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Old 08-23-2014, 11:46 AM   #41
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I don't know where all of you live, but we are in a very cold weather state. There is always free or no interest very long term loans available for house projects particularly new windows, insulation, etc. This is earmarked for low fixed income people. One just has to do a little asking or some research.

I have found some older people actually have the money but don't want to put it into their house .... I know an older couple who's house needs shingles, windows, just general fixing .They have plenty of money and built this house new over 40 years ago. They don't see why they need to fix up their "new" house...
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Old 08-23-2014, 12:42 PM   #42
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So, what I am saying is I find it hard to believe people are being realistic when they say they can live on less than 40k per year "all in" when I need at least 40K to cover insurance, housing and cap expenditures for large ticket items. My current budget is 70k net and it's tight. Remember, I have no mortgage, college funds banked and no other debt.

I feel compelled to drop in on the MMM and ERE crowd and point out that they may not be realistically factoring in all of life's costs. However, I brought this up here because most of you in the Early Retirement forum are the more experienced group and would like your thoughts and comments.
This is a great thread. I've been pondering the same questions with retirement just ahead. Budgeting for large outlier expenses is one of the biggest challenges and often overlooked.
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Old 08-23-2014, 02:13 PM   #43
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I don't know where all of you live, but we are in a very cold weather state. There is always free or no interest very long term loans available for house projects particularly new windows, insulation, etc. This is earmarked for low fixed income people. One just has to do a little asking or some research.

I have found some older people actually have the money but don't want to put it into their house .... I know an older couple who's house needs shingles, windows, just general fixing .They have plenty of money and built this house new over 40 years ago. They don't see why they need to fix up their "new" house...
I think it is about not parting with money and being overwhelmed with the process. Fear that who they choose will rip them off somehow.
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Old 08-23-2014, 02:25 PM   #44
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I must be on a roll tonight.


I can't think of really anything I don't have that I want. I am blessed with the want of few things. Life is good.
+1. Now might be a good time to remember Thoreau's quote, "A man is rich in proportion to the number of things he can afford to let alone."
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Old 08-24-2014, 09:39 AM   #45
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This is a great thread. I've been pondering the same questions with retirement just ahead. Budgeting for large outlier expenses is one of the biggest challenges and often overlooked.
It would be an even better thread if OP wasn't a drive-by shooter, and came back to defend his position. Methinks he didn't like his 'rant' getting roundly disputed by the evidence given.
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Old 08-24-2014, 09:52 AM   #46
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So much depends on where you live and you circumstances.

I'm single with no kids, so paying for college just isn't an issue.
I ride my bike most places so transportation isn't a big expense. I use buses and the subway if I'm going out at night. I drive my car about once a week, mainly just to keep the battery charged.
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Old 08-24-2014, 11:35 AM   #47
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Well, summer is over and I have enjoyed my time with the kids. I try and read a little each day on this forum and few others (MMM, etc) as I have learned a lot from my peers and gained perspective in my new normal. However, one thing that has me perplexed is reading about what others proclaim are their budgets and expenses, especially the ERE and MMM folks who proclaim to live on less than 40K per year. It is my opinion that a lot of these people do not factor in capital expenditures with their typical annual expenses. Let me give a simple example. A small family (3 kids or less) in America is going to have housing, transportation and maybe college expenses. As such, they need to have reserves for replacement for housing components, cars and some college costs. In my case, I have banked enough in college funds for my kids already, but I put about 5k a year in there for over 15 years. As to housing, I assume around 4K per year as a reserve which covers Roofing, Paint, HVAC, Water heater, Appliances and Maintenance equipment (lawn mower, etc) for a 20 yr cycle. Lastly, I buy a new car to me every 4 to 5 years (We drive our cars for 8 to 10 years). This means I need around 25K (today's dollars) each 5 years, so 5k per year.
We budget about $1500/yr for capital items for our house and that's based on detailed estimates and life cycles of individual systems. Some of that lower cost comes from DIY.

For cars, I'm planning on about $1k/yr replacement cost. Buy a $10k used car every 7 years, and sell it for $3k at the end of 7 years of ownership. In the city, a car is a convenience device, and I don't think we need more than one in the household. Realistically I could probably drive the car into the ground and spend less than $1k/yr in replacement costs. Going on year 15 in my Honda Civic right now which holds our family of 5.

FYI, our entire budget for a family of 5 is $32k/yr. I didn't include a few lumpy costs in there like college and braces (which may be covered by insurance). We have separate dedicated savings for college, and I figure any big lumpy kid related costs will be offset by lower spending once the kids are out of the house. I didn't factor lower costs post-kids into my $32k/yr spending.


