Hello - this is my first post!
I've been avidly reading the MMM blog and skimming the forum over the last month. So much of it chimes with what I was already thinking.
I was taught to save from an early age, especially by my grandfather - who had walked from his home in early 1930s northern England to find a job in London and eventually make his way to financial stability. He and my grandmother were very wary of any debt and couldn't understand why my parents had a mortgage for our family home instead of renting. Like many people in the late 1980s in the UK (when interest rates hit the mid-teens), my parents had some tough times keeping up with the mortgage and those memories have stuck with me into adulthood. I also spent 2 years working part-time for an advice service while I was an undergraduate, typing thousands of letters about people's debts and thereby gaining some great life lessons.
I haven't avoided debt entirely (as you will see), but was fortunate to marry someone with a relatively conservative approach to spending. At the moment, it's only me earning a wage - although that helps keep family stress to a minimum.
So - on the details, which I've altered after some feedback:
Me (36), wife (37) and two kids (7 & 5)
Annaul income:
£48,000 - my wage after all tax, pension and other deductions
Annual expenditure: (changed from monthly, as I prefer to pay things annually and can therefore provide more detail)
£7,200 Investment (drip-fed monthly into equities through an ISA / tax-free wrapper)
£5,500 Groceries
£5,205 Loan repayment
£4,697 Mortgage
£3,600 Loan overpayments (to reduce term)
£3,600 Holiday fund
£1,600 Council tax
£1,300 Cleaner (2 hours weekly)
£700 Gas
£450 Electricity
£366 Water
£222 Home insurance
£575 Car & van insurance
£340 Car & van tax
£1,200 Diesel & petrol
£1,000 Estimated annual car & van servicing and repairs
£229 TV license & Amazon Prime
£200 Landline & internet
£100 Mobile phone
£1,000 Bicycle parts & maintenance
£1,000 Clothes (for us all)
£900 Children's activities (e.g. swimming, tennis) & occasional care (e.g. summer club)
£500 Dining out
£1,000 Miscellaneous cash withdrawals
£2,000 House maintenance fund
Total = £44,484
Assets (all in today's values)
House c.£500,000 (1890s 4-bed extended terrace house in provincial city centre)
My savings c.£129,000 (equity funds in ISA; contributing £7,200 p/a)
Wife's savings c.£400,000 (equities in ISA, bonds etc; not contributing)
Car c.£6,000 (Mini)
Campervan c.£25,000 (VW)
Pensions
I have membership of two government (NHS) defined benefit pension schemes, with expected annual payments in today's terms of: £11,800 p/a from 2040 and then an additional c.£3,600 from 2048 (growing at a rate of c.£1,800 p/a for every year I contribute from here onwards, assuming current salary). I pay 13.5% pension contributions.
My wife has no pension.
Debts
Mortgage £20,351 balance (3.29% APR; runs to March 2022 if no overpayments; 10% annual overpayment limit; reverts to standard interest rate of c.4% in March 2019)
Loan £16,041 balance (3.27% APR; runs to November 2020 if no overpayments; no overpayment limit)
Priorities
- Clear debts within 34 months at £1,125pcm (currently over-paying loan by £300pcm as no overpayment charges; clearing by May 2019, then switching to clear mortgage by May 2020);
- Provide a happy and fulfilling childhood for our kids; and
- Keep active: we have 8 bikes in the house, like travel and camping and are not very car-orientated.
Other than that, we don't really have any other priorities. I think we'd be very open to the whole FI/RE thing, noting that:
- A net income of c.£30k would support a similar lifestyle to our present one;
- Our stocks would need to grow by at least another £200k to support this;
- Assuming I work until I'm 50, my NHS pensions would be £12k in 24 years' time and then another £20k in 33 years' time (plus state pension).
I think this points to a retirement at around 50 years / in 13-14 years' time.
I'd welcome any thoughts! Thank you in advance.