My £10,000 a year life plan

The Monevator blog post last weekend had an offhand comment that caught my attention:

“Even the leanest pursuer of financial freedom wouldn’t consider £10,000 to be a sustainable income these days. I’m not sure it impressed me much as a kid, either, although I’d now respect it as suggesting Darcy boasted a pot of at least £250,000 (presuming he had a flexible withdrawal rate in play).”

The post is a review of an article about a type of bond called a Consol (I’d never heard of these, thanks Monevator). 

Talking about olden days money is fun isn’t it?

Ten grand! How quaint! And how many shillings did you spend on pottage this month?

The thing is a yearly income of 10k is a little bit higher than I’m aiming for with my own FIRE figures.

When I read the Monevator piece it got me wondering. What have I got wrong? I’m not an economist or a finance specialist, and I don’t live in a tent in the woods (that would be the ‘leanest pursuer of financial freedom’ I guess).

So I thought that it was time to hand over my fag packet and cringe while you interpret the calculation on its back…

For context, my current situation is that I’m a private renter sharing a flat with one other person (my girlfriend).

I live in the south east of England, which is a fairly high cost of living area.

I don’t have any kids or caring commitments, so that obviously makes things simpler and it’s lucky for me that my life is so straightforward.

The details

At the bottom of this post I’ve written out spending details for the last three months.

I’ll have a much clearer idea of my spending levels after a year, but based on a three month average I’m set to spend less than £8,200.

That excludes charity except occasional small giving, so let’s round it up to £9,000.

I think having a £1,000 buffer is pretty good. Is that likely to change in the future though?

Only three possible challenges to the 10k allowance spring to mind. Here is where the error must be, if you spot it please let me know…


Currently I’m a private renter. In the future I would like to be a homeowner, and I’d expect to be a good way through paying my mortgage by the time I hit FIRE.

In theory that should actually be cheaper than renting, assuming I don’t overstretch and buy a house that is beyond my means.

So while I understand that owning a home can come with unexpected costs, I would assume that is balanced out by the fact that I can have a small enough mortgage to make it cheaper than or the same price as renting.

I would probably move to somewhere a bit less pricey than south east England too. Maybe Yorkshire…

(there would be ways to build more income here, like renting a room out, but I’d rather plan for purely passive income so that I have the flexibility to do what’s best)


The three months of spending that I’ve tracked so far don’t include holidays.

That’s a red flag in the beach right there. But I don’t think it’s as bad as it seems.

Even before all the FIRE stuff I was never one for big expensive holidays. I’d rather spend that money over a few weeks, socialising with friends and lounging on local beaches.

I can definitely imagine myself going on one proper holiday every couple of years. Probably somewhere in Europe. So that’s maybe £250 a year to add to the cost?


This is one that I don’t understand very well, to be honest.

Is it much riskier to become seriously ill as a non-worker in the UK, and if so how do you mitigate it? Would the £1k or so a year buffer be enough, combined with home ownership and the optionals in the budget (see below)?

What does it mean if I’ve got it right?

The thing is, if my plans are basically right, then that’s quite exciting.

I think being able to save up £250,000 is an immense privilege. It’s clearly out of reach of most people in the world. But it is also pretty well within reach of a lot of people in wealthy countries like the UK.

I know a few people I’ve spoken to about this in the real world who this could definitely apply to, and who are pretty interested in how they can spend less time working and lower their carbon footprint.

Spending summaries

What I spent in April to May 2019

  • Social and eating out: £95.15
  • Bills (rent, electricity, council tax, internet): £497.67
  • Groceries: £52.66
  • Mobile: £6
  • Personal luxuries: £33
  • Household items: £6.62

Total: £691.10

What I spent in May to June 2019

  • Social and eating out: £57.78
  • Bills: £475.50
  • Groceries: £61.19
  • Mobile: £6
  • Personal luxuries: £1.99
  • Household items: £11.37
  • Charity: £7.61

Total: £621.44

What I spent in June to July 2019

  • Social and eating out: £159.34
  • Bills: £472.92
  • Groceries: £64.60
  • Mobile: £6
  • Personal luxuries: £8.13
  • Household items: £11.83
  • Charity: £4.67

Total: £727.49

Average total across the three months: £680.01

If I take that average and multiply it by 12 then I get £8,160.12.

Just taking the most expensive month (July) and multiplying it by 12, I still only get £8,729.88 per year.

You’ll notice that the amount for charity each month is vanishingly small, even though I’ve recently been waffling on about charity.

The main reason for this is that I’ve not decided who to give to. If I haven’t decided by 2020 then I might give a lump sum to GiveDirectly.

In between now and then I try to assuage my guilt by giving away relatively valuable items to charity shops, and getting all my clothes from them too.

Side note on tracking expenses

I can’t really be bothered keeping a detailed budget anymore.

I do find tracking my spending and investments fun, but there’s a bit of a ‘argh crap i’ve left it too long’ psychological barrier to doing it.

The thing I’ve realised is that the easy bit is tracking the spending. 

There’s no quibbling with spending. You’ve either used the money up forever, or you haven’t.

Whereas fiddling around with how to account for different types of savings, and cash transfers between accounts, and repayment of debt from family members… it’s just too much.

It really sucks the joy out of the spreadsheet.

