Once frugal, always frugal?

[RetireeRobert]

OP, just judging by my own life experience, your question "Once frugal, always frugal?"---the answer is YES.

Lifelong habits are not easily changed.

 

[Ramen]

This is the OP. Hard to believe it's been only a month since I joined here. A lot has happened already, so I thought I'd post an update.

I did a lot of thinking and soul searching and realized that my fear of rising housing costs was not as hypothetical as I thought. I've been considering moving for a while now but have been resisting because of what a great deal my current place is. It's a rental that's way below market rate, with other advantages to boot.

However, it's often noisy, both inside and out, and this is not what I imagine as a relaxing post-FIRE living arrangement. There are other downsides too, though they aren't so much the point now.

I have known all along that moving would be expensive, whether buying or renting. But when the great deal you have is not what you want, you have to compromise and decide what the next-best option is worth. I guess this is where the difference between frugal and cheap comes in.

To cut to the chase, I'm moving. I'm voluntarily -- right now, not in some imagined future -- more than doubling my housing costs by moving to a quieter location and a much newer building (10 years old vs. 90). The new place is somewhat luxurious (by local standards), made of stone and concrete (instead of thin plaster walls), and, according to some friends who have lived there, very quiet. Again, it is more than twice the rent, so it had better be nice and quiet. It's also in a good location, still within walking and biking distance of everything.

This will raise my annual spending from $22K to somewhere between $28K and $30K. That's still less than 3% of my $1.2M portfolio, probably about the limit of my comfort zone for now.

In my soul searching, I realized that major life transitions are supposed to be scary. They are supposed to pull us out of our comfort zones, challenge us to face our fears, etc. The way I see this, I might be spending more, but I will continue to be frugal. Just maybe less cheap. And maybe, in the process, I will learn to trust the system that I put in place 30 years ago when I started to save and invest for retirement.

It's only a year lease to start, so if I don't like it, I can try something else next year. I'm starting to pack now and will move in two weeks. Wish me luck. Time to test the system.

 

[Music Lover]

To cut to the chase, I'm moving. I'm voluntarily -- right now, not in some imagined future -- more than doubling my housing costs by moving to a quieter location and a much newer building (10 years old vs. 90). The new place is somewhat luxurious (by local standards), made of stone and concrete (instead of thin plaster walls), and, according to some friends who have lived there, very quiet. Again, it is more than twice the rent, so it had better be nice and quiet. It's also in a good location, still within walking and biking distance of everything.

This will raise my annual spending from $22K to somewhere between $28K and $30K. That's still less than 3% of my $1.2M portfolio, probably about the limit of my comfort zone for now.

In my soul searching, I realized that major life transitions are supposed to be scary. They are supposed to pull us out of our comfort zones, challenge us to face our fears, etc. The way I see this, I might be spending more, but I will continue to be frugal. Just maybe less cheap. And maybe, in the process, I will learn to trust the system that I put in place 30 years ago when I started to save and invest for retirement.

It sounds like you're making the right choice. $30k a year is still quite frugal, no need to sacrifice your quality of life over an expense you can easily afford.

 

[Focus]

To cut to the chase, I'm moving. I'm voluntarily -- right now, not in some imagined future -- more than doubling my housing costs by moving to a quieter location and a much newer building (10 years old vs. 90). The new place is somewhat luxurious (by local standards), made of stone and concrete (instead of thin plaster walls), and, according to some friends who have lived there, very quiet. Again, it is more than twice the rent, so it had better be nice and quiet. It's also in a good location, still within walking and biking distance of everything.

This will raise my annual spending from $22K to somewhere between $28K and $30K. That's still less than 3% of my $1.2M portfolio, probably about the limit of my comfort zone for now.

In my soul searching, I realized that major life transitions are supposed to be scary. They are supposed to pull us out of our comfort zones, challenge us to face our fears, etc. The way I see this, I might be spending more, but I will continue to be frugal. Just maybe less cheap. And maybe, in the process, I will learn to trust the system that I put in place 30 years ago when I started to save and invest for retirement.

