Extreme budget cuts

[kgtest]

Seems appropriate since a lot are facing smaller tax returns. What would you do to extremely slash your budget?
For us, the list might look like this if we had to:


Stop eating out
Eat less food, drink less (DW hardly drinks wine though, 1 bottle every couple months)

Drive Less, rideshare walk or bike more

Comparison shop insurance
Use less energy and water... harder than you think
Bath less (Shorter duration, shower at same times, every other day)
Run sink once to do dishes, instead of running water down drain
unplug unused electronics
turn on power-saver/ dim brightness on all devices
use devices less, substitute screens for nature

upgrade incandescent to LED

use less air conditioning, or none at all
drop the heat down to 65
Grill more often, reducing gas bill but increasing propane
Use microwave less
Vacuum less

Open my attached garage less often
Replace bad weather stripping on external doors

Walk more
Cancel prime (although the convenience is nice)
Cancel my usenet service

Downgrade my hosting service
Sell unwanted things on eBay/CL
Travel Less
Gift less often, or less expensive gifts/more personal free gifts
Skip gifting to each other(this would be sad and DW would miss the flowers)

Re-read eBooks, instead of buying new
Skip the movies, rent a free redbox or go to a museum on free family day

Wash and Reuse Plastic Bags

Recycle Dryer Sheets


Doing all of this for us would likely create at least an additional 10-20% of room in our budget if we needed (thankfully its still business as usual after 1 round of layoffs)

 

[Teacher Terry]

We would cut out travel and eating out so much. We have a RV so would just go places closer. Right now we take cruises and go to Europe so that would go. Some things mentioned were too extreme like bathing less.

 

[Wille]

Go on a cash budget and assign every dollar to where you want it to go
Cut out cable TV and get books at the library to read or put up an antenna for local programming
Evaluate every purchase on credit card and see what you can cut
Review every monthly bill/subscription to see if you need it
Eat less meat to reduce food budget
Stop eating out
Set a budget per meal
Read minimalism blogs for more ideas

 

[travelover]

Fly business instead of first class

Only buy a new Mercedes every other year, instead of yearly.

Buy self winding Rolex to save on battery costs

Cut maids' and butler's salaries

 

[pb4uski]

Recreation and entertainment is 22% of our spending excluding income taxes.... led by golf 8%, travel 7% and dining out 5%... we could golf less often or shop around more than what we do now, travel less and dine out less (though some of that dining out is while traveling I suspect).

We could close down our northern home (drain the water pipes, turn off the power and not heat it, not plow the driveway) while we are away for the winter and probably save a couple thousand. I think it is better for the house to keep it in hibernation (minimal heat 55F) and the bonus is that it is easily available to us or family if needed. Alternatively, we could stay home for the winter and rent our Florida condo for Jan - Mar or Apr. but it would be a long cold winter but the rent would probably bring in an amount equal to 15% of our expenses.

 

[DFDubb]

Seems appropriate since a lot are facing smaller tax returns. What would you do to extremely slash your budget?
For us, the list might look like this if we had to:


Stop eating out
Eat less food, drink less (DW hardly drinks wine though, 1 bottle every couple months)

Drive Less, rideshare walk or bike more

Comparison shop insurance
Use less energy and water... harder than you think
Bath less (Shorter duration, shower at same times, every other day)
Run sink once to do dishes, instead of running water down drain
unplug unused electronics
turn on power-saver/ dim brightness on all devices
use devices less, substitute screens for nature

upgrade incandescent to LED

use less air conditioning, or none at all
drop the heat down to 65
Grill more often, reducing gas bill but increasing propane
Use microwave less
Vacuum less

Open my attached garage less often
Replace bad weather stripping on external doors

Walk more
Cancel prime (although the convenience is nice)
Cancel my usenet service

Downgrade my hosting service
Sell unwanted things on eBay/CL
Travel Less
Gift less often, or less expensive gifts/more personal free gifts
Skip gifting to each other(this would be sad and DW would miss the flowers)

Re-read eBooks, instead of buying new
Skip the movies, rent a free redbox or go to a museum on free family day

Wash and Reuse Plastic Bags

Recycle Dryer Sheets


Doing all of this for us would likely create at least an additional 10-20% of room in our budget if we needed (thankfully its still business as usual after 1 round of layoffs)

If you did all of that you would only free up 10-20%? Really? I mean, vacuum less? Open the garage door less? If you did all of that and could only free up 20% of your spend I'd say you're already living on a shoestring. I could eat out "less" and free up 10-20% of my spend. Don't even get me started on the clothes/shoes.

I can honestly say that I've never once considered the cost of opening my garage door to go to work. What's that cost, a fraction of a penny?

