You need LESS than you think! A Step-by-Step Guide! 

Hey everyone, thank you for the great comments. Some of the comments misunderstood Fixed assuming this mean that this cost is required. Fixed in this context is they the sum is the same each month regardless of whether it is discretionary or required. Also note that this is an example. These are unrelated to what we spend on. We want you to use this as a catalyst to put your own numbers in. This includes healthcare of course. This simple example is put together to nudge your thinking. As the weeks go on, the deeper we will go. We realise that the depth we are going to be heading towards isn’t for everyone, we want to help people that were in the position we were in before we took finance seriously. If that's you, you're in the right place.

I retired at 53 with £500k. It's absolutely doable. If you're a homely person who like to be at home mostly, you'll also find that you'll spend less. Even if you're the type to sit in read in the park etc., you'll spend very little. £65/month for internet?? Could cut that in half by shopping around. If you have a TV for live broadcasts, don't forget the license fee. I don't think you'll need to spend £100/month on clothes either. One thing I've found is I prefer to do the cleaning and gardening myself as it's something to do because you won't be always out and doing the more leisurely things. Plus it's good for fitness.

Spending £800 on groceries and £270 eating out and £100 on takeaways is wild. We are a family of 4 and we regularly spend less than £600 a month on food...

Many years ago went out to dinner with an old college friend who jad retired. They asked me if i had considered doing the same. I relied by sayimg that i couldn't possibly afford it. She then said something that has stuck with me. ' youll always spend less in retirement than you expect'. Roll on a few years and i was made redundant just before COVID and decided to take early retirement on 3 db schemes. Low and behold her words were spot on and im very happily managing on much less.

Sarah! You’re back and you look fantastic! I saw your pinned comment. I think the main takeaway is (1) run your own numbers because of course this list is not covering every possible cost and (2) most people will naturally need less money in retirement. That’s great news! It’s a reminder not to fixate on what you need today, but what you’ll truly need tomorrow. I can only speak for Americans, and I would say whatever you think your healthcare costs in retirement will be, multiple it by 3-4x. Elderly people have more serious dental issues and none of it is covered by Medicare. Neither are routine vision exams or glasses/contacts. If you need home health (to cook, clean, or help with bathing, etc), it’s only covered by your state if your income is below a certain level and even then, there’s a waiting list, often years long. If you have to go into assisted living, it’s astronomically expensive. Finally though 🎉 prescription medication costs are supposed to be capped next year at $2k annually out of pocket for people on Medicare. But who knows if that law will remain depending on the results of the election.

In America the Trap is Health Insurance Cost 🤑 which is Tied to your Job So Retire Early And you go broke 🤮

I have this same experience. My current monthly spend is 7k American every month. My biggest expenses is mortgage, car payment, will have car paid off soon. In 3 years I’m retiring I will still have a mortgage for many more years. My next biggest monthly expenses is Food. I’m always looking at my list and looking for ways to lower or do away with a bill. Like Netflix etc. I discovered long ago the only way to save is pay yourself first. Then figure the rest out. Life comes at you hard and if you don’t pay yourself first next thing you know at the end of the month stuff happens and now you didn’t save anything

Hi Neil&Sarah, thanks for your video. Very interesting. I have watched you with interest from your trauma in Greece to the Thai "C" incident. I am past retirement age....and still working - fear of pulling the trigger AND have not worked out what to do!!!Besides I did not start saving until 50! I think thnk the basics food/shelter/energy/tranport are the essentials and now we should have those covered...its the ACTIVITY in retirement that I am struggling with...agree with Sarah..the discretionary stuff is VERY important ...i have travelled a bit, lived abroad for decades...now back in the terrible UK climate, but as my son pointed out who travels a lot for work, Turkey, Spain, USA etc. he said often he sees "retirees" in those places in small groups in cafes/bars etc. and has the impresion they just drift around eating and drinking....of course its just an "impresion", and in the end, he said (he lives in Swizerland) UK does have a lot to offer culturally castles, national trust, amazing museums like York and tons of fascinating history...and at least you can get away by plane fairly cheaply. So the discretionary stuff would be for us most important - hobbies/interests etc. to preserve metal sanity! Its just ...what!? Wish you both health & happiness.

some of items can be moved from the category they are in. for example GYM can be eliminated...buy a bike or walk an hour a day, buy a 100LB weight set and/or rubber bands and do contrast shower maybe consider a red light panel after some research. lets face it very few of us can get full benefit from a membership other than a case of MRSA from the dirty equipment...I'm retired OR nurse and I've seen many debridements surgeries for just that reason.

My budget was split 2 ways Non discretionary & discretionary and it totalled to £3000 pretty much equally split It allowed for 3 x 1 weeks holidays to Spain for us £150 private health Mortgage paid Both retired 66 on full basic state pensions a year ago I don’t think we have any money worries but I’m not going to spend my life worrying about it if we go out with nothing = result!

What about inflation over 25 years?

