Hi and welcome to Live Full Retire Early (LFRE). Here we talk all things money & lifestyle and explore and share ways to live your best life on a budget. Here are our 9 Rules to help you do just that…
Rule 1. You must always talk about Money.
Money is a bit of a taboo subject, especially for us Brits. We feel talking about our levels of success is a bit of a narcissistic and ugly thing to do, like we are bragging. However, I don’t see it that way. If you talk about your struggles and listen to other people’s successes you might find something however big or small to inspire you into creating a better life and increasing your finances.
Rule 2. Set Yourself Annual Targets.
Think about how much money you intend on saving or investing in that 1 year and then make it your personal mission to hit that goal.
Rule 3. Learn how to repair, cook and make things whenever possible.
My friend had to quickly learn how to repair something recently. The ringlet in his favourite pair of trainers broke and as he didn’t have any room left in his budget to go out and replace them, we went to Wilkos (a low budget household chain) and purchased an Eyelet Plier Repair Kit for £6.00.
It was relatively simple to repair the trainers and watched a YouTube video on How To Repair Eyelets on Shoes.
Rule 4. Always have a side hustle.
In today’s world, relying on one stream of income is risky. VERY RISKY. Since the recession I don’t think there has been one person not affected by it in some way. Some people have been more unfortunate than others.
That leads me onto my fifth rule.
Rule 5. Start an Emergency Fund.
For years I never realised just how important one of these was. For a long while I had never even heard of the term Emergency Fund. But now, I preach this rule. So many people live hand to mouth, never knowing what is around the corner. Receiving a high gas bill in the middle of Winter can wipe many people out and it takes months to recover from this. This type of lifestyle scares me. It scares me so much that it drives me to have side hustles and invest hard!
Rule 6. Spend less than you earn and invest the difference.
For this rule I must give credit to Chris Coney, the co-founder of LFRE and Founder of Cryptoversity. He is the one who taught me this and it has worked for us both every time.
Rule 7. Know your numbers & set a budget.
I was horrified to learn of a friend of mine who has been running his own business for over 5 years told me how much he would like to buy his own house and would like to save up for a deposit. I asked how much he earned and if he could afford to save after paying out all his current living expenses and the reply was … “I don’t know how much I earn”. I was absolutely mortified.
How can you have your own business for so long and not know your numbers. How do you know if your business is profitable? It may be more beneficial to get a regular job (still in your current industry) just with a steady paycheck. The business can be a side hustle until it financially overtakes your day job.
Here is an easy 4 step action plan to help shed light on your current financial situation:
- Gather all your paychecks or self assessments together
- Write down how much you earn after tax
- Write down all your monthly expenses
- What is the difference? Do you earn enough? If not it may be time to consider a side hustle or a career change?
Just make yourself aware of your current situation. You might realise you need to earn more money to cover all your expenses. That’s not a problem. It’s only a problem if you don’t know your numbers. Now you do, we can figure out how to move forward.
Rule 8. Plan for the future.
I know most of us don’t like thinking too far into the future but god willing, we are all going to get old, we will retire and need some form of income to rely on. I’m not necessarily recommending pensions .. we all have our own view on them which I will talk about in another post but we do need some form of plan.
Do you intend on investing in property, stocks and shares and bonds, ISA’s, precious metals, cryptocurrency or yes a pension.
What is your retirement goal? How much do you think you need to retire on?
Rule 9. Prioritise and Scrutinise EVERY Pound and Give Every Pound a Job.
You work bloomin’ hard for your money so let your money work hard for you. You are the boss! You get to decide where every pound (or dollar) goes.
Here is a very simple 3 step plan to follow:
- Get some money
- Prioritise and Scrutinise that money
- Give that money a job
Review your energy supplier, are you on the best deal? If there is an early repayment charge, do you still end up saving money long term … the same applies to your mortgage. In the last 3 years interest rates in the UK have fallen, I know happy times right? But the interest rate I went on 3 years ago is 1.34% higher than the interest rates now. Eek!