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?

Choose an area to live in that is beautiful but inexpensive. Buy a house for the three of you and be happy.

Reading your post it sounds like you need a holiday due to COVID exhaustion/ stress/ loneliness.

Don't jack in decent careers and accommodation and friendships now.

Things will get better!

My parents were hippy types and oh my gosh the stress caused by living hand to mouth, not being able to afford things teens need, the arguments... avoid poverty at all costs if you can.

Of course it's possible but you just need to be realistic. You probably need to work. What do you do? What would the job market be like where you are thinking of going?

We have friends who moved from London to Cornwall. It was a great move for them but they both work for the NHS so they're probably better off than they were.

Don't forget that you need 35 years of NI contributions to be entitled to a full state pension.

When I was 10 years old my parents did more or less this , sold a huge country house and bought a smaller property with land and had money in the bank , substantially more than you are intending too , both were prior to that well paid professionals, they were good with money but it was always a case of going without, chasing after paying bills, constant mend and make do, I as the child seeing the money worries it gave them verses the " freedom " would not recommend this route

How old is the dc?

Thing is you also have to realise that living the "Good Life" lifestyle is exciting and fun when they're little. They'll throw themselves into it and won't mind that they haven't got the latest toys etc and the fact it's two unreliable buses to the nearest town is just adding to the fun.

But when they get older they'll be embarrassed by you whatever you do. Not having the latest gadget won't necessarily be the issue, but they'll want things and they'll want to meet their friends so the unreliable buses become an issue.
It's very easy to think that "I'll just explain to them that material things aren't all they're cracked up to be, and they'll understand." But you have to realise they'll be getting peer pressure at school.

Then throw in the freelance. Freelance is fantastic when it works. But I've known a few people who have been doing really well freelance and then with no warning it dries up. No particular reason, but then they need the savings. if you've already used your savings on moving and aiming to just scrape by, you could very quickly spiral downhill.

No one on here can answer this question really. We don't know where you are planning to move to or what your outgoings will be apart from the obvious. You could have bills as little as £400 up to over £1000.

You need to organise a spreadsheet, choose some areas and work out what you can afford with a calculator or formulas.

I personally would not be doing this with how dodgy the future is looking for everyone, but it's your choice not mine.

I loved being freelance and earnt good money for the day-to-day. My pension is less than brilliant though so would advise making sure you can put enough aside to cover that too.

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.

This. How much money you will need depends on where you want to live but also how you want to live. Are you happy to do without a car? To forgo holidays? To make-do and mend or buy things second hand? How much do you spend on food each month and would you be happy to cut this down? If you have DC you need to think about their future. Do you want them to be able to go on school trips, extra-curricular activities, help them with driving lessons and eventually support them through university of that's the path they choose? What about pensions and if you need care in your old age?

No-one can answer these questions for you. You need to sit down, work out where all your money goes currently and have a proper discussion about what you would be willing to give up.

As someone who lives in the country and is freelance I think you are mad. You have savings. Reassess your work sure, but don't think NOT working is going to magically solve your problems. It sends me into depression. Our mortgage is not the most expensive thing - oil, electricity, council tax, phone, bb, sky, two cars, food... it all adds up. I think simplifying your life is an admirable aim but don't throw the baby out with the bath water at a time when it's harder than ever before to get back on the ladder.

I think it looks like it may not happen straight away, but start working towards it OP.
Are there any changes you can make right now to make life easier?

I've just worked out that our bills aren't massive. Mortgage on 3 bed house with garden and drive is 450pm, council tax is 130, gas and electricity is 72, water 37, insurance is paid annually, life insurance is 17, phones for 3 people are 50 as one of us gets a free mobile with work. We allow 400 a month for food for four of us. Petrol is about 80pm now there is no travel to work.

I aim to keep the monthly bills as low as possible and we will start making big mortgage over payments next year with an aim to being mortgage free in 7 years. We do this to give us freedom and also my husband has a life limiting disease so we want to make it so he can go part time at work if he needs to.

I work part time and he wfh. We do enjoy our lives and have plenty left over for kids activities, long haul holidays, UK holidays, meals out etc.

I don't spend a lot on clothes, beauty products, hair etc as that isn't really important to me and isn't really the lifestyle I have now but I will get myself a new outfit if it's a special occasion and can do most beauty treatments at home or get vouchers for presents.

The main thing is to not compare yourself to others. I don't care what car people are driving or how big their house is. We are doing what's right for us. I am really into interior design but I will wait and save for things. Like I would really like our garden professionally landscaped but I will wait for it til we can afford it.

We don't have a mortgage but there are still lots of bills to pay - utilities, council tax, insurance, car, pension contributions, savings, dentist, opticians, food, clothes - even if you are 'careful' with your money. Decent hiking boots if you enjoy walking etc. "Leisure" costs money - bikes, fishing stuff etc We are over 60 and DH working full time but I can work part time.

