L & M - FI in 2020

movetoportugal · Post by **movetoportugal** » Wed Sep 08, 2010 1:59 pm

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

movetoportugal · Post by **movetoportugal** » Thu Sep 09, 2010 3:32 pm

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

photoguy · Post by **photoguy** » Fri Sep 10, 2010 3:02 am

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?

movetoportugal · Post by **movetoportugal** » Fri Sep 10, 2010 5:50 pm

@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)

Maus · Post by **Maus** » Fri Sep 10, 2010 7:30 pm

@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?

movetoportugal · Post by **movetoportugal** » Fri Sep 10, 2010 8:05 pm

@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

photoguy · Post by **photoguy** » Sat Sep 11, 2010 2:31 am

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)

movetoportugal · Post by **movetoportugal** » Sun Sep 12, 2010 3:06 pm

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.

movetoportugal · Post by **movetoportugal** » Thu Sep 16, 2010 6:21 pm

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.

movetoportugal · Post by **movetoportugal** » Thu Sep 16, 2010 6:31 pm

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

jasoninmississippi · Post by **jasoninmississippi** » Mon Sep 20, 2010 7:49 am

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

photoguy · Post by **photoguy** » Tue Sep 21, 2010 3:34 am

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?

movetoportugal · Post by **movetoportugal** » Tue Sep 21, 2010 10:32 am

@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.

movetoportugal · Post by **movetoportugal** » Tue Sep 21, 2010 10:40 am

@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!

movetoportugal · Post by **movetoportugal** » Tue Sep 21, 2010 10:42 am

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

Mo · Post by Mo » Tue Sep 21, 2010 1:42 pm

@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.

movetoportugal · Post by **movetoportugal** » Tue Sep 21, 2010 9:39 pm

@ 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-payo ... mber-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

jasoninmississippi · Post by **jasoninmississippi** » Wed Sep 22, 2010 6:36 am

@laura

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

Post by **jacob** » Wed Sep 22, 2010 6:51 am

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.

movetoportugal · Post by **movetoportugal** » Thu Sep 23, 2010 11:14 am

@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/