Back of An Envelope

Photo: Pixabay: LwcyD

Semi retirement is looming large. My pension is going to about one third of the salary I earn at the moment. Eeek! We’ll have to survive on gruel. Actually it’s not all that bad. I have a modicum of common sense and wouldn’t be giving up full time work if we couldn’t afford it. But I thought that I’d play with some figures on the back of an envelope and get a better idea of where I’m going to be financially in the near future.

In recent times I’ve reduced my outgoings considerably. Sharing costs with someone else has been the main factor. Household expenditure has pretty much halved and we also decided to give sharing one car a try when my lease came to an end last year. It’s worked out okay. We’ve moved Klaus the Knaus, our motorhome from his storage site, another saving. In an emergency he could be used as our second car. I’ve paid off credit cards, a relic of single parentdom, with teeny tiny pension pots. And, of course, the big one is we no longer have a mortgage.

That back of the envelope calculation, suggests that, with all the savings, my pension will cover my share of the monthly outgoings. It’s only be a whisker but that’s reassuring to know. I also have a little pot of money that should last for nearly a year without the need to touch my share portfolio or retirement lump sum. It’s clear though that I’ll need to have extra income to buy treats, do all that travelling we have planned and keep ‘the pot’ topped up. I’m having a good think about how I’m going to earn that.

There’s a very down to earth money saving YouTuber that I follow called Prepper Princess. She made a video the other day that introduced me to the Japanese concept of Kakeibo. Follow the link here to have a look. I’ve found a book, Kakeibo: The Japanese Art of Budget and Saving Money if you’re tempted to delve further.

My own interest was whetted I loved the idea of a mindful stance when applied to spending and how Kakeibo puts saving at its heart. I also thought that the practice of setting goals at the start of the month and reflection its end is a useful practice. However I’ve decided not to follow the principles whole heartedly.

Firstly the requirement to manually write down expenditure seems to be a tenet of this system. I’m well immersed in the electronic age so that’s not for me. Actually the back of the envelope was really my phone’s calculator. Secondly the categories for expenditure seemed lacking for my own lifestyle. I’d have liked to see ‘gifting’ and ‘travel’. So I’ve devised a spreadsheet of my own that retains the essence of Kakeibo but has my own twist. I’m going to start using it in April to record my income and spending in detail and chart my progress. It doesn’t look like life ahead is going to be a complete walk in the park but it’ll be much more achievable now I have a game plan.

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  1. It’s not until you are free from the constraints of a ‘regular’ job that you can see the opportunities to earn in other ways. I left full time work eight years ago to start a second (freelance) career – I did surveys, online proofreading and had a zero hours contract job for a while until the new role took off, there are many things you can find. Surprisingly to me, I didn’t miss the income. The freedom of having more time is priceless. You’ll be fine.

  2. I know opportunities and costs to retire differ country to country. Besides gift’s and travel, I have to add health insurance to my back of the envelope. Still the exercise is a good one and I m regularly trying to see if I can get one or both of us to drop a few months off work life.

    • Yes, we are fortunate not to have free healthcare. My American friend is wealthy yet the prospect of having to fund her own insurance stops her from retiring early. On another note you’ve reminded me that I need to get travel insurance for our trips to Europe this year. Thanks!