Think carefully before giving up well paid employment.

What are you going to do about state pension? You won't qualify for full state pension if you only work a few hours a week.

I work three days a week from home and can easily afford a three bedroom house in a nice town in Yorkshire, where they cost about 160k. Bills come to about £500 a month not including mortgage of about the same. Basically on my very ordinary salary it's 500 for house, 500 for bills, 500 for me. At the moment it is just me but that was covering 3 people last year. I don't have a car though.

I am reluctant to work more than this as I have other things to do. I really feel I get so much done at work, too - I really go at it for those 24 hours - so it's a good deal for my employer too.

I could choose to pursue a much more high powered career, or perhaps COULD have chosen - there's a time limit on this stuff - and there's stuff I'll never get to do at work (technical job) because I've chosen to stay in this backwater. But for me, my private intellectual and creative pursuits are more important and valuable. It depends on what is important to you personally.

It’s interesting that most people are throwing up barriers and problems with your idea. I think you’re wise. So many people are stuck on a miserable treadmill of work because they have a mortgage to pay etc.and they don’t even realise that life can be different.

We’re working towards something similar. We’re almost mortgage free though and sticking as much as we can into our pensions. When we’re 50, we’ll be leaving our FT jobs and doing freelance PT work. Can’t wait!

It really depends what you mean by working freelance.

I "quit the ratrace" and moved overseas to a rural area with my family, living mortgage free. I work freelance from home so no commute, etc. but I still work full time in a proper career. Thankfully being mortgage-free has allowed us to save up plenty of money, because the idea of losing my major clients and having no work for a while is something that I would worry about a lot if I didn't have lots of savings. I don't think I could live this life if my job was just a kind of part-time come-and-go income. I would be too stressed by the financial insecurity.

I guess what I'm saying is it's really a great idea, as long as you can comfortably afford it and aren't at major risk in the event of job loss.

I’m not sure it is doable? Well... maybe. Depends what your work is like now and the lifestyle you are used to?
Watch out that you don’t end up just working full time at a low-paying job for a shitter lifestyle than you have now?

Also, in a year or so, you may want to go back to your previous careers and lifestyle? But will you be able to? This is a very long term solution to what may be a short term blip?

Why not just ask your workplaces for a sabbatical, and use your savings to take some time out to re-charge, but still with the option of going back? Maybe do it once covid is behind us though, so you can actually do nice things on your sabbatical

Our fixed costs are around 1200 a month - mortgage is 350 a month. Includes ctax, utilities, insurances, car tax but not petrol, groceries but not eating out/takeaway.

What are you going to do about state pension? You won't qualify for full state pension if you only work a few hours a week

Freelancers can contribute NI payments voluntarily to reach the minimum limit per year. It's a few hundred pounds per year. Definitely worth doing, OP.

OP
If you have decent, well paid jobs at the moment hang onto them with both hands !
How are you going to fund the next 38ish years?
How will you fund your pensions?
It all seems rosy the thought of no stress pottering about but self employment is hugely stressful.
How will you fund the expensive ctitical illness insurance you will need?

I constantly think of this tbh

but one word of caution - dcs can get more expensive the older they get

if they go to university, you're likely to have to and want to help them out so factor that in to your calcs (and the impact on your pension from lower contributions)

I've always lived within a tight budget for various reasons. I paid my mortgage off [by moving to a cheaper but very good area, and losing one bedroom] when I was 39 and it has eased everything up ever since. it was the best thing I've ever done. By buying and selling property as a cash buyer since then I have now moved up the ladder and now settled down.

I have a very, very small income to live off [retired], but all living expenses and bills are covered so I am comfortable and have and do everything I need. I do have savings in the bank though as back up.

Whether the 3 of you can live on a small income obviously depends on your location within the UK [I'm in SW, affordable part], what sort of house you would be happy with and your lifestyle of course.

I think we need more information to know how and where you want to live.

How sure are you that you can get enough 'freelance' work, especially in the current economic climate? Many years ago my DH went self employed, to be able to spend more time with our DS, to have more 'control' over his life/work balance ... it was great when he was getting the contracts ... but during the economic downturn around 2007/8 it was much, much harder and he returned to a salaried role. (We had no mortgage to pay, but still needed a regular income for all the other bills).

I'm going to repeat what others have said which is if you can't do the sums yourself now, it looks a bit bleak about managing your finances.

You need to make a spreadsheet of your current outgoings.

Food
Fuel/ transport
Council tax
Utility bills
Insurance (house and contents)
Clothes
Personal care- hairdressers, dentists, prescriptions etc
Hobbies
Other monthly subscriptions
Holidays
Essential repairs / replacements likely ( ie a new boiler/ fridge freezer/ washing machine/ car being written off/ repairs needed)

It sounds as if at the moment you have no idea of your outgoings.

Do you not budget?