Author: Latestarterfire

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Back to Reality

Oh, the joy of returning home after a five and a half week overseas holiday! Or not 🙂

So it’s now back to reality.

And surprisingly it has been a struggle, even though my new role at work is much less stressful compared to what I did before. I finished up at the stressful site at the end of the financial year, then sauntered off to my longed for holiday.

After spending weeks of only being concerned about where I would spend the day or what meals to eat, it was a rude shock to come back to chores and waking up to go to work.

My biggest shock though?

I no longer had access to a work car!

Let’s backtrack ….

My work car

I have had a work car for the last 26 years, ever since I started work for my present employer. There were a lot of deliveries to clients and we always had a fleet of cars. One of my perks was to take a car home. And over the years, it became a part of my remuneration package.

They were not flash cars – just cars that did the job. Variously, I drove a Toyota Corolla, Camry, Hyundai, and most recently a Honda CRX. That is, until I was involved in a car accident in November which wiped it out. But thankfully I was ok.

Due to the tough economic times of my industry, I did not ask for another car – I just drove one of the other cars in the fleet. My boss agreed to get me a new car in the new financial year ie in July.

But of course since then, I had resigned from my stressful role and negotiated a much less stressful role to start from July; but the car perk was attached to the stressful role.

My boss offered to pay me a bit more to compensate for not having a car but I chose to have a car instead.

Savings from having a work car for 26 years

Not having my own car has saved me thousands of dollars over the years. My ‘back of the envelope’ calculations are as follows –

Car registration – $800 annually x26

Comprehensive insurance – $1000 annually x26

Maintenance – $800 annually x26

Total = $67 000 !!!

That is not including fuel. When I first started working here, I lived with my parents 30km away so fuel costs would have added up. It was only the last 16 years or so that I lived 15 minutes away from work.

Upon my return from holidays …

I discovered that I could not use one of the other cars in the fleet from the other workplace. As technically I am no longer employed on that site. And my new car was not ready.

But luckily my boss was negotiating a better finance deal with the car dealer and that had delayed the whole process. So I was still getting a car, just not right now.

During those ten days, I relied on my colleague to drive me to and from work. And on the weekend, I borrowed a car. I live in the suburbs where public transport is just not readily available. A 15 minute car commute to work would take an hour by bus and train.

All this brought home the fact that over the years, I have taken for granted the availability of a work car. Transport has not been a line item in my expenses for the last 26 years. I am incredibly fortunate.

It was a good reminder that it is not a God given right and that really, it can be taken away just as quickly.

My new work car

Emergency Fund

But the biggest reason why I fought hard to have a work car is that I cannot cash flow a car right now without touching my emergency fund. Which I am so loathed to do. It is taking me so long to build this up that I really do not want to touch it. Unless maybe a life and death issue? I am so close to my goal of having 6 months’ expenses saved.

And I most certainly do not want to borrow money to buy a car. I so enjoy being debt free ever since I finished paying off my mortgage. That feeling of freedom … I just cannot stomach being in debt again.

I know in the FI community, the prevailing advice is to buy a second hand car. But I want a car that will last me till the end (maybe the next 20 years?) and that I can drive around Australia on road trips. That is a dream for when I retire; when maybe I no longer feel the need to travel overseas. And when I have time – Australia is rather big.

So an old bomb is out of the question – I don’t want to break down in the middle of the Outback.

In saying that, I also don’t want an expensive European car with all the mod cons. Can you tell I am not a car person at all? I don’t know enough car lingo. I just want a reliable car that is not going to break down every 5 minutes.

So, I am open to buying a 2 to 3 year old car but I guess with my inexperience, I am worried that I may pick a ‘lemon’. My estimate is I may need $15000 to $20000 for a decent car.

Final thoughts

Ever since I discovered FIRE, it has been at the back of my mind that I need to save up for my own car; for the eventual time when I retire and no longer have access to a work car.

This episode just highlighted the urgency. It made me very aware that I really must start saving for a car as soon as possible. Though I must confess that my secret strategy is to buy my current car from my employer when I eventually retire 🙂

Do you enjoy a current perk at work that you will miss when you retire? How will you cope with the loss?

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How will I cope with travel costs after retirement?

Church of Our Lady before Tyn in Prague (that is not the view from my balcony!)

I am typing this post on a balcony in Prague, in the Czech Republic. On a balmy summer evening. How cool is that?

Oh, and after returning from a scrumptious dinner at a Michelin star restaurant, La Boheme Degustation. Needless to say, the meal was not inexpensive.

