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?

@TatianaBis

The piece of the picture you don’t flesh out in the OP is what are your and DP’s fields of work and what you could hope to earn freelance/self-employed.

If I were contemplating a move I would put a lot of careful considertuin into the area. I’d want to be near a decent sized city so that if other options dry up there are possibilities of jobs without a stressful commute.

Moving to say a farm in the Black Mountains and then discovering you can’t get work would be more stress rather than less.

This^ 100%.

I have had a mix of being employed and being freelance over my working life.

Freelance gives me freedom often to work on the days I want (sometimes) but I've had days when I've worked up to 10pm if on a deadline. (And you get no paid holidays, sick pay or pension.)

Luckily my DP was the main earner in a profession where he'd never be out of work, though he did work 12 hr days as a norm, so my work was the balancing act to keep the house/ kids on track.

I had really fallow times as a freelancer and at other times took on more than I was comfortable with in order not to say 'no' to clients and burn bridges.

If' we'd needed my income to make ends meet each month, it would have been very stressful as i was working in a competitive field.

MN has a huge range of occupations so you'd be better off revealing what your field of works are so you can get some real feedback on your employment prospects, as freelancers.

I believe if mortgage free
No health issues
Have paid enough NI
Universal credit would pay about £74 per week, per adult
Plus child benefit
Bills & food would still need to be paid

Exact amounts depend on individual circumstances

I worked out what my monthly outgoings are for all bills and food. Basic essentials (to me) without any provision for clothing shoes, going out, school costs etc. For 1 adult and 2 kids it was £660. It’s then all the little top up shops, buying a coffee and cake, going for a meal etc that really add up but without which life could quickly become pretty miserable.

I would hate finding ourselves like some of our friends with the prospect of working until 67 and live of the state pension afterwards.

That’s where I am now. Not because I chose the easiest, less income job but because of ill health.
It’s shit and very stressful to think about retirement when you know there won’t be a lot there. My only saving grace is that I know I will get a nice inheritance from my grandfather that will give me a nice cushion. However that’s down to pure luck tbh.
Please think about your pension, not just your day to day living cost.

@JinglingHellsBells, I agree with you in that.
I am self employed too and I have to say I would think twice about it wo DH being employed in a stable job.

Yes self employed/free lance can be really great at time and gives you some freedom you dint have been employed. But you also have the uncertainty associated with being self employed too. Just now with Covid, it certainly has made things quite hard (drop if income, less government support etc...)

It depends a lot on your life expectations, where you want to move to and your skill sets.

I'm retraining so I work flexibly and we've talked about dp going pt in 3-4 years time once the mortgage is paid off but we want to maintain enough income for travel, he dreams of a classic sports car etc. But if you are genuinely happy with staying put, living cheaply then it's doable younger.

We did it and are delighted. The pause created by Covid gave us a minute to think about the way we were living our lives. We decided to change it if we could.
We got out a huge map, picked a few areas, researched housing cost, schools, cost of living, quality of life, weather etc. It was fun actually. We finally made a choice. We can work from where we are so that makes a huge difference.
It is a massive change for us as we went from intense city life to rural but so far we are all really enjoying it.
It can work but the keywords are RESEARCH and PLAN.

Our mortgage is less than £400. We put £900 into our joint account to cover everything to do with the house (phone bills, car expenses are seperate) Although we do have a loan we're paying back too, which technically isn't part of the householdbills.

So for a medium sized 3 bed in the North, 2 adults, 2 DC, it costs us around £750 a month to run our house.

If you look on Zoopla, there's a section that tells you roughly how much bills would come to.

The problems with OP's scenario I have personally experienced are:

• freelance is feast or famine, and often lonely
• paid career after decade out is essentially over, no reentry
• isolation from friends and family far more than expected
• plan involves a couple doing it together. what if you want to leave? what if one partner carries the wealth?
• pension plans need thinking through before jacking in career not after (see point 2)

live to work - Bad so very bad.

work to live - this is the one you want

I’d go for it.

W live mortgage free and the bills excluding vehicles is about £500 a month

I’d give up work tomorrow but get paid a good (not huge) wage for doing not a lot so I’d be stupid to give it up. But could if they piss me off to much. Spare money has been used for lots of holiday in the past but this year has put a stop to that for a bit. But there will be other years other holidays.

