Living Differently

My wife and son are napping at the moment so I thought I would take the time to type something up that I've been thinking about over the last two or three days. 

It all started with Maria's post over at the Money Principle, a great article that made me look differently at the Marxist theory. I then stumbled upon the art of non-conformity, another great article about how people don't understand, from flicking through Maria's "Money blogs" links.

I still love the fact that Maria is flustered by my milk and caviar comment from one of her old posts. I still can't understand how she thinks £120k is "enough". That's where the second article came in. Maybe she just doesn't understand the route a lot of people are now taking. 

People aren't just looking to make small changes anymore, a lot of people really want a wholesale upending of everything they do. Maybe because they're bored of their work, or where they live or they are just sick of the day to day of broken Britain. 

So maybe it's time to take the advice of the non-conformists. Maybe looking at life from a different angle is required.

A zero based budgeting approach comes to mind, whereby we scrap the budgeting tools we've used before and start with a blank page. What do we really NEED in our lives.

Humans usually need a few basics, water, food, shelter. Everything else are things we add for comfort or at the extreme greed. 

So maybe we shouldn't start looking to reduce our mortgage rate, or look to save on our car insurance, we should probably look at cheaper places to live other than houses and maybe start thinking about getting rid of the car altogether.

These are the kinds of changes that can turn an ordinary person into an early retiree or at least someone that is not forced to go to work to fund a lifestyle beyond their own means.

That is the kind of person that for me has really got life sorted in their own head, they’ve no need for superfluous items and their comforts come from within.

This kind of lifestyle leans itself to one where families spend more time with each other and learn how to do things for themselves rather than outsourcing at higher costs. Where skills are nurtured from an early age and progress with each passing project, without being put aside because we’re “late for Corrie”!

I looked at my own budget took out mortgage, car, and media costs and immediately my spending went from 80% of my wages down to 42%. This budget still leaves room for luxuries. With a savings rate like that I could retire in 11 years, which seems like a long time, but I am earning a sixth of that £120k and supporting 3 people!

Sounds pretty awesome to me, just imagine if I could double my salary… it drops to 6 years! As Paul Whitehouse once said… BRILLIANT!!

Of course this is unfortunately a pipe dream until I can convince the other half to move to a narrow boat and cycle everywhere ;)

Looking for a side hustle

What a week it's been. The weather has been crap, mostly. So like a lot of people it has made me look inward. 

I've pretty much got my budget in order, so what next? 

Well as MMM says, it's spending and income or income and spending. So income then. I'm pretty settled in my job. Ha guess what I'm not paid enough though! So I could either work harder on cutting my costs, or get a side hustle!!

Side hustles can range from a fully blown part-time job, which works well for some, to earning a few quid filling in questionnaires.

I've done both in the past and enjoyed neither very much. Probably because I have this little thought constantly ticking along in my head that I'm worth more!! $25 doesn't seem like that much though, I was thinking more like £50. 

So what side hustles could stand up to my (probably inflated) sense of worth? Well  £50 translates to £104k a year. I think earning that much is probably a little out of my league at the moment. Unless I break it down.

So today I did some painting. No, I'm not the new Van Gogh, it was more for decoration purposes. So what's this got to do with side hustles? Well I had a look on myhammer and to paint a four bedroom flat they were quoting £1000! Shit I thought, I effectively saved that much today. Although we did only one room, so only £250, but how long did it take us? 5 hours, woohoo that's £50 an hour! Where's the champagne?

Yes, this is simplistic, it ignores the cost of the paint we bought and there was two of us doing it. 

So maybe not quite living the dream yet, but I guess it depends on your dream.

In the long run, you're going to be ok

I've noticed a bit of a theme on a couple of blogs, house buying and it's associated costs. I agree with them both, buying a house is one of the biggest decisions you'll make in your life. That's why you should take your time over it. Don't be put off if someone swoops in and buys the one you had your eyes on from under you. 

It's not the end of the world. Also, although it is relevant to have a sizeable deposit and cash available for fees. This isn't the most important thing.

So what is? You have to make sure your buying a HOME, put aside the money for a few minutes (it won't make you happy anyway), this building you're buying is going to be the place you spend most of your life in from now on. Yes a lot of it you'll be asleep for but nonetheless it needs to be right.

Growth

So your buying a place with your new husband/wife, maybe your going to want an extra room or two? What's that I hear the distant patter of footsteps? 

Got a love for cars / building insane stuff make sure you have access to a garage. Or even better some space to build one!

Training to become an Olympic swimmer? Maybe an indoor pool would be of use. 

The point

Anyway the point is don’t get too wrapped up in the price you pay for a home. Yes, ideally you get it at market rate, but paying a few extra thousand isn't going to break the bank, as long as you are happy to stay there for a long time.

This is the kicker. If you are forced to sell the house due to having / wanting to move in a short space of time you open yourself up to a whole host of bad things.

Like the market moving in the wrong direction, or having to lower the price to bring a quick sale.

Moving again will also add on the transaction costs. Mortgage fees, removal vans, solicitors, it all adds up. It can really be a drain on your short term finances and stop you getting where you want to be.

Holding on to the property for a bit longer can help you increase your net worth as well. Paying down your mortgage will reduce your liability whilst the general increase in the value of property over the long term will increase the value of your asset.

At the end of the day, your probably quite intelligent and you know this all ready, so it’s really down to me to say, don’t take the first quote given for anything, always shop around and remortgage to a lower rate whenever it is viable to do so.

These methods will help you to reduce your mortgage expense as quickly as possible. Then when your mortgage free, the fun begins! 

Well that's the plan anyway :D

Do you have any other tips I've missed?

If you got stuck having to sell at a loss what would you do?

Picture by: Rempstone House