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Old 09-07-2014, 12:15 PM   #21
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I suspect quite a few here do that feat, including myself (roughly).

Expenses excluding housing & healthcare (like OP) for me this year is +/- $15k per annum. That includes $4k from just one expensive travel trip.

Net income this year will be roughly $106k.

I am a renter though, that hacks into my actual savings rate quite a bit (eats up $19k per year).
You hold yourself up as an example, but you want to cherry pick by excluding housing and healthcare. I did not see where the OP excluded housing and healthcare from his $36K expenses. Also, are you supporting a family of 4?
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Old 09-07-2014, 01:15 PM   #22
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You hold yourself up as an example, but you want to cherry pick by excluding housing and healthcare. I did not see where the OP excluded housing and healthcare from his $36K expenses. Also, are you supporting a family of 4?
I don't believe I'm cherry picking nor intend to. I exclude housing since OP also does that. He has a house paid off so obviously that doesn't show up in his expenses.

Likewise I'm assuming OP has healthcare via his employer (wasn't clear). If not, add 1.2k to my expenses. I live in Europe.

Regarding your last point, no I don't have a family of 4. Multiply by three my costs and you end up at 36k or 50K (with expensive travel) including healthcare. I still have alot of fat in the budget.

For another example, look at MMM. House paid for, wife and a kid. Lives on 24k per year in denver colorado. He posted his breakdown several times and lives a nice life.

Jacob (of ERE) is even lower.

Just to say it is frugal but doable without depriving yourself. Many do.
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Old 09-07-2014, 02:49 PM   #23
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I don't believe I'm cherry picking nor intend to. I exclude housing since OP also does that. He has a house paid off so obviously that doesn't show up in his expenses.
I don't want to get into an argument with you, but just because someone has a $350K paid off house doesn't mean there are not expenses associated with it. Most pay taxes, utilities, maintenance, insurance, etc that can add up to quite a lot on a house like that.

Since you come from Europe, your experience may be different and perhaps thats also the case for the OP. Its tough to compare such expenses unless we are talking apples to apples, and your example looks more like a pear.
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Old 09-07-2014, 05:06 PM   #24
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Not skeptical, but very curious. I would like to know how to live on $36K/year with a family of 4, in a $350K house, and not eat dog food.
Me too. Awaiting the answer with bated breath.
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Old 09-07-2014, 05:57 PM   #25
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Not skeptical, but very curious. I would like to know how to live on $36K/year with a family of 4, in a $350K house, and not eat dog food.
Around here, a $350K house would run you approximately $7K in property tax. Heating that house is probably going to run you about $2k per year if NG, maybe $4k if oil, more if electric. Aside from heating, the electric bill will run probably $1.5k per year -- more with central a/c. Homeowners insurance will be another $2-3K. Water will be $500 per year. So you're looking at $15-16K per year just to sleep indoors. If you can pay for everything else for a family of 4 -- food, clothing, transportation (including car payment, taxes, registration, insurance and repair), entertainment, school expenses, telephone, cable, home and garden repairs, etc. -- all for less than $1700 per month, then you are truly a wizard at pinching a penny. I couldn't do it.
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Old 09-08-2014, 04:58 PM   #26
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Family of three, $300K paid for home. We try to limit our spending to $3K a month. In reality:

Property taxes: $750
Electric: $150
Water: $100
Gas: $40
Cable/Internet: $75
Home insurance: $65
HOA: $40
Car insurance: $75
Fuel: $300
Food: $500

The remaining $905 (or $10,860 per year) goes towards rare eating-out and a couple of week long vacations per year.

CapEx items like car replacements and major home repairs obviously are not included but we have managed to save thousands on such things because (for now) I am able to do them myself.

I did not include HC because currently DW's job covers that. If we didn't have that, it would mean she wasn't working and we'd most likely be eligible for ACA subsidies anyway.

Can it be done? I think so. But it takes an awful lot of work.
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Old 09-08-2014, 09:45 PM   #27
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Family of three, $300K paid for home. We try to limit our spending to $3K a month. In reality:

Property taxes: $750
Electric: $150
Water: $100
Gas: $40
Cable/Internet: $75
Home insurance: $65
HOA: $40
Car insurance: $75
Fuel: $300
Food: $500

The remaining $905 (or $10,860 per year) goes towards rare eating-out and a couple of week long vacations per year.

CapEx items like car replacements and major home repairs obviously are not included but we have managed to save thousands on such things because (for now) I am able to do them myself.

I did not include HC because currently DW's job covers that. If we didn't have that, it would mean she wasn't working and we'd most likely be eligible for ACA subsidies anyway.

