Steve Gibson initially wanted to live off just over £12,000 a year but found it impossible due to a hike in his mortgage and energy bills
In our How I Manage My Money series we aim to find out how people in the UK are spending, saving and investing money to meet their costs and achieve their goals.
This week we speak to Steve Gibson, 43, who lives in Plymouth. In 2018, Steve quit his job as a primary school teacher to work as a freelance private tutor for secondary school children. He aimed to live off £12,570 per year, the threshold for starting to pay income tax, but found this impossible. Steve lives frugally and thinks the cost of living is a nightmare for single people. He’s not currently putting money in a pension, but is confident his former teacher’s pension and the state pension will be enough to live on in later life.
Monthly budget
My monthly income: On average, I earn £1,245 per month from my work as a private tutor four nights a week. I also make around £100 a month reselling republished local history books and Lego on Amazon and Bricklink respectively. From April, I expect to earn about £100 per month from my teacher training work, but this may be less or zero.
My monthly outgoings: Mortgage, £680; council tax, £123; groceries, £160; gas and electric, £65; water, £17; mobile phone, £7; broadband, £32; petrol, £90; eating out, £25; streaming service, £10; other household spending, including my pet cat, leisure and camping trips and home maintenance, £160. I put any money I have left over each month into a Trading 212 cash Isa. I spend £450 a year on road tax and business, home and car insurance.
Growing up, my family taught me the value of money. Meals were often self-service from the middle of the table. My grandad’s catchphrase was ‘Stretch or Starve.’
Having studied mathematics at university, I pursued a career as a primary school teacher, earning around £35,000 a year. I left my job in 2018. I loved it, but valued my mental health over money. I think teachers in schools are under ever increasing pressures.
I knew I’d miss being in the classroom, but felt it was the right decision to move on. I now work as a private tutor, focusing on mathematics, for secondary school children. I’m fully booked and have a waiting list. I also run a Facebook group matching pupils with 180 independent private tutors.
Following an infection, I lost most of my hearing in one ear a few years ago. Working one-on-one or in small groups as a private tutor means I can hear everything going on much more easily, enabling me to continue doing what I love. On average, I earn £1,245 per month from my work as a private tutor, however in months like August, this falls to zero.
I make about £100 per month selling republished local history books and Lego on Amazon and Bricklink respectively. I also do some teacher training, though government funding has been drastically reduced, meaning my income from this will be £100 a month or less from April.
On top of my tutoring work and charitable projects I’m involved with, I’m completing a Master’s over two years in Theology, Ministry and Mission with St Mellitus College. I’ve received a £9,500 student loan for this.
I purchased my two-bedroom semi-detached house in Plymouth for £165,000 in 2016 and my mortgage repayment is £680 per month. It is my biggest monthly cost and it would be hugely beneficial if interest rates went down further. I have a five-year mortgage with an interest rate of 4.33 per cent.
When I first quit my job as a primary school teacher, I aimed to live on £12,570 per year, the threshold for starting to pay income tax. That was my goal, but is it now 100 per cent impossible. It doesn’t touch the sides as a single person covering a mortgage and all the bills.
My mortgage has increased by £200 a month and my energy bills have more than doubled, but would have tripled if I hadn’t resorted to switching off the heating for most of the winter. I want to see the standing charge on energy bills dropped. It feels as if I’m paying a single person tax as I’m not splitting it with anyone.
I keep my bills relatively low by following various money saving hacks. When I run the kitchen tap to fill the sink with hot water, I put a large squash bottle underneath and collect the cold water that comes out first. I use this to water the plants.
During winter, I layer up and can often be found wearing a fluffy onesie as well as an Oodie when I’m not expecting visitors. I cannot eat gluten, which limits the ways I can reduce food costs, but I often cook in batches and freeze the leftovers. I don’t have a TV licence as I use a different streaming service each month, rotating through them and taking advantage of any free offers. I’m currently enjoying three months of Apple TV for free thanks to an online deal.
I put any spare money I have each month into a cash Isa with Trading 212, though the interest rate on this has fallen recently. I’m prioritising putting money into my savings over paying my mortgage off sooner. To help me budget, I use an app called Daily Budget, which releases £7 per day for me to live on.
I’d like to retire at 60, but do not think this will be possible. I am not currently putting any money in a pension. At present, my partial teacher’s pension looks set to give me an income of around £9,000 per year. This pension together with the state pension, will, I think, be sufficient for me in retirement. In fact, as things stand now, I think I could survive solely on the state pension, though I’m aware this isn’t an option for many people.
My plan is to continue enjoying a simple life, having a positive impact and helping others. I don’t have a desire to earn a six figure sum each year. If I won the lottery I would stop working, simplify my life further and continue doing my charity work.
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