What do you tell people you do?

[cute fuzzy bunny]

I just re-ran my budget for the last two years.

My fixed costs including food, gas, utilities, health care, and all miscellaneous expenses rounds up to about $18k. No debt, so no home or car payments included. My "discretionary spending" for the last two years ran to about 6k per year excluding some one-time expenses (like an engagement ring...I sure as heck hope THATS a one time thing...).

I've shaved that 18k down to the point where I doubt I could reduce my base costs any further. If I moved into a smaller easier to heat/cool house, dropped cable tv and internet access, sold my car and bought an old one that I only took minimal insurance on, and ate a lot of pasta I might shave about $2.5-3k off of it. Not worth it.

Considering that up until 3 years ago I made six figures every year and spent most of the salary, this represents quite a lifestyle change, of which I dont miss a thing.

I'm tracking to cut that "discretionary spending" roughly in half this year. Pretty much just thinking 3 times before buying any non-essentials.

Seems to be something magical about that $24k number...

 

[wabmester]

Wow, are you guys including taxes in your expenses? My taxes alone exceed your "magic number".

 

[farmerEd]

Wow, are you guys including taxes in your expenses?  My taxes alone exceed your "magic number".

ONe of my prime reasons for ER'ing as early as I did was because I was tired of paying so much in taxes. I live now on a fraction of what I used to pay in taxes each year...and because I have a large family(lots of deductions running around), I don't owe any federal taxes any more and almost no state(maybe even zero this year). It is a nice feeling. No debt and no taxes, other than property taxes(which I haven't figure out how to get out of).

Almost every penny of money of I make goes into my pocket, not the governments....and I do everything I can to make sure it stays that way...all legally.

 

[Bob_Smith]

Just did a Quicken analysis for 2003. Here's my spending by category. I left out medical expenses since I'm still employed and my employer pays most. I paid $3,008.34 for premiums and $800 out of pocket. Were it not for the employment, my medical expenses would probably be about $15,000 - $18,000. We own the house, two cars, and have no debts. This is a husband, wife, and two kids still at home. Here's the breakdown:

Expenses:

APPLIANCES-------------------------------113.08
CABLE TV-----------------------------------374.25
CAR REPAIR/PURCHASE -----------------516.75
CAR INSURANCE---------------------------915.00
CAR LISCENSE-----------------------------234.00
CHARITY----------------------------------1,033.00
CHRISTMAS GIFTS-------------------------668.92
COLLEGE (APPLICATION FEES)---------100.00
CLOTHING-----------------------------------872.65
DENTAL--------------------------------------362.17
FOOD--------------------------------------4,999.49
GENERAL\MISC--------------------------6,460.85
HOUSE INSURANCE-----------------------379.00
HOME MAINTENANCE-------------------3,080.82
INTERNET-----------------------------------551.40
LIFE INSURANCE ($100,000 each)-----311.00
NATURAL GAS (HEAT)---------------------917.30
PHONE--------------------------------------301.43
PROPERTY TAXES---------------------------939.00
UTILITIES (elect, water, garbage)----1,940.39
TRIP TO LAS VEGAS----------------------1,518.89

TOTAL EXPENSES BEFORE TAX------26,589.39

TAX (FICA, FEDERAL, AND STATE)---7300.00
(Most of this is FICA which I won't have in ER. I haven't done the state return yet, but this is close. I'll pay only $1,086 federal tax.)

TOTAL EXPENSES AFTER TAX--------33,889.39

 

[eridanus]

Hmm, that is a magic number. I'm not retired but I spent $24759 last year. That excludes the mortgage and car note, but does include property taxes and all insurance. It also includes three vacations, one of which was a worthwhile but expensive boondoggle.

 

[wzd]

hmmm, I knew we were not pinching pennies, or even counting them, but our expenses are a bit higher. Now we have me, wife, 2 teenage girls, and one younger boy; not that much more than Bob Smith. If I exclude the mortgage, which is paid by our real estate investment income, we spend just about $50k. Car insurance alone is $1800 with a teenage driver. Some expenses I know are double or triple Bob Smiths - Property taxes are triple, and other housing items are about double. I know we have a big house, and that is a luxury;I would peg about $10k to $15k of the difference to housing related expenses. I think for just me and my wife, in a smaller house, $30k a year wouldn't be a problem; maybe even less.

Budget expense may be relative also. I have almost always saved 25% of my gross salary, and as it went up both the savings and spendable part went up. Although we are thrifty compared to some of our friends, we aren't compared to some of the people on this board.