It's only a year lease to start, so if I don't like it, I can try something else next year. I'm starting to pack now and will move in two weeks. Wish me luck. Time to test the system.

I would have done the same. The quality of life difference is more than worth it. Congrats on your decision.

 

[NW-Bound]

To cut to the chase, I'm moving. I'm voluntarily -- right now, not in some imagined future -- more than doubling my housing costs by moving to a quieter location and a much newer building (10 years old vs. 90). The new place is somewhat luxurious (by local standards), made of stone and concrete (instead of thin plaster walls), and, according to some friends who have lived there, very quiet. Again, it is more than twice the rent, so it had better be nice and quiet. It's also in a good location, still within walking and biking distance of everything.

This will raise my annual spending from $22K to somewhere between $28K and $30K. That's still less than 3% of my $1.2M portfolio, probably about the limit of my comfort zone for now.

You will be fine. Enjoy.

 

[Letj]

I too believe once frugal always frugal. I wonder though whether this is pathological to some degree. I can’t fathom why anyone wants to be very rich. I’ve accumulated way more than I can or will ever spend and I seriously can’t think of any creative way to spend more money. My happiness and contentment level seem so fixed that spending additional money doesn’t seem to be anything I can do. I will most certainly leave a large legacy for my children and wonder what will they do with this much and whether that even makes sense. I’ve stopped working and stopped striving for more money. Frankly, it seems pointless to me. How do billionaires continue to do it? I am surely flummoxed by that. Maybe someone has an explanation. I saw the blow that dough thread but I have everything I could ever want. House at the beach - been there done that and hated going to the same place all the time, big house, been there too, luxury car, check until I sold it in favor of my Subaru, paid for private school and private college, waste of money, good public schools would do the trick. For those who plan to spend all their money, how will you do that?

 

[finnski1]

I too believe once frugal always frugal. I wonder though whether this is pathological to some degree. I can’t fathom why anyone wants to be very rich. I’ve accumulated way more than I can or will ever spend and I seriously can’t think of any creative way to spend more money. My happiness and contentment level seem so fixed that spending additional money doesn’t seem to be anything I can do. I will most certainly leave a large legacy for my children and wonder what will they do with this much and whether that even makes sense. I’ve stopped working and stopped striving for more money. Frankly, it seems pointless to me. How do billionaires continue to do? I am surely flummoxed by that. Maybe someone has an explanation. I saw the blow that dough thread but I have everything I could ever want. House at the beach - been there done that and hated going to the same place all the time, big house, been there too, luxury car, check until I sold it in favor of my Subaru, paid for private school and private college, waste of money, good public schools would do the trick. For those who plan to spend all their money, how will you do that.

This pretty much describes us as well minus the college(no kids) and luxury cars. Just don't care about them. Happy with our Subaru Outback and Toyota Tacoma as well. We have a nice but modest(1950 sq ft) house with 9 acres and have more than either of us could have imagined growing up. No debt. Very content. I'm sure the billionaires are just wired differently. Can't imagine working forever billionaire or not.

 

[brett]

^+1

We are exactly the same.

 

[Exchme]

Noise is one thing, that may just mean lively, but at some point in the desirability scale of neighbors, your old building may dip too far down and get juvenile delinquents or worse, so it's often worth it from a safety and security standpoint to move up the cost food chain, especially as you get older.

We moved a number of years ago as our old neighborhood was getting car break ins, loose dogs and occasionally more serious incidents. Haven't regretted it, though the new "quiet" neighborhood tends to have much more reserved neighbors that are harder to get to know.

 

[2017ish]

Those who live to spend remain that way.

Those that are frugal stay frugal.

Exceptions are rare.

Change isn't something that easily occurs.

We definitely spend more in retirement, by a lot (excluding taxes). But, that was what we planned. The difference is travel, which we couldn't really do while working. Otherwise, we spend far less than our assets and preretirement incomes would support. Generally, I think the original post is correct. Your baseline will continue to be your spending after retirement--unless you have entirely new spending categories, which is essentially our situation.

