Zero waste – a slow journey to reducing our contribution to landfill

IMG_3258For some time I have been admiring this minimalist home – it’s sleek, completely uncluttered and uncomplicated. It just looks relaxing. Relaxed people must live in it. And of course it has become my dream to live in such a house. Until I tried it. Let me tell you about our zero waste journey.

Bea Johnson is an environment activist, first tackling her own domestic waste, and then inspiring domestic waste reduction around the world. It started with her own journey, then a blog and ultimately a book, which I purchased a few months ago.

The key principles are this:

  • Refuse what you do not need
  • Reduce what you do need
  • Reuse what you do use
  • Recycle what you cannot reuse
  • Rot what you do use

The Johnson family produce a small jar of rubbish that goes to landfill every year. It’s astonishing, isn’t it. A family of four living in the US. THEY DON’T HAVE A BIN. Digest that for a bit.

The crazy thing is that I thought we were doing awfully well as our family of seven to have two recycling bins and a small bin that goes to landfill. Every week. Every week, our family produces such a considerable amount of waste that goes to landfill and masses of recycling.

And I thought we were doing so well, because our recycling bins were double the size of our landfill bin, until I saw this other YouTube clip produced by a really fun and smart environmental scientist that tells me how much oil and carbon that my recycling produces. Sigh. Recycling has become good, but not quite good enough.

So, about eight weeks ago, I embarked on getting our house to a zero waste stage. What I learned I this journey, is that it is actually incredibly admirable to aspire to a zero waste lifestyle….. and the journey to get there can be quite stressful. Over the next few posts I will write about our experience, and how (spoiler alert) we have opted to strive for a low waste household, rather than a zero waste one. I’m quite happy with this realistic compromise.

One thing I found about Bea’s incredible bible on how to get to a Zero Waste home, is that it skips over the getting to zero part quite quickly. I thought I would share with you how we got to our alternative proposition.

And because it is that time of the year, I hope you all have a wonderful break and spend quality, slow time with your loved ones. Take care and see you in 2016.

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Part 5: Retirement planning (or for younger people – financial independence planning!)

IMG_1572

Last financial post for a little while. Well – just for a few weeks…

This week I’m thinking about retirement. I’m really thinking about it because I am having a little mid-life retirement right now, and I’m on the other side of forty.

A couple of things have happened to spur me into action to think about retirement planning at the wee age of 42.

  1. When I was on the treadmill of full time work, I had no idea of how much money I was aiming for, to save for our retirement. If you find yourself in a job that doesn’t thrill you each day, this question about how much money you need in retirement comes into sharper focus (when can you get the hell out of your work place).
  2. At 42, I also had more of an idea of the type of lifestyle I want to live in the second half of my life. And for us, the second half of our lives is less about career and more about fulfilment. It’s less about keeping up with the soccer mums and more about spending time with my family. Being clear on the type of life we want to live means that I can be more realistic about what living expenses I will need

I will ‘fess up. I spreadsheeted our life in excel right out to my husband’s death. I thought about a comfortable retirement where we owned our own house, travelled once a year internationally and pottered about Australia every now and then. I made provisions for:

  • A contribution to either the children’s education or a deposit on a home, given how difficult that is. To do that, I have planned to lock away $20k per child in a growth account until they require it
  • An upgrade to our existing house – it needs a new kitchen, bathroom and ensuite need an update, and possibly the exterior verandah and steps. It’s a 25 year old house and things are starting to peel/chip/rust/corrode/rot – you get the picture
  • $200k to down size and upgrade our house as our birds leave the nest – not sure when this will be, to be honest. But when it happens, I’m keen to live in a house that is consistent with our values like minimalism, leaving a minimal environment footprint and self-sufficiency.
  • We will need to get cars at some point in the future. I’ve budgeted $50k for that, because I know that we will get something second hand or an electric car.

So all up, we need an extra $500k on top of what we need to live on, to meet our anticipated living expenses between now and retirement.

Following these calculations, we went to see a trusted financial planner (word of mouth).

We looked intently at our superannuation pensions and realised that my husband (who I now love a little bit more) has a great pension that he can start to access in five years that will meet our living expenses.

We already have savings. In summary, this means is that we need to save another $440k to meet our anticipated capital or lump sum expenses, maintain our private health insurance and combined with the pensions we will have a standard of living that is equivalent to $100k per annum in five years’ time – and for now, it’s tax free income.

So let’s work backwards. If my husband and I continue to work full time/part time over the next five years, we should be able to save approximately $50-$70k per annum. That will mean that by my husband’s pension age, we will have between $250k – $350k in the bank towards those capital outlays, sans any interest that we have earned.

Come early retirement time, we will need to earn between us around $50k extra per year for 3-5 years to make sure our capital lump sums are taken care of. That’s a very part time job for me at the ripe old age of 48. My husband will be 55.

Prior to completing these calculations, I felt like I was on a working full time treadmill until the ripe old age of 65 at least. The purpose of completing these calculations was to see whether or not that treadmill for life was actually necessary – and guess what – it’s not.

By gritting your teeth through the boring bit of looking at the figures, and getting some advice, you can predict to the greatest extent that’s possible in this uncertain world – what the second half of your life can look like. A part time job for both of us enables us to pursue our passions (volunteering, travel, music, doing up old cars, growing veggies) and taking the slow road in life. It was this calculation that enabled me to take this recent career break and reassess the way we want to live.

Here is the calculation in summary:

  • Current expenses, and then add an inflationary multiplier each year (I chose 3%). Extrapolate out to the time that these expenses are relevant and then reassess. For example, I calculated that we will have kids requiring full care for the next eight years and after that, they will be making some contribution to their own living expenses, therefore our overall expenses will be less. Extrapolate that new figure out until the average survival rates for men and women in your country.
  • Think about the big lump sums that are coming your way in the future. Home upgrade? Medical procedures? Big travel plans? Replacing cars? Home renovations? Contribution to children education expenses? Still paying off the mortgage? When will that be complete? Total this amount.
  • Now add in current income with a wage increase (I used 2% to be conservative)

If you set up the spreadsheet horizontally, and add in when lump sums will occur, you can actually forecast when your cash will be called upon, and the cumulative cash flow position of your family.

Add in when you will start receiving superannuation pensions and there you have the best prediction of your family cash flow. Here’s a blank version of how I set up this sexy spreadsheet:

retirement calcs post tax
Kirsti 43 44 45 46
Husband 50 51 52 53
CPI 0.03
2016 2017 2018 2019
Expense
Capital exp
Extra travel
Kids savings
Renovations
Replacement cars
Total capital
Income required
Salaries
Husband   current income
Kirsti’s current income
Income total
Pensions
Husband pension
Lump sums
Kirsti’s pension
Total pensions
Surplus/shortfall
Carry forward (savings)
Return on savings

I’ve extrapolated this out until my husband’s death at 87…. (cheeky!)

I cannot stress the importance of getting good financial advice. Without ours, we would not have realised how good my husband’s superannuation fund was and how early it was going to enable us to retire.

Now to be clear, retirement for me isn’t about heading off to the golf course and playing bowls at the age of 48 (although if you love golf and bowls, go for it). Retirement for me is retiring from the ball and chain of full time work that I am resentful of. Retirement for me is financial freedom, part time work and the time, space and money to focus on the things that truly bring me joy and fun.

Perhaps this position is best summed up as financial independence and the freedom to live your life as you choose.