Wayne

 

[John Galt]

In addition to no debt, we have almost no income taxes
to pay. Truly, at this time the 24K income (for 2) is easy
for us.

John Galt

 

[John Galt]

Hello Jarhead. Yeah, I thought that "easy" remark would yield some comment.

Nope, no mutimillionaire here. I do have a survivalist
streak, but living on the 24K truly is easy for us. Look at it this way. I am convinced we could scrape by on
$50.00 per day ($18,150 yr.) So, 24K gives us a $6,000
cushion. But, we buy used/cheap whenever we can and shop like crazy for everything else. We sell off
anything that is just laying around and I add to this by
buying and selling odds and ends when I know I can
make a buck. This is not included in the 24K, but I never
"work" at it and it does not add a lot to our available
cash. We dial down the heat in the winter, go without
air conditioning until we get uncomfortable, do a lot of fishing (supplements the groceries), buy cheap wine,
forgo cable, new books, new magazines, movies at the theater, and don't go
nuts on gifts at Christmas, birthdays, etc. Personally
I'd rather get something inexpensive that I could
actually use. We live in a low cost part of the state
which helps. And, we only have ourselves to worry about (plus 4 dogs). We have insurance but take
the minimum with high deductibles on everything.
We have 2 vehicles, 12 and 7 years old. I would guess
90% of household furnishings/appliances are used, from flea markets, auctions and garage sales. Sooooooooooo,
yes it is easy for us, but we're almost on ER autopilot.

John Galt

 

[Bob_Smith]

Hi Wayne,

We live in a three bedroom, one-bathroom home that we paid $40,000 for 21 years ago. It would sell for around $80,000 today. That has helped to keep our expenses down.

We live in a small town of about 7000 and property taxes are low relative to most locations. There is no crime here to speak of - it's very much like it was in the 50's. The schools are good. I can get to work in 5 minutes - there is no traffic. On the downside, we have cold winters and there isn't much to do for those who enjoy the things a city can provide. And there isn't much natural beauty here. No mountains, few lakes, no ocean - just fields.

The median wage here is $10.12 per hour. So there are many families who are getting by on $24,000 per year, and someone making that wouldn't feel poor here, and they would be viewed as living an average lifestyle.

 

[John Galt]

Hey Bob_Smith..............your situation sounds very similar to ours (size of town, little traffic, 50s atmosphere, good schools, weather,
etc.). We do have outstanding scenery here and lots of water though. Plus, we are 90 miles from Chicago,
although I never ever go there. Not for any reason.

John Galt

 

[Billy]

Thanks to all that have posted...

It would be great to have more feedback. Anyone else interested?

Thanks, Billy
Web-site http://www.geocities.com/ba264

 

[sgeeeee]

I retired last year (April 2003) and my wife did not retire for a couple more months. No kids. Not counting income taxes, we spent $47K. Although our spending varies significantly from year to year, that is as close to a typical number as I have seen. Over the past 6 years our spending has ran from a low of $38K to a high of $66K. Taxes always at least double that number (but not after this year) .

Our spending is dropping in retirement. Since retirement, we are spending at a $36K annual rate. That is far below the $64K budget I anticipated in my planning.

 

[rose]

Hello,
I'm a new poster. Retired at age 53 a year ago. When people ask me what I do I say "Whatever I want!". It brings a smile to most faces.

 

[eytonxav]

Since I took a separation package last November and have not returned to work, I tell people that I'm semi-retired and am looking forward to dropping the semi. I'm not sure that full ER will be possible for me at my present age of 54.5, so may do some consulting/part-time work for the next 5 years, while gradually trying to cut costs.

My expenses are embarrising compared to most on the board, running about $82K, with me, wife, two kids, dog, two cats and a big house and two college tuitions on the horizon. If I could pare expenses down to about $50K, I would be much more comfortable with totally pulling the ER trigger now, but as it stands, I plan to continue to do something so that we can stay in our current home until my daughter graduates high school in another 5 yr. We live in North Texas and between property taxes and insurance, cost cutting isn't easy without downsizing.

Doug

 

[unclemick]

We had it cranked down to around 18k/yr - 93 to 98 wherein I took my early pension at age 55 and promptly lost any budget discipline - don't keep track anymore but probably running mid to high twenties with eat out/take out, remodeling, entertaining visiting relatives, etc. accounting for the upward drift along with putting some more money in my 'hobby stocks'. Three(me,girlfriend,widowed mom).

