Author Topic: Feedback on my UK FIRE budget  (Read 1986 times)

celticblue

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Feedback on my UK FIRE budget
« on: May 23, 2018, 10:44:55 AM »
Hi Everyone,

I am very blessed and about to move to the UK and be officially FIRE. Its a wonderful stage of my life. I am a UK citizen returning from work in USA

As a sanity check here are my numbers . Any feedback would be appreciated. They are padded for some additional expenses that will drop after I have been there a year (eg. resolving outstanding US tax issues). Also some of my travel budget is actually included in the sundries, food and entertainment budget. Travel is strictly cost of air fare and accommodation.

Per month expenses (paid off home in one of the most expensive areas of London which impacts some costs)
   
council tax home, travel insurance &  TV license                        209
phone line internet and mobile                                                 60
TV package, Amazon Prime and US tax prep (1200 first year)    160
monthly shared building costs                                                   80
gym                                                                                          69
London travel card                                                                  132
gas & electricity                                                                    80
water                                                                                  16
dental and prescription                                                          40
entertainment & clothes                                                           430
food                                                                                         300
sundries & family gifts                                                              350
significant repairs and regular maintenance                                 250
leisure travel                                                                          300
total                                                                                        2476 pounds (excluding any taxes which I guess could be 20 percent plus to my costs)

Total FIRE investments to draw income                       1.43 milllion pounds

I believe I am in really good shape. I am very boots and braces and asking people's opinions is another form of that I guess. Thank you for peoples's time

ExitViaTheCashRamp

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Re: Feedback on my UK FIRE budget
« Reply #1 on: May 23, 2018, 11:24:56 AM »
Welcome back !


council tax home, travel insurance &  TV license                        209   -- This seems v low. TV licence is 150 alone and my council tax in a cheap house in the midlands is over 100
food                                                                                       300  -- How many people ?


 For the other bits - they are really lifestyle choices. It's a healthy budget to live a good life.

celticblue

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Re: Feedback on my UK FIRE budget
« Reply #2 on: May 23, 2018, 03:24:26 PM »
This is all for one person (food etc)

The council tax is 143 per month (1716 per year) for a single person living alone and the TV license is 150 per year . Total 1856 per year. So I thought 209 per month would be a big over estimate and also cover if we became a 2 person household for council tax. Am I calculating wrong? please let me know

ExitViaTheCashRamp

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Re: Feedback on my UK FIRE budget
« Reply #3 on: May 23, 2018, 03:48:37 PM »
Whoops ! Sorry I am being an idiot - Was using the 150 tv licence as a monthly rather than annual figure ><

 For food - again this is a lifestyle choice and depends a fair bit on alcohol consumption. Our monthly shop for 2 adults, 2 smallish children is 350.

former player

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Re: Feedback on my UK FIRE budget
« Reply #4 on: May 23, 2018, 03:53:28 PM »
Welcome back.  That's a nice stash you are coming back with.

Council tax in some London boroughs (eg Westminster) is relatively low, so as long as you've checked your home's Council Tax Band against the relevant London Borough precept and added in the 25% single person discount. you are good to go on that.

Where are you on National Insurance contributions?  Is it worth you making voluntary contributions to catch up a bit?  You can check your current status here - https://www.gov.uk/check-national-insurance-record

To me your budget looks pretty comfortable: no noticeable scrimping there.

celticblue

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Re: Feedback on my UK FIRE budget
« Reply #5 on: May 23, 2018, 03:55:59 PM »
Thank you. That is a really good idea regarding NI. It is a topic I am really confused by. I am not clear on either the cost or the benefit

celticblue

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Re: Feedback on my UK FIRE budget
« Reply #6 on: May 23, 2018, 03:59:47 PM »
If anyone has any insight on NI contributions please feel free to share. I am wary of paying for another 23 years (I am 46) and not having access to that money if I need it and then it not making that much difference at 69 years old. I have worked for 25 years across USA and UK and thought my time in US would count, I might be wrong. I kind of have the idea that you need 30 years to max it out?

cerat0n1a

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Re: Feedback on my UK FIRE budget
« Reply #7 on: May 24, 2018, 12:42:36 AM »
First step is to register with the Inland Revenue/HMRC online system, you can then check how many years NI contributions you have made. You need 35 years of contributions to get the full state pension.

https://www.gov.uk/check-national-insurance-record

Once you have that information, you can start doing calculations as to whether voluntary NI contributions make sense.

In terms of budget, I'd think tax is the big unknown. Everyone I know who has got tangled up in the US tax system says what a nightmare it is getting out of it, and we have different rules for taxation of overseas dividends for example. So learning the rules and structuring things correctly probably worth the effort.

SpreadsheetMan

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Re: Feedback on my UK FIRE budget
« Reply #8 on: May 24, 2018, 03:14:46 AM »
Well, based on those numbers that's circa 30k pa, so a 2% draw on your stash - looks great.

