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  • FIRST POST
    • Therese1
    • By Therese1 12th Apr 18, 3:31 PM
    • 145Posts
    • 76Thanks
    Therese1
    I'm going to need a (new) budget
    • #1
    • 12th Apr 18, 3:31 PM
    I'm going to need a (new) budget 12th Apr 18 at 3:31 PM
    Hi all,


    I have made the decision that later this year I WILL be giving up the corporate life and heading off in a new (currently unknown!) direction. I am in an unenviable position in saving from many years of working & earning very well. I do plan to take a few months to think about what to do next. Whatever that is, it will be part time and will be on MY terms rather than via the hamster wheel.


    I appreciate that this is the Debt Free Forum and I'm not in debt. If anyone thinks the thread should be moved then please let me know - the SOA automatically brought me here.


    The CC is a new thing, in theory to let me see what I'm spending and possibly I'll use it for any new business costs once I know what I'm doing. It is 0% til May 2020, 6,000 limit and it will be paid off by then. I have never used credit cards before and I have no intention of paying a penny interest now.


    So, my questions are....


    What is a realistic budget going forward? Initially I wont be earning at all - I'm willing to give myself 6 months at this. However, part of this exercise is also to work out what I want/need to earn in my new life to live reasonably - I am not looking to match my current earnings, I want a life to go alongside work that interests me!


    Here is my "no earnings" SOA - but using my current baseline bills. Currently I bring in 2700 per month and don't need to budget so I have no idea on food, entertainment etc, but have made a guess on what it might 'need' to be in future. Feel free to advise me here!


    Household Information
    Number of adults in household........... 1
    Number of children in household......... 0
    Number of cars owned.................... 0 (currently company car)


    Monthly Income Details
    Monthly income after tax................ 0 (once I leave)
    Partners monthly income after tax....... 0
    Benefits................................ 0
    Other income............................ 0
    Total monthly income.................... 0


    Monthly Expense Details
    Mortgage................................ 0
    Secured/HP loan repayments.............. 0
    Rent.................................... 0
    Management charge (leasehold property).. 0
    Council tax............................. 114
    Electricity............................. 28
    Gas..................................... 28
    Oil..................................... 0
    Water rates............................. 0
    Telephone (land line)................... 10
    Mobile phone............................ 16
    TV Licence.............................. 12.12
    Satellite/Cable TV...................... 0
    Internet Services....................... 16
    Groceries etc. ......................... 200
    Clothing................................ 20
    Petrol/diesel........................... 20
    Road tax................................ 0
    Car Insurance........................... 0
    Car maintenance (including MOT)......... 0
    Car parking............................. 0
    Other travel............................ 0
    Childcare/nursery....................... 0
    Other child related expenses............ 0
    Medical (prescriptions, dentist etc).... 10
    Pet insurance/vet bills................. 0
    Buildings insurance..................... 42 (build & cont - stupid expensive but I keep missing the "auto renew" date. Lesson learned for Feb 2019!)
    Contents insurance...................... 0
    Life assurance ......................... 0
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 40
    haircuts.............................. 15 (annual spend/monthly)
    Entertainment........................... 150 (is this reasonable)
    Holiday................................. 150 (I plan on going on lots!)
    Emergency fund.......................... 200
    Total monthly expenses.................. 1061.12


    Assets
    Cash.................................... 50000
    House value (Gross)..................... 120000
    Shares and bonds........................ 10000
    Car(s).................................. 0
    Other assets............................ 1000
    Total Assets............................ 181000

    No Secured nor Hire Purchase Debts


    Unsecured Debts
    Description....................Debt......Monthly.. .APR
    Santander CC...................1500......50........0
    Total unsecured debts..........1500......50........-

    Monthly Budget Summary

    Total monthly income.................... 0
    Expenses (including HP & secured debts). 1,061.12
    mount avail for debt repayments.... -1,061.12
    onthly Unsecured debt repayments. 50
    Amount short for making debt repayments. -1,211.12


    Personal Balance Sheet Summary
    Total assets (things you own)........... 181,000
    Total HP & Secured debt................. -0
    Total Unsecured debt.................... -1,500
    Net Assets.............................. 179,500


    I have a corporate pension which in theory will be 20,000 pa when I'm 60 in 12.5 years time.


    I will be giving up my company car so will have to buy one - I have no idea what the monthly running costs are likely to be? Any clues?


    Paid my mortgage off several years ago.


