How to start you own death spreadsheet in Excel – part 1

death spreadsheet overview

Grimly titled but the death spreadsheet is the most useful spreadsheet I have ever created.

I created the first version of this document back in 2014 when I felt like I was trapped in an awful job, earning quite well but job stress was out of control and I wondered if I had to tolerate this level of angst and frustration for the rest of my life.

To wrestle back some form of control, I decided to create a spreadsheet to work out exactly how much we needed to earn to live a reasonable life – for the rest of our lives. To build this spreadsheet, David and I had many conversations, over a period of time, to think about and design the type of financially independent lifestyle we would be happy with. An extravagant, luxurious one? No – not really our thing. A really nice lifestyle that includes international travel once a year, travelling within Australia, going to other capital cities, money for our hobbies/passions, time for volunteering and one home renovation project a year? Yes, definitely. I’ll take that version of financial independence any day of the week.

In 2014 we were close to paying out our mortgage, so our expenses were about to change considerably. I also knew both had good superannuation or retirement savings, so I wanted to understand, excel spreadsheet cell by cell how much we needed to earn in order to be financially independent.

And so the death spreadsheet was born. On the top line, I created a table out to David’s average life expectancy and mine (there is a little age difference 😊). Then I plotted out our expected income and expenses until we died. Fun, huh!?!

Key assumptions for the spreadsheet:

  1. Indexation of 2% for wages and our superannuation pensions (except for mine – I’ll take a flat rate)
  2. Inflation over our lifetimes (around 2%)
  3. Conservative estimated earnings on our investments at 5% over the next thirty or so years.

I created detailed expenses tabs that adjusts for this year and next when our expenditure circumstances will remain the same. In 2020 we expect to be paying for only one child in total – the other children may be living here and eating with us, but they will be largely responsible for their own expenses.

I have highlighted the current year we are in, and the year my husband’s superannuation commences ( I LOVE to see those two drawing closer together – means we are closer to financial independence).

You can see our net result bounces around a little but that’s ok – over the 12 year period, it works out about even. In my next post, I will detail how I have calculated our expenses over this period, and how I have calculated how our investments will support us in our two stage financial independence plan, paying down like an annuity.

Excel has saved my sanity! Never thought I would say that out loud to the world…..

 

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92 days of winter survival plan

autumnThe last surviving autumn leaves in our garden

Here in the southern hemisphere, winter has hit. I live in Australia’s capital city, Canberra and it really turns winter on. So the 92 days of a Canberra winter have begun and I’m frantically thinking of how I can enjoy winter, rather than endure it this year.

The summers in Canberra are perfect – it rarely gets beyond 40 degrees, and the overnights are very bearable with a sheet on the bed and the quiet whispers of a cooling ceiling fan. We love our house in summer because we have a pool and various outdoor eating areas to enjoy alfresco dining. It’s on those long summer nights with a glass of wine and the sun setting I thank my lucky stars and can’t believe the life I am leading.

But that lifestyle is still 910 days away and I need to live for now, rather than focusing on when my life will be better once we are financially independent. So I have started a survival list of things to inspire me during the 92 days of winter.

  • Knit my cosy bed blanket. I have purchased some chunky Peruvian wool (like 10 skeins) and have started knitting a large blanket to really keep us toasty during the -6 degree over nights here in Canberra. Just knitting that thing keeps me warm as it continues to grow beyond my lap to my knees as I am knitting.

 

  • I have discovered chai lattes. A little late to the piece, but I made this yesterday, along with some cashew milk and OH MY – it’s like a hug in a cup. Beautiful winter spices in a warm mug in my hands. Yesterday’s recipe was a little ad lib, but worked beautifully:

Chai Latte

  • In a small pot, fill up half way with water and put on the stove top
  • Add to the pot a couple of cinnamon quills, some fresh ginger chopped, grated fresh nutmeg, some allspice, some vanilla pods or paste and some cardamom. I haven’t given quantities here because it really is an individual preference about how spicy you like it.
  • Simmer for five minutes to enable the spices to infuse, and then add two earl grey tea bags for another five minutes.
  • Cool and transfer to a container for the fridge you can use when you need a little warm pick me up. You could either drink this tea heated, or whip up some milk/cashew milk or other nut milk and add half and half with a teaspoon of honey, warm it through and enjoy.

