King of frugality=me??

[W2R]

So I figure after my kids are grown and gone and the house is paid off, I can probably live the same lifestyle I do now (which is probably similar to Khan's and a bit lower than W2R's)

Hee hee!! It appears that I have successfully pulled this off. Now, I am spending enough for some or perhaps many on the forum to be a teensy bit envious, but not spending like an NBA star! By George, I think I've got it... behold, a middle ground!



Life is such an adventure, for all of us.

 

[unclemick]

50k in 2007 - including everything, all taxes, 4 driving vacations to Orlando, New Orleans(2), Chattanooga, 11k payoff of car loan, other wild and frivolous stuff like mortgage, and health insurance.

15th year of ER - and still under running my 4% bogey - need to pick up the pace cause I'm not getting any younger(64).

12k for one year back early ER in the 90's - my one time all time best(no health insurance, mortgage or new car payments).

Doubt if I could get back that cheap - or would I want too??

heh heh heh - fond memories of cheap bastardhood do tug at the mind once in a while .

 

[FANOFJESUS]

I find it fascinating that nearly everyone who answers these kinds of questions -- including me -- says we spend $X "but that's not including" X, Y, or Z. X, Y, or Z are surely expenses that must be paid, and so they ought to be accounted for in a proper FIRE plan.

In my case, my annual all-in expenses run about $60K per year right now, or about $5K per month on average. That includes everything according to Quicken reports, but that still excludes longer term infrequent expenses such as a new roof / new car / major medical expenses. I handwave those kinds of things away since I haven't had those expenses in the last two years and don't plan to have them for quite a number of years in the future.

Now my "X, Y, or Z" exclusions: Easily 75-80% of that $60K per year goes to pay for my kids (including child support, etc.), my mortgage interest, and my income taxes. So I figure after my kids are grown and gone and the house is paid off, I can probably live the same lifestyle I do now (which is probably similar to Khan's and a bit lower than W2R's) on about $1K per month.

So I guess it depends on how you measure.

2Cor521

I do this with taxes because they are something I have little control over. I asked a tax lady once how could I cut my taxes more she said I could go live under the bridge and not work. She has a good point but I have become spoiled by the utilities. The rest of the stuff I have more control over.

 

[youbet]

Depending on what I include or exclude from the calculations, we spend between $0 and $130,000 annually. A detailed review of actual 2007 expenditures revealed not a single penny spent where a case couldn't be made as to whether to include it or exclude it. So....... I wind up with a rather broad window! We don't have to spend a penny (that couldn't be excluded from the add-up) or we need a ton of money. It depends!

I love comparisons made in threads like this one...... since they are so absolutely apples to oranges and generally meaningless. But, entertaining just the same!

To OP: We can easily go way below your $1176/person and that's even using some of the same accounting rules of thumb you seem to be using. You must be throwing the $$$ out the window!

 

[Shawn]

I find it fascinating that nearly everyone who answers these kinds of questions -- including me -- says we spend $X "but that's not including" X, Y, or Z. X, Y, or Z are surely expenses that must be paid, and so they ought to be accounted for in a proper FIRE plan.

For me, I excluded my mortgage and charitable contributions to come up with $1022/month. The charitable contributions are not expenses in the sense that they don't have to be paid. They are completely optional. They do not impact my lifestyle or frugality. Are they expenses? Yes. No. Sort of. As for my mortgage, it's a conscious decision not to pay it off. In essence, I've invested the loan to receive a net positive return. I could pay off the mortgage tomorrow and stop giving to charity. This would have no impact on my lifestyle. So I look at these expenses in a different way. But I agree. These types of comparisons are apples and oranges. It all depends on how one looks at it.

 

[haha]

For me, I excluded my mortgage and charitable contributions to come up with $1022/month.

One nice thing about paying rent and buying health insurance is that it is pretty clear that expenses are what you spend, plus amortization of lumpy expenses.

As for excluding things like trips and gifts, I am not sure. Likely most of us want to continue at whatever level we now travel, or even increase it.

So under real duress we could cut back, but life would be noticeably inferior. I know my life would really change if I dropped a couple thousand from my current spending level.

