Hey guys. I'm 27, partner is 26, and we've recently become free of all interest-accruing debts. Apologies for the massively-long post, I understand if you can't be bothered with reading all of it. There's a summary at the bottom for lazy folk.
From what I can see, FIRE seems to boil down to two basic tenets:
1. Maximise income
2. Minimise spending
I think I'm halfway there, our spending is lower than most, but I've a sneaking suspicion you'll be able to point out some areas in which we can save. All figures are monthly, income slightly under-estimated due to reasons.
Total post-tax income:
Me - £1487
SO - £1185
Total - £2672
Actual income on a very good month is £3800, on a very bad month is £2140
Joint Spending:
Rent: £560
Home Internet: £19.95 - cheapest I could find
Gas and Electric: £48.62 - a little under the average, 12 month contract
House Tax: £92.67 - set by our local council
Water: £23.75 - set by our local council
Home Contents Insurance: £7.05 - requirement of the rent, cheapest available
Food: £260 - we spend £40 per week on groceries, and save £20 per week towards eating out and alcohol
Other: £20 - average for things breaking/being replaced
Total: £1,032.04
Personal Spending - Me:
Car: £83.33 - I don't have a loan, this is saving towards my next car.
Car Tax/Maintenance/Insurance: £116.67
Diesel: £86.67
Mobile/Cell Phone: £14
Professional Subscriptions: £6.33
Christmas/Birthday: £41.67
Emergency Fund: £58.33 - mainly to cover days off work sick, this grows around £300/year on average
Hair: £10
Clothing: £20
Spotify:£10
Tools/Shop materials: £50 - not work-related
Other spending money: £130
Total: £617
Personal Spending - SO:
Professional Memberships/CPD: £64.50
Travel to work: £104.80 - buses/trains
Christmas/Birthday: £41.67
Phone: £30
Other spending money, including hair/clothing: £173.33
Total: £414.30
Total income minus total expenditure:
£608.66 (around £750 with tax optimisation)
Current Savings Rate:
23% (25% with aforementioned tax savings)
We also have a soft budget of £700 annually for holidays, so actual savings rate is around 20.5%
We don't watch television, although SO has a shared netflix subscription at £3.50 monthly.
We don't pay monthly for anything which attracts interest, such as car insurance or mobile phones (SO is still in a loan agreement for her phone, which runs out this month - this decision was made before we met, mistake won't be made again).
About our work:
- I work in an office 10 miles/20 minutes away by car. I take 10 weeks off work each year, but apart from that it's full time (40 hours/week).
- SO works two days per week, 45 minutes in the opposite direction. She usually has 10-13 weeks off work each year.
- Take-home for a full time minimum wage job here is £1102 monthly. Our spending is below this, so we're not tied to what we do, but we generally enjoy our work.
About our leisure time:
- We're both big readers, so evenings in are spent with books, or sometimes a film on Netflix.
- We enjoy walking, and live in a lovely area partly for this reason.
- SO has an art hobby/sometimes side-job, which generally pays for itself
- I have a fantastic workshop where I spend a couple of evenings a week
About our house:
- We live within walking distance of all local amenities, including the train station. Weekly shop is done on foot
- Small town, fairly rural for England
- Location was chosen for lowest total weekly travel time
- House itself is two-bedroom terrace with a small garden and outbuildlings
Good changes we are making:
1. I will be cycling to work (8 miles, 45 minutes), and we will be cycling for leisure as well. This will save £65 monthly in diesel, but I'm giving us a Little-MM esque pay rise/incentive for this. Actual savings £22
2. SO's mobile phone plan is dropping from £30 monthly to £20 monthly, saving £10
3. I'm considering going professional with my workshop in order for it to pay its own way in the world. This amounts to doing paid work for one hour each month, but it won't be for a few months, as I don't have the confidence to ask people to pay actual money yet. Eventual savings £50
Bad changes we want to make:
1. We'd like to spend more on holidays, so we could have a really nice summer holiday abroad each year. Total savings -£110
2. SO would like to have her nails done professionally each month. Total savings -£30
Things I'm proud of:
1. Our total spending is under minimum wage, and if we walked to work at minimum wage jobs our savings would increase by £100 monthly, although our leisure time would decrease drastically.
2. Our holidays are currently rather frugal - this week, we're off to stay with family for 5 days. In return for free accommodation, we're spending a day running errands in my car (they don't have one) and will be cooking them some fantastic food whilst we are there. Total cost for 5 days away is around £50 in increased food spending.
3. We save throughout the year for Christmas and birthday presents, and we don't have any hits to our savings rate in December as a result
4. Our town is one of the best in the country for local small businesses, and we support them as much as we can - this doesn't cost anything, because every time we go shopping it might cost £5 more but we don't need to pay diesel or parking to get to the city.
5. We're fantastic cooks. All meals are made by us at home, with the exception of one meal out and one takeaway each month. Lunches are the previous day's dinner, boxed up the night before and microwaved at work.
Things I'm concerned about:
1. Big purchases are currently coming out of savings - this includes mobile phones (£22 monthly average) and furniture (£8 monthly average).
2. We're set to retire in our mid-60s, assuming no help from the government - not sure if I'm actually concerned about this, or if my FIRE reading is just a bit out of hand.
3. We want to be even more lavish than we currently are, with changes amounting to £140 in extra spending each month.
Things I'm embarrassed about but I don't know if I should be:
1. We both essentially work part-time, far less than some of our friends, and save more money than them.
2. On a related note, if we worked full time at our current rate of pay, our savings rate would be around 50% - are we mad to not be doing this?
3. We take more holidays than anyone I know, including some old retired people.
4. I have a £50 per month addiction/hobby of knocking together bits of wood and mending the neighbour's appliances
5. The owner of our favourite restaurant knows us by name
6. I have a bit of a preoccupation with my haircut, and I know I pay too much. My justification is that I had real issues around it as a younger person, but I know that at this point it's just a bad habit. I swear, I can change. Maybe next year?
7. SO has a £20/month bubble tea habit - I think this is Korean? It's basically frogspawn in a mug. Either way, it comes out of her monthly personal spending budget, so I don't mind.
8. I don't know if our lightbulbs are energy-efficient.
So please, have at me. Should we be working more? Should we be spending less? Can we afford an extra £1300 annually on holidays?
ASSETS EDIT: Our current assets are negligible, after going on a debt-killing spree recently (the original aim being, if we're holding money in joint accounts, we don't really want any liabilities). Roughly £3,000 in an emergency fund, a small pension pot, and "shares" in community projects which are unlikely to pay any dividend this decade.
[TL;DR]:
- 20% savings rate
- total spend is less than two full-time minimum wage jobs
- on target to retire in mid-60s
- currently holidaying (or at least not working) 10 weeks per year
- we want to take more holidays abroad
- should we be working more?