So this post is most likely to get people labeling me as a complainypants and telling me to drink a cup of cement and harden the f**k up – or something along those lines 🙂 Well I don’t think I am the first, but I can accept some of the second! I accept that this means I won’t be able to do the magical retire in 10 years, but you know what, I can accept that. I have suffered from huge lifestyle inflation, but I also know that retiring to a shed in the wood and foraging for mushrooms to eat every day just isn’t me 🙂
There are a number of things that for me are not negotiable, and I accept that this will add on a good few years to my working life. Would I like to retire earlier, or even be financially free tomorrow? Yes I would. Am I willing to give up the things I do now to allow for it? No. So, no change then. I do want to keep an eye on my spending and see if I can shave an extra £50 or so a month out of it, but so far I don’t think that’s too realistic. I thought to share my view on things here to show that early retirement is still possible even if you choose to not go for an uber frugal lifestyle – you just have to recognise that the more you spend, the longer it will take.
So why am I so sure I couldn’t even touch the MMM / Frugal extreme lifestyle? I am not willing to make the sacrifices that some of the guys and girls out there do every day. So what are the key elements that are always batted around?
The typical is buy as small a home as you can and keep it as cheap as possible and make it a doer-upper. So where to even start on this.
Buy a small home. This is bad enough in the UK, even more so in London given the costs of housing here. We moved from a 2 bedroom flat to a larger property – the 2 bedroom flat was too small for us, which sounds rubbish to most people I am sure, but to us it was cramped. I have absolutely no regrets about that, and in fact I am actually saving more money now than I did before, despite such a massive increase in my outgoings (i.e. mortgage). When we are not at work we do spend a lot of time at home, so comfort and space is important (don’t get me wrong it’s not a 10,000 square foot mansion in Kensington!). We like to entertain and have friends and family over, so again space is important and we can do that now.
I would still love to own a country estate don’t get me wrong, but that is highly unlikely 🙂 For now I will stick with where we are and continue to chip away at the mortgage.
The additional knock on effect is that the insurance to cover me (illness, income protection etc.) has also shot up due to the increased mortgage – but I wouldn’t want to leave our home. As I chip away at the mortgage, and my savings increase I will in the future be able to drop this insurance. So yes, I suspect I could slash my monthly outgoing on this section by 50%, but I wouldn’t want to as I wouldn’t be happy, and I do like being happy 🙂
So if you want the space, why not buy a really rundown doer-upper? Simple – I hate DIY and I am not good at it. Yes I could probably start learning YouTube clips and practice (and pay someone to come in and fix it when I make it go wrong), but honestly, that isn’t me. I’ve tried some and each time I think it will be a good idea I regret it. Really regret it.
Ok, I do keep an eye on the bills, although they are still relatively high compared to other FI’ers out there. Hands up, I don’t hustle through to find the cheapest energy rate (we haven’t changed in over 3 years), because the savings would be so minimal based on our current bills. Our Gas and Electricity bills are pretty low, and so the hassle of switching for me is not worth it for saving £10 a year. Yes, I could add that £10 into my savings, but in the scheme of things, I would rather have the hour or so back. Then you see news of some of the more minor providers going bust, I don’t worry about that. I could probably cut my mobile bill, but on a recent holiday I realised why I paid a slight premium (ok, it’s still only about £20 a month). Out of 5 mobiles, only my personal mobile worked with any consistency – others on different networks had trouble.
I will look with interest to see how much the food for home has cost over the year, but I know of many others who live and eat far cheaper. I tend to buy in bulk (especially from farms when I can) so food tends to fluctuate, at the minute the freezers are fairly full after a recent top up, but otherwise we are generally reasonably cost efficient. Could we do it for a lot less? I suspect yes we could – I could give up meat (HAHAHAHAHA yeah right!). We do need to cut down on the amount we eat and that’s something we have been working on to a degree so that will also reduce the bill somewhat, but I suspect we are close to a level we are happy with. Even still at least it is not a huge obscene monthly bill.
Alcohol at home
Ok so a lot of the talk in the FI community is around home brew and limited alcohol intake. I know I could save an absolute fortune if I reduced the amount of alcohol I drank, and used home brew instead. Next year I do want to cut down the amount we spend on alcohol, however there is no way I will cut it out.
I tried home brew once. It didn’t work. It *really* didn’t work. It was so bad I poured it away. I also now don’t really have anywhere to put it so that’s another reason I probably wouldn’t get around to it. I do get a lot of pleasure from the wine we drink, so again that’s something I wouldn’t cut back. Could I save substantially more if I cut out booze? Yes. I would also be an incredibly miserable bastard 🙂
On the plus side I have tried to reduce the whisky and brandy we drink, so save the good bottles for a less frequent occasion, and now stick to more standards if we have already had a drink before.
