Hello,
I am posting our case study here - be warned though, it is a bit unusual :-) - we have never in our life bought anything on credit - but our income is low and so are our assets.
We are a family of 5 - my husband, myself and 3 children, 2 teenagers and one pre-teen. We live in Europe.
My husband and myself both work part time (22 hours per week each). I have worked part time for about 15 years now. My job pays a mediocre wage while my husband is only earning quite a low income. Due to health reasons he was unabIe to work for 8 years (he did get state payments during that time though) but has thankfully been able to take on a part time job about 3 years ago. I drive to work (unfortunately ... about 40 minutes ... however, I own a hybrid car which brings down petrol costs), my husband works locally and travels to work by bike.
I have 23 years to go until the official retirement age, my husband has 10 years to go. We will both qualify for a state pension. I will most likely switch to full time work once our children are in college. My husband will stay on working part time due to health reasons.
Due to our situation FIRE will not be possible for us, but as we both only work part time I guess you could say that we already have a bit of that :-)
We are a one car family and own our 2006 hybrid car outright, bought in cash.
We do not own the house we live in but have been renting from day 1. Where we rent at the moment is just right for us and we hope to stay on for at least 5 more years.
We would consider ourselves quite frugal but are prepared to spend more for local / organic produce.
Without much further ado - here is our yearly income based on 2017 figures:
income 1: 25500$ (after pension and taxes were deducted)
income 2: 13920$ (after tax)
child benefit: 5627$
additional child benefit due to low income: 4115$
Our yearly expenses last year:
groceries 9516$ -- Two teenagers! Nough said ...
rent 9145$ -- this is extremely low for our area
petrol 1986$
miscellaneous 1879$
holidays 1676$
clothes 1511$
gifts 1408$ -- (errm, bit shocked about that one, actually!!) within the family and children's birthday parties etc, as our children get older the latter will decrease
car maintenance & repairs & tax etc. 1329$
electricity 1117$
school transport 897$
days and meals out 858$
school (books etc.) 850$
house and garden 783$
heating 724$
treats for my husband and me aka fun money 586$
internet 506$
phones 351$
after school activities 306$
birthday parties/hosting 262$
donations 250$
waste disposal 218$
pet 92$
Assets:
* We own a site that is lying idle. I am not sure of the current market value but estimate it to be around 46000-55000$.
* See above for our car. (Not really an asset as such, I know!)
* Pension attached to income 1 - current value: 6300$ (I cannot access this pension fund until I retire.)
* Savings in various savings accounts: 41000$
Our parents on both sides had money issues and I think as a result we have become debt averse. This means that we never got onto the property ladder as we haven't been able to buy a house outright. We hope to be able to afford to build before we retire - a small 1 bed home, as the children will have flown the nest. Having said that we really like renting, no headaches, no hassle, if something breaks the owner has to fix it. We love the area we live in and would not be able to afford buying here. We are not even sure if we want to build on that site - we might decide to sell it and keep renting. We really like the freedom of renting, too, if for some reason the rental doesn't work out any more or we want to move to a different area (and this might well be the case once the children have flown the nest) we can just move.
A note on education - our children will qualify for college grants, we will not have to pay college fees.
A note on health care - we do not have private health insurance but have some free state cover and live healthily (we are active and eat healthily).
Any thoughts, please? Does anything jump out? We are quite happy with our situation as it is but feel our assets could be higher and more diverse. As we are quite risk averse we have not considered investing (apart from the pension fund, does that count?). I have thought about buying gold but would have to look into it more, any thoughts on that, please?
I would welcome any suggestions :-)
Thank you!