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?

In any part of the UK, low-income benefits housing costs and CT bands are at your fingertips. You know what food, fuel and cars cost.

That you ask or need strangers to provide those easy peasy answers and work out the sums for you, indicates you're far too immature and gumptionless to implement that kind of lifechange, let alone make a success of it.

Council tax is a lot - we pay just over £200 a month on a band E property so even if its £150 for you, you have to find that. Bills are likely to be around £200-300 for energy, water, insurance and basic broadband and mobile. And then you have food. Do you run a car or cars?

Even without a mortgage there is still maintenance and things that break.

I think you need about £1.5K a month to be comfortable and have some leeway eg if your washing machine breaks and you need a new one.

I also agree with the pp above. You don't need to move somewhere "off-grid", just somewhere cheaper. And I wouldn't not do it purely because of pension, realistically it is possible that you may either not live that long or not have the good health to enjoy an active retirement, so I think there is a balance to be struck in enjoying life now.

budget planner

Useful budget planner to work out costs.

@2bazookas

In any part of the UK, low-income benefits housing costs and CT bands are at your fingertips. You know what food, fuel and cars cost.

That you ask or need strangers to provide those easy peasy answers and work out the sums for you, indicates you're far too immature and gumptionless to implement that kind of lifechange, let alone make a success of it.

In a bad mood this morning? Is there really any need to be so nasty?

You need to think about continuing you pay into a private pension for you both. And paying NI to get the higher old age pension.

Surely the first question is: do you want or have children?

My bills total £400 per month max. That's electricity, wood for heating, insurances, water, 75% council tax, broadband, running a car, birthdays/xmas, dentist, dumb phone, TV licence, chimney sweep.

I'm 39 and we did this two years ago. We need about a £1000 a month to pay for essentials (food included), everything else is a plus. Our jobs are part-time and not rat race at all. Walkable/cycling distances from daily destinations. We do have a car for longer trips. We do work to live, not live to work 😉 Career wise we're a bit frustrated, but I think we'll start a business at some point to challenge ourselves a bit more..

You need to think really long term so try and spitball all the known costs and add a contingency for the future unknown. For example It’s likely the NHS will be privatised in a few years post Brexit so include a cost in your budget for medical costs / insurance. Add in capital costs like major repairs in 30 years to your home. Oil and gas will become very costly and running a car will shift to electric in about 15 years which will also be very dear. If you can find a place that allows you to walk to doctor school shops etc it cuts out costs and gives you options. Also consider if your partner leaves and didn’t pay maintenance can you make it on your own.
It’s very doable esp if you are not a materialist consumer who needs to constantly spend.

We were mortgage free at your age but have moved again so currently have a mortgage (which we will pay off in the next 2 years). You are right the freedom of not having a mortgage is lovely and makes a real difference. We've timed it this time round to finish when our eldest is 18 so we can help with uni if they choose that route. Last time we were mortgage free I was on maternity leave so it made a huge difference.

My work is stressful (I'm a teacher) but I really missed proper teaching when lockdown happened and although I'd been thinking of leaving my job it made me want to stay!

In your position I'd worry about my pension. I think I'd need some kind of job even if part time

Thank you everyone - this is all really helpful. There’s certainly a lot to think about and consider.

Sounds like you need a change OP rather than "opting out".

Even with a low mortgage you will need a certain amount to survive.
House repairs, fuel, food,internet, mobile phones, insurance, clothes, travel, a car perhaps.

I agree with others, £1.5K a month minimum to survive as a couple, but life would be basic.
There are interesting and exciting ways to make money- find a job you enjoy, start a business, move to a more rural location perhaps.

You are young to be considering throwing in the towel.
I would suggest a life shift rather than an opt out- you have no children so you can afford to have more risk with your ventures.

Good luck.

i think this sounds like a great idea. from what i can gather you are considering a life change in a less urban environment/ WFH, rather than going full "good life"/hippie existence.
I cannot mentally deal living with the pace of cities/suburbia. we bought a affordable home in a small town on the fringe of some bigger towns. we have a almost paid off house, 2 years to go! (mid 30s) . we have low pressure jobs and a very calm existence. if you can freelance from home - brilliant. the one trade off that annoys me is having to own 2 cars (no public transport, we are not in Uk and our country has terrible PT outside of urban centers) apart from that i love it.
with kids - there can be a balance, you dont have to move full remote, you could always search for a place that will meet the needs of future teen years.

To those asking if I can do the sums - yes of course I can add up. I think I phrased my OP badly - what I really need is more general advice about making a big life change, which some posters have helpfully given!

indicates you're far too immature and gumptionless to implement that kind of lifechange, let alone make a success of it.

