Hey! Welcome to the forum! I spotted your post in the ‘UK threads elsewhere on the forum’ thread – good call, as UK stuff tends to get lost under the avalanche of dollar signs.
There are basically two aspects to Mustachianism: the money/numbers (which you ought to be able to get on top of pretty quickly) and the emotional/psychological aspect (which can take YEARS). This is why you can ask what you think is a simple question about numbers and get a hundred slightly different answers – because everyone feels differently about things like being in debt, how important travel is, what’s achievable for them…
First thing I would recommend is checking out a few journals. You can find some UK ones here:
https://forum.mrmoneymustache.com/uk-tax-discussion/post-your-uk-journal-link-here/ Hopefully they’ll give you a sense of the journey before you or of camaraderie to have others walking alongside you.
Second, I would recommend reading this post about ‘converting’ your SO:
https://forum.mrmoneymustache.com/ask-a-mustachian/how-to-convert-your-so-to-mmm-in-50-awesome-steps/ You two don’t sound like you’re in major conflict, but it’s good to realise that you might be about to suggest some radical changes in your life which – to him – will come out of nowhere. Turn compassion and patience up to max.
Third, read this about investing:
http://awealthofcommonsense.com/2014/02/worlds-worst-market-timer/ I would consider myself a beginner investor who is a bit of a scaredy cat, but it convinced me that ‘buy low-fee index funds and hold them’ actually is investing and not gambling. I buy Vanguard LifeStrategy 100 because I want a simple life and I know retirement is some time away. It may not be absolutely optimal, but I can always optimise in the future but I can’t save money in the future I didn’t save now.
Fourth, know that everything else I’m about to say is coloured by:
a) My own emotional and psychological prejudices about money. (I work part-time in a artsy job and am just about to have our first child, my husband has committed to a steady but low-income career that he allegedly never wants to retire from. Debt freaks me out and I am desperate to own a house with a garden. YMMV.)
b) An enthusiasm to help people with their money.
c) The knowledge that if there’s anything you don’t like, you can just shrug, say ‘not for me, thanks’, and move on with your life.
We had so much disposable income in our 20s that we more or less just disposed of it and didn’t really think much about saving (well, we did, but if something came up that we wanted, we bought it).
This is OK! This is a very very common feeling around here. The ‘facepalm! Why didn’t I think of this earlier??’ feeling. But great news! You made it here before you got in trouble, and now there is a huge and enthusiastic community of people to cheerlead and support you. On the general forum there are some real jerks, but thus far the active UK subset has been incredibly nice, and we all hang out in each other’s journals. There’s a wide range of ages and life circumstances. Draw a line between your pre-MMM life and your post-MMM life. Don’t beat yourself up about all that, but do resolve to change things from now on.
(I work 4 days/week, he works 3, and our little boy goes to nursery the other 2 days).
Things may have changed given that you’ve recently moved, but SURELY you can find a way to eliminate those childcare costs if neither of you works full time! The great thing about a stash is that it gives you choices so you don’t have to desperately clutch at the first thing that comes along. Either you could re-ijg your schedules or find someone to swap childcare with.
my husband is categorically not interested so I look after all our money.
Me too, and it’s working out really well for us. He trusts me to look after everything and all he wants to know is ‘how much money do we have to spend on X right now?’ I generally have a philosophy of ‘(s)he who does the work gets to make the choices’. For example, I painted our house so I picked all the colours. Obviously I consulted with my husband so he wouldn’t hate it, but if he’s so bothered he can pick up a paintbrush! So given that I do all the personal finance work, I decide where our money is invested, who our utility suppliers are, how much we budget for food… Obviously he can always comment/submit an appeal against an unfair decision, but by and large Mr SLTD would rather not get involved. It’s meant I have sneaked so many little things in that he hasn’t noticed – changing energy suppliers, changing MY mobile phone, I do the online shop and meal plan… He works full-time and I work part-time so the work of the house falls more heavily on my shoulders so I get more control over everything, but it works for us. But LEAD BY EXAMPLE. Do the things that affect no one first (e.g. electricity supplier), then do the things that affect you and talk about them enthusiastically (cycling, declutter your personal stuff), then…wait. Just wait. Maybe he will come round, maybe he won’t, but it takes time to adjust to this new way of living.