    Thank you,
    T
Page 1
    • ceb1995
    • By ceb1995 12th Apr 18, 3:37 PM
    • 250 Posts
    • 553 Thanks
    ceb1995
    • #2
    • 12th Apr 18, 3:37 PM
    • #2
    • 12th Apr 18, 3:37 PM
    Hi all,


    I have made the decision that later this year I WILL be giving up the corporate life and heading off in a new (currently unknown!) direction. I am in an unenviable position in saving from many years of working & earning very well. I do plan to take a few months to think about what to do next. Whatever that is, it will be part time and will be on MY terms rather than via the hamster wheel.


    I appreciate that this is the Debt Free Forum and I'm not in debt. If anyone thinks the thread should be moved then please let me know - the SOA automatically brought me here.


    The CC is a new thing, in theory to let me see what I'm spending and possibly I'll use it for any new business costs once I know what I'm doing. It is 0% til May 2020, 6,000 limit and it will be paid off by then. I have never used credit cards before and I have no intention of paying a penny interest now.


    So, my questions are....


    What is a realistic budget going forward? Initially I wont be earning at all - I'm willing to give myself 6 months at this. However, part of this exercise is also to work out what I want/need to earn in my new life to live reasonably - I am not looking to match my current earnings, I want a life to go alongside work that interests me!


    Here is my "no earnings" SOA - but using my current baseline bills. Currently I bring in 2700 per month and don't need to budget so I have no idea on food, entertainment etc, but have made a guess on what it might 'need' to be in future. Feel free to advise me here!


    Household Information
    Number of adults in household........... 1
    Number of children in household......... 0
    Number of cars owned.................... 0 (currently company car)


    Monthly Income Details
    Monthly income after tax................ 0 (once I leave)
    Partners monthly income after tax....... 0
    Benefits................................ 0
    Other income............................ 0
    Total monthly income.................... 0


    Monthly Expense Details
    Mortgage................................ 0
    Secured/HP loan repayments.............. 0
    Rent.................................... 0
    Management charge (leasehold property).. 0
    Council tax............................. 114
    Electricity............................. 28
    Gas..................................... 28
    Oil..................................... 0
    Water rates............................. 0
    Telephone (land line)................... 10
    Mobile phone............................ 16
    TV Licence.............................. 12.12
    Satellite/Cable TV...................... 0
    Internet Services....................... 16
    Groceries etc. ......................... 200
    Clothing................................ 20
    Petrol/diesel........................... 20
    Road tax................................ 0
    Car Insurance........................... 0
    Car maintenance (including MOT)......... 0
    Car parking............................. 0
    Other travel............................ 0
    Childcare/nursery....................... 0
    Other child related expenses............ 0
    Medical (prescriptions, dentist etc).... 10
    Pet insurance/vet bills................. 0
    Buildings insurance..................... 42 (build & cont - stupid expensive but I keep missing the "auto renew" date. Lesson learned for Feb 2019!)
    Contents insurance...................... 0
    Life assurance ......................... 0
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 40
    haircuts.............................. 15 (annual spend/monthly)
    Entertainment........................... 150 (is this reasonable)
    Holiday................................. 150 (I plan on going on lots!)
    Emergency fund.......................... 200
    Total monthly expenses.................. 1061.12


    Assets
    Cash.................................... 50000
    House value (Gross)..................... 120000
    Shares and bonds........................ 10000
    Car(s).................................. 0
    Other assets............................ 1000
    Total Assets............................ 181000

    No Secured nor Hire Purchase Debts


    Unsecured Debts
    Description....................Debt......Monthly.. .APR
    Santander CC...................1500......50........0
    Total unsecured debts..........1500......50........-

    Monthly Budget Summary

    Total monthly income.................... 0
    Expenses (including HP & secured debts). 1,061.12
    mount avail for debt repayments.... -1,061.12
    onthly Unsecured debt repayments. 50
    Amount short for making debt repayments. -1,211.12


    Personal Balance Sheet Summary
    Total assets (things you own)........... 181,000
    Total HP & Secured debt................. -0
    Total Unsecured debt.................... -1,500
    Net Assets.............................. 179,500


    I have a corporate pension which in theory will be 20,000 pa when I'm 60 in 12.5 years time.


    I will be giving up my company car so will have to buy one - I have no idea what the monthly running costs are likely to be? Any clues?


    Paid my mortgage off several years ago.