 

chai tea

My chai tea mixture next to my favourite smokey wintery smelling candle

  • If you are home, follow the sun around your home. I have written about this before but I watch how the sun heats up particularly areas of my home naturally and I design my day around where I can catch the most sun.

 

  • Of course days like today are no good for sun catching – it’s overcast and super cold. So basic one I know, but for now I put on more clothes to stay warm, rather than using the indoor heating. I was listening to a financial podcast where one FIRE interviewee just wears a onesie all day and doesn’t put the heating on at all. I’m not at that extreme yet, but I will spend the time to design my stay at home days around the weather.

 

  • Right now the house is 18 degrees but the temperature will fall throughout the day without any sun to warm up through the double glazed windows. So I am doing my indoor work this morning; will grab a bite of lunch here and then head out in the afternoon to complete my tasks – taking an old chest of drawers and office chair to the second hand place; visit my daughter; read up on my favourite magazines in the library and find other cosy, free spots to relax until David comes home and I can justify putting the heating on. One of the greatest pleasures for us is the gas fire we installed during our renovations. It has a mesmerising flame and pushes out heat.

 

  • Make slow cooked soups and stews that are homecooked, without anything artificial and fill up your belly with yummy warm, flavourful, rich food. Last night I made bone broth too, which is a great base for soups, with bones from the butcher, left over vegetable scraps I collect in the freezer, bay leaves and apple cider vinegar.

bone broth

So there’s my top six for now. What do you do to enjoy winter?

So why financial independence and how does it relate to simple living?

living area

This is a quiet nook in the corner of our newly renovated living area.  I’ll do a house tour later this year.

So why financial independence and how does that relate to simple living?

I love the fact as humans, we are constantly evolving and changing.  I have always had a really big thirst for knowledge, and when I am really interested in a topic, I emerge myself in all available material to learn and grow and connect with like-minded people.

I have found this is absolutely the case on my simple living journey.

First came the feeling over being overwhelmed. With five kids more than half time, a busy job, two kids with mental health issues and interests outside of work, I felt I was never on top of things and always running behind.  My to do list was always longer and greater than 24 hours in any day and I never truly felt like I could sit down and relax.

My health started giving way and I realised things needed to change.  So we created the year of austerity to pay down debt and not be a slave to full time employment.  We achieved this goal in 2015 after some hard work and a small inheritance.

During this time, I was also organising the whole house like crazy.  I thought if I made some sense of the physical chaos in my life, simplicity would descend upon our household like some kind of magic.  A place for everything, everything in its place.

But of course, I organised every drawer within an inch of its life, felt only marginally less overwhelmed and realised I just needed to downsize and declutter.  For a while I donated, sold and gave away stuff in my house like a possessed woman.  Gumtree, eBay, Vinnes and Buy Nothing New became my best friends.  We also renovated which provided a great opportunity to reassess a lot of clutter in our house. The downsizing was enormous – I stopped counting at 25000 items, and I forced myself to reassess all purchases, use up all cosmetics, audit the fridge, pantry and freezer……..

I found the two upsides of decluttering were:

  1. The house felt refreshed, sorted and clear of things that previously made my brain ache. I confirmed in the maximalist/minimalist debate, I’m definitely in the latter camp, although far from living out of my back pack with less then 100 items to my name.  Funnily enough, the first year of our retirement David and I have decided we will go through the house and declutter again as a first priority because we can still identify many items that need to go.
  2. We spent so much less money following a consciously commitment to this form of living and this has enabled greater savings for our FIRE plan.