 

[tmm99]

I'm spending more in retirement as well. Not by a lot, but my discretionary funds are bigger. I was pinching pennies during my accumulation phase, but I am living a little now, which is nice.

 

[RobbieB]

Yeah, me too.

Can't shovel it into the coffin eh?

 

[Ramen]

Noise is one thing, that may just mean lively, but at some point in the desirability scale of neighbors, your old building may dip too far down and get juvenile delinquents or worse, so it's often worth it from a safety and security standpoint to move up the cost food chain, especially as you get older.

We moved a number of years ago as our old neighborhood was getting car break ins, loose dogs and occasionally more serious incidents. Haven't regretted it, though the new "quiet" neighborhood tends to have much more reserved neighbors that are harder to get to know.

This factored into my decision as well. I can sense some degradation coming if the owners don't shift with the times. This is one of the cheapest buildings in town that's still nice. It's going to become less nice unless it becomes less cheap. I'd gladly pay more to stay if everyone else had to. When I moved here, the word on the street was don't live anywhere for less than X amount per month. That amount has risen in the past 10 years while my own rent as remained little changed, so I'm moving to the other side of the current X amount.

 

[Digger1000]

This is the OP. Hard to believe it's been only a month since I joined here. A lot has happened already, so I thought I'd post an update.

I did a lot of thinking and soul searching and realized that my fear of rising housing costs was not as hypothetical as I thought. I've been considering moving for a while now but have been resisting because of what a great deal my current place is. It's a rental that's way below market rate, with other advantages to boot.

However, it's often noisy, both inside and out, and this is not what I imagine as a relaxing post-FIRE living arrangement. There are other downsides too, though they aren't so much the point now.

I have known all along that moving would be expensive, whether buying or renting. But when the great deal you have is not what you want, you have to compromise and decide what the next-best option is worth. I guess this is where the difference between frugal and cheap comes in.

To cut to the chase, I'm moving. I'm voluntarily -- right now, not in some imagined future -- more than doubling my housing costs by moving to a quieter location and a much newer building (10 years old vs. 90). The new place is somewhat luxurious (by local standards), made of stone and concrete (instead of thin plaster walls), and, according to some friends who have lived there, very quiet. Again, it is more than twice the rent, so it had better be nice and quiet. It's also in a good location, still within walking and biking distance of everything.

This will raise my annual spending from $22K to somewhere between $28K and $30K. That's still less than 3% of my $1.2M portfolio, probably about the limit of my comfort zone for now.

In my soul searching, I realized that major life transitions are supposed to be scary. They are supposed to pull us out of our comfort zones, challenge us to face our fears, etc. The way I see this, I might be spending more, but I will continue to be frugal. Just maybe less cheap. And maybe, in the process, I will learn to trust the system that I put in place 30 years ago when I started to save and invest for retirement.

It's only a year lease to start, so if I don't like it, I can try something else next year. I'm starting to pack now and will move in two weeks. Wish me luck. Time to test the system.

Congrats! I retired April 2017 at age 51 and I am as big a tightwad as ever. My average spending has been 14k a year since retirement. Like you, I have a full life. I could not be happier. My investable assets have increased from 625k when I retired to over a million today.

 

[Ramen]

Congrats! I retired April 2017 at age 51 and I am as big a tightwad as ever. My average spending has been 14k a year since retirement. Like you, I have a full life. I could not be happier. My investable assets have increased from 625k when I retired to over a million today.

Wow, $14K a year is amazing. That's half of what I'm worried about squeaking by on. Is your home paid for? Last time my spending was that low was when I owned a cottage free and clear. Miss it sometimes but really prefer renting now.

Cheers on the asset growth. If mine can do that in the next three years, I'll be on cruise control.

 

[f35phixer]

so going to Ponte Vedra Inn and Club on way back from snow birding with dad in Fla @ Depending on which room I pic at ~300-400/night and playing golf for two @ say 150/ frugal fro three days
The onto Jekyll Island for a couple three nights @ who knows where we want to stay and play golf frugal I'm with Robbie, I'm blowing the DOUGH! Not being frugal, I was Frugal, Parsimonious (AS DW CALLED ME)... The CV19 suxs, I just retired in November, was planning to travel travel travel, not frugally !!!! oh well, we shall see what happens...