There are lots of places in rural Scotland within commuting reach of big cities where you can get a small house or big flat for ridiculously small sums compared to London prices. The map search on rightmove is your friend here.

I haven't opted out but I did take a pay cut to work in the public sector, where I've got no silly overtime, no daily commute at the moment, and while the work is sometimes hard I'm doing it to make people's lives better rather than to maximise shareholder profits which I can tell you makes a huge difference to how it feels logging on in the morning. I can't afford to go on a big holiday abroad but on the other hand I can rely on finishing work at 5pm most days. People who earn a lot more than me have to save their money to come on holiday where I live; I just walk out the door on a Saturday morning.

Re teenagers and rural life: round here the kids go to a rural high school rather than one in a big town so they're all in the same boat more or less, and they seem to make it work.

Think very very carefully about your retirement planning

Not working/working very little means little or no employer contribution to a pension and little spare cash for you to contribute yourself.

You may be able to cover your costs now but can you cover them until you are 90

You are young to be considering throwing in the towel.

I do wonder if we’re too young. I’m just so burnt out!

To me it just sounds like you need more balance. I work part time in an office close ish to home, but currently from home. I don't like WFH all thr time and love the social side of an office but also like my days off. DH is freelance of sorts. Go for it but IMO at mid 30 with no pension to draw, you will still need to earn a set wage each to keep going so you'll just be reducing your workload and pressure (which is fine). It is hard to say how much as it depends on your outgoings.

@2bazookas

In any part of the UK, low-income benefits housing costs and CT bands are at your fingertips. You know what food, fuel and cars cost.

That you ask or need strangers to provide those easy peasy answers and work out the sums for you, indicates you're far too immature and gumptionless to implement that kind of lifechange, let alone make a success of it.

That's pretty unpleasant. There are ways of making your point without resorting to personal insults.

Your op didn't state country or city, though I think a lot of people assume 'opting out' means country life. I'd go the other way though... it costs money to live rurally, you need a car, it is very difficult with older children if you're planning DCs, etc etc. I would look at a small city or big town, good public transport, libraries, free stuff to do like museums, ability to meet other people, able to walk to get a pint of milk, decent schools that children can self-travel to, options for Saturday jobs for them in the future etc.

And I cannot stress this strongly enough: prioritise a pension. You'll need 35 years of NI for a state pension, but as a freelance you'll need a private pension too. Don't skimp on this.

Oh actually I’ve also remembered I have friends who did this a few years back! Although they weren’t mortgage free.

First of all they were much much happier as living by the sea and bigger house (but long commute for one of them who still worked in a city).
Then they had another child- unplanned- one partner gave up work to look after the child, the one with a long commute started to burn out working extra hours to provide for everyone.
Then after a time they both decided to go freelance.
Less stress initially but found themselves eating into savings many months as couldn’t reliably pay the bills. Stress slowly increased again.
Then covid struck.
It’s been a dire year for them.

Obviously everyone is different. But be careful.

@Wandafishcake thanks - a good cautionary tale. I hope things improve for your friends.

My household bills excluding car running costs and food are £800-£850 a month. That includes a £200 mortgage. It includes all stuff like council tax, utilities, insurance, mobile phones, Netflix, contact lenses.

So if you can really reduce your mortgage then it’s possible to reduce your income and be ok.

My brother and SIL quit higher paying jobs, paid their mortgage off and work as TEaching Assistants, they both enjoy their jobs, not overly stressful, easy commute, good holidays.

The main thing to also consider is insurance for if either of you is ill either short term or long term if you are not covered by an employer's sick pay scheme.

Dh was self employed for years and I am a SAHM (with a disability so working would be incredibly difficult) and we paid a fair amount of money every month on immediate sick pay cover and one that kicked in after 6 months.

As Dh was the sole earner when the bank said we can lend you X for a mortgage we went way under that to allow us as much disposable income as possible to be able to put savings away and not worry if the boiler died or we needed a new car. We do live up norf and our house move was dictated by both outstanding primary and secondary schools.

Expected university parental contribution is hefty so definitely look into that.

My friend and her husband went down to 4 days each when their son was born so that they each spent a weekday with their child and both feel like they benefit from a long weekend as one has Mondays at home and the other Friday at home. It meant each one could take 1 day holiday and have 4 days together. They continued this when their son started school and it has worked well in terms of reducing stress and a better work/life balance.

I opting out of the full time rat race in my early 30s by locumming - I worked about 7/8 months of the year mostly doing holiday covers . I had most of the winter off . It was a knee jerk reaction to being made redundant at the time and it served me well for about 4 years - I also took a lodger which helped .