Lettuce heart with raspberry powder and a slice of lard – one of my dishes from La Boheme Degustation

This got me thinking …

How I currently fund my travels

I save for my travels in two separate accounts  – one that I use for ‘spending money’ while I am overseas and one for serious costs such as airfares and accommodation.

The account for spending money does not accrue great interest.  But it has no foreign exchange fees and comes with a debit card that can be loaded with different currencies. So I only transfer money on a weekly basis here when I have imminent travel coming up and while I am travelling. I work out approximately how much I need for the holidays and start automating weekly transfers accordingly.

The second account (which is really my travel account) does accrue good interest. I transfer a weekly amount irrespective if I have anything planned. So it is replenished constantly. And ready for my next lot of travels, whenever it may be.

This account is non negotiable – that is how important travel is to me. I don’t want my finances to prevent me from travelling whenever I feel like it. Just as I always have a valid passport. Sure, my work schedule may prevent me from travelling at the drop of a hat. But I don’t want to, ever, be constrained by my lack of funds.

What happens now when I am on holidays?

Generally, by the time I leave the country, I will have already paid for the expensive items such as flights and accommodation plus any pre booked events. I only need money for food, transport and sight seeing expenses while I am travelling. This money then comes out of my spending account. Which is funded. So I don’t draw any money from my usual everyday account while I am on holidays.

While I am away, my everyday account will continue to perform as per usual ie automated weekly deductions to the emergency fund, investment account etc will continue uninterrupted. And any bills that are direct debited from this account or my credit card will also continue as per usual.

Most importantly, my weekly pay cheque will continue to be deposited into this account while I am on holidays.

That’s correct – I get four weeks paid leave per year. I have never done unpaid leave before. If I travel for more than four weeks, it means I did not use up my leave entitlements the year before. Or I have long service leave available.

After I return from my travels

Any money left over in the spending account will be transferred to my emergency fund.

And that weekly amount I was depositing into this account will now be available for the emergency fund which is very close to funding 6 months of expenses.

So … when I retire …

What happens when I retire? That is, I will not have any consistent income like a pay cheque. Yes, I may have the odd dividend arriving from my shares portfolio but that is hardly consistent at the moment. Hopefully, my shares portfolio will grow to a bigger pie by the time I retire in the next decade.

But the question remains – how will I feel if I cannot replenish what I have spent?

I know intellectually, that my nest egg should provide for me – I will not retire unless I have a certain amount saved up. And whether I use the 4% rule or be more conservative and use 3% or 3.5% – that is all conjecture at the moment.

And I have budgeted overseas travel in my plans. I only travel every second year now but I can envision myself travelling every year if I don’t have work commitments.

But psychologically, how will I cope? I can justify spending money (within reason) now, knowing very well that I am still getting paid while on holidays. And that I have a job to return to which means more incoming pay cheques.

So I find myself pondering this …

Should I travel as much as I can now, while I can spend $250 on a dinner, knowing that I can replace it? And while I am in good  health and can walk happily for miles? 

Maybe I should focus on the expensive routes and cities (that’s you, Scandinavia & western Europe & dare I dream it – Antartica?) while I’m working. And leave Asia and South America until I retire.

Maybe I should have my fill of Michelin star restaurants now. And what about cooking lessons? But I have always dreamed about cooking in Tuscany or Provence – join one of those insanely expensive tours where you stay in a magnificent historical house in the countryside and cook and eat.

Will I still want to travel or will I not enjoy travelling as much if I cannot spend money on experiences that I value? If I have to question every expense, justify every dollar …

Needs and wants change …

Perhaps I am worrying needlessly. After all, what I think I want when I retire may not be what I want when I do finally retire.

For example, on this holiday when I was in London with my niece, I was much happier spending time with her than gallivanting about town, attending shows and eating at trendy restaurants. Which is absolutely what I would have indulged in if my niece were not available. And it was what I did on previous visits before she was born. I did do those things on this trip, just not as much as I did on previous trips.

So who knows … I may tire of eating at overseas Michelin star restaurants; I may give up that dream of joining a culinary tour to Tuscany or Provence; maybe the need to visit Antartica will fade …

After all, I cut out my daily takeaway cappuccinos when the need arose. Perhaps travel experiences will be not be any different.

And there may be new dreams – like spending each summer with my niece or exploring mini retirements …

Sigh …. I think my FI date just got pushed further away …

Final thoughts

Am I over thinking this? Maybe. But it’s best to think out scenarios and prepare for them. At least, anticipate that there may be a problem.

And start thinking about how I would react or respond. And perhaps explore if some other contingency plans can be forged.

 

How about you? Do you have an expensive hobby that you worry you may not be able to fund once you retire? Am I thinking this all wrong?

 

 

 

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