Once I discovered the FIRE community and worked out we could work less I immediately amped up our savings plans and began consuming everything I could on saving, investing and planning for an early retirement. I realised the FIRE path was really one that could really support my goals of living simply and with less stress.  FIRE became the wind beneath my simplicity wings and the two goals merged into one. I reduced my working days to three a week and began living a simpler life – with a longer term financial plan.

So – in short – from overwhelm to organisation to minimalism to FIRE.  I’m sure it’s such a well-worn path. With December 2020 looming, it can sometimes be a source of overwhelm all on its own, but I am looking forward to writing about our plans for our post FIRE life and all of the hope for a peaceful life it holds. For me, financial independence and simple living are inextricably linked.  To live a simpler life I need to have a source of passive income to pursue the things I want to pursue – be fast when I want to be fast and slow when I want to be slow.

Are you on any of the paths to financial freedom or simple living? Have you been down a similar path?

Financial independence update May 2018

NGV

This is from the Triennial exhibition at the National Gallery of Victoria – spectacular.

It’s been awhile on the post (apologies friends!) but sometimes life takes over (like teenagers and their needs) and priorities change. But I’m keen to let you know where we are up to on the financial independence journey and tell you we have 925 days to go until we are financially independent.

NINE HUNDRED AND TWENTY-FIVE DAYS

Feels like an eternity and super close, all at once. I have a countdown app on my phone and I when I started it, the number was 1009 days. In a very short period of time, over one hundred days have passed, so this is going to fly by quickly.

countdiwn

So I am keen to write a bit more on this topic and share with you how and why our finances allow us to live a simpler life.

For this post, I want to share with you our financial independence plan. Not to brag, or to be compared to others. I’m just doing it to actually disclose my numbers and my plan, so anyone doing research on this topic can find some cold hard numbers. Lots of websites talk about “…x times my annual expenses” or $1m at a 4% withdrawal rate. But a lot of these sites are from the US and while they are interesting to read about, I am often left wanting after a google search to find something that represents middle class, urban Australia. And if you can’t find, it create it. Start a conversation. That’s my view.

So we have two scenarios we are working on. One is base level, worst case, where both of us feel compelled to leave our jobs immediately…..(usually a Sunday night sort of conversation at our house – let’s call this the Sunday night calculations) and the more realistic and comfortable version, where there is enough padding (let’s call this scenario Padded FI). Sunday night calcs involve finishing up our well-paying jobs with current savings and just earning enough to make our living expenses between now and December 2020; Padded FI (Financial Independence) see us working in our well-paying jobs until December 2020 and continuing our current savings rate (around $50k per year).

One more thing before I disclose the numbers – we have a two-stage strategy. I am 45; my husband is 52. We are close enough to superannuation to take this approach – Stage 1 Before Super and Stage 2 After Super. But I think anyone contemplating financial independence in Australia can think about it in two stages – pre-super and post-super.

For us, it looks like this:

Now:                   Work to save/pay living expenses until December 1, 2020

Stage 1:               Live on my husband’s superannuation, which he can access from 55 and supplement with investment earnings (2021-2032)

Stage 2:               Access my superannuation at the start of 2033 when I’m eligible to start  drawing a super pension (aged 60) and continue my husband’s (indexed)                          superannuation pension

US case studies rely on the 4% withdrawal rate for thirty-somethings, for the rest of their lives. We only really need to build sufficient passive income for a twelve year period to supplement my husband’s superannuation, before accessing mine.

In Australia, for those families with superannuation, the numbers might work a little differently. You may find you need to live off investment incomes for a period of time until you can access your superannuation. Or you may decide to supplement lower superannuation pensions with some investment income. Either way, it’s important to do your long term financial projections to understand your particular circumstances and discuss your strategy with your financial advisor. Ours got the tick of approval a couple of weeks ago at our annual appointment with our financial advisor.

