Cutting Costs in Retirement

[proud_texan]

From reading most of the posts in this forum, I get the feeling that most are concerned with the quality of life as much as they are in the quantity. That brings me to this question...how have some of you continued with the quality of life that you want but at the same time been able to cut expenses.

Personally, my wife and I have been working to rid ourselves of much of the unnessary accumulation of what the world perceives as wealth. We had to ask ourselves what it was that we really wanted and really needed, then be honest with the answer.

We've discovered that the key is to live your life for yourself, being content with what you have whereever you are. When you realize that you don't need that accumulation, you not only simplify your life but lower your expenses. What is it they say? "The best things in life are free"

[MRGALT2U]

IMHO there is no connection between the amount of
money you spend and your happiness with your life.
It's all between your ears. I know lots of miserable "rich" people and an equal number of contented "poor" people. Guess I would be an example.
I live on less than 25% of my working income and yet
there is no doubt I am more satisfied now. It has even
occured to me that further cuts might yield additional
"life satisfaction". Thoreau thought so.

[patnbj]

Quote:

From reading most of the posts in this forum, I get the feeling that most are concerned with the quality of life as much as they are in the quantity. *That brings me to this question...how have some of you continued with the quality of life that you want but at the same time been able to cut expenses.

I live on a modest budget, however 25% of it is allocated to leisure costs. I retired to enjoy myself so spending this much on leisure is my way of maintaining quality of life.

I scurtinize all my elective spending to make sure that it adds to my quality of life. If it doesn't, I eliminate it.

Sometimes increasing quantity equals increased quality of life. For example: Since I want to enjoy as much leisure as possible, I stretch my leisure dollars. Taking 3 low-cost camping trips makes me happier than taking 1 high-priced trip for the same price! 8)

[proud_texan]

Quote:

Taking 3 low-cost camping trips makes me happier than taking 1 high-priced trip for the same price!

Good point, Patnbj! I know exactly what you mean about maximizing your leisure money. In addition, I like what you said about eliminating those things that don't add to the quality of life. It's just excess baggage anyway.

We went through a period of wanting the so-called "better things in life" and found them sorely lacking. The simple things in life usually give the most satisfaction.

I've had expensive meals and expensive wines, but sometimes a 99 cent Jumbo Jack and a Vanilla Coke are much more satisfying.

[MRGALT2U]

I did not find
"the best things in life sorely lacking" exactly.
Actually, I mostly enjoyed my "big spender" days.
The turning point for me was when I decided I no
longer wished to do that which was necessary to
support the lifestyle. Soooooooo, I enjoyed my
former life and I enjoy my ER life, even though one bears
little resemblance to the other.

[unclemick]

Dory36's 33% that's my story - was one of the clinchers to join this forum. Back in 1993 at age 49 our cost of living dropped without any effort on our part. And with no debt whatsoever the $50/day meant we were saving money at first until we found ways to spend it.

[Cody]

Quote:

I live on a modest budget, however 25% of it is allocated to leisure costs. * I retired to enjoy myself so spending this much on leisure is my way of maintaining quality of life. * I scurtinize all my elective spending to make sure that it adds to my quality of life. *If it doesn't, I eliminate it. * Sometimes increasing quantity equals increased quality of life. *For example: Since I want to enjoy as much leisure as possible, I stretch my leisure dollars. *Taking 3 low-cost camping trips makes me happier than taking 1 high-priced trip for the same price! 8)

Exactly my thoughts - great minds DO think alike :-)! I found that many of the things others feel are needed for the good life, are things I don't particularly enjoy anyways. Most of the things I like are free or very low cost, so living on small budget is a joy and not a hardship!

Cody

[Whakamole]

Quote:

Exactly my thoughts - great minds DO think alike :-)! I found that many of the things others feel are needed for the good life, are things I don't particularly enjoy anyways. Most of the things I like are free or very low cost, so living on small budget is a joy and not a hardship!

I've found the same is true for me. I'm not quite retired yet ;-) but I can be entertained cheaply, which seems to help if you want to retire early.

