Spending no more than £12,000 on everyday living in 2018

[BixieThoms]

Me and DP are starting to turn our attentions very seriously to early retirement. We're some years off yet but we're working towards it and thinking about what life will be like when we get there.

In 2018, we've decided to have a practice run on the money front and see if we can bring in our yearly everyday living expenses at less than £12,000 for the year.

We're not including our mortgage payments or what we pay on commuting in this because those costs won't exist when we're retired.

We've worked out that all of our "necessary" bills (not including food shopping) come in at about £400 per month:

Gas/electricity: £60
Council Tax: £95
Water: £23
Phone/Internet: £55
Gym: £40
Dog grooming: £30
Beauty Stuff: £30
Birthdays/Xmases averaged out per month (other people's presents, not me and DP buying for each other): £40
Home Insurance: £10

Monthly total: £383

I say "necessary" as some could be cut but this is how it stands at the minute. That leaves us about £600 per month for food shopping and treats. So, about £150 per week

To try and achieve this, we've got three aims:

• Try and bring in a weekly shop for as close to £40 as possible

In the past, we've had online shopping delivered twice per week (with a minimum £40 spend each time) and have spent an average of about £90 per week on shopping. This year we're going to have cheaper meals whenever we can and try to concoct meals from bits and pieces we've got left over from previous weeks. We're also going to cut down on buying sparkling water (currently costing us about £80 per year and generating lots of plastic waste).

• Shop around for best prices on bills In the past we've been lazy and auto-renewed for basically everything. This year, we've already saved £250 on our home insurance by swapping provider We're looking at energy providers over the weekend and will call our internet provider when our contract is up to see what they can do for us.

• Start accounting for every penny At the end of each month, we're going to download our statement and see exactly where our money's been spent so we can map where it's all going and if there are any ways we can trim this back. Where we get cash out, we're going to account for where this went too. For me, this means avoiding "popping" into the £1 shop where I can very easily spend £10 on basically nothing.

In November, we should have a pretty good idea of how well we've done and we'll use this to set a Christmas budget. We've never had a budget at Christmas before and normally spend £200-£500 on each other. However, we can still have an amazing Christmas on £50 or £100 each so we'll see how much we get

That 500k will only see you out around 40 years assuming interest is level with inflation.

Many people with campervan living much cheaper in Spain and Portugal - they place there furniture in storage and rent out their homes.

This gives them an income, plus they are living much cheaper travelling whilst they can.

One couple I’ve met have a narrow boat and spend the summer in uk and winter in Spain and Portugal

Others have purchased second properties to give an income.

But of course there are expenses with this if no one is living in property then utilities become your responsibility including council tax

Why would they be bored, just because they are not working, there so much more than work.

This is also my plan, i just wrote about it on the how much do you meed to retire thread but i will retire 55 or 58.

Its discusswd in the channel 4 documentary " How to retire at 40".

Save as much as possible whilst working to retire earlier and live on the savings.

I would be looking to have 20-25 years fund initially before retiring and a further 100k from a downsize at some stage. Im also due an inheritance but would prefer my mum to live longer.

However i would not be looking at 40 or 45 years of living after retirement. Id plan a visit to a euthnasia clinic if i could. I dont want to live past 80, too many problems and illnesses develop and care is expensive, even though in my family we do the care ourselves, its expensive for those who work less because of caring duties etc.

Im entitled to state pension at 67 so this would make the savings go further from age 67 also.

flirty I think a financial plan involving a euthanasia clinic is unlikely to appeal to everyone!!!!

Why would they be bored, just because they are not working, there so much more than work.

Yes of course there's more to life than work - but hobbies, activities, holidays, days out, courses etc tend to cost.

Crikey I'm 45 now. I like the routine and structure of work, albeit part time. Wouldn't think of retiring now!!! 55 maybe.

DH is hoping to retire in 2 years, just as the last DC goes off to uni.
I will carry on working as I love my job (most of the time).

Once you settle into your new way of life you could always choose to do a few hours work at something that interests you if need be.

Could you scrap the dog groomer? Our dog hated going to the dog salon so I bought decent clippers and learned to groom our Llhasa Apso myself. They are not the easiest breed to groom so he had a few interesting cuts before I got the hand of it but he looks great now and no stress involved. Would also save you a few hundred a year.

I'm 48 and I'd love to retire. I've worked hard all my life so far other than 6 months maternity leave and I am starting to get health problems that I think are stress related and I have no ambition to achieve anything else professionally. I'd much rather spend my days being involved in community activities, having time for my sick parents, spending the last few years with my DD before she leaves home and exercising etc. to remain as healthy as I can. I wish I had planned my later years better (though as a LP I would have found it difficult to save anyway).

OP, following this thread with interest. DH fully intends to retire early if we can afford it, my part-time money will cover the mortgage but we'll have exactly the same amount as you.