Ha

 

[W2R]

The important aspects of this type of discussion (at least to me), are:

1) Being happy with how much we spend, and how much we save
2) Challenging ourselves to improve
2) Realizing that we are in control - - our conscious decisions have a huge effect on how much we can save, and
3) We demonstrate and confirm that each of us can set and achieve realistic budgetary goals.

(This is as a single person - - none of the above worked for me when I was married! Maybe it does for couples who are better aligned when it comes to spending habits.)

It really doesn't matter what you count or don't count, because (as 2Cor51 pointed out), our totals really aren't comparable. It's interesting to see the itemizing in others' budgets, though, because others' expenses in various categories give me ideas of where I might be spending too much and where I might want to spend a little more (now that I can).

 

[Moemg]

TThis is as a single person - - none of the above worked for me when I was married! Maybe it does for couples who are better aligned when it comes to spending habits.)

I know several people on this board were married to real spenders but I do not understand how you can not still accumulate money . From your posts I wonder if it is just that you finally started LBYM at a later age . My first husband was a spender but I was still able to squirrel away some money and then I spent seven years as a single Mom and saved enough to put my children thru college . So how can people possibly get to be in their fifties with no savings and high earning potential ? I'm not being facetious I truly don't understand .

 

[W2R]

I know several people on this board were married to real spenders but I do not understand how you can not still accumulate money .

My first husband was a spender but I was still able to squirrel away some money

.

So how can people possibly get to be in their fifties with no savings and high earning potential ?

Moemg, good for you to be able to save some money while you were married! I think that the answer to your question is that different people face different challenges, experiences, and life choices. But maybe I am wrong (it wouldn't be the first time).

 

[Moemg]

.

Moemg, good for you to be able to save some money while you were married! I think that the answer to your question is that different people face different challenges, experiences,

My sister is married to a big time spender but luckily she realized it early and took control of the money . He still spends and she still saves and they've been happily married for forty years . So I think the answer may be to not let things get out of control money wise . Of course there are always awful things like illness ,addictions and bad choices which can do in anyone's savings .

 

[W2R]

My sister is married to a big time spender but luckily she realized it early and took control of the money . He still spends and she still saves and they've been happily married for forty years . So I think the answer may be to not let things get out of control money wise . Of course there are always awful things like illness ,addictions and bad choices which can do in anyone's savings .

You sound very proud of your sister, and for good reason, it sounds like! Unless I'm mistaken it also sounds like you and I agree that marriages can be different from one another, just as people and the life challenges they face are different from one another. It has something to do with walking a mile in another man's moccasins, I believe.

 

[SecondCor521]

In general I dislike analogies, but one just came to mind here in relation to my "excluding X, Y and Z" comment.

I play golf, and when I do I generally keep score. I've played for nearly 30 years and I've never broken 100 for 18 holes. (The closest I have come is 103.) When I keep score, I follow all the rules (as best I know them). When I hit my tee shot in the water, I go back and "retee hitting 3", a.k.a., stroke and distance. When I muff it off the tee 3 yards, I count that as a stroke, leave my ball where it is, and hit my second shot from where my ball lands. If I swing at the ball and miss, I count that as a stroke, because that is what the rules say. When I tee the ball, I tee it behind and between the tee markers. I have friends who have broken 100 but they do so by not following the rules. I don't begrudge them or look down on them for doing so; I do disagree with their approach and I don't do it that way for myself. I am really hoping one day that I will break 100, and when I do I know that it will be because I really scored less than 100.

A similar thing happens with FIRE and expenses. I can claim that I spend $12K per year by excluding certain categories or types of expenses when in fact Quicken tells me the true number is more like $60K. Unlike golf, where the result is unjustified bragging rights, in the case of the 4% rule if I mentally exclude certain costs I run the risk of pretending myself into an unsafe SWR situation. Put another way, even if I mentally exclude taxes (or vacations, or charitable giving, or roof replacements, or whatever) from my annual expenses, I sure as shootin' better include them in my spending when I am figuring up whether I am spending less than 4% of my FIRE stash. To not do so represents a certain kind of peril which can be avoided.

In a similar vein, I think it is far better to measure and track 100% of one's finances for at least a year before retiring and ensure that spending is "4% safe" than to say, "Oh, I can cut back on spending this or that and get my spending down to $X and so I can retire now", which is even better than just guessing at one's expenses without tracking. YMOYL makes a similar point when it suggests tracking one's income and expenses over a long period of time. I have done so and I know for a fact that my expenses have tracked right around $5k per month for a number of months. Knowing this represents an increased degree of certainty and therefore security to me in my FIRE planning.

