Tiny, regular expenditures add up. Over the long run, these little costs here and there make mountains out of molehills. Coffee and avocado toast are frequently used analogically in regards to the impact of ‘little and often’ over the long run. When budgeting, we look for ways that we can reduce our expenditure and increase our saving rate.
The two biggest monthly expenditures for most people are food and shelter. These take up a huge chunk of most people’s budget. I hear that Mr Maslow puts these pretty high on the agenda too.
Finding a way to reduce expenditure in these areas has the potential to have a huge impact on your long-term net worth/savings rate. To reduce expenses, many FIREers reside closer to work to reduce transportation costs, down size to reduce the rent or mortgage payment, cycle rather drive and house hack. I believe this term originated in America but is becoming more and more frequently referred to on this side of the sink, too.
House hacking is basically where you rent out rooms in the place you live, and the incoming rent covers the cost of your own rent or mortgage. You essentially get your accommodation cost paid for you by your tenants. Smart. In the UK, we’re allowed to claim £7,500 a year tax free from a tenant. That’s £625 a month! Now, if you got a room free in your house get on spareroom.com and rent it out.
I did exactly this. I rented out a room when I lived in the UK. I had a tenant from Lithuania who was quiet, and we never saw each other. He paid his rent on time and if we passed each other, we’d say “Hi”. Perfect tenant *5 stars* *Would recommend*. I then had a Polish tenant who was a raging alcoholic who never slept and broke several things. He did pay his rent on time and fix the things he broke but shiiiit, what a liability! I’ll never forget getting back from a night out at 2am and he was still up. Pouring me a voddy, swaggering and staggering, he slurred “You play guitar! Play thish!” and he showed me what could only be described as heavy Polish Folk-Rock on his phone. It was a 4-chord repeating pattern. I was also pissed, so I fetched the guitar, strummed it merrily and he sung it at the top of his lungs until daybreak.
One thing Americans tend to forget about us Brits is that we’re Brits. Reserved and introverted. House hacking sounds mint and all but when we’re home, most of us don’t want to share it with some weirdo (a British perception of anyone we don’t know or who isn’t family… nah, anyone that isn’t us). The money is good and all that but what’s the point in being home if you can’t relax because of the weird tenant, sitting quietly upstairs. ‘How am I supposed to talk to myself if the tenant is about?’ I hear you say. I know, right!! If you’re a confident British person however, getting a tenant might be for you.
Joke time (This is a temporary instalment to the blog and may not be a recurring feature)
How can you tell if your speaking to an extroverted Brit?
It’s one who looks at your shoes when he’s talking to you, instead of his own…
There’s a better way to house hack that I stumbled upon. This one is aimed at teachers in particular as I can only speak from experience (however, I’m sure there are other professions where your skills are welcomed in other countries). My house hacking involved me getting off the big rock we call Britain and relocating abroad. Not only is my job a million times better than my teaching job was in the UK, but my accommodation is also free for five years and subsidised thereafter. That’s a huge chunk from the budget gone. Beauts! Additionally, I can still rent out my accommodation in the UK. Double beauts!
A search of TES will show all the teaching jobs available and for many of these, the package will involve free or subsidised accommodation. Yes!
UK based teachers, listen. No job satisfaction? 80 hour week? Ridiculous expectations? Dread that Monday morning feeling where you are sick to your stomach? Sleepless nights? Unrealistic demands? Constant stories of people ‘going off on sick’ due to ‘stress’? Morale so low it would be out of Barry White’s range? Bills? Debts? For the love of God, get off that rock! Apply for a job. See what happens.
Free accommodation. Better job. Better life. If that’s not your thing I guess you could stay where you are and moan about it relentlessly. But, hey, I get to do that here as well. We all proper love a good moan here and there, don’t we? I’d rather do it in my free digs. Ta.
Let me know what you think and get in touch, if you want.