to do.

Sounds a bit like my son. He's a bright kid and wanted to be a motor mechanic - right up until he was 16 and had a week's work experience with a main dealer when he found it boring. He went on to A levels and is now in the second year of a mechanical engineering degree.

Firegirl

Awwwww so lovely to hear of kids doing well and being happy. My DS has had a hard year after choosing subjects in school that just weren’t right for him so I’m hoping next year will be better for him whatever he decides.

MallyGirl

jimi_man said:

We are obviously a rarity since we have a joint account and everything goes into that. There has never been any attempt to go down the road of ‘I’ll pay for this if you pay for that’. It all comes out of the joint account and we just share everything. I’ve always earned more than my wife but it doesn’t make any difference. She buys what she wants and needs from the joint account as do I. 

We are the same.
Before I went on mat leave I earned slightly more than DH but I came back part time, then got made redundant, then contracted briefly before taking a permanent but part time job at a lower salary than before. It was worth it as they needed my skills so I negotiated 3 days a week and from home at a time when that was rare (20 years ago). We had an offset mortgage so it made sense to leave have all the money in one place - no savings - and put every spend on cards till the end of the month or the end of the 0% deal. We did a lot of stoozing and focussed on paying off the mortgage.
We have always earned well so there is no concept of personal spend allowances - we have the same goals and are not massively spendy. Big spends like car/big holiday get discussed but the rest of life just gets paid for by whoever is sorting it and the credit cards are paid from the joint account. CC always have a 0% deal or cashback.
DH always paid more into his pension - that was setup before we met as a personal one as his employer didn't offer one. In more recent times the pension lightbulb moment happened and we switched from MFW to FIRE. We now pay £40k & £50k into company pensions via sal sac and also pay into S&S ISAs for flexibility. As a result we live off a lot less than we earn on paper. Good practice for the future.
We have a lot of capital in the house but would not look to downsize for at least the first 10 years of retirement. That does not feature in any planning.
We all have different methods that work for us.

Firegirl

its actually lovely to hear everyone’s stories. Thanks for sharing @MallyGirl

Firegirl

Back to finances and fear of HMRC.

So I’ve had previous experience with HMRC where they sent me a bill for 4K and then I called again for something else and suddenly found the money paid back as a refund in my next wage!  Imagine if I hadn’t called back and got someone else. 

Anyway, that’s another story.  So before TYE I will have some funds to put to Pension ISA or Mortgage.  I phoned HMRC at the start of the year to say I was paying £12k to Pension and they adjusted my tax code accordingly.  Ideally I’d like to put funds to pension before April but I don’t want to somehow end up with a bill or having to do a tax return.

So this is my plan:

Between now and 1st July save mostly to ISA, maybe a bit to mortgage.

1st July I will move to an umberella company and will salary sacrifice to pension to take me out of the higher tax band so gross salary will be below £43663 and then if I can save more to ISA/Mortgage I will.

MallyGirl

If they really need the money for something else then they can withdraw from the Lisa - there is a penalty for doing so but it is there as an option 

LL_USS

It seems many (if not most) of us here use some form of investment (S&S ISAs). I have been reluctant to learn about investment to know enough to try it. All so far just in brick and mortar and cash ISAs/ LISA (not a big amounts yet so these are still fine as buffers and ready to use - I am asking for what to do with my savings next). The only exception is my Investement Builder pension, which is in the automatic management choice with my pension fund (low growth). Is it too late to learn about investment, or just to press ahead and have go with some longer-term performing funds first (OR stay "too scared to try" )? It seems to be the way to make more serious money - see below, in Opinions (We are fast approaching the era of the trillionnaire), The Guardians today I don't want to lose serious money either, hence my approach so far. Just got another article about ISAs including S&S ones, in the same journal: "Figures from Hargreaves Lansdown show that a £1,000 investment in a global tracker fund – which tracks a selection of stocks – made 25 years ago would be worth £4,094 today. The average cash Isa would have returned £1,864 over the same period, it says." No new understandings. Just not sure how much work we need to put in when using S&S.

barnstar2077

LL_USS said:

It seems many (if not most) of us here use some form of investment (S&S ISAs). I have been reluctant to learn about investment to know enough to try it. All so far just in brick and mortar and cash ISAs/ LISA (not a big amounts yet so these are still fine as buffers and ready to use - I am asking for what to do with my savings next). The only exception is my Investement Builder pension, which is in the automatic management choice with my pension fund (low growth). Is it too late to learn about investment, or just to press ahead and have go with some longer-term performing funds first (OR stay "too scared to try" )? It seems to be the way to make more serious money - see below, in Opinions (We are fast approaching the era of the trillionnaire), The Guardians today I don't want to lose serious money either, hence my approach so far. Just got another article about ISAs including S&S ones, in the same journal: "Figures from Hargreaves Lansdown show that a £1,000 investment in a global tracker fund – which tracks a selection of stocks – made 25 years ago would be worth £4,094 today. The average cash Isa would have returned £1,864 over the same period, it says." No new understandings. Just not sure how much work we need to put in when using S&S.

As I have said a few times before, I use Vanguards own platform to invest in their FTSE Global All Cap index accumulation fund.  If you are planning on investing for the long term, then you could do worse than doing something similar.  There are other platforms and other funds that will probably do the same thing slightly cheaper, but I find it is doing the job well enough, and I am not too worried about costs when the platform fee and fund fee combined is something like 0.38%.  Do a bit of research and then, once committed, don't be tempted to sell if the fund goes up or down a lot.  That last bit is the hardest bit to do in my opinion, there is always a new idea (or an old doubt), cropping into my head from time to time.