2Cor521

 

[plex]

Yes, I spend 100/month of groceries. As mentioned, I never eat out, except maybe once a month, and put that under Misc. I only eat out for purely social reasons, it is almost physically painful for me to be spending 3-4 times as much on food than I normally would. I live in the Midwest and buy my food at Meijer. 90% of what I buy is on sale, 8% is low cost staple itmes and 2% are "splurges." usually just one or two items.

I do not drink, smoke, or drink pop. Yes, it is only called pop in my state. I eat some sort of frozen vegetable, pasta, orange juice, milk and tea every day, I may mix it up a bit for the other items. A eat 1/3 of the frozen beans, which costs 35 cents a serving, the pasta costs about 40 cents a serving, including the no-fat/no-cholesterol squeeze "butter" I put on it, the orange juice is about 50 cents a glass, the milk is about 30 cents, the tea ranges from low quality to high, so can range from 20 cents to 50 cents (since I drink multiple servings of it). I also usually eat a bag of pretzels as a snack throughout the day which is 1 dollar. This adds up to...about 2.75 on a normal day. The other .66 a day goes to my splurge item (fresh asparagus/cherry strudel) and household items (toilet paper/paper toweling/one other household item).

Oh yea, my credit card discounts 2% off all my groceries as well. 5% on gas (but it is still 150 even after that ). Obviously, I don't pay a fee for the credit card and the amount is automatically deducted from my bill each month.

One year in undergrad, I was on a ramen noodles diet for a bit when I was stuck in a dorm without a stove, that got old very fast, I have a much more balanced diet now, thanks to having access to a stove and some experience buying groceries. My salt intake is a bit high still, but not too bad, I only sometimes go over the daily recommended amount. There is way to much salt for my liking in a lot of foods. Mac/cheese, ramen, boxed rice are pretty nasty in regular quantities. I would like to get a rice cooker though at some point, as I like white fluffy rice, especially with some sort of sweet or salty sauce, but the packaged stuff has a gigantic amount of overkill on butter and salt.

If I am working, I bring a low cost microwave meal, something in the $1-$1.50 range (often healthy choice on sale). Also go through 75 cents in snacks. However, my work provides some fairly decent green tea for free, which offsets the extra cost of the convenience meal, I usually go through 8-10 cups.

I had to fix my tires twice this month (two different tires went flat) but it was free thanks to the warranty through discount tire.

 

[W2R]

Yes, I spend 100/month of groceries. As mentioned, I never eat out, except maybe once a month, and put that under Misc. I live in the Midwest and buy my food at Meijer. 90% of what I buy is on sale, 8% is low cost staple itmes and 2% are "splurges." usually just one or two items.

I do not drink, smoke, or drink pop. Yes, it is only called pop in my state. I eat some sort of frozen vegetable, pasta, orange juice, milk and tea every day, I may mix it up a bit for the other items. A eat 1/3 of the frozen beans, which costs 35 cents a serving, the pasta costs about 40 cents a serving, including the no-fat/no-cholesterol squeeze "butter" I put on it, the orange juice is about 50 cents a glass, the milk is about 30 cents, the tea ranges from low quality to high, so can range from 20 cents to 50 cents (since I drink multiple servings of it). I also usually eat a bag of pretzels as a snack throughout the day which is 1 dollar. This adds up to...about 2.75 on a normal day. The other .66 a day goes to my splurge item and household items (toilet paper/paper toweling/one other household item).

If I am working, I bring a low cost microwave meal, something in the $1-$1.50 range. Also go through 75 cents in snacks. However, my work provides some fairly decent green tea for free, which offsets the extra cost of the convenience meal, I usually go through 8-10 cups.

You are doing wonderfully with your food budget! That's amazing. I was going to ask if you are getting enough protein, but I guess the beans probably supply some (?) and then there is probably some in the microwave meals.

 

[CuppaJoe]

Your story is so interesting, Plex. The only other time I've seen "pasta with butter" was at my favorite Italian restaurant. I imagine you as very thin, very young and very peppy. Hope to see more posts from you. I like the idea of classifying eating out as Misc.