Stage Income total Sunday night Padded FI
Stage 1 Husband pension $       73,621 $         73,621
Investment earnings $       27,433 $         29,819
Income total $     101,054 $     103,440
Savings remaining $               – $     120,000
Stage 2 Husband pension $       86,414 $         86,414
My pension $       40,000 $         40,000
Income total $     126,414 $     126,414
Savings remaining $               – $     120,000

 

As you can see, the difference in income is not that great, but the financial security of some money in the bank is worth the otherwise sleepless nights of not having a safety buffer. So we push through working more and continuing to adhere to the budget, in order to enjoy the fruits of our work later on in life.

Do you have a financial independence plan? Are you thinking about retiring early from a job and pursuing other business or creative interests? If you are game, share your numbers 😊

Upping my Zero Waste game

market shopHello! Life is full of little obsessions.  Lately mine has absolutely been about reducing the amount of plastic coming into the house. I was inspired by the recent ABC Four Corners documentary on the failing recycling industry in Australia, particularly the recycled glass market, and the mass warehouse storage facilities filled with broken glass waiting to be recycled.  I also heard an alarming statistic the other day – in the first ten years of this century we have produced more plastic then we did in the ENTIRE LAST CENTURY. Finally the science is out on how long it takes for plastic to breakdown, but a known known is that it at least takes longer than our lifetime.  So every piece of plastic I buy/use, I am sending to landfill for my children’s lifetime and beyond. It really got me thinking about how complicit I am in all of this excessive plastic production.

The primary plastic culprit in our house is groceries. And I am the grocery shopper, so it is really up to me to lift my zero waste game.  My theory is if I reduce our supermarket intake (processed foods) , and increase my market intake (unprocessed and likely to be unpackaged, food) then we will reduce our plastic consumption.

In our early, pre-zero waste days I would say the ratio would be 3:1 in the supermarket’s favour, in terms of quantity.

A couple of years down the track, and this week when I went shopping, our ratios completely reversed.  It did not take long.  Every month or so, I look for some new alternatives.  For example, with a bit of research, I located a deli that sold cheese cut from cheese rounds (like a beautiful triple cream brie) as well as tasty cheese – that was not pre-wrapped in gladwrap. The deli just wrapped it up in paper and I bought it home and put it in a cheese cloth. I bought some fresh pasta in a stainless steel tin – they just “tared” my tin (put it on the scales and pressed reset so I did not pay for the weight of the tin).

I then went to an organic butcher and purchased my meat in old Tupperware-types of containers. I know this is still plastic, but I also don’t believe in throwing everything away if it still has a useful life  – it’s going to end up in landfill in any event. Finally for mince, I reused some cereal bags that my husband eats – great for mince and they will be washed and recycled at the REDrecycle facility at Coles.

And they beautiful thing about it all – my early retirement plans were not compromised. The entire food shop came under budget, and I bought all organic meat, including two chooks, a leg of lamb, lamb and chicken mince and chicken breasts.

Strangely when I cooked with some of the meat last night, I treated it differently.  Call it psychological but I found myself not just dumping the meat to brown (or stew, when I try to do things too quickly!) but cooking it in batches, looking for the browning meat and making sure not to overcook it. I put way more love and care into my food last night.

That could also coincide with the fact that I now have more time, as I am working two days a week but hey, it felt great.  I enjoyed every mouthful.

Zero food waste fridge set up

zucchini spiral dinner

The ABC’s War on Waste has got me supercharged about food waste.  According to the show, and NSW Government data, the average Australian household throws out 345 kilograms of food waste a year. If you think about that in dollar terms – assume an average of $5 per kilogram of food – that is $1725 a year! Let alone the cost to the environment of the food that ends up in landfill centres.