Love it and thanks very much, done this myself many times and it's scary to be begin with but when you work things out it's not so bad facing into retirement and I'm planning this for next year at 59, looking forward to the next videos, cheers Nick

I believe the retirement crisis will get even worse. Many struggle to save due to low wages, rising prices, and exorbitant rents. With homeownership becoming unattainable for middle-class Americans, they may not have a home to rely on for retirement either

Never disappoint. Looking forward to the next in the series.

This is another world to me although I only have 1 bed home and total monthly direct debits is £400. Then add on food maybe£60 a week. Then have 300 a week to spend on anything I want like 6 months of holidays. Amazes me what people waste their money on

Its impossible to budget further out than about 3 years given the inflationary environment we are now in - some of the prices I have seen recently are shocking...

Nice video, and a good explanation of budgeting. Although, I am quite sure that you have missed something there. And to be honest, every single video I see like this does the same. And that's the car payment. Sure, you may well wish to keep your car much longer in retirement. However, everyone seems to miss the fact that you are potentially retiring for 30 years. I mean, if you are retiring at 55, you are probably hoping to live until at least 85. Now you might not be fit to drive at 85. But you might be. I see very fit and sharp people at 85 who are perfectly able to still drive at that age. And how many people nowadays are driving around in 30-35 year old cars? Some do, and that's great. But as you age further, you will be less able to do work yourself to keep them on the road, and at some point, the maintenance costs of running the older car will go beyond the cost to replace. Thus as you go on, your car maintenance budget will likely need to increase if you are to continue with the same car. So, are you likely to keep the same car for 30 years? I suspect not. You say there you plan to keep your car for 10 years. And that being the case, you may need 3 cars for your 30 years of retirement, but you have not budgeted anything for this. Whilst you wont likely need the same monthly budget you did to keep up with a 4 or 5 year car replacement cycle, you WILL need something budgeted none the less for a 10 year car replacement cycle. Just something else to consider.

I looked up what Council Tax is and I think it closer aligns with property tax in the U.S.

Removing the PCP on a car and a mortgage is a huge saving. I was laid off but fortunately with a payout, but we have have been able to make do with £1.2k a month, from that. We are not looking to retire early, and are also fortunate to have 2 small pension. Once I become eligible for retirement things will improve greatly. But £1.2k is really feasible, as the small pensions are used to add to a contingency fund for unknown expenses, so not really used month on month.

Just remember that your property tax and homeowners insurance isn't a part of your mortgage. That said, I do my calculations with the assumed spending in retirement, not spending today. So I already account for the house being paid off, etc. I still have a long way to go.

Good content. For most UK residents (and I guess the US and other countries as well) two state pensions/Social Security cover a good portion of the luxury lifestyle and all of the retirement lite options.

I am 50 and hope tro retire at 58 or hopefully a bit earlier.Circumstances dictate i wont be able to travel,have a disabled daughter and also a wife with MS so want to be available when needed for them for hospital trips etc.I think my budget can be far more modest than most peoples. I am at the stage of just saving as much as i can into company pension and cash and hoping for best and haven't yet done this kind of detailed budgeting. Although i dont necessarily know what exactly i spend on each thing i know exactly how much i currently have after tax,pension cons,savings etc each month, A few costs can be cut but fuel will go up as the beach is too far away, but i can tramp it in van for a few days if need to! I think my basic needs are pretty easily achievable from pension pot so long as i can keep my job till i decide to jack it in.Premium bond wins here and there will hopefully add some extra luxuries.Assuming i am still fit theres always the possibility of a bit of part time in winter if i need more, just got to be brave and go for it at some point i reckon.My relative modest lifestyle actually makes it easier for me than most that have to accept substantial lifestyle cuts to retire i reckon.

I just realized that I probably could 🫣 that‘s a bit scary 😅…

Loved this, I am just looking at this right now. I love that you are realistic for lower numbers and not smug about having saved enough. As artists we will be relying on the state pension with a bit extra from other savings. We never had huge earnings to save from. There are so many people like us who have lived the dream of being professional artists throughout our lives, but the reality is we have always budgeted like this and wouldn’t change a thing.

Great video, very practical. Looking forward to the drawdown model

In the USA, for a house, you will typically have mortgage, property tax, home insurance, and some times HOA. Some times older people have their home fully paid off, so that would eliminate mortgage during retirement.

Another great video! Good information. Without a mortgage and less discretionary costs, it is much easier to afford retirement.

Thanks for your practical tips and for simplifying things, with a bit of welcome humour :) Look forward to your weekly updates 🙂

Thanks for another great informative video, you guys are right up our street and we cant wait for the next two instalments. Could i ask what is the situation with your motorhome please?

I’m just early retired and our monthly costs are closer to £5k, rather than £3k. We have a dog and a 22 year old still at home. There is no way that our costs will ever be £3k per month (no mortgage or loans) even when our son moves out.

Very insightful video. I know this video is high level however would suggest considering impacts of inflation.

Why would you need a cleaner if you're now retired?

