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Crazy expenses in first year
Old 02-20-2013, 04:23 PM   #1
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Crazy expenses in first year

Has anyone had just a series of events causing big expenses in the first year?

We have had a few. First - our air compressor went - it was only 10 years old and we did not expect to replace it for awhile. (came with the house and was poorly maintained) $2500. Then the washer went - also did not expect that - $1000. We also needed to do a family trust (which we put off forever) and that added about $5,000. (this was a choice)

To then add insult to injury, our 7 year old dog jumped and came down on a hind leg, shattering it. Cost about $5,000 total for the surgery (rod and plates) and lots of follow up. No "dog injuries" line item in our budget.

We are still OK, which means we have probably over budgeted by more than expected. I would be happy if someone reassured me this is not likely to happen again. Not to mention the year is not over - until May!

And yes, my DH already said the dog gets one major injury, no more.
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Old 02-20-2013, 04:34 PM   #2
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And yes, my DH already said the dog gets one major injury, no more.
Not retired yet, but tracking expenses closely starting in January. In six weeks our cat was diagnosed with Kidney failure and dog with hypoglycemia. We have a pet care line in our budget, but we are way over. Most other categories are way under to the tune of about 2000/month. I think this is good news :-)
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Old 02-20-2013, 04:39 PM   #3
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Not retired yet, but tracking expenses closely starting in January. In six weeks our cat was diagnosed with Kidney failure and dog with hypoglycemia. We have a pet care line in our budget, but we are way over. Most other categories are way under to the tune of about 2000/month. I think this is good news :-)

3 years ago-auto immune disease-on deathbed-now 3 years laters cats fine although diabetic from drugs used to save life-6,000 dollars-happy wife
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Old 02-20-2013, 04:47 PM   #4
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To OP - things DO seem to come in waves. Just do as you would if still w*rking - when something unexpected comes up, economize in other areas until things settle down again. They usually do.
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Old 02-20-2013, 04:50 PM   #5
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Has anyone had just a series of events causing big expenses in the first year?
Not in our first year, but we did have big expenses in the third year of retirement. We met our max out-of-pocket on our health plan...cancer can be expensive to treat. My mother died, so we had funeral expenses. We were also hit with a big car repair bill and I had mouth surgery.

Even though we had those large expenses, we did not exceed our WR by much. During that year, we just did not spend much money on discretionary items/experiences.
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Old 02-20-2013, 05:48 PM   #6
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Has anyone had just a series of events causing big expenses in the first year?

We have had a few. First - our air compressor went - it was only 10 years old and we did not expect to replace it for awhile. (came with the house and was poorly maintained) $2500. Then the washer went - also did not expect that - $1000. We also needed to do a family trust (which we put off forever) and that added about $5,000. (this was a choice)

To then add insult to injury, our 7 year old dog jumped and came down on a hind leg, shattering it. Cost about $5,000 total for the surgery (rod and plates) and lots of follow up. No "dog injuries" line item in our budget.

We are still OK, which means we have probably over budgeted by more than expected. I would be happy if someone reassured me this is not likely to happen again. Not to mention the year is not over - until May!

And yes, my DH already said the dog gets one major injury, no more.
Ouch, those were some big expenses! I usually figure there will be a couple of big unexpected expenses every year, but as AWeinel pointed out, these things sometimes do come in waves and you got hit by a big one.

Actually, my first year was low in expenses. Also for me last year was an unusually good year for this sort of thing. Even so, there was unexpected spending due to Hurricane Isaac evacuation and water damage inside my home that meant replacing the flooring, plus earlier in the year I needed a new water heater, and then I had to have a bone graft to prepare for a dental implant that I didn't know I was going to need. But overall, the total amount for these was not as much as it sounds like it would be.

Sorry that this happened to you during your first year of retirement!

During our working years we became so accustomed to having a paycheck. I wonder if perhaps it might help to "pay yourself" a fixed amount every month from your portfolio. I dunno - - it just sounds like it might be comforting to have a paycheck coming in, but really I can't think of anything else to suggest.

