Bloggers on FIRE – Money for the Modern Girl
In our Bloggers on FIRE series, we interview European FI bloggers to find out what makes them tick. Our aim is to build up a “who’s who” directory for the European FI blogging world. We hope you enjoy the series and discover some new blogs to follow. You can find a full list of our Bloggers on FIRE interviews here.
Please briefly introduce yourself to FIREhub.eu readers
My name is Sonia and I grew up in Italy. My father is Italian and my mother is German, so I have plenty of relatives in Germany and a strong connection to that country, so much so that I married a German. Our daughter was born in London in early 2017 and she is just great to be around. I have lived in the UK (mostly London) since 2004 and became a British citizen in January 2018.
I work in digital marketing specialising in Google Ads. I like my job because it is a mix of numbers, website user psychology and liaising with people (many of whom feel overwhelmed by this discipline). It also allows me to be in touch with digital advancements, and it satiates my desire to tinker and learn and try out new things.
What’s your backstory?
My sister and I were raised in a very traditional way: be a well-educated, good girl and you’ll find a husband to look after you and your kids. The surprising thing for me is that my mum was only able to break out of an unhappy marriage thanks to her job, yet she never broke free of the thinking that “money” is a man’s business.
My family is a middle-class family and although we were never rich, money was never scarce. As a kid I always got the feeling that somehow it’ll work out and that we should just keep on living the way we were. This is how a lot of our baby boomer parents lived.
I moved to London for a short work project, but I had only purchased a one-way ticket. I knew very soon that I would stay, I love this city. I also realised early on how expensive it is and that you need a certain level of income.
Living here during the financial crisis of 2008 onward and now Brexit is very interesting and helps me focus on what I really value. Yes, I’d like to live in a bigger place as our daughter grows (one more room would be brilliant), but not at the cost of worrying about mortgage payments in case our income decreases because of political and economic changes.
As a European by birth, I have a conservative attitude to debt – avoid it. Except for your mortgage. For example, I totally and utterly dislike the fact that when getting a credit card in the UK, the option of paying the total open balance automatically by direct debit is not the default option. No wonder some people get into credit card debt!
Why do you want to reach Financial Independence?
I became aware of the movement years ago by reading blogs like Mr Money Mustache, but couldn’t completely relate to them as they are too American and manly (“and then I built a whole house by myself” kind of thing).
I started getting serious about Financial Independence a few years ago when I got tired of working a lot and started wondering what else I could be doing. Buying our flat and redundancies definitely helped me focus!
We bought our first place in 2015 in a London suburb. We love the flat and the area, but for a long time I felt a heavy mental burden to have so much debt and put any money I had (except for my F* money) into overpayments.
Then I was made redundant twice between 2015 and 2017 – great financially, not so great on an emotional level. The second time I was made redundant was a few weeks into my maternity leave (yes, there are ways to do it, legally). I had a difficult pregnancy and my daughter was born early; when I was told about losing my job she was still in hospital. The money offered was enough to take away the financial stress, but a large part of trust in employers was also gone.
Since then I’ve been trying to figure out how I can make a living on my terms. I set some goals for myself such as by which age I want to stop working the way I am now and how we can change things if our daughter’s requirements change.
How much is your “enough“?
My husband and I know how much we need to live and would choose a normal FIRE rather than lean FIRE or fat FIRE. It helps that we are both enjoying our jobs, but I am willing to reach FIRE later if I chose to work less (or differently) in the meantime.
We still live in a fairly small flat and overall are very conscious of our expenses and work on keeping them low. For example, we do most of our food shopping at Aldi, a German supermarket chain we know and trust.
However, we are both aesthetically conscious – we live in a nice part of London, have a nice interior design and generally enjoy nice things in life. We are also not willing any longer to get a 6am flight just because it’s cheaper.
It helps that we are aligned in our beliefs hence we don’t work against each other.
Where are you on the road to Financial Independence?
We are still at the beginning, or at least that’s what it feels like!
In a recent blog post I wrote about the Financial Independence Hierarchy of Needs – we are in the Taking Control phase, also called the accumulation phase.
I am now 42 and want to stop working the way I do now at 60 or sooner. Seeing the number 60 in writing is a little scary… 18 more years to go?! I will aim to aim to not need to work any longer at 55 or sooner.
I want to start drawing my private pension at 65 and will get my state pension at 68 (or later if rules change till then).
That means I will have to live off my passive income for 5 – 10 years while my daughter is still living at home. I mentioned above some of the strategies I plan to use (lower fixed costs, invest in tax-advantaged accounts, leverage pension to save on tax), but I think I’ll be like many FIREs – I will still work and be busy, just differently. I will probably still earn some money (I like to get paid) but may work part time or work a different job.
In the meantime, I want to work on my terms – shorter and cheaper commute, some time off every 6 weeks (even if just a day or two, plus regular holidays), time to have enough mental space so I don’t feel stressed or overburdened.
My regular readers may be surprised that I went from contracting to an employee again. I recently started working for a company that ticks many of these boxes. I now cycle to work in half an hour mostly along the river Thames thus saving time (my commute used to be 1 hour) and money (£230 / month vs. the occasional bus ride when the weather is horrible). They are family friendly (e.g. they don’t make my life difficult if my daughter is unwell), and every year they give all their staff an extra day off for their birthday, one for charity work and one for their mental wellbeing (e.g. to go to an exhibition). And they pay me what I asked for.