Assets:
Cash emergency fund £25k (5% interest on the first 20k)
Cash ISA (mine) £36k (1.2% interest) note: we have a lot in cash ISA as we may need it if we plan to move soon. Plus, I can’t invest in stocks and shares yet, and I want to have money in my name just in case. Open to advice on this!
S&S ISA (husband) £40k
Pension (mine) £5500
Regular savings £3500 + £1200 (both earning 5% for a year. We’re saving the maximum allowed each month so in July when they mature, we’ll have £6000+£2400)
Car (is this an asset??) 2007 Ford Fiesta, inherited from husband’s aunt
You have an INSANE amount of cash. Please read about Bob above and come back. Please also have a serious conversation with yourself about what size emergency fund (in terms of X months expenses) you need to feel comfortable. I decided we only needed a very small amount (basically 1 month) in cash and I was happy to keep everything else in the market. YMMV but do make sure this is a conscious decision.
Also, NO your car and the house you live in are not assets. How can you tell? Ask yourself ‘Can I spend this on food?” You should only ever calculate your stash based on liquid assets. You can convert your car or house into liquid assets by downsizing or selling altogether, but until you do then it is not an asset that matters for mustachians.
Student loans: I have about £5k to pay off, my husband more but in the uk these loans are not worth paying off, as they’re income dependent, so if you don’t work, you don’t pay.
If I were you I’d take some of your HUGE amount of cash and pay off that £5k. You’ll pay a substantial amount in interest if you’re only paying £96/month and you certainly have the assets lying around! It’ll also simplify your financial position.
Utilities £60: Good job on this one.
Internet £27: We pay £18.99/month with Plusnet. You should look at USwitch.com and find someone else. It’s a one-time thing that offers savings forever.
Mobile phones £27: Again, go to Uswitch. I pay £7.50/month for, um, some minutes and texts (I never get close to using them all so I don’t know what it is!) and 2GB data with a discount of £1 per unused gigabyte every month (pro rata) so usually pay about £6. Look for iD and Smarty as new providers and get a SIM only contract with your current handset.
Groceries and household - depends on the month, usually between £250-£400: This is a lot! I know you have a child and we don’t, but we’re two adults averaging £270/month for all food, household and toiletries. It doesn’t matter how much you spend in any given month – you want to know your longer term average. It doesn’t ruin my grocery budget if I buy £100 of toilet paper one month because then I’ll spend less on it for, er, many months more! A high grocery month is only a problem if it repeats indefinitely and if it’s on silly or highly perishable things. It’s a big difference between ‘usually £400 and sometimes £250’ and the other way around. So find out your average for the past six months-one year (or track in the future so you find out your future average). Broken record question when it comes to food is: what are you eating? How much of it are you cooking yourself? Meat and fish are expensive, tins of beans are cheap. I would recommend doing an online grocery shop really slowly at least one time so you can compare prices and see what’s driving up the cost and whether there are cheaper alternatives.
Cleaner (I know!!) £60: WHAAAAAAAAAAAT?!! You work part time! What are you DOING on your days off??? I mean, I hate cleaning. Really, I do. But go away and read this thread then cancel your cleaner (or at least IMMEDIATELY get them to come half as often):
https://forum.mrmoneymustache.com/ask-a-mustachian/advice-for-making-your-home-interior-easier-to-clean-and-maintain/Window Cleaner £15: Even bigger WTF! You get your windows cleaned every month?! Who does that??? Instant cancellation, please!
Personal spending £200 (£100 each): Excellent job! This is the foundation of a happy marriage. We all have our own vices and it’s good to be given some unscrutinsed but boundaried freedom with them.