It will get better!
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Old 02-20-2013, 05:57 PM   #7
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Whew, inflation sure has hit the cost of pet ownership hard!

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Old 02-20-2013, 06:01 PM   #8
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Not RE'd yet, but when budgeting for expenses when I finally do, I have a generous (IMO anyway) contingency of $12k per annum ($1k a month).
I plan to carry forward any unused contingency into the following year's budgeted expenses, sort of like an insurance slush fund.
For example, if in 2013 I only use $5k of the contingency, then the 2014 budget will have $19k set aside for this ($12k plus the unused $7k from 2013)
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Old 02-20-2013, 08:21 PM   #9
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Whew, inflation sure has hit the cost of pet ownership hard!

Amethyst
Yes, it has. I see at least a 10% increase in standard things, like shots, each year, for the dogs I've had 10+ years. I started getting each dog's files organized, and I can see standard tests, etc., increasing.

There is also the upselling that has started to occur in the world of vet practice. Or maybe I am now just more attuned to it, having w*rked for a community bank for 2 years.

And then there is the puppy that we got in January of last year. Cherry eye surgery, twice; mushroom eating and stomach pumping; tea leaf ingestion from the tea bags our rescue dog shredded all over our kitchen. There is always something with our little beagle. Eventually I will be able to keep up with her or foresee what she'll get into, and then also she will grow up.

We finally realized that our days of having 3-4 dogs may have to wind down through attrition, solely because their medical care gets increasingly expensive. Although we tried it, we no longer price shop for our dogs' care. We stick with our good vets, whom we trust, but we have accepted that the posse may have to be smaller as time goes on.

I wonder if I can even have dogs once I hit my 70s or so because who knows what the vet costs will be?

And then there is reality, which means that I think a house without a couple of dogs just ain't home.
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Old 02-20-2013, 08:45 PM   #10
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Not RE'd yet, but when budgeting for expenses when I finally do, I have a generous (IMO anyway) contingency of $12k per annum ($1k a month).
I plan to carry forward any unused contingency into the following year's budgeted expenses, sort of like an insurance slush fund.
For example, if in 2013 I only use $5k of the contingency, then the 2014 budget will have $19k set aside for this ($12k plus the unused $7k from 2013)
This is exactly what I do . It has worked great .
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Old 02-20-2013, 08:53 PM   #11
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Has anyone had just a series of events causing big expenses in the first year?
We're planning on it! I'm retiring 3/31 and in June we're moving house and will do quite a bit of updating, buying some new furniture, a second car, etc.

Year 2 should be cheap, though.... (knocks wood)
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Old 02-20-2013, 08:54 PM   #12
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Whew, inflation sure has hit the cost of pet ownership hard!

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Old 02-20-2013, 09:18 PM   #13
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I wonder if I can even have dogs once I hit my 70s or so because who knows what the vet costs will be?

And then there is reality, which means that I think a house without a couple of dogs just ain't home.
I was thinking about this thread on my way home from w*rk today thinking the same thing - "maybe we just shouldn't have a pet after this one". And in all honesty - I'd rather work another year so that I could include pet expenses / more pet expense contingency money in my budget.

I have 3k per year for "one time expenses". Its a little low but I also have 95k held aside outside my portfolio for planning purposes. Of the 95k, 5k is for "dog emergency".
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Old 02-20-2013, 09:48 PM   #14
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There are things I think I would give up before I would give up dogs, but lately it has sure hit home how expensive it is to have them in our lives.

Still, we have no children so may have already had our savings....
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Old 02-20-2013, 10:06 PM   #15
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There are things I think I would give up before I would give up dogs, but lately it has sure hit home how expensive it is to have them in our lives.

Still, we have no children so may have already had our savings....
Having five of the buggers in the house right now gives me a good perspective on your dilemma, though we are still working. I will say that many of the super-expensive surgical and medical options are still just that, options.