    Thank you,
    T
    Originally posted by Therese1
    You could easily get that food spending down with some simple things, like downshifting a brand perhaps, it takes some effort but we feed two people on a similar budget the entertainment one is a personal thing as everyone's idea of entertainment is different.
    • Fireflyaway
    • By Fireflyaway 12th Apr 18, 5:07 PM
    • 1,882 Posts
    • 2,068 Thanks
    Fireflyaway
    • #3
    • 12th Apr 18, 5:07 PM
    • #3
    • 12th Apr 18, 5:07 PM
    Are you guessing some of this? Electric and gas is low and really only 20 on clothes? Do you not pay water either?
    Re a car, check out the likely insurance on some comparison websites for the kind of car you might like. Then car tax, breakdown insurance and a yearly mot. Are you paying cash for a car?
    It's great you have the courage to take a break and change direction. Hope it works out.
    • Therese1
    • By Therese1 12th Apr 18, 8:59 PM
    • 145 Posts
    • 76 Thanks
    Therese1
    • #4
    • 12th Apr 18, 8:59 PM
    • #4
    • 12th Apr 18, 8:59 PM
    Thank you Ceb1995....Yep I honestly don't know what my food spend is at the minute...would be a good exercise for me to try a month on 200 just now to see how I get on and work down from there. When I'm organised I do enjoy cooking from scratch and using the slow cooker so the brand challenge will be good to try. Entertainment- you are right, it's all relative really.
    • Therese1
    • By Therese1 13th Apr 18, 8:50 AM
    • 145 Posts
    • 76 Thanks
    Therese1
    • #5
    • 13th Apr 18, 8:50 AM
    • #5
    • 13th Apr 18, 8:50 AM
    Are you guessing some of this? Electric and gas is low and really only 20 on clothes? Do you not pay water either?
    Re a car, check out the likely insurance on some comparison websites for the kind of car you might like. Then car tax, breakdown insurance and a yearly mot. Are you paying cash for a car?
    It's great you have the courage to take a break and change direction. Hope it works out.

    Hi Fireflyaway, thank you.

    No guessing with my bills, gas and electric combined is 56 per month and in Scotland water is included in Council Tax.

    The clothes is a complete guess, but then again I hate clothes shopping...it really is a "needs must" chore!!!128512; that I put off and only do it when I need something replaced. I literally wear a pair of shoes til they are done before replacing them! I'd rather shop in DIY stores or go travelling!

    Having said that, maybe 40/month budget would be more practical and realistic going forward?

    Re the car, yes I have to cash in the shares when I resign so I was going to use this for a car. I haven't owned a car for over 25 years so have no idea on the running costs.

    Thank you for the good wishes, I'm currently flitting between excitement at leaving the rat race and toxic environment and taking back control myself, to panic thoughts of "what are you thinking of woman"??!?

    I fully appreciate that I am so lucky to have the choice.
    • Happier Me
    • By Happier Me 13th Apr 18, 10:47 AM
    • 438 Posts
    • 975 Thanks
    Happier Me
    • #6
    • 13th Apr 18, 10:47 AM
    • #6
    • 13th Apr 18, 10:47 AM
    Well I dream of doing something similar to what you're planning to do but as yet I haven't found the b@lls to go through with it. One day hopefully I will start a similar thread...

    In your position I'd set a monthly budget and road test it before you jump ship. So live to whatever budget you set for say 6 months. Personally I think you may find things like entertainment and holiday spend is on the low side, particularly during the period you aren't working...you will have alot of time to fill after all.

    I absolutely get the draw of leaving the rat race but the rat race has given you a comfortable mortgage free life. This decision will obviously mean a significant adjustment in lifestyle so I would attempt to live that lifestyle before you go, to ensure your budget stacks up and the lifestyle change actually suits you.
    • theoretica
    • By theoretica 13th Apr 18, 7:39 PM
    • 5,302 Posts
    • 6,589 Thanks
    theoretica
    • #7
    • 13th Apr 18, 7:39 PM
    • #7
    • 13th Apr 18, 7:39 PM
    How much of your salary do you save each month at present? That will let you know how much you are currently spending. Are there any things you currently spend on that you won't when you leave your job?

    Without a job you will have more time, what will you be doing in it and will it cost you money? More time can easily turn into a higher entertainment budget.
    But a banker, engaged at enormous expense,
    Had the whole of their cash in his care.
    Lewis Carroll
    • bouncydog1
    • By bouncydog1 14th Apr 18, 7:13 PM
    • 2,600 Posts
    • 2,057 Thanks
    bouncydog1
    • #8
    • 14th Apr 18, 7:13 PM
    • #8
    • 14th Apr 18, 7:13 PM
    Just another thing to consider - remember to ask your employers to get evidence from their insurers that you haven!!!8217;t made any claims ( if this is the case) so that you can get a good introductory no claims bonus. As you havent had insurance for many years in your own name you won!!!8217;t have any bonus. Go over to the insurance board for advice if you think you need advice before you start getting quotes.
    • enthusiasticsaver
    • By enthusiasticsaver 15th Apr 18, 9:00 AM
    • 6,877 Posts
    • 14,812 Thanks
    enthusiasticsaver
    • #9
    • 15th Apr 18, 9:00 AM
    • #9
    • 15th Apr 18, 9:00 AM
    Congratulations on putting yourself in a position where you can do this. how old are you and what is your pension provision so far?