How long is a piece of string! Different areas/different circumstances etc etc etc all change the picture totally. I would sit down and do a very detailed spreadsheet for the last 3 years' earnings and expenditure and see where the money is going, and compare it to the area you are thinking of moving to. Also work out your pension situation as well on your current input. I don't think anyone here can answer your question, and it would be a wild guess if they did!

OP you don't say where you might like to live but, if you are thinking of remote countryside, please bear the following in mind. I've said similar before on another thread, but I think it bears repeating:

• petrol is often much more expensive than in towns. Country roads can be dangerous and also in a bad state of repair; this causes extra wear and tear on tyres, car springs etc. You need to factor in car repair and replacement costs.

• village shops are also much more expensive than supermarkets with a very limited range of goods for sale (espec. fresh fruit and veg). That's not their fault; they simply don't have the purchasing power of the big companies. Many rural areas have no supermarket deliveries, so you either have to drive a long way to the nearest town (and the trip will take up your time) , or pay higher local shop prices.

• growing your own fruit and veg is great, but in many areas you'll need a greenhouse or polytunnel, and deer- or sheep- proof fencing round your garden, and a strong, weatherproof, rodent-proof shed to house a big freezer to store your produce. If you are thinking of chickens, they'll need a fox/rat/otter/pine-marten proof house and run and food storage bins Together, you could easily spend £5,000 or more of your £30,000 capital on things like that.

• you have not said what sort of freelance work you want to do, but , if it's likely to require broadband, remember than many rural areas have poor, slow, expensive broadband services and some have no broadband at all

• in the same way, many rural areas still have no mobile phone reception (or terrestial TV, or even decent radio reception)

• as has already been said, council taxes are high (low population density means higher cost per individual)

• parcel post/courier services often have surcharges

• the cost of getting building repair materials delivered can also be high. There is often only one plumber, electrician, handyman etc in an area, and so there is no competion that lowers those prices

• wood and oil for heating are expensive; gas is cheaper but usually requires a big payment every so often (gas companies often have contracts that involve filling up tanks)

• septic tanks/private water supplies need emptying/maintaining; this can also be costly.

• In many rural areas, there is a real shortage of work and relatively high unemployment. Rural wages are often low.

Freelancers do have some tax advantages, but (as other have said) you have to pay Nat Insurance contributions as well as tax, and also make decent private pension contributions. If you don't earn enough each year, or pay full NI contributions for at least 35 years, you won't get the full state pension: [[https://www.moneysavingexpert.com/savings/state-pensions/]] see especially the sections about 'qualifying NI years' and 'contracting out' . You have to keep proper paperwork to show HMRC, and file returns on time (or else employ an accountant /book keeper to do both). If you need a mortgage, you usually need three years' proper accounts to show the lender. They mostly lend based on profits, not on gross income.

No paid holidays/bank holidays can be hard to cope with, especially if you have children. Freelancers I know often have to work weekends to meet deadlines. No sick pay is fine if you stay healthy, but I know someone who had to return to freelance work (albeit at a desk) just days after a very major operation - it was either that, or lose an important client. Had they been employed, they would have been entitled to 6-8 weeks paid sick leave. Etc etc.

The advice givern by a previous poster about having a 'cushion' of at least six months' earnings to tide you over the times when no work is forthcoming is very sound. And, like others, I don't think £30,000 is nearly enough to rely on, unless both of you already have a lot of freelance contacts and really, really reliable prospects of a steady stream of future freelance work for years to come.

Inheriting a house a a young age means that I have lived without a mortgage almost all of my adult life. It's allowed me and DH to take a slightly slower pace of life, me working part time and prioritising family matters and him not feeling obliged to take on well paid but extremely stressful roles when the chance of promotion comes up. We've been happy with that and know we're very lucky to not ever have to worry about losing our home.

We felt very fortunate owning a three bedroom house at 25 - but at 45, I really don't feel rich any more, especially when our friends who have continued in the rat race now have big houses and salaries twice what we earn.

It's the big purchases and unexpected expenses that worry me; when our ten year old car goes, how will we afford to replace it? What can I do to make my 20 year old kitchen look a bit more up to date? What if the boiler dies or the roof needs replacing? Funding University for DD has been a challenge but her younger sibling m won't be able to go until DD graduates - we can't afford two at a time. Life gets more expensive as your children get older!

I also worry about security in the future; fortunately DH had a decent public sector pension but we have little in the ways of savings. Being mortgage free isn't the golden ticket to a stress free life, I fear.

Your too young OP. Can one of you afford to go part time?

Your too young OP. Can one of you afford to go part time?

