Mid-life musings

gambleruk

Not always possible but I always start a list of items which may be needed this time of year in preparation of Black Friday, new fridge, toilet seat and running trainers were all on last years and saved a chuck of money being able to wait until they all went on offer that weekend.

kimwp

barnstar2077 said:

I'm going to start tracking any purchase or service over £100 next financial year.  I already have my monthly budget, but think it will be quite insightful.  I've had a few big buys recently that have made me rethink about the size of my needed house maintenence and white goods budget in retirement.

Being in a very fortunate position of not having to tightly budget, but wanting to figure out my retirement figure, I record every spend except (for some reason which now escapes me, donations to Wikipedia) and I split these into categories. 
Having tracked my spends for nearly 20 years, I have a good idea of outgoings, so a certain amount of my income is siphoned into savings and the rest is left for bills and spends.

Irregular large spends (replacement of white goods, large vet bills due to one-off illnesses, new car), which come from savings are recorded separately to regular spends (which includes small house maintenance and smaller items that are covered by my monthly budget)

Separating out the larger irregular spends has let me see that actually there is a bit of a pattern and also decide which of these spends are likely to continue in retirement.

kempiejon

When was made redundant I started tracking all my spending, I got some trial software to sort though my bank account and credit card statements assigning a heading for each expenditure. I found too many thing in miscellaneous so went through with a bit more granularity. I was surprised at how much the car cost. When I had a category for each spend I could then grade spends as vital, wanted and discretionary. 
I found my vital spend was much lower than I expected. A food, heat and shelter subsistence spend. It informed my thinking about money with a different slant on how much I really needed and how much was lifestyle choice and indulgences. 
.

Albermarle

I think ones level of spending is largely linked to habit/your personality.
I do not budget in detail, but we seem to spend a similar amount each year anyway, as by the time you are a 'certain age' you do not change very much, unless you have to reduce spending due to necessity. 
Of course there will be the occasional big one off ( new car, new kitchen etc) but for the rest, even including holidays it seems very stable ( taking inflation into account).

Bumblingbee

Thanks for all the comments, to answer a few questions and share my views on a couple of things. I don't do a strict tracking of spending but do use Snoop across all of my accounts and find that really helpful for things such as what we truly spend on food, rather than just thinking about main shops and not realising how much the little purchases add up. 

I haven't accounted for inflation as I am working in todays money for both what I'd need and what I spend so I don't think I need to worry about that for now? As inflation will go up but the pot will grow, hopefully around the figure of or more than inflation. 

Also with regards to the LISA being inaccessible or accessible with a penalty, we'll be topping up s&s ISAs and have some short term cash so I think we'll be fine in that regard

Bumblingbee

Interesting budget today, our approach will stay the same with prioritising pension payments for tax relief but now also making sure we fully utilise ISA allowances for us and our children, as including pensions within the estate from 2027 is unappealing to say the least. However we don't know what that actually looks like yet

Bumblingbee

Additional pension contributions made, figures now stand at pension 1 (L&G) £291,044 and pension 2 (Aegon) £59,913. Total £350,957. Likely to transfer some from #2 to #1 in due course as the fees are lower and I have selected the funds I want in #1 and don't want to have to do this over 2 providers

BlackKnightMonty

Bumblingbee said:

I think it's unlikely that the state pension would be abolished, but I guess who knows what will happen! I certainly couldn't have foreseen a lot of the last 5-10 years 🤣

With regards to paying off our mortgage, there perhaps is more to be gained via investments but it doesn't interest me. Certainty and security is something I value, there is plenty of time after that to try and make gains if we wish and it will give us financial freedom. 

Likewise when we hit the pension number I'd expect us still to be working and contributing at least whatever is required for our employers contributions, so I'd expect this to bridge the gap between the value today vs the value in the future - but I can worry about that when we hit the number 

Very unlikely they will get rid of the state pension.

It is likely that the age you receive it will increase. For me it is currently 68; but by 2044 I could see that increased to +70.

it is likely it will be means tested in future; the irony there being only those who haven’t contributed towards it would receive it.

This all sucks, I know, but the UK is actually quite poor and has been living beyond it’s means for far too long.

MeteredOut

BlackKnightMonty said:

Bumblingbee said:

I think it's unlikely that the state pension would be abolished, but I guess who knows what will happen! I certainly couldn't have foreseen a lot of the last 5-10 years 🤣

With regards to paying off our mortgage, there perhaps is more to be gained via investments but it doesn't interest me. Certainty and security is something I value, there is plenty of time after that to try and make gains if we wish and it will give us financial freedom. 

Likewise when we hit the pension number I'd expect us still to be working and contributing at least whatever is required for our employers contributions, so I'd expect this to bridge the gap between the value today vs the value in the future - but I can worry about that when we hit the number 

Very unlikely they will get rid of the state pension.

It is likely that the age you receive it will increase. For me it is currently 68; but by 2044 I could see that increased to +70.

it is likely it will be means tested in future; the irony there being only those who haven’t contributed towards it would receive it.

This all sucks, I know, but the UK is actually quite poor and has been living beyond it’s means for far too long.

I agree the state pension age is likely to increase. 

I strongly disagree it is likely to be means tested for anyone currently of working age and making NI contributions.

michaels

MeteredOut said:

BlackKnightMonty said:

Bumblingbee said:

I think it's unlikely that the state pension would be abolished, but I guess who knows what will happen! I certainly couldn't have foreseen a lot of the last 5-10 years 🤣

With regards to paying off our mortgage, there perhaps is more to be gained via investments but it doesn't interest me. Certainty and security is something I value, there is plenty of time after that to try and make gains if we wish and it will give us financial freedom. 

Likewise when we hit the pension number I'd expect us still to be working and contributing at least whatever is required for our employers contributions, so I'd expect this to bridge the gap between the value today vs the value in the future - but I can worry about that when we hit the number 

Very unlikely they will get rid of the state pension.

It is likely that the age you receive it will increase. For me it is currently 68; but by 2044 I could see that increased to +70.

it is likely it will be means tested in future; the irony there being only those who haven’t contributed towards it would receive it.

This all sucks, I know, but the UK is actually quite poor and has been living beyond it’s means for far too long.

I agree the state pension age is likely to increase. 

I strongly disagree it is likely to be means tested for anyone currently of working age and making NI contributions.

It is already means tested, if you have other earnings of more than 12.5k then 20% is deducted and if you have other earnings of more than 50k then 40% is deducted.