Not being chained to the work week, there are many ways of living a good life and not spending a lot. We pay a lot for convenience!

[unclemick]

Even after ten years, the joy of not being chained to the work week is still there - and 'we don't budget' except that the frugal habits developed during 'before ER days' are still alive and well. I have developed the ability of doing nothing into a high art.

[Billy]

We do not budget either....I hate that term...but we do track expenses...an old habit from owning businesses...13 years of retirement, and we are under $55.00 per day...and that's after many miles of travel, both in the US and abroad.

Keep it up...
Billy
Web-site http://www.geocities.com/ba264

[MRGALT2U]

I don't hate budgeting (former accountant), but we no longer do anything very formal. The only time in my life
when I kept a real budget was just after I retired
(and was married to my first wife). We never could make budget over about 2 years. Now (second wife)
frugality is so engrained that I guess I feel it is not
necessary. I consider every purchase (even a newspaper) carefully. It's so natural now this is no
burden whatsoever.

[cute fuzzy bunny]

I dont budget much. I do look at each fixed cost item and try to minimize it to suit.

My costs became much lower in retirement. I used to eat out ALL the time and had to have a house cleaning service and a yard service to do what I didnt have time to do. We used to live in a cold weather climate and took a lot of expensive vacations to warm places in the winter. We lived in a huge house in a fancy neighborhood, drove expensive cars and wore expensive clothing.

Since retiring, I have all the time in the world to clean my own house and cut my own lawn. We moved to a warmer area in northern california. There are two dozen places within a days drive that people in other areas of the country (and world) travel to on their vacations. Plus we can bring our dogs when we drive there. Not to mention my fiancee and I spent a LOT of time on airplanes as part of our work, and we've vacationed extensively. It was nice, but the last thing in the world either of us wants to do these days is get on an airplane.

I've always enjoyed cooking but never had much time for it. In the last 3 years I've honed my cooking skills and can pretty much make almost anything. My far better half doesnt even want to go out to eat anymore, she claims I'm a better cook than most restaurants and theres no waiting for a spot at the table. We still go out for a bite once in a while, but less than a few times a month.

I'm generally handy, so I also do the majority of my own home repairs and auto repairs.

There is a lot of free time to comparison shop for food and other essentials, and for many items I can scour the web for the best prices. I'm not a clothes horse anymore, I wear jeans, tee shirts and sweat shirts I buy at a warehouse store.

As part of this austerity effort, in which I feel like I'm denying myself nothing, my fixed annual costs including a fair lump of cash for food and gas is a measly $16,000. I draw roughly $32,000 per year from investments, buy a number of toys and gifts, and I still have a few bucks to roll back into the investment pot every year.

So: trade your time for cost savings. Stop doing things that cost a lot that you dont really enjoy anyhow, or substitute a lower cost alternative. Learn to cook. Invest some time in comparison shopping. Dispose of the big house, car, suit, etc.

[haha]

Quote:

As part of this austerity effort, in which I feel like I'm denying myself nothing, my fixed annual costs including a fair lump of cash for food and gas is a measly $16,000.

Hi TH, welcome to this discussion group. Does the $16,000 you quote include health insurance? What provisions have you made in this area?

Also, congrats on your success. And thank you for being so specific in your posts. It is so much easier to understand what is being said when the poster stops being coy and just says it.

As an aside, my son has worked in software for the past 15 years, and he is very wealthy. He just underwent an expensive divorce, partly because he works all the time, partly because his ex was crazy. (I actually do mean crazy.) To make him feel better after his divorce he bought a Porsche Twin Turbo. I feel he works so much he is endangering his health. But maybe partly because he grew up in an "early retiree family", he just wants stuff. Sometimes he has so much, he can't remember what he has.

To me, money is for autonomy and security, in that order. Stuff is anti-money.

BTW, you are a good son for helping out your parents. There aren't many successful ballplayers who don't spread a little to their families. Why not software multi-millionaires? And I am not complaing, just sending approval your way. I'm ok, and I'm 20 years in grade as an ER.

