FI Wannabe
Kahra
Forumite 88 Posts
I've seen other financial-independence (FI) wannabes on this forum, so I'm going to sneak this diary in here even though I don't have a mortgage (yet?).
My fella and I are in our early 30s and have landed our dream jobs after several years of under-employment. With some (developing) frugal skills and inspiration from sites and blogs like Early Retirement Extreme and Mr. Money Mustache, we managed to save and invest even when we weren't making very much. Now that we're both working full-time, our savings ability is way higher than it ever has been! On the other hand, our expenses have definitely increased too.
I don't know how long it will take me to be FI, so I'll need to calculate that. To do that, I need to figure out what my expenses will be like - I've tracked our outgoings for the last 3 years, but if our expenses are as high as they have been for the last year it'll take us a looong while to be FI. So, I'll also have some goals for getting expenses down, and savings goals too. It's hard for me to feel the urgency for saving when my job is great and we have no short- or medium-term goals ('freedom' feels so ambiguous some days), but I want to have the option of leaving if my job gets boring or awful, or the option of doing something wonderful that doesn't pay at all! And what better time to save than when you're enjoying what you do.
Will be back later with more plans. And confessions!
My fella and I are in our early 30s and have landed our dream jobs after several years of under-employment. With some (developing) frugal skills and inspiration from sites and blogs like Early Retirement Extreme and Mr. Money Mustache, we managed to save and invest even when we weren't making very much. Now that we're both working full-time, our savings ability is way higher than it ever has been! On the other hand, our expenses have definitely increased too.
I don't know how long it will take me to be FI, so I'll need to calculate that. To do that, I need to figure out what my expenses will be like - I've tracked our outgoings for the last 3 years, but if our expenses are as high as they have been for the last year it'll take us a looong while to be FI. So, I'll also have some goals for getting expenses down, and savings goals too. It's hard for me to feel the urgency for saving when my job is great and we have no short- or medium-term goals ('freedom' feels so ambiguous some days), but I want to have the option of leaving if my job gets boring or awful, or the option of doing something wonderful that doesn't pay at all! And what better time to save than when you're enjoying what you do.
Will be back later with more plans. And confessions!
0
This discussion has been closed.
Latest MSE News and Guides
Replies
I'm someone that loves my job and wouldn't want to retire - my granddad is still an important part of our family business at 79 and I can see that being me! However, I do like to aim for the financial security of having assets that provide an income. It makes life a lot less stressful.
good luck on your journey, I look forwards to readin gmore.
(For 2 Adults)
Rent and Council Tax - £266
Gas/Water/Electricity - £83
Transportation - £89
Internet - £29
Mobile Phones (2) - £18
Renter's Insurance - £13
Groceries/Household goods - £365
Gym Memberships/Health - £103
Restaurants - £153
Entertainment/Spending Money - £57
Other - £224 (lots of work things)
Pets - £131
Gifts - £71
Electronics - £73
Clothing - £76
House Purchases (decor, furniture, etc.) - £141
Travel - £371 (family in another country)
Total Average Monthly Spend: £2263 :eek: (wow, that's WAY higher than I expected!)
Total Average Monthly Saving: £990
Average % Income Saved: 30%
It's pretty embarrassing to post this, as I think of the two of us as pretty un-spendy... but the numbers don't lie. The only reason we're able to save so much is that my fella's employer subsidises our housing, and we walk/cycle/take public transit rather than own a car. As you can see, there are PLENTY of places to trim! My first categories to tackle will be the grocery/restaurant and other budgets - I have most of what I need for work now, so this should be some low-hanging fruit.
My first goal is to save 50% of our income for the rest of the year.
Rent and Council Tax - £266
Gas/Water/Electricity - £65
Transportation - £56
Internet - £28
Mobile Phones (2) - £20
Renter's Insurance - £16
Groceries/Household Goods - £325 (baby steps)
Gym Memberships/Health - £132
Restaurants - £75
Entertainment/Spending Money - £60
Other - £40
Pets - £20
Gifts - £80 (couple of birthdays)
Electronics - £0
Clothing - £0
House Purchases (decor, furniture, etc.) - £25
Travel - £200 (going away for a week, have already booked accommodation and transportation)
Total August Budget Goal: £1408
Total August Saving Goal: £1899
% Income Saved Goal: 57%
I know the grocery budget is still high, but I'm budgeting the food part of our trip in there as well - I'm trying for £40 per week for the rest of the month so that our holiday feels especially luxurious.
Ps. £224 for 'other' is 10% of your expenses, you need to add more detail to that category so that you know what other is. If it's food etc., you either need to get better at taking stuff to work or be honest to yourself about the fact that your 'food' line is unrealistic.
I'm pretty bad at work spending myself, can be nearly £7 on a naughty (breakfast/coffee/lunch) day! :eek:
Pps. You need in the region of £700,000 based on current spending.
I'm going to have to look into the pension thing, as it's defined benefit and I don't know the value/how much my employer contributes. I'll look into it for my August savings rate.
Thanks for the pointers - I have a lot of changes to make to get to FI!
Other spends this week were a book, some stationery, and cheap tickets to a show coming to £17.55 all together, and gifts at £40. Plan to hold off on going out to eat until we're actually on holiday. I also want to look into MB and other ways to make a few extra quid this month, although I'm still at the point where reducing outgoings is going to make the biggest difference.
You've good decent salaries, so you'll get there, I hadn't even clocked your super low housing costs. We manage to pay over £1k a month for mortgage + council tax on less wages and we're relatively spendy compared to most on MFW.
Vital you get spends under control though, you're spending about the same as us, but we're renovating a mortgaged house.
Have you done a Pareto analysis of your spending data? I.e. top 10 spends or whatever?
Travel - £371
Groceries/Household goods - £365
Rent and Council Tax - £266
Other - £224 (Pareto for this category is: work supplies, repairs, fees and memberships)
Restaurants - £153
House Purchases (decor, furniture, etc.) - £141
Pets - £131
Gym Memberships/Health - £103
Transportation - £89
Gas/Water/Electricity - £83
...not that I didn't notice it before, but our travel and total food categories are SO high and housing costs SO low. I'm not surprised at the travel, because this includes about 2 years' worth of flights paid for in the last 12 months to visit family abroad. Adding together the grocery and restaurants category means that almost a quarter of all the money we spent last year has gone down the toilet (literally!) :rotfl::eek::o
Then re-arrange them and see what you get. It quickly becomes apparent (dumping the above into Excel), that you've got 5 themes accounting for something like 75% of your spends. Logic suggests challenging each and every one of these for the quick wins. Some things you can't change the amount (say a season ticket), but you could change the item (by switching from train to bus, for example).
This might actually prove more useful for you than a lot of people as most folk have 'mortgage' as their typically huge immutable expense.
Flights from the past shouldn't really be included as part of your average spends (unless they will be repeated), it skews the average.