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Old 03-20-2010, 09:07 PM   #41
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Midpack I think moving is the answer. A big city is nice when you are working but when you retire it is an anchor around your neck. Try moving to a smaller town in MO, KS, OK or AK. We live in Missouri for under 20k for two people. Cars are killing you to try keeping them 10 years or more. The car we have is fifteen years old. I tried to take your list and add our budget to it.

Category Annual
Allowance $500
Auto Gas $1200
Auto Insur $400
Auto Maint/Repairs $400
Boat (no boat)
DH Clothes/Personal $200
DH Haircuts $0 family cuts
Dog Food/Vet $0 no pets
DW Clothes/Personal $300
DW Hair/Nails $0 family cuts
Entertain Dining $1050
Entertain Internet $120
Entertain Movies/Plays $6 ( two dollar movie house)
Entertain Chicago Parking $0 (not a problem in a smaller town)
Entertain Dish TV $0 (no cable)
Food Grocery $4800)
Food Wine/Liq $20 ( very little drinking)
Gifts $200
Home Insur $400
Home Lawncare $21
Home Misc/Repairs $100
Home Assoc Fee $0
Home Prop Taxes $2000
Med Insur Prem (Hi Ded) $700
Med Out-of-Pocket $500
Misc Off Supplies $0
Misc Postage $10
Util Elec/Gas $1200
Util Phone $324
Util Sewer $210
Util Trash $180
Util Water $210
Vacation $400


I realize the accrual is large, but we can't expect everything we own to last 30-40 years and many are big ticket items. These things have to be accounted for somehow no?
One car that is fifteen years old. $500
travel (every 2-3 yrs) $300
Home Repairs (roof 20 yrs, paint 5 yrs, etc.) $300
furniture (once) $0
PC (every 5 yrs) $500
bed (every 15 yrs) $0
appliances (furnace, AC unit, stove, dishwasher, washer, dryer, fridge, etc.) $30
TV (every 15 yrs) $0 (have some old ones)

Total $17075
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Old 03-20-2010, 11:49 PM   #42
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I, too, have looked with marvel at some of the very low budgets. Some of things that impact those with higher budgets are: number of people being supported (couple v. single, with kids adding still more), where you live (affecting all kinds of expenses), and discretionary expenses.

For us, in comparing our soon to be retirement expenses I think that ours are higher than many because of (1) we still have teenagers at home (2) living near large metro area, (3) insurance -- many people here have much less insurance than I would be comfortable with, and (4) discretionary spending.

Everyone's discretionary spending is different. For example, while I may like the occasional nice vacation, I really don't desire to do a lot of traveling. On the other hand, my computer budget is way, way, way higher than most people (I like high end gaming computers -- will keep longer than an average computer but still a total indulgence). But we don't drink so no alcohol expenditures and we don't spend huge amounts on going out. But that's us. Others will have other priorities.

Many people who have really low budget don't spend nearly as much on discretionary spending. I know that I have several versions of our budget and what mostly varies is the level of discretionary spending.
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Old 03-21-2010, 06:51 AM   #43
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Only $53 a month for booze What kind of teetotalling freaks are you?? I need a moment to grasp the enormity of such a thing. In 2009, the young wife and I went through $283 per month just for wine at home.
LOL
I knew someone would say this. We used to spend a lot more, buying much better wine, but now we have really good wines much less frequently. It was helpful for us to make wine/liq a separate category, we did not realize how much our wine (quality not quantity) purchases were costing us.
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Old 03-21-2010, 07:13 AM   #44
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I hope there are even more replies, but I could not be more grateful for those who have posted so far. I will spend today continuing to assimilate it all and the 'you're spending too much on X' remarks are exactly what I was looking for. I realize it's our choice, but being challenged on our specific spending habits is the best way to improve IMO.
  • I would be happy if we could get down to $50K/yr, I just thought it might be helpful to ask about folks who make $24-36K/yr work in comparison.
  • We're at 38X the expenses shown, but I believe in plenty of safety factor (the next 30-40 years could see drastic changes, health care & taxes, etc.) and we are perfectly happy living LBYM, always have been.
  • The key trick for us all along has been to reduce the frequency of spending on discretionary categories, not the quality. And that will most likely be how we ratchet down spending further.
    • We'd rather go out for dinner less often, than go to a lesser restaurant. Rather have wine less often, than drink cheap wine. Travel less than often, than more to lesser locations. Just our preference, no right or wrong.
  • In actuality, we have kept most of our cars for 6-7 years and did keep one for 10 years. And we buy them on a staggered replacement schedule. I've just never wanted to put DW in a car that might break down on her, so I've never let her regularly drive our older car. But we might stretch this out more in retirement.
  • We live about an hour away from downtown Chicago, so our prop taxes etc. are much lower than a close in suburb. We have learned our lesson on neighborhoods with homeowners associations, the fees and sewer have become outrageous.
    • We may move, but we would not want to be more than an hour from a major metro area somewhere.
    • We're considering Bloomington, IN; Asheville, NC; Raleigh/Durham, NC & several locations in VA. Austin, TX would be our first choice if it was not so hot (we've lived in Dallas & San Antonio, so we know first hand it's just not for us).
  • Our home is 2270 sqft, our next and hopefully last home will probably be in the 1100-1500 sqft range. But it will take us awhile to pick a next location, we'd like to avoid (the expense of) having to move twice due to a bad pick the first time.
Again I can't thank you all enough, you gotta love this forum.
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Old 03-21-2010, 09:40 AM   #45
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[/QUOTE][*]Our home is 2270 sqft, our next and hopefully last home will probably be in the 1100-1500 sqft range. But it will take us awhile to pick a next location, we'd like to avoid (the expense of) having to move twice due to a bad pick the first time.
[/QUOTE]