I have a natural aversion to food waste and like to get creative.  For example this week I was invited to my mother in law’s house for a beautiful roast leg of lamb.  She generously packed us off home with some leftovers “for sandwiches” (what a sweet).  Knowing that sandwiches were already made for the week, I made a middle eastern lamb “pizza” for dinner the next night, using the cooked lamb, peas, mint, fetta, hummus and a smidge of pomegranate molasses that I had in the cupboard, all on puff pastry. YUMMO.  Crunchy deliciousness and no food waste.

Despite my commitment, I felt like I was still finding food that was past its useful life up the back nether regions of my fridge and so I decided to take action. I needed a new system that would enable me to use my fridge like a well ordered machine that would tell me what foods I needed to consume  now or soon.  The obligatory before shots:

I reuse the plastic bags for vegs that I buy and wash in the mesh bags when I get home – this keeps the veg fresher for longer. Bit of a mish-mash of all sorts of things right there in the fridge as you can see.  There is food behind the front row too, because our fridge is quite deep.  And there is no recognisable system of organisation in the fridge door full of condiments etc.

So I planned the system.  Really I wanted my fridge to tell me what I needed to use today, this week or this month.  I wanted to know whether the condiments needed to be used in the next three months or would keep for longer. I wanted to be able to look into my fridge and decide what to shop around, for the next grocery shop.  What needed to be used up next?

A couple of containers from the dollar shop (Home Base in Australia), my labeller and voila. System complete (apologies for poor photo quality – fridge light interfered….):

 

For a little closer look at the labelling:

Have you got any other fridge food waste hacks that I could implement? Hope you are all well.

 

 

 

 

Not dead – just sorting a few things out

potatoesI’m not quite sure what happened to the last six months, but it sure has not been happening on iheartsimpleliving….

We have had some big family shifts and changes and the sum total is that I now work three days a week as of last week and my time for recording our journey has now increased exponentially.

I’ve been obsessed with financial independence of late and have been madly spread-sheeting (again) to see when my husband and I will achieve financial independence. It is seriously now a few years away – more on that in a later post, but for now, I have discovered many resources and other writers on this very important topic that I am looking forward to sharing with you all.

And of course, we have a newly renovated house and have reaped the summer harvest. I’m now preparing the soil beds for winter plantings – an expanded garlic crop this time.  If you have never grown garlic before, buy some organic (non-supermarket) variety – I got mine from our local farmer’s market) and pop single cloves into some well-composted soil, in a sunny position  Water regularly and about (yawn) ten months later you will have beautiful cloves of garlic. My friends Chloe and Paul introduced me to home grown garlic and oh my, I have never gone back.  THE tastiest stuff ever.

Hope you have all been well and are tucking down your homes and gardens as we approach the winter months.  David bought me a book on Hyggie and I have just loved getting the house ready for a cosy winter by the fire.

Renovations are making me minimalist….

IMG_1572

My husband came up with this nifty phrase to describe our family the other week – the accordion family – which is how we came up with our renovation plan a few months ago – to create a cosy, energy efficient space that works for my husband and I while the kids are at their other homes; and a large family home when the kids are all here.

Next week, the kitchen is pulled out and we are without a working kitchen for four weeks. Scary.

Today, in preparation for this huge food shift, my daughter and I made six freezer meals. We will be eating lots of bbqs and slow cooker meals to the extent that it works for the four weeks after next. I started packing up our utensils and cookware today, just leaving out the essentials for the next four weeks.

It feels like accidentally we are taking up the packing party challenge that The Minimalists advocate – packing up your things for thirty days and then removing only what you need from your boxes over time.

So for the next four weeks we will live like real minimalists in the kitchen and hopefully, I can restrain myself post the kitchen renovation to only unpack the things that we need.

