Monday, 10 February 2014

Living on £10k pa in the UK ?

I spotted this posting on the Firestarter's blog, one of the many fine FI blogs I visit occasionally....

.... and so I thought I'd carry out a similar exercise myself.  Click on the Table for an enlarged view. 

I've included things like depreciation on household appliances and the car.  Although we bought it for just over £4k around four years ago, and we'd hope to get another four out of it at least, the car will have to be replaced at some stage..

It doesn't include the mobile phones or any depreciation on the computer equipment, because they're business expenses.

Unfortunately, despite being mortgage-free (on this particular property at least) and considering ourselves to be reasonably frugal, I don't think we can realistically hit the £10k target but we can (and do) live for around £15k expenses, in today's terms.   There's maybe some scope for reductions, but overall it seems a reasonable sum for the two of us.

Still, it was a useful exercise as it gives us a better idea of the size of the savings and SIPP pots we'll need for FI.   Using a 4% drawdown rate, it seems that we're on track and hopefully I've at least a few more years of earning potential !!


  1. This is actually awesome!!!! I just wrote a reply to you on my site but didn't realise that this was for two people.

    My post was split down the middle expenses for me and Mrs... so you are doing a lot better than us, if you added on our mortgage to your figures it would have been £10,856 per person, but you have included a better estimate of expenses than my original post. We are probably running at around £12,000 each right now, if I included stuff for household and appliance repairs, car depreciation, and so on. I'll do an updated post with a more realistic budget I think.


  2. Thanks for the comment. As always, best of luck in your quest for financial independence ! Pay down the mortgage ASAP but don't forget the other recurring costs that carry on for the rest of your life....

  3. Hi!
    This is great! I did a similar exercise - working on our current budget/spending. Right now we have use of a company car and paid for Broadband so they would need to be added in the future + house repairs and travel, I think we'd be looking at approx £16k (for two).
    Here's our figures:

  4. Hi Laura.

    Many thanks for stopping by. I also regularly read your blog - some interesting stuff on there.

    On the company car front, you're probably losing as much through the revised tax code each year as it costs me to own and run the car.

    We also don't carry house contents insurance - we've not that much worth pinching ! I'm not sure why you carry life insurance either, if there's just the two of you and no kids to provide for. Your digital TV subscription and DVD rentals seem a big expense too - if it ain't available on Freeview, then we don't watch it ! Plus £186 per year on boiler cover - you can likely get a brand new boiler fitted every six years or so for the same money.

    And paying for window cleaning ?? Why not buy one those telescopic poles with a dual cleaning head, i.e. cloth one side & rubber strip the other, and just do it yourself - it will pay for itself in just two months.... :-)

    Sorry - I must stop hectoring - been reading too much from MMM's site !!

    1. Hi not hectoring - I appreciate your thoughts!
      The car costs us approx £200 a month, but we do have a high end car! Next time around we'll go with a smaller one or a Prius. My husband commutes to London most of the time so it sits on the drive anyway!
      The contents insurance is a very small part of our insurance - it's mainly for my jewelry. The life insurance was to do with the mortgage - once it's gone we may reconsider it. I'm not working in my field anymore and I would struggle to get back in these days, so if anything was to happen to my husband we want to make sure I'm ok.
      The digital tv stays because of the sport - it's our vice ;)
      The boiler cover was £108 due to £80 Cash back. We keep it because we had so many issues with our boiler, and this included and annual service, but you're right it's something to think about.
      If I'm honest the window cleaner is kept because I haven't got the heart to sack him! :)

  5. It's funny isn't it, we all have one final thing, one barrier that we struggle to get through. ERE & MMM are obviously the true Jedi masters and we're struggling trying to lift a rock with our minds.

    From an external perspective, it's obviously your car costs (and fuel is unlikely to get less expensive as it runs out), and of course for me it's eating/drinking out.

    It's moderately easy (at least for eng/sci types) to cross through the consumption curtain, it's harder to cross through the lifestyle one.

    1. Hi. I don't think the 1,500 quid for the car (including the cost of its future replacement), is too bad.

      The fuel costs are actually much less than I indicated, because I use the car for visits to local clients and claim 40p a mile from my company for those trips, which is usually enough to cover the total fuel costs each month. And the insurance came in at only £200 this year.

      On the other line items, after a very mild winter there's now no way we'll spend the full £1,500 budget on heating oil in 2014 - another 1,000 litres or so in October or November and this will still be less than £1,200 for the year.

      Maybe at the end of the year I'll include an 'actuals' column in the above spreadsheet, although the two holidays we've had so far this year, and maybe a third in the early winter, will probably blow the £15.4k budget...