You bring up a key point I forgot to mention. We live in a home around 1300 square feet. It is one of the biggest homes we have ever lived in. Smaller houses are one key to keeping the bills down. Smaller houses have smaller utilities,taxes,insurance and maintenance.
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Old 03-21-2010, 09:47 AM   #46
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Austin TX is great if you like urban living (lived there for 30 years). And it's only hot in the summer, but the mild winters more than make up for it. That is the true tradeoff wherever you might want to live - enjoyable winter or enjoyable summer? Besides, summer is a great time to travel. The only reason we left was because we really didn't want urban/suburban living and there are better parts of the country if your main focus is wildlife photography.

There are some nice hill country cities west of Austin yet close for enjoying Austin urban stuff like Marble Falls, TX - if you are in to water sports especially. If I wanted to have a house close to Austin but not right in town, that is where I would probably move.

[OK - have to add the qualifiers about chiggers, scorpions and rattlesnakes and secession minded politics. Maybe my suggestions are buried far down enough in your thread not to bring down the wrath of my fellow TXns]

I really couldn't contribute any input about budget, because frankly we're not trying to be that lean on ours, and we spend a lot on dining out and groceries. We do own one car and I hardly ever buy clothes and visit salons rarely. But our spending on some of the other categories more than makes up the difference!!!!! Plus we gift quite a bit.

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Old 03-21-2010, 09:55 AM   #47
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One sure way to reduce expenses is to look at the cost of your investments. The difference between 1% overall expense ratio and 0.25% is substantial for a multi-million dollar portfolio.

Here's an odd fer-instance: My spouse has a 401(k) with fees of about 2% added on top of the expense ratios. It turns out it is cheaper to borrow from the 401(k) and put the money into the exact same fund in a 529 plan just because of the extra 2% return. Or put it into a taxable account where the LT cap gains would be taxed less than in a 401(k) or IRA.
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Old 03-21-2010, 10:15 AM   #48
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Maybe my suggestions are buried far down enough in your thread not to bring down the wrath of my fellow TXns
Nope, not far enough...
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Old 03-21-2010, 10:32 AM   #49
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Just by eating out half as much and slashing the seeing plays in half you save over $2200 . Your food budget can also be trimmed slightly to $100 that would save another $1300 . Just do not cut out the hair & nails for your wife or you'll be facing a big expense as in DIVORCE !
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Old 03-21-2010, 10:36 AM   #50
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Midpack, I hope you don't think this is to noisy but do you have a pension and SS?
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Old 03-21-2010, 10:41 AM   #51
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How often do you get your haircut? DH goes only every 6 weeks, and it runs him about $20 (including tip).
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Old 03-21-2010, 10:57 AM   #52
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Midpack, I hope you don't think this is to noisy but do you have a pension and SS?
No pension (a small lump sum) and no retiree healthcare. I do expect SS and Medicare will help one day, but my financial plan includes 50% of published SS and no Medicare - if we're pleasantly surprised, great.

Quote:
Originally Posted by simple girl
How often do you get your haircut? DH goes only every 6 weeks, and it runs him about $20 (including tip).
Every 4 weeks for $27 incl tip. I am still working (hence the frequency) and I get my hair cut professionally by one of DW's friends, so not negotiable (and it's a very small expense in the overall scheme).
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Old 03-21-2010, 11:15 AM   #53
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In actuality, we have kept most of our cars for 6-7 years and did keep one for 10 years. And we buy them on a staggered replacement schedule. I've just never wanted to put DW in a car that might break down on her, so I've never let her regularly drive our older car. But we might stretch this out more in retirement.
FWIW I think cars are greatly more survivable today than 30 years ago. We have a '97 Nissan Altima that we've generally neglected and put barely enough money into to keep it running. Nothing special, didn't really do much research before buying it. We haven't even bothered repairing any of the fender/bumper dings. If it dies tomorrow then I'd push it to the side of the road and empty the glovebox before abandoning it with the windows open and the keys in the ignition.

