Monthly / Yearly Spending for Super Savers

[rollergrrl]

Part of the reason I like the perspective is to help me identify areas we could/should be saving that don’t really matter to us or where we’re spending money that doesn’t increase our quality of life.

Always think of it as in cars. Most car company’s have a tier system. Low low end to super high end. This is like most products. My goal is to not go to cheap so it doesn’t last, leading to it actually costing more, but finding the sweet spot and sometimes it might be super high end. but normally it’s not, it’s the non-flashy one. The most common object.

 

[Junior]

I am just starting, so I try to listen to different perspectives.

I particularly find increasing income and reducing costs, both, interesting strategies. I see it like soccer, in the sense that one has to adjust to the environment and personal circumstances to try to get the most favorable results.

One of the elements that I find rather curious is the impact of emotions when dealing with strategies. Which are your thoughts on that?

 

[karen1972]

Up to the age of 22, I was poor. I don't get the concept of "WANTING" to live that way. After 25 years of being forced to grow my own food, cut wood to heat, doing all our own repairs, etc.. my body has a lot of wear on it and I had a desk job my whole adult life.

Living that lean often means a lot of manual labor and not buying the things that can make ones life easier and more comfortable. Having good inserts in your shoes, a great bed to sleep in, etc can relieve a lot of aches and pains as one grows older. I have no desire to turn down the heat and be cold as that makes my arthritis kick in.. I'm only 48 but the years of abuse my body took in child hood living that poor lifestyle has had some serious long term impacts.

 

[scrabbler1]

I think $15k is just about my annual heath insurance bill for the two of us...if that’s all we had to spend, we’d be pretty hungry and cold...

Health insurance and housing together are about $15k for 1 person. So, if I want to starve, go with utilities, and a car (among other things), then $15k is way too little for me. It takes about $25k to get me through the year, and that's pretty cheap in my HCOL area (Long Island, NY). And I don't live extravagantly to any degree.

 

[joeea]

I have been able to lower our yearly spending down to about $26,000 a year for two adults, without sacrificing.

Without sacrificing?

I'm curious what you actually mean by the term "sacrificing" in this context.

For some it would mean "giving up subsistence-level necessities". For others it would mean "giving up my daily double half caf venti low-fat mochaccino".

 

[Teacher Terry]

We always tried to increase income and lowering expenses if needed. People waste a lot of money on cars. We buy 2-4 years old certified by dealer and drive them until it no longer makes financial sense. The last car was the most expensive and was 20k out the door. The car is now 9 years old and our other one is 11 years old. At the rate we are putting miles on them could easily have them 10-15 more years.

 

[ivinsfan]

OK, I'll be a little more blunt.

I can describe my life and my status or class in ways that make me look either high class or low class. Both paragraphs in my previous post are completely true and they're both about me, yet the first paragraph makes me sound like a loser and the second paragraph makes me sound successful.

Other people will categorize me into a certain class based on what I choose to reveal, but if they do that on very little data then they miss a lot of who I am. If they do that about people in general then they're missing a lot about a lot of people.

People are fascinating, complex people, and most who reach middle age have a lot of history and texture and complexity.

One such person was a friend of mine from childhood. He lived down the street from me and was my same age. He was wicked smart, good looking, and athletic, as well as friendly and outgoing. He ended up going to college on a baseball scholarship. He was married twice and had several sons. He ended up working in construction, mostly concrete work. I lost track of him until about a year ago, when we met over drinks - he wanted my advice on a financial matter, which I was honored to give.

He died a few months ago, never making it to 50. When I die I expect perhaps five people to notice; when he died there were hundreds and hundreds of people posting about him on Facebook (including me).

I'm going to the Caribbean to help blow my dough and as an acknowledgement to my childhood friend that life is sometimes too short.

I'm unemployed in the sense that I don't have a job. As noted above, I retired at 46 and currently have just under a 1.5% net WR.

It is possible that things are not adding up for you because you are drawing straightforward conclusions from too little information. Sometimes those kinds of conclusions can be way off: first, because the little information provided may be selectively good or bad; and second, because some correct conclusions are unusual and not straightforward.

...

ETA: I'm not sure why you're apologizing. That might be a way for you to say you don't believe me. That's OK by me; I don't need anyone to believe me (although I've been on this board for 13 years so I have a long track record for anyone to evaluate). But I think you might be missing out on some interesting experiences by categorizing people and dismissing them rather than trying to understand, and although you didn't ask for my help I thought I'd try offering it anyway. Good luck.

I love this entire post but my favorite part is the paragraph before your ETA. In one short paragraph you have described the major problem in this country and maybe worldwide today.

quote...It is possible that things are not adding up for you because you are drawing straightforward conclusions from too little information. Sometimes those kinds of conclusions can be way off: first, because the little information provided may be selectively good or bad; and second, because some correct conclusions are unusual and not straightforward. unquote...


