Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Where does the money go?
Old 02-10-2011, 06:09 PM   #1
Thinks s/he gets paid by the post
 
Join Date: Jun 2010
Location: France
Posts: 1,195
Where does the money go?

I have a simplified theory of where people spend their money. I reckon that, once you've put a roof over your head and paid for utilities, health insurance/deductibles if you're American, and orange juice to put in the fridge, there are five major categories of ways to burn the rest:

1. Clothes - serious fashion shopping, not $25 jeans
2. Eating out, drinking out, etc
3. Home stuff ("the one who dies with the most stuff wins")
4. Cars - replace every 2 years, 3 cars in the garage
5. Travel

Note that I don't count FIRE savings in there, nor college fees which I assume people also save up for (and which I don't regard as "burning" money, although it depends if your kids are majoring in surfing, I guess).

DW and I make the kind of money where we could afford to do perhaps 3 of those and still save a little. As it is we do #5 quite a bit, #2 and #4 very modestly, and save a lot. We know people who make a lot less than we do and do #1 through #5 like they're going out of fashion.

Anyone else have a model like this? Or a category to add?
__________________

__________________
Age 56, retired July 1, 2012; DW is 60 and working for 2 more years. Current portfolio is 2000K split 50 stocks/20 bonds/30 cash. Renting house, no debts.
BigNick is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 02-10-2011, 06:16 PM   #2
Moderator Emeritus
Khan's Avatar
 
Join Date: Aug 2006
Location: Pine Island, Florida
Posts: 6,868
Send a message via AIM to Khan
Quote:
Originally Posted by BigNick View Post
I have a simplified theory of where people spend their money. I reckon that, once you've put a roof over your head and paid for utilities, health insurance/deductibles if you're American, and orange juice to put in the fridge, there are five major categories of ways to burn the rest:

1. Clothes - serious fashion shopping, not $25 jeans
2. Eating out, drinking out, etc
3. Home stuff ("the one who dies with the most stuff wins")
4. Cars - replace every 2 years, 3 cars in the garage
5. Travel

Note that I don't count FIRE savings in there, nor college fees which I assume people also save up for (and which I don't regard as "burning" money, although it depends if your kids are majoring in surfing, I guess).

DW and I make the kind of money where we could afford to do perhaps 3 of those and still save a little. As it is we do #5 quite a bit, #2 and #4 very modestly, and save a lot. We know people who make a lot less than we do and do #1 through #5 like they're going out of fashion.

Anyone else have a model like this? Or a category to add?
Buy enough clothes to keep myself covered and comfortable
Go out to eat maybe a few times a year
Home stuff is only replaced as it wears out
Cars replaced as they wear out (previous one lasted 18 years)
Travel rarely (flew in Dec for first time in ~15 years)

I enjoy giving stuff and money to people/orgs/causes
__________________

__________________
"Knowin' no one nowhere's gonna miss us when we're gone..."
Khan is offline   Reply With Quote
Old 02-10-2011, 06:40 PM   #3
Moderator
Ronstar's Avatar
 
Join Date: Aug 2007
Location: A little ways southwest of Chicago
Posts: 9,360
Wow,

Those 5 sum it up very well. I can't think of any of our expenses that don't fit into one of those 5.

#1 - frugal - I spend less than $300 per year in clothes
#2 - frugal - probably eat/drink out only twice a month (except cheap fast food)
#3 - not so frugal - spend $ on new tech gadgets, oversized primary home, vacation home
#4 - average frugality - have 4 vehicles, 3 over 10 yrs old.
#5 - average frugality - rarely go anywhere except vacation home
__________________
Ronstar is offline   Reply With Quote
Old 02-10-2011, 06:52 PM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2005
Posts: 8,626
My spouse would give her entire income to charity if I let her.
__________________
LOL! is offline   Reply With Quote
Old 02-10-2011, 06:52 PM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 16,521
Hobbies.

I don't think that counts as "home stuff"
__________________
Well, I thought I was retired. But it seems that now I'm working as a travel agent instead!
audreyh1 is offline   Reply With Quote
Old 02-10-2011, 07:05 PM   #6
Moderator Emeritus
 
Join Date: May 2007
Posts: 11,044
6? "sins" i.e. alcohol, tobacco, lottery tickets/gambling, etc...