    Re your soa I agree road testing it or putting an app for tracking spending on your phone is a good idea. 200 for food for 1 sounds a lot but if you are used to picking up wine with your food shop or have shopped without restraint up until now it may take you a while to get used to living within a tighter budget.

    Car insurance may be high as we found when my husband gave his company car back although he had no accidents on his record the lease company insisted on it going into the car body shop to have chips and dents from hospital car parks sorted out (he was a medical engineer). That ended up as a 3k claim on his insurance record and consequently showed on his letter from company insurers. Buying a car was his biggest expense and car maintenance depends on how old a car you go for.
    Debt free and mortgage free and early retiree. Living the dream

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages and Endowments, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
    • Therese1
    • By Therese1 15th Apr 18, 10:46 PM
    • 145 Posts
    • 76 Thanks
    Therese1
    How much of your salary do you save each month at present? That will let you know how much you are currently spending. Are there any things you currently spend on that you won't when you leave your job?

    Without a job you will have more time, what will you be doing in it and will it cost you money? More time can easily turn into a higher entertainment budget.
    Originally posted by theoretica
    Since I made the definite decision that I was going - about 6 months ago - I've saved 1000 a month without too much difficulty. This is over and above the 400 I have going out on standing order to two savings acounts each month. However I guess that is without the cost of running a car and I've not been 'careful' with my food shopping or entertainment in that time.

    My main sports are cycling and walking and I already have my bicycle so no extra costs with this really.
    Last edited by Therese1; 17-04-2018 at 8:38 PM. Reason: Adding details
    • Therese1
    • By Therese1 15th Apr 18, 10:51 PM
    • 145 Posts
    • 76 Thanks
    Therese1
    Just another thing to consider - remember to ask your employers to get evidence from their insurers that you haven!!!8217;t made any claims ( if this is the case) so that you can get a good introductory no claims bonus. As you havent had insurance for many years in your own name you won!!!8217;t have any bonus. Go over to the insurance board for advice if you think you need advice before you start getting quotes.
    Originally posted by bouncydog1
    Good point, thank you. I am toying with the idea of asking if I could buy the company car even though it'll be short of the 4 year renewal. We have the option to buy our car at renewal and I've done this twice in the past for family (well they've bought it obviously !!!128512 but I dunno about the mid lease? It would be 2 years old which is roughly what I was thinking of buying anyway and figured better to get one I know and like?
    • Therese1
    • By Therese1 15th Apr 18, 11:03 PM
    • 145 Posts
    • 76 Thanks
    Therese1
    [QUOTE=enthusiasticsaver;74163712]Congratulations on putting yourself in a position where you can do this. how old are you and what is your pension provision so far


    Re your soa I agree road testing it or putting an app for tracking spending on your phone is a good idea. 200 for food for 1 sounds a lot but if you are used to picking up wine with your food shop or have shopped without restraint up until now it may take you a while to get used to living within a tighter budget.


    Car insurance may be high as we found when my husband gave his company car back although he had no accidents on his record the lease company insisted on it going into the car body shop to have chips and dents from hospital car parks sorted out (he was a medical engineer). That ended up as a 3k claim on his insurance record and consequently showed on his letter from company insurers. Buying a car was his biggest expense and car maintenance depends on how old a car you go for.[/QUOTE

    Thank you! It's funny this hasn't been a long term plan but once I'd starting thinking "I've had enough of this" I kinda realised that THIS is what all my savings were for - I've never been a big spender it didn't know what I was saving up for!!!128514;. Now, time is worth so much more than money to me.

    I am 48 and have company pension which will be 20k if I wait til 60 or about 16k if I cash in at 55. Do you think I need to keep adding to this going forward - separately or via this existing pension? Any tips would be much appreciated.


    This last 6 months I've put away 1000 per month - basically what was left on payday. This wasn't too difficult but didn't involve scrimping or the cost of running a

    My plan is to go for a 1 or 2 year old car - with the theory being start with a good condition one and run it for as long as it holds out until uneconomical. I've no need to renew every 4 years etc.