By timing the offers that come up I can get some pretty good wine at a very reasonable price, but it does mean every so often I get hit with a large bill.
So within this I include the cost of buying my daily lunch. I don’t always buy the £3 meal deal (when I make my own lunch), but it’s definitely far more often than not, but does go part way to explain why this is higher than it may normally be. I don’t go out for meals that often, I think maybe a couple of times a month on average, so I do tend to enjoy it when I go out.
Why don’t I make every lunch meal at home? There are a couple of factors. Right now I have no fridge or microwave etc. at work, so have to take things in to work in a mini freezer bag which limits me generally to just sandwiches and pasta or rice salads (let me know any other suggestions if you have them!). I also calculated how much it cost me to make them – ignoring my time. I actually found making my own sandwiches was more expensive – albeit a lot nicer! Now I grant you my sandwiches have been legendary in size (they tend to be a four finger depth) as I need it to keep me going, so there tends to be a huge chunk of meat (expensive), some cheese, salad, chutney etc. in there.
In addition I get the supermarket reward points, and my credit card reward points at the same time! Every so often I will also get meetings over lunch where lunch is provided, so I get a free lunch then – but often I won’t know when that is so I may get it put in the diary the same day, so I get my homemade food for dinner!
I’m always happy to hear suggestions from others on this so please do let me know what you do for homemade lunches especially with no access to a fridge or microwave.
Ok so this tends to be quite a large spend, and I accept this – one reason I have tried to reduce just how much I go out. I have found I can blow through money like you wouldn’t believe by the time you have a few pints, maybe some wine and add in a bite to eat – it can soon add up. Again, I could drink tap water, but I do love the social environment and interacting and meeting new people, and here in the UK, what better place than the pub (or maybe a great little port bar?).
I have reduced the amount generally, although it is still important from a work and career approach for networking so I can’t always avoid going out, and I would say that roughly 50% of my meet ups are work related in some way or shape, but that is an investment in myself and my career.
Could I slash this budget? Yes. Am I willing to? Not completely, although it is definitely down over the last 12 – 18 months.
Transport & Cars
Living closer to where I work is not really that realistic (the apartments within a short walk are in the millions for a two bed one!), so I accept that there will be some commute, especially as my work location can change frequently.
In theory I could cycle into work (I say in theory – this is for another post!), but in reality I commute on public transport. It ought to be cheaper to buy a season ticket for the year but given the nature of my work this may not actually be the best, so I usually by a month travel card (if I am not going on holiday or there are multiple bank holidays) otherwise its pay as you go, and walking! I think the cost side of the public transport in that sense is pretty well optimised (other than cycling / jogging).
Yes, I could ditch public transport and start cycling in, but where I am at the minute that isn’t going to happen.
I do now own a (second hand) car after over 10 years without in London. Now it’s time to build up the no claims bonus. More recently we utilised Zip Car which was great, and a lot cheaper than owning a car, or we would hire one if we needed it for more than a few hours. Given the circumstances, we do now have a car although it doesn’t get used that much it is convenient to have from time to time.
I could sell the car as financially this would make sense, however for personal reasons this isn’t an option.
So technically, is a holiday a necessity? No, in the scheme of things required to live it isn’t. For me though, FI is not just about “hitting the number”, but also how you get there. I would far rather take a few more years and explore places whilst I am physically able to (never underestimate how much hard work some holidays can be – even for a 40 year old, so I am glad I did some when I was in my 20’s and 30’s).
I love to switch off, explore new places and sites, as well as some more physical holidays, but of course these come at a cost.
Yes, I could not go on holiday for the next 5 years and really smash my savings rate but I would be such a grumpy bum it wouldn’t be worth talking to me! I try and tailor them down a little bit and certainly a lot less frequently than before but I would never take a year without a holiday.
So this is the bucket catch all of things, anything that basically doesn’t fit in one of the above categories. Over the years I will be keeping an eye on it, and see if there are any trends (for example taxi’s I put under other) that should mean I need to break this out into more detail but for now, no.
Yes, there are plenty of places where I could optimise my costs and save a bit extra, but as it is I am as happy as I can be with the journey to get there. I could half all of the costs above I am sure, and knock a couple of years maybe off my retirement date, but the thing with FIRE is that it is a very personal journey – I am not willing to make the trade.
So, are you going as frugal as possible or are you taking the longer road?
What do you do for your lunches – any suggestions and recipes I should try?