For us, we decide the quality of life outcome and make decisions based on that as best we can. In practice this has meant managing a limp rather than surgery in an older dog, choosing not to treat cancer in a dog that didn't have a good prognosis, and now, making a very old cat comfortable rather than attempting to treat a variety of maladies (we have 6 cats).

Fortunately, our vets are good friends, and come out to the house for routine items. One thing that has saved us money is not doing yearly routine vaccinations now that the animals are all older.
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Old 02-21-2013, 06:21 AM   #16
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Originally Posted by BellBarbara View Post
Has anyone had just a series of events causing big expenses in the first year?

We have had a few. First - our air compressor went - it was only 10 years old and we did not expect to replace it for awhile. (came with the house and was poorly maintained) $2500. Then the washer went - also did not expect that - $1000. We also needed to do a family trust (which we put off forever) and that added about $5,000. (this was a choice)

To then add insult to injury, our 7 year old dog jumped and came down on a hind leg, shattering it. Cost about $5,000 total for the surgery (rod and plates) and lots of follow up. No "dog injuries" line item in our budget.

We are still OK, which means we have probably over budgeted by more than expected. I would be happy if someone reassured me this is not likely to happen again. Not to mention the year is not over - until May!

And yes, my DH already said the dog gets one major injury, no more.
A similar series of unfortunate events happened to us in the fourth quarter 2011, right after FIRE. Several $1k "unusual" expenses appeared one right after another. All the while I was watching the 401k balance bounce like a yo-yo. I almost became a nervous wreck.

We weathered it just fine and as a result I reconfigured the yearly budget to build a margin for a future series of events like this.
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Old 02-21-2013, 07:05 AM   #17
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Most of our basement appliances went out in the same first year. Washer, dryer, water heater, water conditioner, and we had a sump pump put in due to basement flooding. Additionally, due to the 30 year age of house, much of the work required additional plumbing to bring up to code.
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Old 02-21-2013, 08:07 AM   #18
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We have an 'accrued cost' budget of $10K/yr for those expenses. We enter those expenses as they occur along with all the normal budget expense categories.

Not pulled out of thin air, it's based on a spreadsheet we developed projecting our annual expenses (to age 95) for DH car after trade in, DW car after trade in, furniture (beds, other non-appliance), home remodel & replacements (roof, paint, HVAC, appliances, etc.), consumer electronics (PC, TV, etc.) & major travel. We have a pretty good idea what the frequency should be for all of them based on our past actual experiences, though we've built in some fluff by using pessimistic intervals (ie, trading cars every 5 years even though we never have).

These less frequent than annual major expenses have to be budgeted somehow, but there are lots of ways to handle them.
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Old 02-21-2013, 08:57 AM   #19
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Thanks everyone, seems we are not alone. I did over-budget. My DH was resistant to tracking expenses so I worked on the budget in a round about way. I think that is why we are fine. I also set aside 100K for extraordinary expenses beyond everything else. This fund was for trips outside our budget, money we wanted to give the kids, and a couple of smaller remodeling projects.

We love the dog, but we are done with pets once he is gone. Just too much trouble and expense. He is anxious dog so we can't put him in a cheap kennel when we travel. We hired a house/dog sitter at $50 a day to stay with him. UGH We work this into our travel budget. We are likely to buy a slide-in camper so we can take him with us on long road trips.

I also agree about the upselling and over diagnosing with vets. They are always asking me to do more tests, and want me to give the dog more meds. Meds that are actually just supplements and which can be purchased for much less on Amazon.
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Old 02-21-2013, 09:05 AM   #20
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We have a 12.5 year old Golden Retriever who is starting to have problems. Our other dog is a 3 year old Sheltie. We decided that after the Sheltie passes away, we probably will not get another dog. We love them both dearly but the expenses when they get older are too high, and we want to have more flexibility for travel when we are retired.
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