None of the categories look particularly out of line. No idea what it may end up costing to get you out of the IRS's clutches though - good luck with that ;-)

sea_saw

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Re: Feedback on my UK FIRE budget
« Reply #9 on: May 24, 2018, 03:28:25 AM »
I'm only new around here, but in terms of expenses, this looks beautiful to me! Plenty of room for absolutely everything I could want plus a comfortable margin. Very happy for you :)

Fig

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Re: Feedback on my UK FIRE budget
« Reply #10 on: May 24, 2018, 01:22:05 PM »
The US and UK have a reciprocal agreement on social security contributions, which may help you. Some recent info here:

www.litrg.org.uk/tax-guides/migrants-and-tax/national-insurance-migrants/what-if-i-come-country-which-uk-has-social

PhilB

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Re: Feedback on my UK FIRE budget
« Reply #11 on: May 25, 2018, 10:42:18 AM »
Definitely investigate the state pension / social security situation, but don't rush to make any voluntary payments.  Get settled into your new life first.  You may decide after a couple of years that the UK is not for you after all.  You may decide to take a part time job (You only need to earn about 8.5k in a year to get your NI stamp).  You could get married, have kids and get the stamp credited to you for being a stay at home dad!  Who knows what the future holds?
You only need 35 years stamp to get full state pension (assuming your weren't contracted out in your previous UK employment) so you probably have plenty of time to pay the missing contributions, but get a forecast asap to confirm that. Oh and congratulations!

skip207

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Re: Feedback on my UK FIRE budget
« Reply #12 on: May 26, 2018, 09:28:55 AM »
Your budget is within 50 of mine (but mine is for 2 people living in NW England).

So I would say its defo in the ball park.

I worked my budget out by tracking all spending for 3 months. 

This gave me a base line for a reasonable standard of living of c.29k PA. 

Playing with Fire UK

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Re: Feedback on my UK FIRE budget
« Reply #13 on: May 30, 2018, 06:07:20 AM »
Budget looks good to me.

ck425

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Re: Feedback on my UK FIRE budget
« Reply #14 on: June 21, 2018, 08:43:52 AM »
I reckon you could reduce that significantly tbh. 69 on the gym for example could easily be replaced by some dumbbells and a nearby park. Entertainment and clothes also seems high, though that's a lifestyle thing. Out of curiosity, why live in central London? You could get a lot more bang for your buck in other areas.

celticblue

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Re: Feedback on my UK FIRE budget
« Reply #15 on: June 22, 2018, 05:17:04 AM »
Thanks everyone.
to answer a few questions about some of the fat in the budget (I agree it could be much more frugal)
Gym - this would be a non negotiable for me - it's my favorite and most frequent leisure activity , would definitely cut elsewhere before this, though I could shift this into my entertainment budget if times were tough
Central London - yes can definitely get more bang for buck elsewhere and am going to reassess once I move back. It's in an amazing location that makes a great walkable lifestyle possible. Am just going to sample that lifestyle from a retired perspective first. Am also a potential beneficiary of crossrail 1 and potentially lso 2 if it happens so seeing if I can get a bit more capital appreciation first
Entertainment and clothes - yes this could be an area for cuts if and when necessary

celticblue

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Re: Feedback on my UK FIRE budget
« Reply #16 on: June 22, 2018, 06:04:26 AM »
Just on the gym - I am going to try EasyGym (no contract) for the first month. That would be 25 pounds per month vs 69 pounds

poppydog

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Re: Feedback on my UK FIRE budget
« Reply #17 on: June 22, 2018, 09:36:02 AM »
Hi Celticblue.

I'm with you on the gym membership.  Mrs PD and me are David Lloyd members, which isn't cheap, but we use it all the time for gym, classes, sauna/spa etc.

Just as importantly, over the years we've developed a circle of friends who attend similar activities as us and this is a huge part of our social life.  We'd cut out many other things before dropping our membership.

Good luck you seem to be in very fine shape financially.

PD

ck425

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Re: Feedback on my UK FIRE budget
« Reply #18 on: July 06, 2018, 09:32:44 AM »
Thanks everyone.
to answer a few questions about some of the fat in the budget (I agree it could be much more frugal)
Gym - this would be a non negotiable for me - it's my favorite and most frequent leisure activity , would definitely cut elsewhere before this, though I could shift this into my entertainment budget if times were tough
Central London - yes can definitely get more bang for buck elsewhere and am going to reassess once I move back. It's in an amazing location that makes a great walkable lifestyle possible. Am just going to sample that lifestyle from a retired perspective first. Am also a potential beneficiary of crossrail 1 and potentially lso 2 if it happens so seeing if I can get a bit more capital appreciation first
Entertainment and clothes - yes this could be an area for cuts if and when necessary

If you do consider moving away from London, I can thoroughly recommend Edinburgh. It's absolutely stunning, highly walkable (more so than Central London I'd wager) and still relatively cheap compared to much of the uk (even if it is the priciest place in the UK). Also has great transport links and incredible culture. Winters can be rough at times, but the summers are stupid (currently gets dark around 10pm).

celticblue

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Re: Feedback on my UK FIRE budget
« Reply #19 on: September 01, 2018, 02:03:51 AM »
UPDATE

Big thanks for all the thoughts. Particularly I have investigated making NICS. I think it makes sense for me, and in fact I missed an opportunity by not paying them at a reduced rate while I was in the USA. At the moment I am looking into buying back the years I can (seems to be about 7 years within the historical cut off period) plus paying them going forward until I hit the 35 years needed for max UK pension.

I did join EasyGym instead of the more expensive gym, and cut my gym budget in half and got a gym that I am happier with. WIN.

Am also spending less than expected on travel as I walk or get bus more than expected so might be able to spend less than the budgeted amount for a full monthly London travel card by using PAYGO instead.

Broadband and mobile phone came in a bit cheaper. NHS is AMAZING and much prefer to US insurance based system for peace of mind

I way underestimated the cost of moving countries (ie. the repairs I needed to make on my London home that I had been putting off, replacing furniture and appliances, boiler repairs, new windows) so that is going to be a significant one off expense and will need to increase the money I put aside monthly for ongoing repairs.

So am here in UK and once I have finished the repairs and renovation am ready to enjoy being FIRE.


former player

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Re: Feedback on my UK FIRE budget
« Reply #20 on: September 01, 2018, 05:02:56 AM »
Welcome back, and good luck with your FIRE life in London.