My annual expenditure

[obgyn65]

As we are approaching the end of the year, I thought I should start a new thread about annual expenditure before I travel for two weeks from this coming weekend.

My personal annual expenses for 2012 were less than $40k. Single, 47, no debt, owning my condo.

I feel very safe as my FIRE plan shows I can withdraw between $85k and 100k this year from my nest egg. Therefore, I may be classified as one of those who do suffer from the "one more year" syndrome, which I hope this forum can help me get rid of .

Take care everyone.

[LOL!]

OK, my personal annual expenses are about $5,000. It's all those other expenses that get to me like college expenses for child, income taxes, charitable giving, property taxes, health insurance, etc.

[Richard4444]

Quote:

Originally Posted by obgyn65 My personal annual expenses for 2012 were less than $40k. Single, 47, no debt, owning my condo. I feel very safe as my FIRE plan shows I can withdraw between $85k and 100k this year from my nest egg.

Are you saying that you spend $40,000 annually, while you could FIRE now at $85 - $100 K? If that is so, give your two weeks notice before your two week vacation

[obgyn65]

Easier said than done.

Quote:

Originally Posted by Richard4444 Are you saying that you spend $40,000 annually, while you could FIRE now at $85 - $100 K? If that is so, give your two weeks notice before your two week vacation

[Richard4444]

Quote:

Originally Posted by obgyn65 Therefore, I may be classified as one of those who do suffer from the "one more year" syndrome, which I hope this forum can help me get rid of .

So, are you agreeing with my above concept. And are you looking for validation to RE when you spend 50% of your projected SWR ??

[pablohk]

i'm on course for a savings rate over 60%, a personal record

[donheff]

I don't know. Living on so little and making so much are you working long hours and living very small outside of work" If so, it strikes me that "what will you do all day" may be a real question. Is there any way you can scale back at work and begin exploring what life after FIRE may hold for you? You can clearly afford to do lots more (outside of work) than you do today, but what? Alternatively, you may be one of us who thrives on chillaxing and doing pretty much nothing, but have you ever tried that to see?

[Meadbh]

While I'm another frugal MD, I can't beat that. My personal expenses this year will total ~$50k. Then again, I'm in Canada, where stuff costs more. And that does include socking away $5k in my TFSA, plus some debt repayment.....hmmm. Must recalculate!

Anyhow, I'm wondering about a couple of things. First, do you own a vehicle? Living in Chicago you may not need one. After ER are you likely to take road trips or move to a suburban or rural location where a vehicle will be essential?

Second, you do a lot of volunteering in Central America. Are your travel and accommodations paid for? If you are away from home a lot and eating on someone else's dollar, your personal food budget will be low.

Third, as donheff said, how will you fill the time you now devote to work? After ER that time may go from a revenue center to an expense.

Fourth, what about the cost of health insurance in ER?

For all those reasons I would not assume that your personal expenses will remain so low when you ER.

[Koogie]

Obgyn thanks for starting this thread. I've always been impressed by your lifestyle and the way you are planning on doing things. You don't have to justify your choices, or deferring your choices, to anyone.

This years expenditures seem to be on track with last years for us. 68K, married cpl. Again, like a previous poster, you have to realize that we have a higher cost of living in Canada (think taxes and higher cost of goods). Saying that, a lot of our expenses are intermingled with the business, so it is hard to draw a straight line through them. We are also renting a house close to work for a better quality of life. When we ER, that cost (35% of the total) will reduce significantly as we buy a cheap house out in the boonies.

[Backpacker]

I must be doing something wrong... We spent approx. $67,500 in 2012. Not sure what you'all are counting as personal expenditures. I counted food, personal hygene products, utiltities, insurance of all kinds, car gas, RE tax, tithe and gifts, and repairs. We are totally debt free, but have 5 kids so maybe that sucking noise i hear is the kids 2 are on their own for the most part 2 in college and 1 in HS

[rbmrtn]

ontrack for a little over $16k.

[aaronc879]

Looks like I should come in a couple hundred under my $15,000 budget. Single, no kids, no debt, low cost area.

[scrabbler1]

I am right around $20k for the year 2012.

[ERD50]

Quote:

Originally Posted by Backpacker I must be doing something wrong... We spent approx. $67,500 in 2012. Not sure what you'all are counting as personal expenditures. I counted food, personal hygene products, utiltities, insurance of all kinds, car gas, RE tax, tithe and gifts, and repairs. We are totally debt free, but have 5 kids so maybe that sucking noise i hear is the kids 2 are on their own for the most part 2 in college and 1 in HS

Assuming you know basic arithmetic, I doubt you are doing anything wrong.

The kid thing may be a significant factor. I've never felt motivated to micro-track my budget, but I only have two accounts that spending money comes out of, so I just add up the withdraws from those two accounts, and adjust for anything that was reimbursed to us, or that was transferred to another account (my annual IRA contributions).

My spending hasn't really changed much at all over the past nine years. Property tax and HI have increased, mortgage has decreased (ARM), but kids have been leaving the nest, so I suspect that has had a mitigating effect on my personal inflation rate.