So from now on I’m going to track spending only. It’s not like I don’t check on the investments very often anyway…


11 thoughts on “My £10,000 a year life plan

  1. Interesting to read your thoughts on this. I guess that this £10K per year number is intended to cover yourself only, and then your girlfriend would need her own source of £10K per year to cover herself? If so, then it’s not actually too dissimilar to my current situation. In my case, my girlfriend and I live off less than £20K per year, the vast majority of which is provided by me (she’s currently finishing her PhD and, as an international student, doesn’t have much of an income).

    £20K per year for a young couple is manageable, but I would argue it doesn’t leave you a huge buffer for if things go wrong, e.g. if something breaks at home, or if the markets go through a rough patch. I think that, if you retired at 30, then living off of £250K for the next 50+ years would be ambitious. But if you were 55, then it might be doable.

    As for your health concern, I don’t think the NHS distinguishes between workers and non-workers, especially if you’re a British citizen. However, it’s obviously struggling at the moment, and you may wish you had the money to go private if something terrible happens, rather than waiting for 6+ months!

    I suppose, ultimately, aiming to save £250K will put you in a better position than most. At that point you can reevaluate and, if needs be, possibly carry on working and earn another ~£100K!

    Liked by 1 person

    1. Hey Dr Fire. Yes this is for me only, I think we’re both keen on maintaining our financial independence from each other as well as bosses. As it happens she’s just finishing her PhD too! Although she’s a domestic student so maybe that’s a bit more straightforward finance wise.

      Your last sentence sums up my attitude at the moment. In all likelihood I’ll end up working part-time in the end, but I think there’s something to be said about aiming for full FIRE so that any work you do is genuinely optional.

      I think the comment about the markets going through a rough patch is interesting. In those circumstances I would expect it to be balanced out by gains in future years and by prudent measures like cutting out some optional costs, but maybe that’s naive. I would be looking to be FIRE in my late 30s, so that’s a concern for me…


    1. Hey, thanks for the comment. So in fact you’ve spotted a mistake…eek! It turns out that I forgot to include personal travel in my summaries, which I’ll amend in a minute. They are £0 for April/May, £5 for May/June, and a whopping £43.25 for June/July (includes £30 railcard renewal). So that still keeps me well under 10k on average but was a dumb oversight.

      But yes you’re right, I don’t have a car. I don’t need one where I live and I don’t have a driving licence. I *do* commute to work, which is expensive, but I haven’t included it in the above list. It’s the only expense I excluded. I wouldn’t exclude it from a ‘how much am I saving’ table, but from the point of view of ‘what income would I need when I retire’ I assume I won’t still need a season ticket to work.



  2. I do think £10k a year is doable if you live somewhere that accommodation is reasonably priced, which it sounds like you do. It’s around the benefit cap level for a couple for context.

    And I think sometimes high earners and people in more expensive locations seem aghast at people living on £10k a year, whereas in reality for most of the country this is actually a normal level of expenditure.

    For health, I’m not sure exactly what your concerns are – no political party is yet proposing to charge for the NHS – so it looks like our free healthcare is safe for the foreseeable future.

    Liked by 1 person

    1. Yes I agree! When people have put aside tax, pension contribution, national insurance, loan repayments, cost of working (e.g. buying work clothes) I reckon they’d be very surprised at how small the sum of money they really live on looks like…

      I agree on the NHS, I didn’t know if having lots of savings etc. can be wiped out by means testing for disability related benefits or anything like that. It’s a big area of ignorance for me. I’m a healthy person but you never know?


  3. TheFIREStarter asked this question back in 2013 –

    I responded to his post by saying that if I strip away my holidays, hobbies and social life, then I could live on £10k, except that I wouldn’t call that living! However, it’s good to know that if it came down to it, I could scale back to save some money during a downturn in the markets.

    As others have mentioned, I don’t think there will be concerns about the NHS but if you want to jump the queues, you will likely have to pay. Also, might I add that as you get older, dentist bills get a lot more expensive!

    You mention that you don’t have children currently but you’re young so that could still happen.

    This links back to my own post about timing FIRE – for me, it’s easier doing it now at my age as I’m certain about what will happen in life, eg I can 100% say that children will not feature so can plan accordingly.

    Liked by 1 person

    1. Oh nice, thanks for the link. I haven’t read it yet but from a quick glance there looked to be some good budget detail, love that…

      I hadn’t even thought about the dentist. Maybe I need to factor in around £200 a year for that. This was my main concern – stuff can crop up that you just wouldn’t even consider. Perhaps the only way to cover that off is to ‘over save’ and just have a couple of safety nets, which to be fair I think I’d have.

      Holidays seem to be a common factor/the main difference in my spending to others. I definitely enjoy my under-10k life and have hobbies/a social life, but I just don’t have a desire to travel much. Lucky me or unlucky me?

      Liked by 1 person

  4. My spending for 2020 will actually be £8,700. That’s with £100 per month going on a ‘luxury pot’ and £1,500 for the year going on holidays. I also live a really good life! I just don’t own a car, we bought a really cheap house which only costs me £257 per month (and we actually add more than half of that into equity), and we cook everything from scratch (we spend about £50 for TWO PEOPLE every two weeks).

    Like Jacob Lund Fisker says: “We consider spending money a failure to solve our problems by smarter means.”

    Liked by 1 person

  5. If you are looking to buy a house then you will need to budget for boiler replacement, roof replacement, white goods replacement, painting and decorating, kitchen and bathroom refurbishment. These are 20 years later expenses but still need to be costed to avoid finance. Depending on the difference between mortgage payments and rent you may be better off renting!
    Hopefully get an update on the journey soon!


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