Mikey

[sgeeeee]

My DW and I have always been frugal and have valued things that don't cost much. The last several years we were both working, we lived off of less than 10% of our salaries but never had to pass on buying anything because of cost. We just didn't need more money than that to be happy.

But we were very busy when we both worked and we relished our free time too much to use it for things that we didn't really care too much for. We often bought food in restaurants rather than cooked to save time. We flew to destinations when our schedule permitted, rented a 4 wheel drive vehicle and stayed in hotels that were conveniently located.

We bought gas and groceries at the store that was quickest. etc. We paid others to do house and auto maintenance that would take more than a few hours for me to do. For entertainment, we often rented movies from one of the local rental places.

In retirement, we enjoy actually having the time to drive to locations we want to see and camp in primitive campgrounds or along a trail. When we are going to fly, we plan far in advance and shop for great fares. We enjoy shopping for the lowest cost gas and food items and preparing our own meals. We do all of our own yard and house maintenance and I am much more likely to be found with my head under the hood than I used to be. We have re-discovered the local library as a great place for free entertainment including movies, books and lectures. In general, we are far more discerning shoppers of everything. There is a certain satisfaction that comes from finding a good deal and watching the savings add up.

[sgeeeee]

Quote:

LoL -- My DW and my idea of roughing it, is staying in a timeshare that doesn't have a jacuzzi in the master bedroom. *We try not to do it, but occasionally it just happens... *Looking towards Orlando and the Hilton Grand Vacation Club next month to thaw out a little. *We'll be 'roughing' it in a 2bdrm/2bath/full kitchen/LR/DR jacuzzi couple TVs indoor/outdoor pools etc. . *. . .*

As my DW says, we can settle for that kind of vacation when we're old farts and can't backpack anymore.

[cute fuzzy bunny]

Quote:

Hi TH, welcome to this discussion group. Does the $16,000 you quote include health insurance? What provisions have you made in this area?

I've done a lot of research on healthcare. I felt like I had just finished watching a game of 3 card monte when I was done. For the last 3 years I went with a local HMO here in northern CA, Kaiser Permanente. They were charging me $150/mo for full coverage my first year, $198 last year and went to $218 this year. Service with them was very good and for those who are heavy healthcare users, I recommend them highly. My dad also uses them as his medicare HMO supplement for about $75 a month and he's happy as well. For me, $218 a month bore some analysis into options. I ended up going with Blue Cross of california's lowest cost package. For $85 a month it covers nothing for the first $1000, then 80% for the next $1500, then i've hit my out of pocket max for the year and they cover 100%. It includes no prescription drug benefits, which really drives the cost down. $25/$75 for a basic/full checkup annually. This works for me because I never go to the doctor and when I do its something persistent but not major. I've never broken a bone or required surgury. My dads 70 and except for the occasional checkup, thats his story as well. In this I get coverage if (god forbid) I'm in an accident or develop a major medical need. In a year or two, i'm planning on marrying my fiancee. She works as a healthcare provider in the local hospital and they have GREAT insurance, and she can cover me on her policy for cheap. She's cut way back on her time at the hospital, but still puts in enough hours to keep herself busy and in pocket money.

Quote:

Also, congrats on your success. And thank you for being so specific in your posts. It is so much easier to understand what is being said when the poster stops being coy and just says it.

Cool. Every "performance appraisal" I ever had said that I could use a lesson in brevity. I've already learned a lot from my readings here, hopefully I can give something back.

Quote:

As an aside, my son has worked in software for the past 15 years, and he is very wealthy. He just underwent an expensive divorce, partly because he works all the time, partly because his ex was crazy. (I actually do mean crazy.) To make him feel better after his divorce he bought a Porsche Twin Turbo. I feel he works so much he is endangering his health. But maybe partly because he grew up in an "early retiree family", he just wants stuff. Sometimes he has so much, he can't remember what he has. To me, money is for autonomy and security, in that order. Stuff is anti-money.