 

[W2R]

I have friends who have broken 100 but they do so by not following the rules. I don't begrudge them or look down on them for doing so; I do disagree with their approach and I don't do it that way for myself. I am really hoping one day that I will break 100, and when I do I know that it will be because I really scored less than 100.

A similar thing happens with FIRE and expenses. I can claim that I spend $12K per year by excluding certain categories or types of expenses when in fact Quicken tells me the true number is more like $60K. Unlike golf, where the result is unjustified bragging rights, in the case of the 4% rule if I mentally exclude certain costs I run the risk of pretending myself into an unsafe SWR situation. Put another way, even if I mentally exclude taxes (or vacations, or charitable giving, or roof replacements, or whatever) from my annual expenses, I sure as shootin' better include them in my spending when I am figuring up whether I am spending less than 4% of my FIRE stash. To not do so represents a certain kind of peril which can be avoided.

Great analogy! As long as one is aware of reality and not pretending when computing SWR and needed nest egg size, I supposed it doesn't matter what they include or exclude.

In a similar vein, I think it is far better to measure and track 100% of one's finances for at least a year before retiring and ensure that spending is "4% safe" than to say, "Oh, I can cut back on spending this or that and get my spending down to $X and so I can retire now", which is even better than just guessing at one's expenses without tracking. YMOYL makes a similar point when it suggests tracking one's income and expenses over a long period of time. I have done so and I know for a fact that my expenses have tracked right around $5k per month for a number of months. Knowing this represents an increased degree of certainty and therefore security to me in my FIRE planning.

I would go one step further and suggest that it might even be smart to track 100% of one's finances for five years before retiring, if possible. Some years my emergency fund remains pristine and untouched, and then there are years when large expenses pop up one after the other.

 

[plex]

I forgot to mention I sometimes substitute Tyson breaded chicken sometimes for the pasta meal on some days, slightly more expensive per serving, more like 50 cents a serving (including either meijer/on sale heinz ketchup) (national brand ketchup is a bit ridiculous, it can be more than half off if it is on sale) instead of 40 cents for pasta. It depends on whether I have not been feeling "full" lately (I can tell when I a not getting enough protein from this, vegetable/fruits are much harder to gauge so I do those regularly). The milk I drink also provides some protein. I also may substitute peanuts for pretzels as well if I am feeling less fulfilled than I would like from what I am eating, it costs about the same per serving (I particularly like honey roasted).

The rest of my income goes towards maxing my Roth each year and setting aside the rest for the eventual tuition loan payments I will have when I graduate. I previously had 3.1% aggregate interest federal loans subsidized by a state program, but that program just died, so I will be probably be saving less money and instead put the money directly towards tuition to avoid as much of the 8.5% federal grad+ loans as possible, which I don't consider a good deal.

As to my health, yes, I am very healthy, I haven't been sick in about 6 or 7 years, my BMI is just a bit below optimal for my height (I am 6' 3), so that means I am a bit thin. I am usually laid back, rested and not too stressed, despite a stressful and demanding schedule.

 

[W2R]

You are doing wonderfully, Plex, and it sounds like you are probably getting better nutrition than a lot of people who spend much more for their groceries. It's good that you keep track of your BMI so that you can be sure you are getting sufficient food.

 

[Moemg]

A similar thing happens with FIRE and expenses. I can claim that I spend $12K per year by excluding certain categories or types of expenses when in fact Quicken tells me the true number is more like $60K. Unlike golf, where the result is unjustified bragging rights, in the case of the 4% rule if I mentally exclude certain costs I run the risk of pretending myself into an unsafe SWR situation. Put another way, even if I mentally exclude taxes (or vacations, or charitable giving, or roof replacements, or whatever) from my annual expenses, I sure as shootin' better include them in my spending when I am figuring up whether I am spending less than 4% of my FIRE stash. To not do so represents a certain kind of peril which can be avoided.

In a similar vein, I think it is far better to measure and track 100% of one's finances for at least a year before retiring and ensure that spending is "4% safe" than to say, "Oh, I can cut back on spending this or that and get my spending down to $X and so I can retire now", which is even better than just guessing at one's expenses without tracking. YMOYL makes a similar point when it suggests tracking one's income and expenses over a long period of time. I have done so and I know for a fact that my expenses have tracked right around $5k per month for a number of months. Knowing this represents an increased degree of certainty and therefore security to me in my FIRE planning.