What do you want to do with your life once you reach Financial Independence?
My plan is not set in stone because I’m still quite far away and so many things could happen and change in the meantime. Say another revolution like the internet will happen – things would be drastically different.
As mentioned before, I am not the kind of person to sit idle and watch TV all day long. After a thorough digital detox and some travelling, my time will probably be divided among the following:
- Spend time with family and friends
- Spread the word on financial independence (education)
- Explore new hobbies
What is your strategy for reaching Financial Independence?
In the past I focused on getting a higher salary, and I am now at the stage where I can shift my focus to these other elements:
1. Lower our fixed expenses
Example: we bought our flat 4 years ago and thanks to savings and redundancy pay-outs we were able to make enough overpayments to reduce our monthly mortgage payments by £250. We have also just remortgaged, getting a lower interest rate and reducing our monthly expense by a further £250 a month. This means every month we are now paying £500 less than 4 years ago! We chose not to reduce the term (total number of years left on the mortgage) as the interest is low at the moment and if we are left to pay a couple hundred pounds a month for longer, we can live with that.
Another example I mentioned above is the reduction in my commuting cost by over £200 / month.
Just these two things mean that I now have £450 more in my pocket every month (public transport + my half of our mortgage). And my husband is also £250 / month better off.
2. Explore tax efficiencies
In the UK from the age of 55 you can take out 25% of your private pension’s value every year – tax free. That means you don’t pay tax when you pay it in, and you don’t pay tax on the 25% you take out. I plan to pay in as much as I am allowed to before reaching that age, then withdraw some and put it into my ISA and other investments that allow me to reach the 4% withdrawal rate sooner.
3. Increase our passive income
We are in the taking control of our accumulation phase. We both invest in ISAs (savings accounts where you don’t pay tax on your gains). Currently we have peer-to-peer ISAs, my husband has a Lifetime ISA (I am 2 months too old!) and I’d like to open a fund ISA soon. We both make healthy pension contributions and enjoy the tax refunds given to the higher tax payers.
I am also investing into a Junior ISA and a Junior pension for my daughter to help her with future university costs (or whatever else she wants to invest it in). Btw, in the UK you can claim tax benefits on a child’s pension based on the tax brackets of the parent the child’s account is linked to. My daughter’s is linked to mine, so she also gets a 40% tax benefit on what I pay for her pension. 😊
4. Last but not least, get to meet more FIRE people and exchange ideas and opportunities. Build my community!
What will be your financial strategy after reaching FI?
As mentioned above, I invest a lot in my ISA and pension. Besides this I am likely to invest in funds via Vanguard in the near future as you can start with a small amount and grow it bigger.
I am also open to investments in companies either directly or via crowdfunding – feel free to contact me!
I think that the golden era of property investment in the UK is over, it is now quite down to luck to bag a good deal. We own our flat, but we see that more as our home than as an investment. I thought about investing in property in the Eurozone, but Brexit showed us the risks of investing and having regular payments in a currency that is different than the one you earn in.
In 2011 I started a blog that gives me a moderate yet regular income. It is a website in Italian on how to write a good CV in English. I earn some money through AdSense advertising and get the occasional translation. It is not a life-changing amount but nice to have and a way to try out new things.
What was your biggest financial mistake?
There are two:
1. Not starting sooner
Think of how much more money I could have saved! I never had a “money mentor” and stumbled across Robert Kiyosaki’s Rich Dad Poor Dad years ago, but it didn’t (and still doesn’t) mean much to me as it is too American, too far from my own life and money philosophy. I also read Mr Money Mustache before getting serious about financial independence, and although I immediately liked him, for a long time he was too manly and too American for me.
These are the books I wish I had read sooner*:
- The Simple Path to Wealth: Your Road Map to Financial Independence and a Rich, Free Life – by JL Collins
- Overcoming Underearning: A Five-Step Plan to a Richer Life – by Barbara Stanny
- RESET: How to Restart Your Life and Get F.U. Money: The Unconventional Early Retirement Plan for Midlife Careerists Who Want to Be Happy – by David Sawyer (to be fair, this book only came out last year, but you get the gist).
2. Not buying a property in London sooner
Why did I not do it? Because I grew up in a different economic culture (Europe) where rent is heavily regulated and property is not as much an investment as it is in the UK. In hindsight I wish I had understood the “local rules” better.
What advice you would give to your younger self?
Think about what you really want to achieve in life, then make tangible changes to your finances that will enable you to dare more.
An example: when I started getting serious about financial independence, my husband was supportive but treated it like my hobby which he wasn’t involved in too much. It was only when I showed him real, tangible results that he started listening. I showed him:
- How we could lower our monthly rent / mortgage payments
- How I searched until I found the best paying savings account, then watch your money multiply daily
- How I got a better paying job without compromising my life values
What’s your wildest dream?
Help reduce the stress people all over the world feel.
Many people worry about money, so financial independence education is key. But stress can have a number of different causes:
- Mental health
- Young people not knowing what to do with their lives
- Instability caused by political, economic and climate changes
- Social injustice
- Many more
What’s your favourite just-for-fun activity that brings you joy?
Cycling, going to soft play with my daughter (and going in with her), going to music concerts, travelling and generally taking time to decompress.
*As always on FIREhub, these are NOT affiliate links.