I can relate. When I was working I had lots of cars and tons of electronic toys, etc, etc. I've had to learn the "I dont need that" lesson from my dad. He retired a little early with a handful of EE bonds and still has most of them. Every time I see something that makes me want to buy it, I just think "and where will I put THAT in my new smaller house", followed by "and theres another $75 I get to keep in my portfolio, which will be worth 5x that in 10 years.". HAH!

Quote:

BTW, you are a good son for helping out your parents. There aren't many successful ballplayers who don't spread a little to their families. Why not software multi-millionaires? And I am not complaing, just sending approval your way. I'm ok, and I'm 20 years in grade as an ER. Mikey

The two best things I did with my windfall was to pay their mortgage off and my fiancees. My dad lives in a "sun city" community (in their very smallest and least expensive layout that he bought for a bargain price), and he was able to get himself a used golf cart and play more often without worrying about watching his pennies as much. My fiancee has been able to maximize her 403b and cut two days a week off her work schedule. I remember years ago when I was working 3 jobs and barely staying afloat, I read a tidbit in a book about how no matter how tight or tough things are, helping someone who isnt as well off as you makes you feel a lot better...and theres always someone who isnt as well off as you are.

Man, I'm glad this "OF" thing came up. Listen to me all fo you campers and backpackers, wilderness explorers and cowboy wannabes etc etc. I am very outdoorsy. Always have been. A lot of my adventures involved sleeping on the ground for weeks at a time. I last slept in a tent in
1991 and never will again. I am not happy about it,
but there it is. The list of stuff I used to do and/or
planned to do is shrinking. I know it's natural but
I don't like it one bit. I am lucky in that I will never run
out of stuff to do, even if I am reduced to just sending
out insightful commentary and witty anecdotes .

John Galt

[Bob_Smith]

I'm with you on the cell phones and phone card, Cut-throat. I know people who don't have two nickels to rub together, but everybody in their household (including each kid) has a cell phone. My phone bill is about $18 a month for local service, plus 3.47 cents a minute for long distance calls with my Sam's Club card. By the way, does anyone know of a cheaper LD rate?

[sgeeeee]

I didn't mean to offend anyone with my "Old Fart" joke. In my defense, I did punctuate the comment with a big smiley face to indicate I was only joking. I certainly don't want to imply that anyone of the posters on this board is less than vital and important. I value your comments and insights.

Actually, just 3 and 1/2 months shy of my 50th birthday, I feel like an old fart almost every morning. After my workout and coffee, I feel better, but my wife never fails to remind me of my old fart status if I let out a groan because of one of those early morning creeks in my joints. She is only 11 months younger than I, but she takes full advantage of her right to claim to be young and vibrant while I have become an old fart.

When I was working, I was very active in professional activities and well known in my field around the world. I was often invited to speak at various conferences and events. My wife and I traveled as guests of various organizations all over North America as well as France, Brittain, Italy, Spain, Turkey and Egypt. We took full advantage of the VIP treatment. We've dined and stayed in palaces, drank wine with leaders of nations and exchanged Christmas cards with heads of state. But what I missed was the time I needed to get so far into nature that I couldn't drive back to a motel in a day. I really love how my concepts of time and my priorities change when I'm lost in nature dozens of miles from any civilization. I like being reminded of what is truely important and of how absolutely insignificant I really am. I am getting a chance to do more of that now and I am aware of my limited time to enjoy these pleasures . . . before the morning creeks and pops become too painful to make the experience worthwhile. I certainly have other things I want to do too. But it is the love for this experience, not the desire to save cash, that keeps me backpacking, rafting or primitive camping.

I realize that many don't feel the same way I do about the nature experience. That's good. As much as I love you all, I really don't want to see your face when I've hiked 3 or 4 days into the middle of nowhere. Similarly, my wife and I are not likely to be competing with any of you for a week in a timeshare in Orlando -- jacuzzi or not. That's good for you because it will keep your rates lower. (By the way, we do have our own jacuzzi in our large master bathroom and we enjoy it tremendously -- especially after some of those long hikes.)