Quote:
So, what I am saying is I find it hard to believe people are being realistic when they say they can live on less than 40k per year "all in" when I need at least 40K to cover insurance, housing and cap expenditures for large ticket items. My current budget is 70k net and it's tight. Remember, I have no mortgage, college funds banked and no other debt.
Wow, 70k? You realize more than half the households in the US make less than that every year, right? Could it be that the MMM and ERE crowd are comfortable living like others at or below the median income?


Quote:
I feel compelled to drop in on the MMM and ERE crowd and point out that they may not be realistically factoring in all of life's costs. However, I brought this up here because most of you in the Early Retirement forum are the more experienced group and would like your thoughts and comments.
Sure, go for it! This forum is the most spendy of the three major early retirement forums, so you'll probably get a pretty poor reception at the other forums if you start telling people they don't know how to plan for the future adequately when a lot of the posters are actually very smart, well prepared individuals.
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Old 08-24-2014, 11:58 AM   #48
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So, sorry but I just checked the glossary of terms and I didn't see it. What is "ERE"?
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Old 08-24-2014, 12:07 PM   #49
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So, sorry but I just checked the glossary of terms and I didn't see it. What is "ERE"?
Wasn't familiar with it either, but a Google search helped. It refers to the Early Retirement Extreme site.
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Old 08-24-2014, 12:09 PM   #50
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Wasn't familiar with it either, but a Google search helped. It refers to the Early Retirement Extreme site.
AAH, OK. Thanks. I knew what MMM meant. Was stuck on the ERE
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Old 08-24-2014, 12:57 PM   #51
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With a low taxable household income, state and federal income taxes, college costs and health insurance costs under the ACA can possibly be pretty close to zero dollars a year. Actually taxes may even be a revenue source for those with refundable tax credits.
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Old 08-24-2014, 01:15 PM   #52
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Oh now, come on, who does not like a good drive by shooting. However, I will not come spray the place then not stand my ground. My rant was directed at the 30 and early 40 somethings with young kids that are checking out of the rat race and professing to live on +/-40K but their budgets do not include capex. I question whether it is sustainable long term both without capex figured in. Also, what about lifestyle creep from the pressure of consumerism that occurs when kids get into grade school.

It is clear from the comments that many of you who have retired early (50 to 60 age), with kids no longer being factored, have mastered the ability to live comfortably and happily in the 30 to 50K range. It is the efficient living concepts you expound here in this forum that I have come to appreciate and in some cases adopt. For that I thank you.

As to those that feel my budget of 70+K is a little excessive, well, I guess you should know that I do succumb to some of the pressures of consumer world as my kids are provided music lessons, play on club sports teams (travel tournaments are not cheap). Summer international travel and summer education camps in marine biology, engineering and sports (surfing and sailing). I have owned a boat all my life to which my oldest has her captains license at 16 yrs old so she takes it out on her own. Great confidence builder. Where do I live? A little brain teaser for you, I have water front property, but I can also walk to the beach.

Yes, I am not going to win the frugal as sh*t award but I can live with that as long as I can look back at the memories and smile.
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Old 08-24-2014, 01:34 PM   #53
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When I was growing up, our softball team "uniforms" used to be different color bandanas. One team would be yellow maybe another blue. We just played other teams in the neighborhood and I rode my bike to the games.

If I had to do life over again I wish we would have raised our kids in an environment more like that, not one where the better part of Saturdays for the whole family could be spent on traveling sports teams sometimes 100 miles apart. I think the teams I was on as a kid were a lot cheaper, simpler, less stress and more fun. I don't even know if any one kept track of win loss records among the teams, other than the score for the game that just finished.
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Old 08-24-2014, 01:40 PM   #54
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One Spouse (50 years), 4 Kids but all on their own with their own, One Car (5 years old), One Condo, Retired Military (now in 36th year of retirement with medical care under Tricare for Life and/or VA). Our Budget is $32,000 per year and in 2003 it was $22,000 per year. Now at ages 73/76 do not see any big expenses (can self-insure up to about 10 years of LTC). We "retired" about 30 years ago and the budget creeps about 2-6% per year depending on a few reasonable variables.
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Old 08-24-2014, 01:49 PM   #55
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I have found some older people actually have the money but don't want to put it into their house .... I know an older couple who's house needs shingles, windows, just general fixing .They have plenty of money and built this house new over 40 years ago. They don't see why they need to fix up their "new" house...
This is one reason why I like living in a condo. External maintenance does not depend on one individual and is not going to be neglected as long as we have an effective board and management. Of course, I don't take that for granted, which is why I joined the board!
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Old 08-24-2014, 01:50 PM   #56
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When I was growing up, our softball team "uniforms" used to be different color bandanas. One team would be yellow maybe another blue.......... .
What? You had bandannas? We played shirts and skins and that included the girls.
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Old 08-24-2014, 03:49 PM   #57
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When I was growing up, our softball team "uniforms" used to be different color bandanas. One team would be yellow maybe another blue. We just played other teams in the neighborhood and I rode my bike to the games.