2Cor521

Good point ! I tracked my expenses for seven years before I retired. I saw some places I could cut back if I needed to and some places I wanted to cut back on . Since I retired I'm at less than 2.5% so according to many books I should be spending more . Funny thing is after years of budgeting I'm not sure I can . I buy nice clothes , good food , lots of presents , partially support my mother ,give to charities ,entertain and travel .What else is there ?

 

[headingout]

I've been tracking monthly expenses (no mortgage, doesn't include taxes or private school tuition) in a couple dozen budget categories for about 5 years. Our average for a family of 3 (including one voracious teenager) for the last 12 months is $5750/month. That's much less than half our gross income. My projected ER budget for just the 2 of us will be $4500/month. Nearly half of that will be two items: health insurance + groceries. We eat organic as much as possible, consider it a health investment, but it is a significant expense, and might get a closer look in retirement. I'm budgeting $400/month for travel in retirement, $250/month for dining out. We live well, don't feel deprived, could live on somewhat less if necessary, but would rather not.

 

[cho oyu]

I live in northern California - San Francisco Bay Area - arguably the most expensive place in the country (although I live in one of the less expensive cities in the Bay Area).

Last year was a little higher than normal for income tax. Normally it's about 50K/yr. However, it's still somewhat ironic that I get taxed about twice what I spend. I think the government needs the will power.

Your budget looks very similar to mine (except I rent instead of paying down a mortgage - not much of a choice since I moved to the Bay area in 2005 ). Nearly twice as much in taxes as in expenses, rent is over 40% of expenses and student loan debt is another 10%.

Not only do I not feel deprived, but I really can't imagine what else I would spend money on. I eat out, take decent holidays, leave town most weekends to play, and have more than enough stuff.

 

[Dawg52]

Yes, I spend 100/month of groceries. As mentioned, I never eat out, except maybe once a month, and put that under Misc. I only eat out for purely social reasons, it is almost physically painful for me to be spending 3-4 times as much on food than I normally would. I live in the Midwest and buy my food at Meijer. 90% of what I buy is on sale, 8% is low cost staple itmes and 2% are "splurges." usually just one or two items.

If I am working, I bring a low cost microwave meal, something in the $1-$1.50 range (often healthy choice on sale). Also go through 75 cents in snacks. However, my work provides some fairly decent green tea for free, which offsets the extra cost of the convenience meal, I usually go through 8-10 cups.

Looks like you are doing a great job of LBYM. Glad I don't have to do this but a good way to go when you are on a tight budget. I will eat a health choice dinner on a rainy day, but I couldn't eat these on a daily basis. I bet you are a very thin person. Which is not a bad thing.

 

[Walt34]

I know several people on this board were married to real spenders but I do not understand how you can not still accumulate money . From your posts I wonder if it is just that you finally started LBYM at a later age . My first husband was a spender but I was still able to squirrel away some money and then I spent seven years as a single Mom and saved enough to put my children thru college . So how can people possibly get to be in their fifties with no savings and high earning potential ? I'm not being facetious I truly don't understand .

I don't understand it, but have seen it happen with other people and for the life of me I simply cannot fathom what they are thinking. A good friend tried to explain it. He believes that "fate" will decide if he has money, and if he doesn't have it, then "it wasn't meant to be". This guy is not stupid; he's a regionally well-known and respected aircraft mechanic, is a mechanical genius, has his Airline Transport Rating pilot's license (not an easy rating) and is qualified to fly left front seat in a number of multi-million dollar jets. Owners of those airplanes don't let stupid people fly them.

He's also the one who said that I have a "controlling personality" when it comes to finances because I think it is necessary to save for unknown future needs, and asked "What is all that money in the bank doing for you?" My response is that it gives us options. I tried to use the analogy of him knowing how to manage fuel among tanks on a long flight compared to managing money in his life but he didn't get it. Just a blank look.

Just a whole different outlook on life I suppose. Live for the present and let the chips fall where they may in the future. But it helped me understand my ex's behavior because I saw the same type of outlook.