Why do you think I'm too young out of interest? The thought has also occurred to me too, but on the other hand, the thought of continuing as we are now for the next 20 years or longer fills me with dread.

@Ideasplease322 The most senior people in my department are similar to your friends - but they're paid accordingly. I'm sort of mid level and I do my contracted 36 hours a week. If I go over that in a busy week or need to do something out of hours I get the extra hours back as flexi time to use later. I'm never expected to check emails or take calls when I'm off even though I've said I'm happy to be contacted if needed, whereas in my previous private sector job eyebrows were raised when I said I wouldn't be taking my work phone on my honeymoon. Everyone here assumes everyone else is doing the best they can, rather than starting from the position that everyone else is a lazy slacker until proven otherwise over the course of several years. It's been a huge change in my stress levels and work life balance - ie I now actually have a life outside of work and dont wake up at 3am worrying about it.

To be fair this is my first public sector job - I can't be sure I haven't just got very lucky with my team.

[quote raspberrymuffin]@Ideasplease322 The most senior people in my department are similar to your friends - but they're paid accordingly. I'm sort of mid level and I do my contracted 36 hours a week. If I go over that in a busy week or need to do something out of hours I get the extra hours back as flexi time to use later. I'm never expected to check emails or take calls when I'm off even though I've said I'm happy to be contacted if needed, whereas in my previous private sector job eyebrows were raised when I said I wouldn't be taking my work phone on my honeymoon. Everyone here assumes everyone else is doing the best they can, rather than starting from the position that everyone else is a lazy slacker until proven otherwise over the course of several years. It's been a huge change in my stress levels and work life balance - ie I now actually have a life outside of work and dont wake up at 3am worrying about it.

To be fair this is my first public sector job - I can't be sure I haven't just got very lucky with my team.[/quote]
Thanks raspberry.

I don’t really understand the levels in the public sector Or civil service.

I think I would need to go in at a lower level than my friends to achieve that work life balance. But the pay cost would be huge.

I also have a friend who is a head of team/manager - I think it’s grade 7 level - and she often works through the night and weekends.

There's not really any such thing as too young. If you can afford it, age doesn't matter.

Think you need to get a budget and work it out.

Not everything has to be a rat race. I live in Belfast and work 10am to 6pm. I drive to work, takes 15mins max as miss all the rush hour traffic and same going home. So yes still city living but Iv reduced one things that stresses me. Housing here is also cheaper even though wages are lower, we hope to be mortgage free by 45.

If I were you I'd let out your house for a few years and rent in the area you're thinking of. You can then test out your new area and life and see if it suits you. If it doesn't then you've still got your property and you haven't been priced out. Or you could test out different areas of the country and both of you could work part time.

You're in your 30's and in good health but if you had medical issues you might not get the same level of health care in a rural area. Just something to bear in mind, I think I read that Cornwall has 3 hospitals covering the whole area.

If it's the job that's stressing you why aren't you looking at a career change rather than throwing it all in?

This. And also what @CheltenhamLady says about having a purpose in life. Really - don't underestimate the importance of meaningful paid work in ongoing happiness.

OP it's not all or nothing. You don't have to continue 'in the same way for the next 20 years'. (In fact, it will be 30 years before you qualify for a state pension, unless you are over 37 now.)

What qualifications/skills/ experience do you both have?
Have you or your DH thought of retraining? You are young enough to start a completely different career. One that might be more rewarding/interesting/give you a purpose in life (as a previous poster very wisely advises).

Until we know what sort of freelance work you are thinking of, then we can't really say much more. If it's high-tech, high-spec and in vastly short supply, then freelance might well be a possibility, if you can find a location with all the right facilities (eg broadband). If it's something really useful, like (eg) plumbing or child-care, then maybe - but it would entirely depend on the local need for such services. No point jumping into an already crowded local market. If it's almost anything in the arts/crafts world, then proceed with great caution.

As harried harriet says above, research and plan. Research and plan. Her advice is very sensible. Read it and take it very much to heart.

Look at how much the state pension is
Could you live on that amount now ?
To pay bills & food
Not including cost of mortgage or rent

My decision
Work hard when young & lots of energy
Hope to take it easier when (much) older

You need to work out if taking it easy in your 30s, will impact you later in life

If you want some alternatives

Covid allowing

Rent out or sell your existing property to

Live on house boat - travel

Live in camper van - travel

Live in different airb&bs - travel

Live in a small shared accommodation community

Both work 4 days instead of 5? It feels very different.