 

[ExFlyBoy5]

I didn't see the OP mention "recycle dryer sheets". You are to cancel your membership here...immediately.

 

[Bigdawg]

go back to work since you were obviously not FI when this started.

I'm not willing to do all of the things you mentioned so I would find alternate sources of income. PT job, HELOC, etc... All of the things you list above are minor. The big three are housing, transport and food. If when you RE you have a good handle on those big 3 then you shouldn't have to tighten too much later on. The unexpected health issue? Plan for it. Have health, life, disability and LTC covered. If not then don't RE.

I would much rather umpire one more baseball game/week ($95) than drop my thermostat to 65. Mine stays at 71 in winter and 74 in summer because that is what is comfortable to me. Why RE and then be miserable?(thermostat at 65, no booze, no TV, walk around the house in the dark, etc...)

 

[pacergal]

These three things would significantly decrease our budget:
Stop eating out
Stop first class for airline travel, or stop travel completely, depending on how extreme cuts are needed
Stop gifting to kids, stop charitable donations.
Some impact would be to sell our second car, decrease auto cost and insurance.

 

[FireFool]

For anyone on this forum not yet retired if your WR/spend would be effected by the OP's list my opinion is that you aren't yet ready to early retire. Other than cutting out restaurants, shopping insurance, and travelling less. the other items might knock out a few hundred total off your annual spend. The three that I listed being meaningful really depends on how fat your spending currently is in those categories. If using your garage door opener less makes any difference to your budget I pity your situation. The take-away I have on this is that you want to make certain that your retirement assets have a sufficient cushion, and why I'd be too gutless to ever do a LeanFire. Luckily, and I stress the luck part, I'm doing FatFire - cutting out travel alone buys me at least $30k with this year's spend significantly higher - and thankfully nothing is on the horizon to cause me to need to do that. I'm blessed.

 

[EastWest Gal]

A tax refund means you withheld too much. The question is, how does annual tax compare to previous years.
I usually try to get very close with quarterly tax payments. This year we put in solar-we're getting a huge refund this spring, which adds to our cash reserves the same time I retire.

More ideas:

Get ebooks and paper books from the library. Look for free book exchanges, and donate yours.
We won't cancel prime--prime is cheaper than annual shipping costs, and we're not paying the gas, USPS and UPS are paying it.
Eat out less (already do). Buy no beverages when eating out-just have water. Look for 2 for 1 grocery sales, only on stuff you buy anyway, and keep the freezer full (which saves energy).
Don't buy flowers (DH has allergies) or candy (for health reasons).
Mow your own lawn, clean your own house.
Use vinegar, baking soda, lemon oil, or plain diluted bleach when you can, rather than premixed cleaners.
Cancel landline or switch to VOI.


Many other things-there are many frugal living threads on this forum.

 

[gstillson]

Fly business instead of first class

Only buy a new Mercedes every other year, instead of yearly.

Buy self winding Rolex to save on battery costs

Cut maids' and butler's salaries

This is just silly.

You could save a lot more by turning down the thermostat on your villa in Italy.

 

[Sojourner]

Seems appropriate since a lot are facing smaller tax returns.

Is there any specific reason you think tax refunds will be smaller for many of us this year? Personally, I'm not expecting this, but I'm curious why you think this may generally be true.

Even if my tax refund were $100 or $200 (or $500) less this year, I wouldn't seek to make any substantial changes in my spending. That amount of money is somewhat of a "rounding error" in what FIRECalc says I can safely spend. Maybe I would give some thought to spending slightly less on hotels, airfare, or other pure luxuries like wine.

 

[bobandsherry]

Not sure how size of return impacts your spending budget. It's more about how much tax you pay/tax rate.

 

[bobandsherry]

I didn't see the OP mention "recycle dryer sheets".

Yes they did.

 

[Chuckanut]

Eating out is certainly expensive. I can eat well at home for a fraction of the cost of eating mediocre when out. And, since I eat healthier at home, perhaps I'll save a bit on medical costs in the future. I might take a harder look at the senior discount thread.

I doubt if I would stop traveling much though I might choose more discounted locations. My currently wonky knee has shown me that when it comes to traveling - the earlier the better.

While not a budget cut, the other thing some of us can do is turn on SS earlier than anticipated. I am waiting until 70, but if things really go bad, I can turn it on earlier.

 

[daylatedollarshort]

I am constantly optimizing expenses and trying to live more sustainably, it's my main hobby. We cut our budget by more than half and I think we still live pretty well. We try to spend less while living better by comparison shopping, making the house more water and energy efficient, more DIY, eating less meat / more Mediterranean diet, buying used when we can, looking for deals on food and entertainment, etc.