Obviously do be aware that if you're not working you may want more money towards petrol for trips out, eating out, doing stuff with the garden, hobbies (whatever you enjoy and would like to do more of).

ifonly Your DH should have a look at the many, many early retirement and financial freedom blogs. Lots of investment tips and lots of support for the ideas that (a) you should retire as early as possible and (b) you can retire ridiculously early.

this is a good one
so is this
and this
and this one

There are loads out there.

God for you OP. I find this fascinating. I'm in the UK but a big Dave Ramsey fan (US). He has a lot to say about retirement.

I work in the public sector and I agree with you and others about the freedom to choose how your time is structured. I'd want time with my animals. To others that would be hell.

I'm not counting on my nhs pension tbh, I think investments are the way forward. not that I have any yet

I think it's a great idea. Good for you. We're also planning to retire early but more like 55 than 45. I enjoy work, but as you say there's so much more to life. I can think of lots of things I want to do when retired. I can't imagine getting bored as I've so many hobbies and interests. I do want to have the money to travel though, so we need to keep saving hard.

We’re also very interested in this. Paid off the mortgage and are looking to reduce waste and build passive income to either retire early or continue running our business in a more relaxed fashion. I would be interested to see how your spending experiment goes!

Retire at 45??? Bloody hell...you are living the dream!
Im 40 and im going back to uni to study for a second career as i cant imagine teaching till im 65!!

What do you work as op?

op where are you - given up?

I'm just about to start a new (well paid) job. Was thinking that I might actually pay myself a lower salary and stash the rest. Mid forties now but would actually like to keep working but maybe not at the same pace/level. If I took a lower paid job then it wouldn't come as such a shock!

Have you had any prolonged periods away from work, op? I have and actually find that I need the structure of work. My DH and best friend have found the same...

Retiring at 45? Jeez I am 45 in a few months and it wouldn’t even cross my mind. I still feel young and I enjoy working. If I was mega rich and could fill my days then it’d be different but not skimping on a meagre income just so as not to work.

I’m also gobsmacked at how cheap your bills are. £60 on gas and electricity and £10 on house insurance?

£500 000 isn't going to go far if you retire at 45 and might live another 50 years. My DH is a high earner and has over £1.5 million in his pension pot plus other savings and at age 55 we are think maybe by the time he is 60 we will have sufficient to allow us a nice life style for possibly another 40 years.

Have you thought about inflation OP?

At the moment it is running at about 2% above best buy savings rates. In 10 years that would reduce your buying power by 20%

I don’t bother with pet insurance myself but I do have an earmarked fund for pet emergencies. If I could not risk the costs of a major incident due to living on a limited fixed income I would definitely purchase it

@blueskyinmarch 1.5mil in a pension fund is so far beyond most peoples' reach that it is probably skewing your view just a teeny bit...
@BakedBeans47 our bills are pretty similar and there are four of us.

Hello everyone

Thought I'd update now we're at the end of the first month.

There are a few bills and expenses that we pay in one lump sum rather than monthly. That means that some months (like April when the council tax comes out) will be more expensive than others (like February when nothing happens).

However, we're averaging out spending across the year looking to spend no more than £12,000 over the year rather than keeping strictly within £1,000 per month. If that makes sense!

Anyway, January was a good month! We spent about £560 on:
Fuel: £62
Hair cut : £57
Gym: £40
Home insurance: £107
Food shopping: £300

I've been sure to use the gym as much as possible to make sure I'm getting my money's worth. I've also lost 8lbs and feel great

Giving a little bit more thought to food shopping and doing proper meal planning has been great. We've pretty much halved the amount we spend on weekly shopping and we've reduced our food waste hugely.

We've also gotten into good habits of not spending a few pounds here and there (you know, a take away coffee, an extra packet of biscuits you might or might not actually need). It's amazing how this adds up over weeks and months.

I've also discovered another really good FIRE blog: here

Total for the year: £560

Back to update soon

My concern for you is that you need to factor in the extra costs of being at home eg heating and entertainment.

@bixiethoms

There are lots of FIRE podcasts out there which will help you stay motivated. I’m on a similar path although I think my discipline is lacking at times! With more flexible pensions and adopting a more minimalist lifestyle, I think it is more of a possibility then ever before.

If you haven’t already you should check out mr money moustache blog. He is massive in the American fire community.

Trying I'll have a look at the podcasts, thanks. Oh yes, I know Mr Money Moustache's blog

Having said how well we're doing so far, we're having a long weekend this weekend so our shopping is going to be a bit more expensive

If I were able to retire at 45 (instead of 22 years later I would want money to travel with, or at least go on hol occasionally. See the world and what it has to offer. Pursue my hobbies and interests. Are you factoring in holidays?

You spend a LOT on food if it is just for the two of you. Are you 30? Do you have kids?

However, if you are not working you will be able to eat more cheaply: shop at the market, do dishes that cook more slowly based on cheaper cuts of meat etc.