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1. 

   laura
   

   Novice
   Joined: Jul '10
   Posts: 23

   the story so far:

   L is in debt for 20 years (has 3 kids with ex-husband)
   L meets M (2003)
   L and M buy house (2006) – 10% cash deposit/ mortgage £138k
   Renovate house with cash (£13k)
   Pay for wedding (2007) with cash (£10k)
   Start to live frugally and decide to move abroad (Portugal) in 2012 when kids all at uni (starts blog)
   Have plans to pay off mortgage in 5 years but all work bonuses stop and jobs become unsafe
   Save £11k for emergencies (ISA’s)
   M starts to learn Portuguese (2008)
   L finishes paying off large debts (end 2009) and quits soul destroying job
   Small mortgage overpayments made onwards from 2008
   Son moves back home and starts paying board
   M gets promoted 2009 and 2010 - new salary £45k – start to save 35% of salary

   future plans:
   -L get a job
   -increase saving%
   -Rent out house in UK in 2012
   -Continue to overpay (UK) mortgage to finish in 2020
   -Initially rent small in Portugal/M get job in Portugal
   -Buy 2 bed apartment in Portugal – rent out room to overpay mortgage to finish in 2020

   M age 31 L age 45

   plan to be FI in 2020 when M is 40

   Posted 2 years ago #
2. 

   laura
   

   Novice
   Joined: Jul '10
   Posts: 23

   To add to this thread here's our new budget: family of 4 in the UK - eldest son lives at home and pays monthly board

   Mortgage £542.34
   Mortgage overpay£200.00
   Council Tax £107.50
   Water Rates £32.00
   TV Licence £11.87
   Life Insurance £21.08
   House Insurance £15.00
   Telephone £12.00
   Gas & Electric £88.00
   Cable TV £64.00
   Window Cleaner £4.50
   Bus fares daughter£15.00
   Grocery £240.00
   Entertainment £26.71
   Gifts £70.00
   Misc £100.00
   Saving £700.00
   Total £2,250.00

   - Saving £700 + £200 mortgage overpayment (40%)
   - free internet through work
   - company car which costs approx £70 pm in extra tax petrol, repairs all included
   - pension payment of £150 approx taken from salary

   Our next target is to get to 50% saving rate

   Our situation is a little different to others and I'd love to know your thoughts

   Posted 2 years ago #
3. 

   photoguy
   

   Journeyman
   Joined: Aug '10
   Posts: 202

   Welcome and thanks for sharing. Your budget is certainly very frugal by american standards and there's almost nothing to cut out.

   One question I have though, is how is moving to portugal in 2012 going to affect your budget and income? Also are you moving for ER reasons? family? job? other?

   Posted 2 years ago #
4. 

   laura
   

   Novice
   Joined: Jul '10
   Posts: 23

   @photoguy thank you and to answer your questions

   1) we are moving for lifestyle reasons
   2) dh is looking to earn a salary approx 75% of current one; he is almost fluent in Portuguese now, so by then he will be
   3) we expect our outgoings to be 25% less in Portugal too

   I like the idea of this http://www.airbnb.com/
   for extra income and I notice there are properties available already around Lisbon/Cascais (our target area)

   Posted 2 years ago #
5. 

   Maus
   

   Master
   Joined: Jul '10
   Posts: 504

   @laura
   I'm reading a great book on European history that deals at length with 16th century Portugal -- fascinating stuff. While transatlantic travel is not particularly ERE-friendly, I do have a dream of spending at least a couple months on the Iberian penninsula some day. (@Jacob: Forgive me sensei for harboring this heresy.)

   Is emigration to Portugal smoother for you because of coming from an EU partner nation? Are you at all concerned about the future economic stability of Portugal as one of the so-called PIIGS?

   Posted 2 years ago #
6. 

   laura
   

   Novice
   Joined: Jul '10
   Posts: 23

   @Maus to answer your questions

   - there is no problem with us moving to Portugal due to the EU
   - yes, we have concerns about the economic stability in Portugal however I'm not so sure the stability in Britain is much better! :-)

   It's a good dream to have, it's a beautiful part of the world

   Posted 2 years ago #
7. 

   photoguy
   

   Journeyman
   Joined: Aug '10
   Posts: 202

   That airbnb sounds like a great idea. Thanks for posting the link I can certainly see using it next time I'm traveling. Not sure if I'd want to rent out a room in my home for extra income but at least it's a nice option to have. (In many places we are thinking about ER most homes have 3 or more bedrooms)

   Posted 2 years ago #
8. 

   laura
   

   Novice
   Joined: Jul '10
   Posts: 23

   Step 2: I've joined freecycle today and listed a spare single mattress we have (just waiting for a moderator to authorise) I don't need a bike though as I can walk everywhere in my village!