Very good. I'd put Gas and Electricity should be classed as a fixed cost , not variable. Via direct debit you build up a kitty in the summer which gets you through the winter. Much better to budget monthly that way.

Really enjoyed this one. Thanks 🙏+1.

Costs have rocketed since covid and the Ukraine war, putting more pressure to raise retirement funds - especially as so many Russians and Ukrainians have fled to Southeast Asia causing housing and food increases. Geoarbitrage is harder than before. Many thanks for all your videos - amusing and informative ☺️

I enjoy this video and content. Everyone has expenses that they have to pay. It’s interesting to see how other people do there budgets and ways they think about prioritizing what they do

Council tax would be property tax in the USA, yeah?

Nice to have both of you on screen

Its interesting that two full stste pensions come to around £1900/month… so the extra funds you need at 4% come down to around £120k

You must figure in increased and ever-increasing medical costs, at least for most countries in the world. They don't stay static and indeed then can catastrophically increase ... and not just for an acute problem that then goes away, but for a chronic one that will haunt you to one degree or another for the rest of your life.

Hello - I mentioned you guys on my channel this week as I was curious about your travel, but also, how do you plan to live when you finish your travels. Some of my viewers are also fans of your channel. I was wondering, do you plan to buy a place in a lower cost area once you return to the UK after 10 years? Just curious as I am doing the same at some point, and love hearing the ideas.

I believe your council tax would be similar to our property tax here in the US.

Budget seems too light. Appreciate two can live more cheaply but no allowance for pets, pet insurance, pet food, annual jabs etc. Allowance seems insufficient for repairs and one off replacement items in UK. No contingency or pocket money allowance, minimal toiletries . Sounds a bit like a miserable existence rather than an enjoyable retirement.

I like them both 👍🏻

Somewhat alarmed by the 500K comments. We have far less... Also surely we are not the only ones with other family dependents?

Geo Arbitrage all the way 😊

I don’t understand all this pension stuff .. I only have a Civil Service pension which at the moment pays me £6,000 pa 🤷‍♀️.

One of the most expensive things you get is something that has a reoccurring expense.

looking forward to the next two videos. great work.

To retire early but have enough money just to stay home is not retirement but imprisonment. Either you have enough to enjoy or work another few years. I am working now to have enough to buy and maintain a yacht in the Med. and I would rather achieve this goal than retire now and not have what I want in my free years

@2GoRoam hi, I wanted to ask what is your plan after the 10 years of travel? As you mentioned you have sold your house? I’m not sure if you have covered my question in one of your video or not? Ps I’m enjoying the advice and your journey 😊

Great video. I was going to retire at 58 but 1.5 years ago did the figures and stopped work at 55 even though I have 2 kids still under 18. No mortgage, no debt, no car payments and no work! Best decision I have made. Last year I spent more than when I was working but have about £1k more than when I started due to my sipp doing well in Vanguard. My wife is 10 years younger and still working and we are saving so she can finish at around 55 as well when the time comes. We both pay equal amounts into our budget and both save the same into our main savings for family holidays etc. I keep my pension totally separate to our main savings as my future wage packets 🙂.

Probably going to need to be a larger pension pot as there will be some tax on the withdrawals

Excellent as always.

Inflation will Blow all of this Out Of The Water !

We live in the United States and you didn’t include state and Federal income taxes, property and auto insurance, and health care insurance.

Did you set up your travel site? Can you please tell me where to find it. I've been retired 10 years, money sorted, I just want to see pretty places.

What's happened to the Motor Home???

Mobile phone contracts?

Only a little add on but if you have a £75 a month sky subscription, remember by law you have to buy a tv licence, it’s a BBC scam but it’s the law!

Audio?

Remember Labour have already stated they plan to make pensions means tested. So no one can assume the state pension will be there for them

The incompetence and corruption that runs through this administration are getting more ridiculous. I feel for people with disabilities not getting the help they deserve. Thank you Leah Foster Alderman, imagine investing $1.5k and receiving $6.5k in 4 days.

But over years leading to the year of retirement..all the costs will rise with inflation or otherwise.. so the numbers are not realistic. However, I could be wrong if I've missed something.

Why are steaming services on the fixed side? Just do some binge-watching of shows you wanna see and cancel that subscription asap. A Gym, membership!? Cancel that also because when you need to keep up the garden and cleaning the whole house you will have enough exercise, just don't eat to much sugars and fats.

Where is the cell phone

Thankfully I didn't gain anything from this video. So many people lack common sense savings skills. Also retiring in America most people always have a medical insurance payment.

Missing health insurence here, and other health costs

What the f r u talkin’ about. Hard economic times are ahead for everybody anyway. Learn new skills and work as long as you can!

Yoohoo....you failed to budget for medical care. And if you say that's under insurances, your estimate is terribly low And...it appears you budget only for couples with no children or grandchildren. We might not eat out as much, but we do have to budget for family get-togethers, weddings, etc

Are you actually physically fitter now that you’re retired? Constant travelling usually means that you don’t eat so healthily in my experience. Also, how reliable and consistent is your exercise routine?