If I had to do life over again I wish we would have raised our kids in an environment more like that, not one where the better part of Saturdays for the whole family could be spent on traveling sports teams sometimes 100 miles apart. I think the teams I was on as a kid were a lot cheaper, simpler, less stress and more fun. I don't even know if any one kept track of win loss records among the teams, other than the score for the game that just finished.
We're trying to do exactly this. Not raise kids in an ultra-busy environment. Most weekends are unscheduled by design and lead to lots of serendipitous adventures (that tend to be free or dirt cheap). Museums, hikes, play dates, board games, swimming at the pool or water park or lake, boating (we rent), parks, movies, etc.

Some of our kids' busier friends find our lifestyle amazingly freeing. Last weekend was our 8 year old's birthday party and one mom was exasperated after shuttling one kid to a morning game in one city (and taking her other 2 kids along for the ride) then rushing back to make an afternoon game. She was so excited to let her two daughters stay with us all day for the birthday party.

We're like "hey, we don't have any plans so leave your kids for as long as you want. We'll feed them dinner if necessary and walk them back home at dark if you want." It's like we invented this "lifestyle design" thing.
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Old 08-24-2014, 08:17 PM   #58
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Fuego,

We had similar responses from the daughters' friends when they would come over for the afternoon and then stay for dinner. They would say, "Do you mean that you all actually sit down and eat dinner together?" We did, almost every night until the girls were in high school and even then we managed about 4 nights per week. The girls also went to bed by about 10:30 on weeknights through their high school years. This was viewed by other students as unbelievable since many of them would be up until 1:00 AM or so most nights.

It is possible to live a life that cuts against the grain of society, it just takes some backbone.
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Old 08-25-2014, 01:10 AM   #59
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Why do you need two cars when you are retired? Some get by with zero cars but one car should be enough if nobody has to commute.

I question if that would really be considered frugal middle class. Maybe frugal upper middle class...
I could go for the idea of having one "nice" car and the other just for occasional use which could be an older, not so nice car.

Where I live we have a walk score of 0. We are 15 minutes away from the closest gas station/convenience store (soon to be closer to 10 minutes which is really exciting for me). There is no real public transportation that is practical and reasonable in cost.

While DH and I like to be together we are not always together. I never want to be in a situation where he has taken a car somewhere and I need to go somewhere and can't. I don't want to be at home and have a dog need to go to the vet for an emergency and not be able to do it. I don't want to be at home and need to pick something up at the grocery store and not be able to do it.

And, there are times when DH and I have schedule conflicts where we both need to be at different places at the same time.

I could see feeling differently if I lived in area where there was good public transportation or where I could walk most places. But basically I don't want to feel that I am housebound every time DH goes somewhere without me.
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Old 08-25-2014, 10:12 AM   #60
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I truly don't understand the infatuation with extra-curricular activities for kids. I have heard parents talk about taking their kids to some sports practices that started around 6:00 AM *BEFORE* school even starts!!! What is this madness all about!? I get that life *can* be a competition, and we must start as early as possible (slight sarcasm intended). When I was a kid, I did my homework after school over a plate of cookies (not some fruit or other *healthy* treat) and went out to play until about 7:15 when I had a home cooked meal (with vegetables that we seasoned w/ bacon fat!) and went to bed around 10. When I went to the bus stop (in the dark..OH MY!), there wasn't an adult to be seen for MILES! And, the crazy thing? I'm only 40 years old, so it wasn't that long ago.

Sorry about the highjack. My thoughts (and plans) on capital expenses. For our paid-for house that is about 40 years old, I plan about $5K a year. This is something I have built into with dividend income. Using the law of averages, I am looking at *maybe* 4K a year, but to me the extra grand is a worthwhile buffer. And living on 40K a year? Very easy for me to do...but this is with a cola protected pension, and *very cheap* health insurance. Also..no kids in the mix, so makes it quite easy.

I think the likes of MMM and ERE have proven themselves, at least to me.
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