Personally:

1. not so frugal on clothes. Buy good quality clothes but keep them much longer than most people keep their clothes.
2. frugal. rarely eat or drink out.
3. not so frugal. I am a homebody. My home is my castle.
4. frugal, 2 cars replaced every 10-14 years.
5. average frugal. Take maybe 1-2 trips a year. But my annual travel expenses were on the low end of the ER spectrum IIRC from a previous thread.
__________________
FIREd is offline   Reply With Quote
Old 02-10-2011, 07:17 PM   #7
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
bbbamI's Avatar
 
Join Date: Dec 2006
Location: Dallas 'burb
Posts: 9,039
Where does the money go?

Marshmallows and beer.
__________________
There's no need to complicate, our time is short..
bbbamI is offline   Reply With Quote
Old 02-10-2011, 07:17 PM   #8
Recycles dryer sheets
 
Join Date: Aug 2007
Location: S.W. Minnesota
Posts: 134
1. Bought a suit. First time in 25 years (working out - shoulders too big for the old one)
2. Only when traveling.
3. Everything was paid for years ago. (except ground source heat pump - 1 month left on payments)
4. Gave away 11 yo car to niece. Bought a new Hyundai Sonata. Vroom (and it's red!)
5. Can't keep up with friends (Africa and Antartica in the same year!), but, Carribean, spring training in FL, and Rome. Do it, while you can!
__________________
waltwill8 is offline   Reply With Quote
Old 02-10-2011, 07:18 PM   #9
Moderator Emeritus
Martha's Avatar
 
Join Date: Feb 2004
Location: minnesota
Posts: 13,212
What happened to sex, drugs, and rock and roll?
__________________
.


No more lawyer stuff, no more political stuff, so no more CYA

Martha is offline   Reply With Quote
Old 02-10-2011, 07:27 PM   #10
Thinks s/he gets paid by the post
MasterBlaster's Avatar
 
Join Date: Jun 2005
Posts: 4,359
I spent half my money on booze, sleazy women, and wild times...

And the other half I just wasted.
__________________
MasterBlaster is offline   Reply With Quote
Old 02-10-2011, 07:32 PM   #11
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,934
Fitness (expenses such as gym fees)
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities.

- - H. Melville, 1851
W2R is offline   Reply With Quote
Old 02-10-2011, 07:38 PM   #12
Full time employment: Posting here.
 
Join Date: Jan 2011
Posts: 575
Quote:
Originally Posted by MasterBlaster View Post
I spent half my money on booze, sleazy women, and wild times...

And the other half I just wasted.
LOL.
__________________
KingB is offline   Reply With Quote
Old 02-10-2011, 07:43 PM   #13
Recycles dryer sheets
 
Join Date: Nov 2010
Posts: 241
Giving to foodbank, hospice, college, other charities
__________________
MDJO is offline   Reply With Quote
Old 02-10-2011, 08:00 PM   #14
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Moemg's Avatar
 
Join Date: Jan 2007
Location: Sarasota,fl.
Posts: 10,037
Quote:
Originally Posted by Martha View Post
What happened to sex, drugs, and rock and roll?

Now it's Cialis , Metamucil & mood music !
__________________
Moemg is offline   Reply With Quote
Old 02-10-2011, 08:03 PM   #15
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Moemg's Avatar
 
Join Date: Jan 2007
Location: Sarasota,fl.
Posts: 10,037
My grandson , my daughter & charity !
__________________
Moemg is offline   Reply With Quote
Old 02-10-2011, 10:28 PM   #16
Full time employment: Posting here.
 
Join Date: Nov 2008
Posts: 728
how about gifts? I spend a bunch on kids and gradkids at Christmas and their birthdays.......more than I spend on eating out or on clothes. gifts for a great wife as well.
__________________
jerome len is offline   Reply With Quote
Old 02-10-2011, 10:44 PM   #17
Full time employment: Posting here.
Moscyn's Avatar
 
Join Date: Mar 2009
Posts: 728
Clothes - still buying but very wisely indeed.
Eating out/drinking out - well. with the time I have now I discovered I'm a good cook and we since we have a wine fridge, drinking at home is less expensive. Also, gives me a chance to practise on wine pairing.
Spend very little on the home stuff as big items were purchased before retiring.
Car has been with us for 5 years - no intention to change soon.
Travel - oh yeah - one of my favorite activities. Usually 2 long hauls and 3 short hauls per year excluding week end trips.

