Who am I? My online persona is ‘weenie’, I’m 40-something, unmarried with no dependants and I live in Manchester, UK. My interests include keeping fit, football, reading fiction, gigs/festivals, home brewing beer and TV shows like ‘Game of Thrones’ and ‘The Walking Dead’.
I’ve been working for the same international finance company for 20 years in various roles (my current role is my 6th role), and I have been paying into a final salary pension scheme until recently when the company changed ownership. I will be losing my job at the end of December 2016.
I’m on a fairly modest salary which falls between the national average of £26,500 and the limit for the lower tax band, ie £42,525. I will add that I earn by far the lowest wage in my family.
Currently, my only real debt is my mortgage.
The year I graduated from university was the start of the recession in the early 1990s. Unemployment was high, there were no jobs for graduates. Saddled with a small student loan and credit card debt (totalling about £2k – very small by today’s standards!), I worked in the family business for a few years and managed to pay off both loan and debt.
The economy finally picked up a bit and I found myself working in various office temping roles on decent hourly rates. As I was earning more money, so too was I spending more money. My first mistake was to succumb to the peer pressure of keeping up with my friends and family who were earning a lot more than I was and so, I started accumulating credit card debt. This was also around the time when I met my ex and also when I joined the company I now work for.
Coping with Debt
Carrying debt on my credit cards (yes, I was using more than one) became a way of life and yes, I was stupidly just paying the minimum amounts. When a card was maxed out, I’d get the limit increased. At some point, me and the ex bought a house (I had savings for the deposit yet didn’t think to use it to pay off my debts…) and moved in together. We liked to buy “stuff”. Stuff like DVDs, books, CDs, comics, collectibles, souvenirs, signed photos…the house was full of the stuff. I had a very good social life, going out most weekends with friends and during this period, I also financed two brand new cars, albeit not top of the range.
Things got tough when the ex was made redundant. Not only did it mean that there was only one wage, it was MY wage and I needed to pay my bills and loans. Fortunately, we had mortgage redemption insurance which covered the mortgage but I was paying for all the household bills for a long time. I discovered 0% credit cards and started the difficult task of not adding to the debt and slowly paying off my cards whilst also paying off my car loan. At the time, it felt like I was just chipping away at a mountain.
The years went by and when the ex and I eventually went our separate ways, I moved back to the family home. We sold our house and split the funds 50/50. I used part of my share to finally pay off my last credit card debt – I had been carrying that debt for 15 years so it was a huuuuge weight off my shoulders! At its peak, the total credit card debt was around £10k – using this calculator, this works out as over £14.7k in today’s money.
Family Knows Best
My folks told me to continue living in the family home (no one else was living there) and suggested that I buy a property to rent out (they already had such properties, so yes, I was a late starter….). So, I applied for a small mortgage and used most of the money from the house sale to purchase a buy-to-let apartment (I used the last bit of the money as a deposit on a new car..oops, old habits die hard!). The rental income more than covers the mortgage payments, so much so that I have no worries about any proposed interest rate increases. When I bought the apartment, my thoughts were that I would be keeping the property for long term income. In the 4 years I’ve had the property, I’ve always had tenants living in it.
My Version of “Frugal Living”
Having been free from credit card debt for several years, I found that I was still skint most months before pay day, my bank account often tripping into my overdraft (but keeping within the limit).
I knew the reasons why this happened – I enjoy two overseas holidays every year and make regular use of an expensive gym membership. These are things which I cannot give up. Ok, I can give up the second holiday but not the first one as that’s the only time I get to see my family. And my gym membership, well, that’s pretty much my main hobby and the friends I’ve made there are part of my inner social circle. The past few years, I also went to a lot of concerts and a couple of festivals. I ate well, buying what I wanted to eat and also what I wanted to drink.
So what frugal things did I start doing to make up for these expenses? I stopped drinking alcohol during the week, limiting my drinking to weekends, which was good both financial-wise and health-wise. I stopped wasting water, which saw my water bill (I’m on a water meter) reduce by 50%! I turned off lights, didn’t leave electrical things on standby and started charging my phone at work (!) to keep my electricity bill down. I started frequenting the local library and stopped buying books.
I had my loft insulation and cavity walls sorted which drastically reduced my heating bill whilst making the house warmer. I pretty much stopped shopping for clothes and shoes, only going shopping occasionally. I started using cashback websites (I use TopCashback*) and shopped around for my various insurance premiums (car, house and travel) every year.
Having pretty much seen all the artists/bands that I want to see over the past few years, I’ve limited myself to one concert /one festival a year for entertainment.
I finally started to save some money. I started to pay off my buy to let (BTL) mortgage. In 2013, I started a SIPP (Self Invested Personal Pension), whilst continuing to pay into the company pension scheme, and a small stakeholder pension (which has since been transferred into my SIPP). I have a cash ISA , a Stocks & Shares ISA and some premium bonds. Rental income from my apartment has occasionally been used to top up any of the above as and when – I had no real plan.
Seeing the Light
It wasn’t until when I came across the various wonderful financial independence blogs that I realised that I could save so much more, be more frugal and that early retirement was an actual possibility – you just need a plan and you need to control your finances better. Early retirement before was something that I thought only rich people or lottery winners did (or my mum who retired at 47…ahem!)
Ok, so I had already made a start of sorts, but until recently, I didn’t have hardly any real long-term savings, apart from my pension accounts. I certainly had no retirement goals, believing that I’d be working right up to 67 (and probably beyond) because I had no choice but to continue working to survive financially.
I also know for a fact that had I come across said blogs earlier, I would have paid off my debts a lot lot quicker and started saving a lot earlier in my life, instead of just spend, spend, spend in my 20s and early 30s.
Retiring around 60 now seems somewhat achievable. It will involve me changing the way I spend money, saving (and investing) a big chunk of my salary and NOT taking any saved money out (eg from my Cash ISA as I have done in the past).
Retiring at 55 or 56….this is no longer in the realms of impossibility but will require some ‘extreme’ saving and investing on my part and of course, some fortune in the stock markets!
This path I have undertaken will not be easy, given that my family (in particular my sisters) are big spenders (and high wage earners of the stratospheric kind) and many of my friends are younger than I am so ‘retirement’ is still a foreign word to them! Only my best friend understands (I think) what I’m going to be trying to do as she has mentioned she would like to retire at 55!
So, I shall be ‘quietly saving’, whilst attempting to maintain a quality of life that is acceptable to me and outwardly appear to be acceptable to my family, friends and colleagues! That includes socialising with my friends, overseas holidays and my gym membership. I’ve cut back on the things that are not important and kept the things that are important to me in my life.
I’m not saying it’s a secret – if anyone happens to ask, I’ll probably tell them (to a certain extent) – it’s just that I don’t plan on shouting about it (except on here!). This isn’t going to be easy but I’m going to give it a bloody good go!
Thank you for reading – anyone still here?? 🙂