    Ouch! Was that because of an early return? I've never had any recharge when I've changed car.
    Last edited by Therese1; 15-04-2018 at 11:10 PM.
    • D_M_E
    • By D_M_E 16th Apr 18, 9:45 AM
    • 1,684 Posts
    • 63,832 Thanks
    D_M_E
    When you do finally take the plunge, why not consider buying your company car and take it with you - you will know what it's like, its history and will likely get a discount and also doing this could be cheaper than buying one one the open market.

    Depends on insurance and running costs of course.
    • Mnd
    • By Mnd 16th Apr 18, 11:07 AM
    • 637 Posts
    • 739 Thanks
    Mnd
    Well good luck, it sounds very brave at 48
    Regards to your pension payments, while you are not earning you can only pay 2880 pa into a pension that will be made up to 3600 by the government so that will give you 720 free money that you can take tax free as you won't be paying income tax.
    Have you got a state pension forecast?
    • Therese1
    • By Therese1 16th Apr 18, 2:58 PM
    • 145 Posts
    • 76 Thanks
    Therese1
    How much of your salary do you save each month at present? That will let you know how much you are currently spending. Are there any things you currently spend on that you won't when you leave your job?

    Without a job you will have more time, what will you be doing in it and will it cost you money? More time can easily turn into a higher entertainment budget.
    Originally posted by theoretica
    I've been saving 1000/month for the past 6 months...without too much difficulty.

    My main sports are cycling and walking and I already have my bicycle so thankfully no big extra cost for these. I do enjoy eating out and this IS something I'll need to keep track on in future.

    My main new, extra expense is going to be running a car.
    • Therese1
    • By Therese1 16th Apr 18, 3:01 PM
    • 145 Posts
    • 76 Thanks
    Therese1
    When you do finally take the plunge, why not consider buying your company car and take it with you - you will know what it's like, its history and will likely get a discount and also doing this could be cheaper than buying one one the open market.

    Depends on insurance and running costs of course.
    Originally posted by D_M_E
    That did occur to me...just not sure if it's permitted? If it is then I will definitely consider it...the discount on the end of lease cars is very good, be curious to see what this would be? I don't know much about cars so sticking with the one I know would be a good option.
    • theoretica
    • By theoretica 16th Apr 18, 3:05 PM
    • 5,302 Posts
    • 6,589 Thanks
    theoretica
    I've been saving 1000/month for the past 6 months...without too much difficulty.
    Originally posted by Therese1
    So you are currently spending about 1700 a month as your current budget. Do you have a clear idea where the difference between this and the 1060 you propose is going at present?
    But a banker, engaged at enormous expense,
    Had the whole of their cash in his care.
    Lewis Carroll
    • Therese1
    • By Therese1 16th Apr 18, 3:08 PM
    • 145 Posts
    • 76 Thanks
    Therese1
    Well good luck, it sounds very brave at 48
    Regards to your pension payments, while you are not earning you can only pay 2880 pa into a pension that will be made up to 3600 by the government so that will give you 720 free money that you can take tax free as you won't be paying income tax.
    Have you got a state pension forecast?
    Originally posted by Mnd
    Ah now! This is a whole "department" that I don't know much about and would welcome advice!

    My work pension is quoting as worth around 20k at 60 or 16 at 55 - I do plan on working but on lower salary and will hopefully be able to hold out until 60 or nearly.

    I don't even know where to find out about my state pension - can you point me please?

    Thank you!
    • D_M_E
    • By D_M_E 16th Apr 18, 3:48 PM
    • 1,684 Posts
    • 63,832 Thanks
    D_M_E
    Check your State Pension

    https://www.gov.uk/check-state-pension

    The car - if you don't ask, you will never know.

    Yes, it's possible, lots of people do it, my brother bought his company car at retirement - I think he talked to the company about it first but I don't know the full details. I think they get sold at auction and he got offered it for what the expected auction price was - better for him, a big discount, and better for the company, no auction fees, collection fees, etc - win win all round.
    • Therese1
    • By Therese1 16th Apr 18, 8:47 PM
    • 145 Posts
    • 76 Thanks
    Therese1
    Wow, thank you for the pensions link.

    So as of today I should get 124/week at 67. If I contribute (how much?) for the next 9 years it'd go to 163/week.

    Seems I had two incomplete years, last 2 years of University?? Why would they be different from first year? Nothing I can do about that now I guess?

    Do you have any advice on how I maintain NI contributions going forward including my non earning months?
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