Yet when we turned it in last week for new tires and a mortality assessment of future expenses, the service manager said with a frustrated expression "There's nothing wrong with this car!"

It's quite possible that the breakdown probability of a 10-year-old car is only microscopically higher than that of a five-year-old car-- especially for legendary beaters like Honda Civics, Toyota Camrys, or Ford F150 pickups. But the five-year difference can save a lot of accrual expenses.
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Old 03-21-2010, 11:18 AM   #54
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Most of what I would say has been said. We do find we spend next to nothing on cloths, with the exception of tennis shoes. I have been retired three years, and I still have dress shirts on the hanger I have not worn. Same goes for suits and slacks. We also find one car works fine for us. Our over all budget, with accrual is around $70,000. Our medical is less than yours, and our travel is greater. Areas we spend less than expected, autos, dinning out, pocket money, clothes, hair cuts areas we are spending more travel.

I think the key, IMHO, is if you have the funds to finance your retirement expenses, then it does not make any difference if someone else does it for less or more. I knew when I retired I was not willing to take any kind of cost of living reduction, and in fact I was most likely going to spend more. As it turned out, I am currently spending less.
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Old 03-21-2010, 11:21 AM   #55
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Every 4 weeks for $27 incl tip. I am still working (hence the frequency) and I get my hair cut professionally by one of DW's friends, so not negotiable (and it's a very small expense in the overall scheme).
Frank gets his cut as frequently now as when he was working, because he likes to look clean cut. Men's barbershops (the old fashioned kind with the barber pole) in this area charge $12 and I would imagine that he leaves a couple of dollars in tip. So, that is about half what you are paying. I am puzzled - - either this is a regional thing, or else your DW's friend is charging you double the going rate. Or maybe you have longer hair that needs to be styled, in which case it very well could be justified.

As for very small expenses, there is an old proverb/quotation that I regard as wise and it goes "Take care of the pennies and the pounds will take care of themselves." - - Lowndes (1652-1724)

Of course, in my case buying the Venza this year did make a difference... But that was planned over many years as an "accrual expense" and it will probably be my last car.
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Old 03-21-2010, 11:27 AM   #56
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Midpack I think moving is the answer.
Yes, this is the real answer.

My total utilities (including internet) are only a bit more than what you pay for elec/gas alone. A smaller house and lower rates (see above for moving suggestion) are key.

Why is gas so high? Does this include road trips?

Buy a house with a metal roof so you don't have to replace it every 15 years (or every 5 if you live in Texas).

As Nords wrote, use better paint. Contractor's grade lasts 5 years.

Ditch the Dish.

Cook more at home. Or move to somewhere less expensive so the bill is lower.
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Old 03-21-2010, 11:45 AM   #57
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Why is gas so high? Does this include road trips?
Several people have said this, but I don't understand why? The gas cost includes all our driving, miles/yr isn't exorbitant for two people still working. What do others pay?

$160 /mo
$2.75 /gal
58.2 gal/mo
2 cars
29.1 gal/mo per car
30 mpg average (Camry Hybrid and Honda Element)
873 miles/mo ea
10,473 miles/yr each
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Old 03-21-2010, 11:50 AM   #58
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Frank gets his cut as frequently now as when he was working, because he likes to look clean cut. Men's barbershops (the old fashioned kind with the barber pole) in this area charge $12 and I would imagine that he leaves a couple of dollars in tip. So, that is about half what you are paying. I am puzzled - - either this is a regional thing, or else your DW's friend is charging you double the going rate. Or maybe you have longer hair that needs to be styled, in which case it very well could be justified.
A conventional men's haircut in a 'barber pole' joint is probably about $12 here too. My hair is very short (and getting sparser). DW's friend is a salon stylist, she charges $22 + $5 tip. Probably not wise to fire DW's friend to save $150 to $220 per year. But when/if we move I will probably go back to a barber pole or cheapcuts place.
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Old 03-21-2010, 12:04 PM   #59
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Several people have said this, but I don't understand why? The gas cost includes all our driving, miles/yr isn't exorbitant for two people still working. What do others pay?
So this will drop when you're retired?
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Old 03-21-2010, 12:13 PM   #60
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Several people have said this, but I don't understand why? The gas cost includes all our driving, miles/yr isn't exorbitant for two people still working. What do others pay?

$160 /mo
$2.75 /gal
58.2 gal/mo
2 cars
29.1 gal/mo per car
30 mpg average (Camry Hybrid and Honda Element)
873 miles/mo ea
10,473 miles/yr each
Is your assumption that you two will be driving the same amount in retirement? With the commute gone, what should you assume. My experience was that my driving around was half of when I was working -- not counting driving vacations.

Rita
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