This week we went to a concert for free (Facebook contest), I have free tickets for a club with a live band and dancing (Facebook special), we saw a Redbox movie for free (coupon plus gift card), we're going to an astronomy lecture with one of our clubs and one afternoon will be wine tasting in Napa with passes from Costco and a Groupon sale. So all we have to pay for are incidentals like gas, drinks and bridge tolls.

 

[GravitySucks]

Fly business instead of first class

Only buy a new Mercedes every other year, instead of yearly.

Buy self winding Rolex to save on battery costs

Cut maids' and butler's salaries

Your previous comment on this subject:
"Stop bathing and drink sterno." Is what got me hooked on this forum.
Finally, someone who gets me.

 

[Nick12]

Several years ago I tried and survived for 5 months without turning on the central AC in my home in Florida. I have lived in FL for over 26 years and I wanted to see if I could survive without AC like people did 30-40 years ago. I took quick cold showers 3x a day and slept with a circulating fan at my bedside. The ceiling fans that cost pennies to run always ran 24/7. I drank lots of cold tap ice water to bring my body temps down. I pretty much saved $300 approx monthly on turning off the AC. It was extreme but I wanted to see if I could survive and I did. This was from May thru Sept.

 

[Gallaher]

For anyone on this forum not yet retired if your WR/spend would be effected by the OP's list my opinion is that you aren't yet ready to early retire. Other than cutting out restaurants, shopping insurance, and travelling less. the other items might knock out a few hundred total off your annual spend. The three that I listed being meaningful really depends on how fat your spending currently is in those categories. If using your garage door opener less makes any difference to your budget I pity your situation. The take-away I have on this is that you want to make certain that your retirement assets have a sufficient cushion, and why I'd be too gutless to ever do a LeanFire. Luckily, and I stress the luck part, I'm doing FatFire - cutting out travel alone buys me at least $30k with this year's spend significantly higher - and thankfully nothing is on the horizon to cause me to need to do that. I'm blessed.

What Firefool said.....100%

 

[travelover]

Your previous comment on this subject:
"Stop bathing and drink sterno." Is what got me hooked on this forum.
Finally, someone who gets me.

We'll have to get together and throw back a few sternos.

 

[GravitySucks]

We'll have to get together and throw back a few sternos.

Under your bridge or mine?

 

[Aerides]

(OP if a smaller tax refund has you rethinking your budget, then you've been doing it wrong)

I'm sure the OP was just tossing out initial ideas, but some should be done regardless of the need to be extreme:

Comparison shop insurance
Replace bulbs w/LED
Repair bad weather-stripping
Unplug unused electronics

Others will yield such small savings they wouldn't be noticeable, and would come with negative downsides:
Reducing vacuuming
Reducing bathing
"welcome to my smelly messy house that I can't afford to heat/cool, or leave"

Dropping/reducing books, internet, movies - these are inexpensive quality-of-life things. Their loss would exceed their cost for me.

Most of the items listed are not appetizing to me, vs. finding some short term employment.

For practical reductions: defer/delay/reduce travel plans, shop-in-my-closet, and watch my budget when food shopping/dining out a bit.

 

[Jerry1]

I agree with the thought that if you need to do what the OP suggested, you FIRE'd too early and too lean. I feel my FIRE is on the lean side, but it would take a few years of a bad market and depressed income (int/div) or a significant increase in inflation to cause me to feel the need to tighten up. If I did tighten up, I would look first for things that I can exchange. For example, reduce or stop eating out - but not stop eating well. I probably would consider going down to one car and doing a better job of shopping insurance. That doesn't mean I'm not going to be mobile. Cable would probably be the first thing to go but I'm not watching much TV these days anyway.

More likely than cutting too deep is that I'd find a side hustle. In my life, DW was always about saving money, mostly by not buying what she wanted. My goal was always to handle that by making more money. If needed, I'd invoke that again.

Bottom line is that there's about $25K of our $80K budget that is discretionary. I think that's a pretty good cushion along with the belief that even at $80K withdrawal, there is still expected to be money left in the end.

 

[Huston55]

OP-

Not sure what prompted this thread; perhaps the impending potential layoff?

If that’s the case and, even if it’s not, with you planning to work 12 more years & employing an aggressive AA, I would suggest a more strategic approach. Cutting expenses is just one tool and, frankly, those cuts you list would be mostly ineffective. I’d suggest exploring these actions:

1. Adjust to a more conservative AA if you’re worried; at least have more cash
2. Seek new/additional income sources
3. Cut expenses by focusing on the big ticket items (cut discretionary expenses first then evaluate housing, transportation, food). Do #1 & #2 first
4. When you’re closer to FIRE, use concepts like Otar’s ‘Zone Concept’ and/or Fullmer’s ‘Annuitization Hurdle’ concept as part of your backup plans.