Saving for car insurance and incidentals £140: This needs to be renamed. It is not savings, it is ‘bumpy spending’ (a term which I believe was coined by katekat in her journal)
With regards to other spending... I don’t really track it.
Be honest with yourself – do you REALLY even track everything above? Retrospectively, I mean? Or is this the amount you allocate in advance? Tracking spending WORKS. I didn’t do it for years, but am now a convert.
lunches and coffee etc at work
Unacceptable. YOU BOTH WORK PART TIME. You have plenty of time to pack four days worth of lunches. It doesn’t have to be leftovers! You are allowed to buy special groceries for lunch! This is something where I recommend starting off silently just doing it for yourself and waiting for your husband to bring it up. Mine is slooooooowly coming round to the idea of packed lunches, although his standards are much higher than mine.
Also, consider an alternative coffee solution. You could try fancy instant in a mug, or try bringing a pre-filled Thermos, or try an Aeropress or cafetiere, or lobby your work to install a machine for ‘teambuilding and employee morale’. You won’t know which of these solutions will have the best payback time until you’ve tracked your average coffee spend, though. (Another thing to do quietly by yourself at first.)
And then I “allow” £50 for weekend activities - going out for lunch, doing things with friends etc. We don’t normally spend that much though. Every few months we spend about £120 on swimming lessons for little one. We also go on holiday and I’d guess we spend around £1000 each year on holidays. This year we are going to a farm stay for a week with our families and going to a wedding in Italy in June and July. We almost never go out in the evenings any more, so pretty much no socialising costs.
So how much do you spend? Track, please!
We each have a big weakness though….The plan is that each having £100 to spend each month will get us used to having that as our fun money and if we want to spend more, tough shit, you have to wait until next month and save up.
Good job! You’re doing exactly the right thing to address this. Be prepared to adjust this number up and down a bit until you find your sweet spot.
Many words! Do take some time to digest and I’m very happy to answer questions if I can. Ut honestly, the first thing you should do is get out your last six months to a year of bank statements and sit down typing every single transaction into an expenses category on a spreadsheet. Yes, it will take a little while. But honestly, it REALLY REALLY REALLY is worth doing. I wish I had done it about three years earlier than I did. We only track joint expenses but I have tracked my personal expenses separately from time to time in the past and found it kind of embarrassing how much I was spending on snacks/treat food. And there are some expenses that don’t appear at all in your case study. Maybe you don’t have them but… clothes? Presents? Random stuff breaking around the house and needing to be replaced? Car maintenance? I can’t believe none of this stuff EVER happens to you, and you’ll be surprised how much money sneaks away on it.
You need to do your own calculations about savings rate and time to FIRE and decide what hard choices you’re willing to make. I am currently whining in my journal about how I can’t buy a house instantly because I’ve chosen to work part-time as a feckless artist…but I know in reality that I’d much happier pottering around the house baking bread and mending clothes than I would be killing it in some office somewhere. I know the choice I’ve made, and I also know it’s not a forever choice. The only real forever choice is spending all my money on stupid shit right now and never being able to get it back. Anything else can change in the future. But try stuff out! Try three months without a cleaner. You can always get one again if it's miserable, but you might be surprised how you adjust.
Also, read this and mentally apply it to personal finance:
https://paulwheaton12.wordpress.com/2014/12/16/the-wheaton-eco-scale/ We do stuff right now that I would have thought was CRAY CRAY a decade ago. You might well think we’re a bit nuts right now! We don’t have a car, we don’t own a TV, I (try very hard to) grow vegetables, I just started baking sourdough bread, we kept bees for a while, we are thinking of building our own barbeque/smoker in the back garden… But there are people on this forum that *I* think are crazily DIY and austere. Just start on the ladder wherever you find yourself now, but know that one day you’ll be looking down wondering what all those people at the bottom are doing!