Of interest to me today is the pantry. We are now in the process of eating everything we have in the pantry, so I don’t have to pack it into boxes. It is inspiring me to be creative in the kitchen. The 2 cups of dried chickpeas will be made in hummus tomorrow after being soaked overnight. My daughter made three lots of tuna curry to use up three cans of tuna and two jars of mayonnaise. The half packet of French onion soup will be combined with the cream cheese in the fridge for a dip when my mother-in-law comes for dinner tomorrow night. Dinner tonight is chicken breasts with half of the left over potatoes and the last two cups of couscous, with roasted vegetables. My overwhelming concern of wasting food means I am looking at the pantry and its contents in a new way.

The new kitchen also gives me an opportunity to start again. A new simplistic, minimalist approach to food, and a chance to use up the food that we have. I love the way that Bea Johnson, from the Zero Waste Home has only one type of dried legume at a time, and one type of pasta – there is only one pasta jar and one dried legume jar. This approach to food requires you to use what you have, and to not waste food.

 

Simplifying our home

scalesI find it really interesting how people use the space in their houses, particularly blended families like us.  We have seven children and adults every second week, but every other week it is just my husband and I, rattling around in a very large home.

My husband has recently taken a break from work, and it got us thinking. We wanted to use the time to plan out a more simple home to meet our needs, as well as take care of a few renovation projects that were long overdue – our home is showing age and wear in a number of places (bit like me, really….)

To overcome the feeling of too much space every second week, and to create a cosy simple home, we are renovating our living area and kitchen to create a relaxed living space, that together with a our bedroom will be like a little one bedroom apartment. We have organised the zoning of the heating and cooling to move from large house to small apartment; and we are creating a family living area for the big house and a smaller cosy living area for just the two of us.

So with much excitement you can watch our progress over the coming months. We have started in the living area and have pulled up our slate floor, replacing it with a smaller space gas heater.

Here are some before and after photos:

IMG_3979

This was a rarely used area of our house that seemed to be the room for the front door! We have installed the fire and the television with a sound bar, to remove the need for a large stereo and cabinet. Work to date looks like this:

fire place

The fire is calming and relaxing. The set up will enable us to enjoy many warm nights by the fire and appreciate the space. And my husband as the head space to really think about each piece of the renovation plan, building and modifying the home to meet our needs.  It’s fascinating really – while we were both busy work with a crazy out of control life, the house was where we put our bags and keys and lay our heads at night.  Now, with only one of us working, it feels so luxurious to think about each individual room, it’s purpose, personality and to make our house a home.

Empties update

empties 2

Hi all – long time! I have been working full time over the past two months to pay for some home renovations which has meant time has been in short supply. We are trying to do a lot of the manual labour ourselves so every waking moment has involved either working or pulling up slate, painting windows and thinking about kitchen plans – hardly a simple life!

But for me the opportunity is in really thinking about each living space and how we can enjoy it as a family. Our kitchen renovations will enable more food preparation space, to work with the increased volume that will come through the veggie patch that we have expanded. It will mean better organisation of kitchen items and another opportunity to purge as we pack up the old kitchen before it gets knocked down. It will mean more outside family dinners in summer as we open up our living space onto the entertaining area outside. Summer this year will be filled with beautiful family times.

In the meantime, we will be enjoying the fun of doing hard manual labour together and planning living spaces to suit our lifestyle.

I just thought I would update you on my empties that I posted about six months ago. I had this horrible obsession of responding to every gift with purchase opportunity that arrived through David Jones in my letter box and I had a horrendous amount of small cosmetics, umpteen lipsticks and many makeup items that was never going to use.

So I sorted them into things that I would use, things that I would give my teenage daughters and things to recycle/discard.

The things that remained, I committed to using. Slowly but surely over the last six or so months I have used them. I have barely anything left, except for about ten lipsticks which I will continue to work my way through. And I have committed to replacing my cosmetics and skin care products with only things ethically produced or largely natural – only when the run out.

Above is the evidence of the last six months. I’d recommend it. You don’t need to buy doubles and triples of things, or items that come with a gift. Most of the stuff you don’t wind up using and if you are like me, you forget you even purchased them in the first place!