   My de cluttering continues: I'm now applying a 3 month rule to everything I own and so my DVD boxsets have been listed on Amazon.

   Posted 2 years ago #
9. 

   laura
   

   Novice
   Joined: Jul '10
   Posts: 23

   Freecycle is not going so well; 2 no shows; I'm going to give the matress to a local charity furniture place -

   The de-clutter continues -
   Through Amazon I've sold all but one of our DVD boxsets - kept previously 'for old times sake' more than anything

   To watch films in the future we've joined Lovefilm here in the UK, 2 rentals a month for 3.99 - cheaper than going to the movies....and the first 2 rented are free.

   Posted 2 years ago #
10. 

    laura
    

    Novice
    Joined: Jul '10
    Posts: 23

    I'm working my way through all 21 steps of Jacobs programme, paying particular attention to Step 3 grocery as I think this is an area I can improve on.

    This month I've spent £238.45 for the four of us, more than I wanted to but it's getting there.
    I'm cooking nearly everything from scratch but there's still room for improvement - I need to bulk out more meals with beans.

    We don't waste any food at all; I batch cook, making as much as possible at the same time and then freezing it- saving on oven usage.

    I don't eat meat however my family do however they eat vegetarian with me at least twice a week - I'm moving that up to 3/4 times. The key to this is giving them veggie curries, they love it and don't notice the lack of chicken!

    Any other suggestions would be great :-)

    Posted 2 years ago #
11. 

    jasoninmississippi
    

    Apprentice
    Joined: Sep '10
    Posts: 99

    @laura

    What is a TV Licence? Tax? And how does it work? Thank, Jason

    Posted 2 years ago #
12. 

    photoguy
    

    Journeyman
    Joined: Aug '10
    Posts: 202

    Make your family watch Food, Inc.?

    If you are making everything from scratch, it's hard to imagine how you could reduce costs even more. I assuming you are taking advantage of low cost warehouse stores and ethnic groceries?

    Posted 2 years ago #
13. 

    laura
    

    Novice
    Joined: Jul '10
    Posts: 23

    @jason
    Hi Jason, in the UK we pay an annual fee of £145.50 for a colour TV licence - it's basically for the BBC. It's compulsory if your have a TV in your home.

    Posted 2 years ago #
14. 

    laura
    

    Novice
    Joined: Jul '10
    Posts: 23

    @photoguy

    Re Food Inc - yes I thought about that!

    I'm doing a little experiment with stockpiling {shopping loss leaders} over the next few weeks to see if this reduces my costs; it might not initially but longer term it should do.

    I'm also starting to menu plan for a month, instead of a week, as I think this might enable me to save a little.

    If it was just me I would eat the same food most days, however with a family you need to mix it up a bit - I might face a revolt!

    Posted 2 years ago #
15. 

    laura
    

    Novice
    Joined: Jul '10
    Posts: 23

    Good news - I got a job. It's part time but does mean we'll be able to increase our savings percentage.

    Posted 2 years ago #
16. 

    Mo
    

    Master
    Joined: Jul '10
    Posts: 442

    @laura,

    That sounds like a really nice plan. I haven't retired yet, and I don't rent out any properties, so my responses are all theory—and worth what you’ve paid for them.

    First, I'm surprised that your mortgage payment is £542 on a loan of £138k—the monthly payment seems low. Perhaps £138k was before 10% down, but still I can't help wonder is that a very low interest rate, or a lengthy mortgage?

    It looks like you have £700/month left for saving, which is great. I'm sure it has occurred to you that you could also use this to pay off your mortgage faster.
    In the US there are tax differences for rental income vs. income earned by working. You may want to look into this for the UK and Portugal, as it might allow you to come up with a strategy that maximizes the upside for you.

    Congrats on getting a job. Hopefully that will be a big boost to your savings because every pound you earn can be saved. My wife works part time, and although she earns less than I do, we’re able to save every cent of what she earns, so it really helps the savings become more meaningful.