I also think one needs to budget (I call it 'phantom spending') for things that are bought occasionally. Cars are the big one for us. They are paid for, so you won't see any deduction in any account, but roughly every ten years, I'll be spending roughly $20,000, times two for our two cars. So that's roughly$4,000/year, that isn't 'spent', but essentially it is. I add it to my number.

I'll bet many people don't include that - but where does the money come from when they buy a car? I don't bother with other things (new roof, furnace, AC, water heater, driveway, appliances, etc) - I tend to try to spread those out, and tackle one of those categories every year or so. It averages out, and is fairly small %.

BTW, I won't share my number here. I see no point (other than curiosity) to these many threads about what others spend on this or that. I'm not a sheep, I don't really care what others do in this regard. I will do what works for me, and that can be very different from what works for someone else. What's the point in comparing? The point is to find a way to be happy within your means. If not, find a way to adjust one or the other or both. What else is there?

-ERD50

[Texas Proud]

Heck, I would love to get our spending less than $100K....

Insurance and taxes take about 25% of that... then there is housing/cars etc. that take a bit more than 25%....



Our budget for 'personal' items, which include food/gas/entertainment and a lot of other small things is $30K... but with DW and kids, we are closer to $40K every year... it was much easier when I was single....

[Mulligan]

Quote:

Originally Posted by Backpacker I must be doing something wrong... We spent approx. $67,500 in 2012. Not sure what you'all are counting as personal expenditures. I counted food, personal hygene products, utiltities, insurance of all kinds, car gas, RE tax, tithe and gifts, and repairs. We are totally debt free, but have 5 kids so maybe that sucking noise i hear is the kids 2 are on their own for the most part 2 in college and 1 in HS

Well, if my current experience reflects yours, the sucking noise from kids could be bigger than you think. My DD (yes, I love her and don't think of her as an expense, though we are talking money here) is currently my biggest monthly expense. The child support and my prepayment of college expenses is running around 30% of my monthly expenses. By far number one in costs, way outpacing my mortgage payment and health insurance. I will get a heckuva pay raise in 2 years when she is off the books. Even if she comes back to the nest from graduating, homeless and without a job, I will be big money ahead.

[imoldernu]

Quote:

Originally Posted by donheff I don't know. Living on so little and making so much are you working long hours and living very small outside of work" If so, it strikes me that "what will you do all day" may be a real question. Is there any way you can scale back at work and begin exploring what life after FIRE may hold for you? You can clearly afford to do lots more (outside of work) than you do today, but what? Alternatively, you may be one of us who thrives on chillaxing and doing pretty much nothing, but have you ever tried that to see?

+1 what don said.

Appears that you are too intelligent and too concerned with the world, to sit back and accept an easy life. While everyone is different, and some thrive on a self indulgent lifestyle, others will only find satisfaction in challenging themselves to be what they can be. No harm in either situation... but recognizing the need to be involved can provide more satisfaction over the long haul.

The difference between "work" and "satisfaction" is often a matter of relative freedom.

IMO, it is not necessary to make decisions, once one has financial independence, but to take the time to explore every possible area of interest, no matter what direction this exploration may take.

On my own part, look forward every day, to finding something new to be involved in, to learn about or study. Bored? NEVER! When the interest flags, move on. Politics today, Global Warming tomorrow, Religion the next day, Philosophy, Soccer, Civil War, Karl Marx, The Pyramids, RFD TV, Law, Medicine, Singularity, Fishing, Motorcycles, Swimming... The list goes on forever. My avatar is the historical figure I most admire.
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What a wonderful future you have ahead... 40 years to love life, and a built in instinct to be meaningful to the world.

Well done!

[Lsbcal]

This year I started to feel like the spending picture was coming together for me. I don't do a lot of category tracking of spending but do know what the overall year's picture looks like from a monthly maintained spreadsheet. I'll give more details if someone asks.

I try to come up with target numbers for just these 3 categories:
1) Basic living expenses which will only be cut down a little during an extreme portfolio shock (which hopefully never comes). Includes some eating out and good food at home.
2) Spending on DS until he can become fully self supporting.
3) Fun stuff -- new things for house not really required, vacations

My current goal is to spend no more then 4% of the start of the year portfolio value. This basically determines spending on the fun category. DW cares mostly about the fun category.

Things seem to come up that I don't anticipate. This year it was DS's layoff and DW's dental work. This has pushed expenditures to 4.9% of the portfolio at the start of 2012. On the other hand, the portfolio value increased quite handsomely. That's life for you.

P.S. This year our fun category included a 2 week stay in Paris. So planning, work, and luck paid off. I'm going on Medicare soon so will then be truly a senior citizen.

[bbbamI]

Two people, (55 & 58) both retired and no debt...a few hairs less than 3% of our portfolio.

[NW-Bound]

Lemme see... Two pre-geezers, both 56, one eating a lot more than the other (drinking too)...

From Quicken, (Expenses over last 12 mo.)/Current Portfolio = 3.6757021724846%.

Darn! It was only 3.25% a month or two ago. I even bragged about that low WR in a post here.

What happened? Portfolio stayed about the same, so it must be the expenses going up. Yes, there was that recent Hawaiian trip, but it was not that much. Something's wrong!

Maybe there were other bills that came in recently. No more cognac, nor eating out until that WR goes down. What's that cheap Tequila again?