Can it be done? I think so. But it takes an awful lot of work.
$9000 in property tax on a $300K home? They are seriously charging you 3% of your home's value per year just for you to live there? I hope the local school system enjoys their brand new I-pads and school bus with hot tub.
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Old 09-08-2014, 10:37 PM   #28
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Look like YOU can retire. The situation will be better if your spouse does not retire. I disagree with some other people here, I think a family of 4 can live on $36K. When I was a graduate student, a family of 3 of us lived on a $12K stipend in Arlington, VA, and we did not eat cat food and was not on any government aids.

By the way, what do you plan to do at 43 without working?
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Old 09-09-2014, 06:50 AM   #29
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$9000 in property tax on a $300K home? They are seriously charging you 3% of your home's value per year just for you to live there? I hope the local school system enjoys their brand new I-pads and school bus with hot tub.
Yes. Looking at the 2013 property tax breakdown, between the city, county, school, hospital district, MUD, community college and EMS/Fire it's 3.11% of appraised value.

The schools have Ipads but no hot tubs yet. And they certainly don't have a sterling reputation in regards to quality of education.

But property taxes are an area we could reduce if we needed to by selling and buying a much lower valued home.

We could even defer them when one of us reaches 65; the state will not collect them but instead let them accrue at 8% interest per year. The bill then comes due when the property changes hands.

There is a joke in Texas that nobody really owns their home, they just rent it from the state.
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Old 09-09-2014, 09:36 AM   #30
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There is a joke in Texas that nobody really owns their home, they just rent it from the state.
At 3% you might as well. Quite shocked by that I must say.

Then again, you don't have state income taxes in Texas right?
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Old 09-09-2014, 10:52 AM   #31
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At 3% you might as well. Quite shocked by that I must say.

Then again, you don't have state income taxes in Texas right?
Austin is higher than most. The statewide average in Texas is just over 2%. Yes, Texas has no income tax. So it's a great place to have a high income, but not a great place to own lots of property.

Even so, considering all state and local taxes, Texas usually ranks among the top 5 states for lowest taxes, generally about 25% below the national average.
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Old 09-09-2014, 12:05 PM   #32
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I'm absolutely baffled and impressed by families of 4 that can live this cheap. I'm embarrased to say that we spend over $120k per year for our family of 4. Two kids in high school. We spend probably $1,200 a month just on groceries alone. Then there's car insurance for the kids, gasoline, etc. $8k/yr mortgage. 2 cats and a dog that probably add up in vet bills. old house that requires maint. No doubt we spend more than we should, we do take decent vacations for example, but we're not extravagant. We live in Houston.
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Old 09-09-2014, 12:11 PM   #33
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Yes, Texas has no income tax. So it's a great place to have a high income, but not a great place to own lots of property.
Unless you have an ag exemption and then you pay next to nothing. Anyone that owns any property large enough to have livestock have them just to get the ag exemption.

Texas has a nominal 8.25% sales tax (including local portion that a couple places don't fully implement) and property taxes from hell. The only nice thing is that a typical $350,000 house in most metro areas would sell for several times above that in similar areas in Cali, NJ, MA etc.
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Old 09-09-2014, 12:18 PM   #34
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I do find these kinds of debates (level of spending/thrift) at some level humorous. For me personally, I would have never ER'ed if I had to manage my spending aggressively. The point to me of ER is to enjoy myself/life as opposed to simply being able to live/exist without working. Had I not had enough for ER on the terms that I wanted, but had hated my job, I would have used my savings to subsidize a line of work I could enjoy (i.e. take a lower paying job and let saving subsidize lifestyle).
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Old 09-09-2014, 12:45 PM   #35
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I do find these kinds of debates (level of spending/thrift) at some level humorous. For me personally, I would have never ER'ed if I had to manage my spending aggressively. The point to me of ER is to enjoy myself/life as opposed to simply being able to live/exist without working. Had I not had enough for ER on the terms that I wanted, but had hated my job, I would have used my savings to subsidize a line of work I could enjoy (i.e. take a lower paying job and let saving subsidize lifestyle).
That was my original point, how can anyone that has $151K after tax income limit their lifestyle to $36K per year and look to retire early on that amount with a family of 4. To me, that would take incredible discipline and I for one could never live or face a rather long retirement with that $ constraint. I also suspect that some of the expense numbers being mentioned in this thread may not be all inclusive of all "actual" expenses, but no point debating that further.
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Old 09-09-2014, 01:16 PM   #36
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I do find these kinds of debates (level of spending/thrift) at some level humorous. For me personally, I would have never ER'ed if I had to manage my spending aggressively. The point to me of ER is to enjoy myself/life as opposed to simply being able to live/exist without working. Had I not had enough for ER on the terms that I wanted, but had hated my job, I would have used my savings to subsidize a line of work I could enjoy (i.e. take a lower paying job and let saving subsidize lifestyle).
It's all about priorities. I once had a realtor tell me "everything in life is a compromise" and I see that everywhere I look.