    Posted 2 years ago #
17. 

    laura
    

    Novice
    Joined: Jul '10
    Posts: 23

    @ Mo thank you!

    Mortgage balance £116k/just under 20 yrs left on the term/0.99% interest rate {tracker mortgage 0.49% above UK base rate}

    As from January 1st we will be overpaying by £480 a month and saving approx this amount again. Here's a link on my website:
    http://movetoportugal.org/mortgage-payoff-target-date-december-2020/

    You make a good point about the tax situaton, UK v Portugal so thank you, I'll look into that further.

    Yes, we will be able to save every bit of my earnings so this is a bonus :-)

    Posted 2 years ago #
18. 

    jasoninmississippi
    

    Apprentice
    Joined: Sep '10
    Posts: 99

    @laura
    Congrats on your new job and thanks for info on British TV. Jason

    Posted 2 years ago #
19. 

    jacob
    

    Expert
    Joined: Jul '10
    Posts: 3,297

    The US is actually the first country I have come across where you don't have to pay a license to own (yes own) a TV or a radio. It's really a somewhat archaic concept since a majority of radio and TV stations is those countries are now private and either paid for by advertising or by subscription fees.

    Posted 2 years ago #
20. 

    laura
    

    Novice
    Joined: Jul '10
    Posts: 23

    @Jacob

    You're right it's archaic and a little unfair. We could opt out I suppose, however we're choosng to have a TV so we have to pay - my problem is that I've only watched one programme on the BBC in the last 12 months!

    -also there's a lot of grumbling in this country about how much BBC presenters are paid (six figures forsome)

    BBC link: http://www.bbc.co.uk/aboutthebbc/licencefee/

    Posted 2 years ago #
21. 

    Mo
    

    Master
    Joined: Jul '10
    Posts: 442

    Laura, thanks for the info on your mortgage. I have lived and worked in England, but never owned a house (or even seriously considered it). So, I had no idea that mortgage rates could be so low.

    For comparison, in the US, a mortgage rate under 4.5% is almost unheard of, and many people consider anything under 6% to be really good.

    Posted 2 years ago #
22. 

    A Brit
    

    Novice
    Joined: Sep '10
    Posts: 27

    Bear in mind that a lot of UK mortgages are trackers which look good just now as the Bank of England keeps interest rates low. That won't last (certainly not over the 25 year repayment term) and, in the past, we've seen base rates at 15%. When interest rates rise from their current lows a lot of people are going to experience a lot of buyers' regret.

    Tracker rates are not so good if you start one now - cheapest seem to be around 2% over base. But there must be a fair few people on legacy rates such as Laura.

    How's it work in foreign parts? Are most people using fixed rate mortgages?

    @laura: do you have family or personal connections with Portugal? What guided your choice of location? I know we're all part of one big happy EU these days but, while I'm happy to travel, the idea of permanently upping sticks from Blighty would make me feel a bit odd!

    Posted 2 years ago #
23. 

    jacob
    

    Expert
    Joined: Jul '10
    Posts: 3,297

    In the US various levels of insanity has seen

    • The no-money down mortgage.
    • The stated income mortgage (also known as LIAR loans). Also NINJA loans (no income, no job, no assets).
    • The adjustable rate mortgage (ARM).
    • The ARM with an introductory teaser rate.
    • The nonamortizing ARM (interest only).
    • The negative amortizing ARM, where payments don't even cover interest.

    The last two involve a large balloon payment at the end of the loan in which case they're typically refinanced.

    Posted 2 years ago #
24. 

    Mo
    

    Master
    Joined: Jul '10
    Posts: 442

    As Jacob points out, there are plenty of mortgage options in the US. A lot of Americans do use fixed rate mortgages. Many people have locked in mortgage rates b/w 4.5% and 7%. Often the term is 30 years, and the rate is not subject to change. Also, there is a tax deduction in the US for mortgage interest paid, thus reducing the amount of money lost to interest.

    Because of this situation, in the U.S., there are a large number of people who advocate having a mortgage.

    Posted 2 years ago #
25. 

    frugal
    

    Novice
    Joined: Sep '12
    Posts: 19

    Hello all!

    I am now living in Portugal.

    Anyone ERE is here also living ? Why you chosed Portugal?

    Let me know.

    Regards.

    Posted 8 months ago #

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