Going forward in this politically fraught times, I hope we all can remember your very on point comment.

I'm very sorry for the loss of your friend it must have been particularly difficult after your recent reconnection. Enjoy your trip...

 

[rollergrrl]

Without sacrificing?

I'm curious what you actually mean by the term "sacrificing" in this context.

For some it would mean "giving up subsistence-level necessities". For others it would mean "giving up my daily double half caf venti low-fat mochaccino".

I look at sacrificing as doing without or depriving oneself of something, not getting joy. For example your double half calf venti low-fat mochaccino am sure there is something that would bring the same joy, that your could get less expensive or maybe make at home. Or maybe not and that is an expense you keep. As long as it equals same joy it’s not sacrificing. Just working on being open to looking for equal joys that might not cost as much. For example why buy Toyota Camry when you can get a Toyota Corolla. Both still good cars. Now shoes on the other hand, cheap shoes do not bring me joy! I would not sacrifice to save money on shoes.

 

[Dash man]

Same here: we spend $19,000 a year on health insurance alone.

Yes, we pay $21,000/year for health insurance premiums alone. There is no way I could live that cheap!

 

[Dtail]

We always tried to increase income and lowering expenses if needed. People waste a lot of money on cars. We buy 2-4 years old certified by dealer and drive them until it no longer makes financial sense. The last car was the most expensive and was 20k out the door. The car is now 9 years old and our other one is 11 years old. At the rate we are putting miles on them could easily have them 10-15 more years.

This is the main area of expense management for us too. 2 cars paid off, 8 and 7 years with 57k and 38k miles.
Even though we love new cars, we will stick with our current cars.

 

[Teacher Terry]

D, yes people can waste a ton of money on cars. Our health insurance is 12k/year.

 

[SecondCor521]

I don't think saying you're divorced makes people think you're a loser.

Point taken. That part is probably more about my individual view on the subject which I project on others. Thanks.

 

[joeea]

I look at sacrificing as doing without or depriving oneself of something, not getting joy. For example your double half calf venti low-fat mochaccino am sure there is something that would bring the same joy, that your could get less expensive or maybe make at home. Or maybe not and that is an expense you keep. As long as it equals same joy it’s not sacrificing. Just working on being open to looking for equal joys that might not cost as much. For example why buy Toyota Camry when you can get a Toyota Corolla. Both still good cars. Now shoes on the other hand, cheap shoes do not bring me joy! I would not sacrifice to save money on shoes.

Okay I think I understand now. So you have gotten to the point where two of you can live on $26,000 a year without depriving yourself of anything that gives you any joy.

Cars larger than a Corolla don't give you additional joy, but better shoes do. (For me it would be the opposite). Anything significant that you traded off for lower costs but equal joy?

How much were you spending before you reduced your expenses? None of that additional spending gave you any additional joy?

 

[Teacher Terry]

Shoes are on the top of my must have good quality. We have a Honda Accord for trips and it’s more comfortable than my Corolla. But I love the Corolla for around town.

 

[rollergrrl]

Okay I think I understand now. So you have gotten to the point where two of you can live on $26,000 a year without depriving yourself of anything that gives you any joy.



Cars larger than a Corolla don't give you additional joy, but better shoes do. (For me it would be the opposite). Anything significant that you traded off for lower costs but equal joy?



How much were you spending before you reduced your expenses? None of that additional spending gave you any additional joy?

We are lucky when it comes to cars. We are rather short on the height, so a mid-size car feels large. A time when being short pays off lol. It’s easy to lower your expenses when you are debt free. Thats a big solution to the equation and not paying rent. There is always Netflix instead of cable, eating at home instead of out to eat all the time. Buying used instead of new for somethings...borrowing items instead of buying...

 

[daylatedollarshort]

I live in a regular house in a city but I like reading books and watching videos on tiny houses, earth ships, off grid living, self sufficient living, etc. It seems like many retirees could live well but cheap with a mortgage free home, solar panels, a used electric car, xeriscaped yard, Ooma+ trac phone, a vegetable garden, a Blue Zones mostly plant based diet, energy efficient appliances, low property tax location, some craft and DIY skills, ACA or Medicare, capsule wardrobe, etc.

In our area a state parks pass for seniors is only $20 for 9 months for around 300 parks, seniors can attend state colleges for free, the libraries have free passes for around 50 museums and other cultural attractions and there really are just a ton of things to do that don't cost too much. Some of our friends see plays and concerts for free by being volunteer ushers. Credit card hacks provide many people with thousands of dollars in free travel every year.

 

[joeea]

There is always Netflix instead of cable

Don't you receive Netflix over your cable? Or are you still getting DVDs in the mail?