For some, time is the thing they value most, and they would prefer to be home with their kids, enjoying low cost activities with them, then keep working. For others, they want their retirement to be a time for great travel. Some go for something in between.

I do admire folks with low cost budgets. The one posted here looks very reasonable but my budget for two (excluding HC) is $70k (no mortgage, no other debt and a travel budget of $5k / year).
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Old 09-09-2014, 01:28 PM   #37
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Austin is higher than most. The statewide average in Texas is just over 2%. Yes, Texas has no income tax. So it's a great place to have a high income, but not a great place to own lots of property.

Even so, considering all state and local taxes, Texas usually ranks among the top 5 states for lowest taxes, generally about 25% below the national average.
While we aren't in Austin proper (about 20 miles outside of Austin), yes - Austin is expensive.

But I was in the Fort Lauderdale/Boca Raton/Miami area for a week last month and did some extensive comparisons because we were entertaining the thought of moving to Florida.

I was shocked, as I always believed that Florida was comparable to Texas.

While property taxes were lower, comparable homes in comparable neighborhoods cost much more; home and auto insurance was almost triple what we currently pay. I'm betting utilities are much higher as well.

Gas was $3.09 here and $3.55 there.

Groceries? I took pictures because I couldn't believe the difference. While Walmart seems to do a pretty good job on keeping the price of dry goods consistent among different regions of the country (pasta, sauces, cereal were exactly the same price), milk was $4.35 a gallon (it's $2.98 here). Meat, dairy, produce and baked goods (bread) were all much higher and the produce couldn't compare in terms of freshness. I suppose there are advantages to being right up the interstate from Mexico where a lot of our tomatoes and other vegetables come from.

I've since been told that I was looking at one of the most expensive areas of Florida, a point that seems to bear evidence that one's acceptance of whether or not another's claims to be able to live on a certain amount of $$ each month can definitely be clouded by local conditions.
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Old 09-09-2014, 01:59 PM   #38
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I was shocked, as I always believed that Florida was comparable to Texas.

While property taxes were lower, comparable homes in comparable neighborhoods cost much more; home and auto insurance was almost triple what we currently pay. I'm betting utilities are much higher as well.

Gas was $3.09 here and $3.55 there.

Groceries? I took pictures because I couldn't believe the difference. While Walmart seems to do a pretty good job on keeping the price of dry goods consistent among different regions of the country (pasta, sauces, cereal were exactly the same price), milk was $4.35 a gallon (it's $2.98 here). Meat, dairy, produce and baked goods (bread) were all much higher and the produce couldn't compare in terms of freshness. I suppose there are advantages to being right up the interstate from Mexico where a lot of our tomatoes and other vegetables come from.

I've since been told that I was looking at one of the most expensive areas of Florida, a point that seems to bear evidence that one's acceptance of whether or not another's claims to be able to live on a certain amount of $$ each month can definitely be clouded by local conditions.
I am on the other coast near Tampa and the prices you quoted above are similar to what we have here. Homeowners insurance went through the roof after the 2004 season. Don't let anyone fool you, its expensive to live in paradise, but you can find good sales and manage your expenses if you take the effort.
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Old 09-13-2014, 01:04 PM   #39
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With kids at college age and in their early 40s, the OP's spending budget is a big concern but anything is possible. Of course semi-retiring mid50s seems early, for myself. Everyone's circumstances differ.
We're similar in investment assets and a paid off house but more than 10 years older. DW will continue working for a few years next year when we move to the PNW and I'll work PT and draw from retirement while DW's continue to accrue (one hopes). I'll qualify for retirement health coverage and can draw from retirement plan, which is a big factor. We're planning an aspirational budget of 100k/year largely to fund a lot of travel and contingencies to support DM; about half that is the survival budget.
Barring a market collapse, after a few years of semi-retirement, I plan to shift to full retirement and DW to partial/consulting, then full retirement for DW in about 5-6 years.
Everyone's circumstances differ.
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Old 09-13-2014, 01:18 PM   #40
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Can I retire now?

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That was my original point, how can anyone that has $151K after tax income limit their lifestyle to $36K per year and look to retire early on that amount with a family of 4. To me, that would take incredible discipline and I for one could never live or face a rather long retirement with that $ constraint. I also suspect that some of the expense numbers being mentioned in this thread may not be all inclusive of all "actual" expenses, but no point debating that further.

Pretty much my numbers. Not counting mortgage. I pay my savings accounts first, and try to make due with whats left.

I do not have the family of 4 though. However, i find it strange that people are including paying fir their kids insurance and gas. I had to work and pay my parents those costs if i wanted access.


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