Other categories include exercise related expenditure like gym, golf, yoga. Also am a sucker for beauty regimes like facials and massage.
__________________
Moscyn is offline   Reply With Quote
Old 02-11-2011, 02:17 AM   #18
Thinks s/he gets paid by the post
 
Join Date: Apr 2005
Location: Duesseldorf, Germany
Posts: 1,005
1. Clothes - well balanced, some new pieces every year to replace worn outs but classics preferred
2. Eating out, drinking out, etc: 2xp.M. is much, except when travelling
3. Home stuff ("the one who dies with the most stuff wins") : we like what we have and do not need much more, so mostly replacements if beyond repair, we are not into decoration items
4. Cars - replace every 2 years, 3 cars in the garage: company car also for private use and a 12 year old for DH
5. Travel: we love to travel but do not spend extensively on hotels and restaurants. No de luxe travel for us.
__________________
chris2008 is offline   Reply With Quote
Old 02-11-2011, 02:50 AM   #19
Thinks s/he gets paid by the post
 
Join Date: Jun 2010
Location: France
Posts: 1,195
I like "hobbies". Owning a boat or a horse can put a fair-sized dent in your wallet. I'll add that to V2 of the list.

Perhaps "charity" and "helping out kids" could go in their own category too. That would also absorb "saving for college". They all come under "spending money not on yourself". One reason why I didn't list this first time round is that, in theory, it's something you can cut back on without noticing much impact on your lifestyle, although of course your kids are hard to exclude from your lifestyle.

I'm not sure about "alcohol/tobacco/gambling". Alcohol is cheap if you drink it at home (unless you do it to the point where it affects your ability to work ) and if you drink it outside, that's covered. Tobacco is such an alien thing to me that I didn't think about it, but I know that for people who make below median incomes, 30 a day can be a big chunk of change (especially in Europe where $8 per pack of 20 is not uncommon). I'd probably include gambling under "hobbies".
__________________
Age 56, retired July 1, 2012; DW is 60 and working for 2 more years. Current portfolio is 2000K split 50 stocks/20 bonds/30 cash. Renting house, no debts.
BigNick is offline   Reply With Quote
Old 02-11-2011, 06:31 AM   #20
Moderator
Walt34's Avatar
 
Join Date: Dec 2007
Location: Eastern WV Panhandle
Posts: 16,571
Quote:
Originally Posted by BigNick View Post
1. Clothes - serious fashion shopping, not $25 jeans
2. Eating out, drinking out, etc
3. Home stuff ("the one who dies with the most stuff wins")
4. Cars - replace every 2 years, 3 cars in the garage
5. Travel
Not so much on any of those. We don't travel much outside the local area, spend little on clothes, our cars are 8 years old and we plan to keep them until the wheels fall off, and we go out for meals perhaps once or twice a month. I still have a jacket purchased during the Nixon administration.

Two years ago I did splurge on a motorcycle which overall probably costs a bit more than a small car to run (You're doing well to get 10k miles out of a set of tires, which are ~$150 each. They're made of softer rubber to grip the road better but don't last as long.)

Neither one of us shops as a form of entertainment. DW spends a lot of time with family and is her nephew's "emergency babysitter" which she enjoys doing.

Lately I've renewed an interest in photography and of course there's no upper limit as to what one can spend on that. Truth is I'm the bigger spender than DW is and I have to hold myself in check to keep from going overboard on stuff by asking "In three years will I still be glad I bought this?"
__________________

__________________
I heard the call to do nothing. So I answered it.
Walt34 is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Secret Money. Do you hide money from your spouse? Enuff2Eat FIRE and Money 72 07-08-2008 04:13 AM
Money we've made versus money we have kept laurence FIRE and Money 27 07-14-2006 10:44 AM
How long will money last? Money Mag earlyout FIRE and Money 21 10-29-2003 03:15 PM

 

 
All times are GMT -6. The time now is 10:00 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.