 

[John Galt]

Hello Doug! I recognized the DFW .

I used to tell people the same thing, i.e. I was
semiretired and looking forward to dropping the "semi".
Where are you in North Texas? In the Metroplex?
In my "captain of industry" period, we lived in Las
Colinas (Irving). Very pricey neighborhood. We liked
it but no way we could ever live there now. That's okay
though as my wife and I are country people at heart.
Our future digs are about 10 minutes south of Lake
Texoma.

John Galt

 

[eytonxav]

Hey John, I worked in Las Colinas for last 10 years, and we live just west of D/FW airport. I am a country person wantabee and would love a log cabin out in the woods and to be able to rachet costs down like you have done, but the school system here is a pretty good one, and I want my daughter to benefit from this strong school system thru HS, 5 more years. My son is off to college in the Fall, so no issue with him, although I hope he ends up at a school within driving distance.

I have been thinking about the pinney woods or maybe hill country for a final retirement spot, provided I can desuade my wife from wanting to return to CT.

Doug

 

[unclemick]

One area we never made in our 'camper' days was the general Sam Rayburn and Toledo Bend res. areas - the boonie quotient was too high for her.

 

[John Galt]

Hello unclemick! Re. Sam Rayburn and Toledo Bend,
that's some pretty country. Reminds me of Michigan
without the snow. I know what you mean about the
"boonie" factor though. We looked there for a spot
to relocate after we settled on Texas. I always said
you could not get too far out to suit me. However, even though real estate was much lower than around Dallas,
it was a bit too rustic even for me.

John Galt

 

[John Galt]

And another thing.................I've been all over Texas
except for the Brownsville/Corpus area. At first blush
I thought east Texas was the answer
for us. Reminded me
of Michigan. Plenty of lakes for fishing and boating.
Away from the city, lower real estate prices, etc etc.
I recall on my last trip there (when I ruled it out), I was
looking for a marina to park my boat. I confess I was heavily
influenced by the upscale marinas I was used to in
Michigan, Florida and outside of the Dallas metroplex.
Anyway, I stopped by one marina (big lake) in east
Texas and thought it was just awful. So, I asked someone where I could find the nicest marina on the lake. They told me I had just seen it. I was shocked.
Of course, you have to pay for all those nice facilities ,
but truly I could not imagine keeping my boat in such a place. Sometimes my old (high consumption) lifestyle comes back to haunt me, imposing limits on how far I am able
to cut back.

John Galt

 

[unclemick]

Our ex neighbor and telephone man bought a mountain plot in a vacation area of No. Georgia. Plans to keep his apt. in Slidell and put up a Vacation cabin. Divorced, kids grown. Driving from Key West to Alaska this year for his 'Vacation'

Took 55 and out 3 yrs ago - still works as temp on occasion (he passed on Iraq). His 'boonie quotient' is still high after growing up in the city of New Orleans - second trip to Alaska.

And I figured him for a 'city guy' - amazing what you can do in ER.

 

[John Galt]

Hello unclemick! Yeah, it is amazing what you can do in
ER. Even with our financial restrictions, we kind of feel like the
world is our oyster. We can do about anything we
want. We just can't do everything.

Re. "city guy - country guy", I was raised in the country
but while I was working I spent a lot of time in big cities.
Some of this was enjoyable, but now that I am retired
I avoid big cities like the plague.

John Galt

 

[black_hills_Bob]

When asked what I do, I reply " what ever I feel like".
My wife is still working untill she gets the nerve to pull the plug says I am "pretending to be retired"
So much of what is covered here rings true.
We are targeting 33% of our former income but have been cutting back since I pulled the plug and are currently spending 15%. The 24K is also my goal which will allow me to spend twice what I am doing now. I would also like to put in a plug for the Southern Black Hills. Record high is 100F average low is above freezing year round. Its dry so the heat and cold never feel as bad as it does in Minnesota. And did I say, It is pretty out here.

 

[DFill]

I get this question often. In my case my spouse still has a job she enjoys... Therefore... I just tell everyone I am a gigolo. I have yet to have anyone ask to tell them more!

 

[cute fuzzy bunny]

Good one. My sweetie kicks in $500 a month for food and whatnot. Last month when she gave me the cash I looked at her and said "Gee, I thought the sex was better than that!". She said she'd head back to the ATM machine again.

I'm still waiting...