Opting out in our mid-30s - can we afford it?

[newlife4]

Like many people, DH and I have had an exhausting, miserable year and we both feel completely drained.

We're considering a fresh start by selling up, moving somewhere that we can be mortgage free or have a very small mortgage (say £200-£300 a month max) and opting out of the rat race basically.

My question is - even though we'd be mortgage free or reducing it drastically, how much money do you think we would need to earn to pay for everything else (utility bills, council tax, stuff for our one DC and potentially a car)? We currently have £30k savings in the bank.

We're only in our mid 30s and are probably far too young to be considering this, but we're just so done with it all and don't want to live to work (or is it work to live - I always get it the wrong way round!) any more.

I'm just wondering whether this plan is doable or not really. Thoughts?

My question is - even though we'd be mortgage free or reducing it drastically, how much money do you think we would need to earn to pay for everything else (utility bills, council tax, stuff for our one DC and potentially a car)? We currently have £30k savings in the bank.

Why don't you just look at how much council tax bands are in the areas you are interested in buying?

Also think about your pension.

It depends on the area you move too and what sort of jobs you do.

How much are your bills now?

No-one on here can tell you, it depends entirely on your own unique situation.

It sounds like you actually need to sit down and formulate a proper plan. That might give you an idea of if it's doable or not.

All paid work is a rat race. If you’re going to sell up and move, but still work you are just opting for a different rat race. The question is do you want to race for high pay or low pay?

All paid work is a rat race. If you’re going to sell up and move, but still work you are just opting for a different rat race. The question is do you want to race for high pay or low pay?

Not really. There's a big difference between cramming yourself onto a packed train every day to work in a soul destroying job, and working freelance from home doing something you enjoy!

Bold fail, sorry!

I’m your age and for various reasons have no mortgage.

To cover my essential bills I need c.£420 a month.

There is a mental freedom which comes with owning outright. You can be pulled into a false sense of security though and end up living fairly hand to mouth and not saving enough money long term etc.

Surely you can work out how much you need to live?

I would imagine the issue would be pension and when you were too old to work at all to pay those minimal bills.

But people live like you are describing all across the country, it isn't a binary rat race or nothing thing.

Why not move somewhere cheaper and just have a lower pressure job/life as against nothing?

There is a mental freedom which comes with owning outright. You can be pulled into a false sense of security though and end up living fairly hand to mouth and not saving enough money long term etc.

Interesting insight, thanks.

If our bills were something like £500 per month we'd need to do so little work compared to what we're doing now.

@PlanDeRaccordement

All paid work is a rat race. If you’re going to sell up and move, but still work you are just opting for a different rat race. The question is do you want to race for high pay or low pay?

I completely disagree.

I think what the op really needs to do is look at their work life balance. What jobs are available that might be more flexible part time/ freelance. Where they are available, possibility of wfh. Theres no way we can estimate their outgoings, they'll have to sit down and work it out.

I am 42 work part time in the office out of choice, I never intend on working fulltime again. H also works part time. We have a great work/life balance, no rat race here.

Day to day expenses can be cut down with relative ease. It’s the unexpected things - the boiler, the car, the roof - and the long-term things (do you have children who will need help with university and deposits?) that probably need a bit more thought here. We all have fantasies about moving to a bothy on Skye and waking up to the sound of the gulls, but it’s only realistic if you can continue to save for an independent future, IMO.

@DDiva
Obviously, I meant full time work. And you prove my point- you see no rat race because most of your time is spent not working.

Working freelance doing something you enjoy is not all it’s cracked up to be, and I say that from experience. Doing the thing you enjoy becomes less enjoyable when you’re doing it under pressure/ when it doesn’t pay enough etc.
Kids grow and they just become more and more expensive.

Working freelance doing something you enjoy is not all it’s cracked up to be, and I say that from experience. Doing the thing you enjoy becomes less enjoyable when you’re doing it under pressure/ when it doesn’t pay enough etc.

That's not been my experience - I've been freelance before and loved it!

It depends on where you live surely @newlife4 we are mid 30's and mortgage free but we live in Ireland where we don't pay council tax or water rates. But we both still work and save for the future. Are you still planning on working?? Part time or full time? 30k would not be enough to hold you for long imo especially with dc.

One option (and this is effectively what we did) is you carry on with your life pretty much as it is but move somewhere cheaper.

We moved from the south east (expensive house prices, commuting in opposite directions, living in a soulless town where we knew no one and whose only advantage was being halfway between our two jobs) to a beautiful northern city where the company I worked for also had a big office. My work life barely changed at all except that my commute was a lovely 15 minute cycle rather than a 45 minute stressful drive. Dh’s work was fairly flexible so he was able to get a job quite easily. Again with a short (walking) commute.

We were only mid / late 20s so we bought a bigger house rather than cut down on mortgage.

Living and working in the same city made life much more sociable as we were able to go out after work far easier so we made lots of local friends.

There were a few things I missed about our old life - easy access to West End shows and it was a very long way from my parents are the ones I particularly remember (Although we’d been 90 miles from them before so it wasn’t as if they could pop in for a cup of tea on a Tuesday!)

But no regrets.

Just a suggestion as an option - it is a lower level of “getting out of the rat race” so much less risky.

It’s not just money to pay your bills now, it’s money to pay them in 40 years time - think about pension and think about stuff like uni fees.

I love the idea. How long do you want the 30k to last? Is it to tide you over until you get established with a new freelance income?
Obviously you can live very cheaply in some parts of the UK. A friend has just moved to West Coast of Scotland. Beautiful but too remote for me. Can you do your freelance business idea anywhere at all?

I think you have to look at this long term and be realistic about the next 40 years. Do you want to have children in the future?

Sorry I haven't answered your question of how much you need to earn to live if mortgage free.
I guess that depends where you live as in my post.
However as others have said, you still need to save for the future.

We live frugally and without a mortgage would need £1400 a month to cover bills, food, fuel and heating in total for a family of 4

I love the idea. How long do you want the 30k to last? Is it to tide you over until you get established with a new freelance income?

Yes, that's the idea. I'm thinking it might last us a year to 1.5 years, which gives us a good safety net in terms of work - although DH is semi freelance already so has some income coming in from that.

You need a spreadsheet and much more concrete ideas of what you both want out of life and from that, what you need to earn over what period to cover it. It is easy to research costs once you know what is planned. 30k is about the average household income. It is not a big cushion against misfortune or lack of advance planning.

Not exactly what you are thinking about OP but have you looked into the financial independence / early retirement (FIRE) movement?