 

[joeea]

We are lucky when it comes to cars. We are rather short on the height, so a mid-size car feels large. A time when being short pays off lol. It’s easy to lower your expenses when you are debt free. Thats a big solution to the equation and not paying rent. There is always Netflix instead of cable, eating at home instead of out to eat all the time. Buying used instead of new for somethings...borrowing items instead of buying...

So you were overspending on larger cars, getting cable, eating out, buying new before you became frugal? And none of those things gave you any joy?

Okay.

There are a few less expensive things I do, and a few more expensive things I do - all of which give us joy. I guess I no longer have to worry how much it all adds up to these days. I'm lucky that way.

 

[exnavynuke]

Don't you receive Netflix over your cable? Or are you still getting DVDs in the mail?

Netflix over the internet, "cable" as in a traditional tv subscription package (whether comcast or satellite tv etc) is what they were saying I'm pretty sure.

 

[exnavynuke]

So you were overspending on larger cars, getting cable, eating out, buying new before you became frugal? And none of those things gave you any joy?

Okay.

There are a few less expensive things I do, and a few more expensive things I do - all of which give us joy. I guess I no longer have to worry how much it all adds up to these days. I'm lucky that way.

I don't think they're saying that you only eliminate things that don't give you any joy at all. I think the point is to evaluate if there are alternatives that can give you the same, or similar, enjoyment for a lesser cost. I love watching my NFL games in the fall. For years I paid >$100/month for a tv subscription primarily for that purpose. A one-time cost of $100 lets me put a HDTV antenna in my attic that lets me watch the same games without paying >$100/month for that tv subscription these days. Same joy/experience, significantly lower cost.

Some things you can't substitute like that though. A primary hobby of mine is diving. $350/year gets me unlimited diving locally (two dives per day as often as I'd like pretty much). However, the local diving isn't nearly as enjoyable as diving in the tropics, so I still spend a lot of money to go diving elsewhere since I get much more enjoyment out of doing that than diving locally.

Other things you find that you were spending money on and not getting any joy out of at all, and you can just eliminate them completely (that magazine subscription someone never cancelled even though they don't read it these days for instance).

Some things I debate whether I find the additional "joy" worth the additional cost. Sure, that Ferrari would be really fun to drive, but it's not worth spending that much more money on for the increase in joy it would provide me, so no Ferrari in the driveway.

Without endless wealth, I can't afford to buy everything or every experience that would bring me any amount of enjoyment, so it's a balance to decide what things to spend money on to maximize my enjoyment with the budget I've given myself (or to adjust that budget if I feel it's necessary).

 

[rk911]

not imitating a politician but it depends on how you define spending. we have absolutely no debt. out of 100% of our income ~15% goes to monthly expenses (utilities, groceries, fuel, charity, investing, day-to-day expenses, etc); ~65% to a group of sinking funds for future expenses (new car, vacation, etc). the remaining 20% is available for other uses.

 

[Teacher Terry]

Our cable had gotten so high so we switched to direct tv for half the price. We don’t like it as well and when the 2 year price guarantee is gone we will be new cable customers and get their deal.

 

[UnrealizedPotential]

When I first retired in 2016 I was just kind of feeling everything out. It took me a little while to sort things out. My spending, HI, etc. In 2016 I was spending $1200 a month. That's it. It crept up in 2017 by my choice. The latest is around $1600 a month spending. This still gives me plenty of room in my budget.

The amount of income that's coming in has crept up , so my spending has followed it. I've always been conservative with my spending but there was no reason for it being so low before, so naturally it has risen over time. I have no set goal from year to year on spending. I just spend what feels comfortable to me.

I am sure when this year is done, it will end up rising some more. This is just a reaction to more income coming in and the amount of slack in my budget at any given time. I have never had a budget. Never really tracked my spending, although I have a pretty idea of what it is.

 

[Dtail]

When I first retired in 2016 I was just kind of feeling everything out. It took me a little while to sort things out. My spending, HI, etc. In 2016 I was spending $1200 a month. That's it. It crept up in 2017 by my choice. The latest is around $1600 a month spending. This still gives me plenty of room in my budget.

The amount of income that's coming in has crept up , so my spending has followed it. I've always been conservative with my spending but there was no reason for it being so low before, so naturally it has risen over time. I have no set goal from year to year on spending. I just spend what feels comfortable to me.

I am sure when this year is done, it will end up rising some more. This is just a reaction to more income coming in and the amount of slack in my budget at any given time. I have never had a budget. Never really tracked my spending, although I have a pretty idea of what it is.

Don't need a budget when spending is under 20k a year. lol

 

[Spock]

We lived on about 25% of gross income prior to retirement (no kids).
LBYM savings then made "involuntary early retirement" a LOT less stressful now.