So if I offended, I am truly sorry. And let me add, "Happy Holidays to everyone . . . especially us old farts."

[cute fuzzy bunny]

Quote:

I'm with you on the cell phones and phone card, Cut-throat. I know people who don't have two nickels to rub together, but everybody in their household (including each kid) has a cell phone. My phone bill is about $18 a month for local service, plus 3.47 cents a minute for long distance calls with my Sam's Club card. By the way, does anyone know of a cheaper LD rate?

Couple of things. First off, I get 2.97c on phone cards from sams and costco locally. I've found sams indexes their prices based on the 'expense' of the local area. My sams is smack in the middle of a moderate welfare town in the next county. My dads is near a lot of moderately affluent people. I see some wide price margin differences. Costco seems to be the same throughout. Hence, look for another sams in a lousy area thats near enough to you.

Next, after looking at the requirements, I found that my income met the requirements for not only 'low income' telephone but also for low income gas and electric. There were no limits on assets, just annual household gross. Works for me because I live alone. Dropped my phone bill from $17 to $5. Dropped 30% off my utility bills. I wouldnt do this if I was taking money or opportunity from other low income people, but these are simply state mandated reductions.

Your best bet for long distance? How about almost free. If you have a cable modem or DSL, look into www.packet8.com or www.vonage.com. Both of these will give you a little box called a terminal adapter that plugs into your DSL/Cable router, and offers one or more plain old phone jacks on the back. Plug a phone into it, pick it up, and enjoy free unlimited local and long distance for a fixed monthly charge. International calls are incredibly cheap. Its $19.99 for packet8 and $34.99 for vonage. Also includes a local phone number, people with a regular phone can call you. If you spend a lot on long distance, and dont have a broadband connection, you may be able to afford the $26.95 DSL promo's plus packet8 or vonage and still save money. By the way, these prices include voicemail, caller ID, 3 way calling, and any other special features the phoneco will charge you extra for.

Minimal pro/cons: packet8: cheaper but its a smaller company than vonage, uses a proprietary box they make themselves, uses less bandwidth than vonage, has one setting for voice quality although users say its as good as a landline and better than cell phone, does not support 911 so you need to tape local emergency # to the phone. Vonage: more expensive, uses standard cisco box that other providers also support, has several voice quality settings that may improve your voice qual, bigger company and some report has better customer service, 911 works.

To simplify installation, if you have a 2nd line wired in your house, no landline, or plan to drop your existing landline for this, as many have. Plug in the box and run a phone cord from it to the nearest phone jack. Voila, all the jacks in the house are now on the packet8/vonage line.

With recent phone # portability, you may be able to port your existing phone number.

Note that while vonage/packet8 work everywhere, they only offer limited area codes/phone number exchanges. This does however create another interesting opportunity. Lets say the majority of your LD calls go to friends and family that live in a common area in another state. You can buy packet8/vonage service, choose an area code/exchange thats local to those folks, then plug the unit in at your house. Then not only can you call them for free, they can call you for free as their phone company sees your # as a local call. You may also take your telephone adapter with you anywhere in the world, plug it into a broadband connection, and anyone who calls you will ring the phone wherever you happen to be.

Your best bet on either of these is to find an existing subscriber to give you a reference. This usually gives you a discount or both of you a free month. Snoop around the DSLREPORTS web site or somesuch (search for packet8 or vonage), find a stranger and ask them to refer you.

Lastly on cell phones. I found a small local wireless company (surewest, another is metropcs) that charges $29-$31 a month for unlimited wireless minutes and unlimited calling in most of northern california. When I lived 40 miles away from my fiancee, we both bought these and saved $100 a month each in local LD charges. Saves a TON of money over at*t, verizon, etc. Two caveats: roaming is EXPENSIVE, and the non-roaming calling area is usually more limited than the big cell providers.