Good for you Digger, 14K is crazy to me, to each his own. Some months I crack that line in the sand.

 

[Digger1000]

Wow, $14K a year is amazing. That's half of what I'm worried about squeaking by on. Is your home paid for? Last time my spending was that low was when I owned a cottage free and clear. Miss it sometimes but really prefer renting now.

Cheers on the asset growth. If mine can do that in the next three years, I'll be on cruise control.

I rent an apt for $695. My state and federal income taxes are $0. My health insurance premium is $0 with ACA. My deductible is over 7k. I'm very healthy. But I did get a hernia in 2019. So I found a place 365 miles away just outside DC where I could have surgery done for 1/3 to 1/4 of the cost and they had great reviews. The total cost for the trip/surgery was $2500 including motel and $80 in tolls. My total spending in 2019 was $15,600 for everything in life. In 2018 it was $12,600. I havent figured 2020 yet but I know its under 14k. Hopefully it ends up under $13,500 but whatever is ok.

I'm 99% stocks. My current yearly spending is 1.4% of my current net worth(2.3% of the 625k). So if the market goes down 67% and stays there my yearly spending would be 4.2% of that amount. I plan on taking SS at 70.

Someday I wont have to be frugal. That is the plan anyway. But its the only way I know. And I'm very happy.

 

[oiseux]

I rent an apt for $695. My state and federal income taxes are $0. My health insurance premium is $0 with ACA. My deductible is over 7k. I'm very healthy. But I did get a hernia in 2019. So I found a place 365 miles away just outside DC where I could have surgery done for 1/3 to 1/4 of the cost and they had great reviews. The total cost for the trip/surgery was $2500 including motel and $80 in tolls. My total spending in 2019 was $15,600 for everything in life. In 2018 it was $12,600. I havent figured 2020 yet but I know its under 14k. Hopefully it ends up under $13,500 but whatever is ok.

I'm 99% stocks. My current yearly spending is 1.4% of my current net worth(2.3% of the 625k). So if the market goes down 67% and stays there my yearly spending would be 4.2% of that amount. I plan on taking SS at 70.

Someday I wont have to be frugal. That is the plan anyway. But its the only way I know. And I'm very happy.

Thank you for sharing those details. I always wonder how some of these spending rates break down. That works out to $472 per month after the rent. That is pretty lean. After food, utilities, transport, etc you've kept the spending down.

 

[Ramen]

Thank you for sharing those details. I always wonder how some of these spending rates break down. That works out to $472 per month after the rent. That is pretty lean. After food, utilities, transport, etc you've kept the spending down.

Ditto this. I envy those numbers too. My current rent is $615, so my other spending has been more than $1,000 a month. I don't think I could get down to $14K a year even with such low rent. Being 99% in stocks is bold! Wish I had the stomach for that! I'm 60-40 stocks and bonds and will probably stay there. Always interesting to compare numbers. Nice that there are so many ways to do ER and make it work.

 

[SecondCor521]

Ditto this. I envy those numbers too. My current rent is $615, so my other spending has been more than $1,000 a month. I don't think I could get down to $14K a year even with such low rent. Being 99% in stocks is bold! Wish I had the stomach for that! I'm 60-40 stocks and bonds and will probably stay there. Always interesting to compare numbers. Nice that there are so many ways to do ER and make it work.

Emphasis added.

It's easier if you have an ultra-low withdrawal rate, as Digger1000 does.

(I'm in a similar boat. Net WR is about 1.25% and AA is about 97/3 at the moment.)

 

[Digger1000]

Ditto this. I envy those numbers too. My current rent is $615, so my other spending has been more than $1,000 a month. I don't think I could get down to $14K a year even with such low rent. Being 99% in stocks is bold! Wish I had the stomach for that! I'm 60-40 stocks and bonds and will probably stay there. Always interesting to compare numbers. Nice that there are so many ways to do ER and make it work.

If I was 60/40 today at my current net worth I would be happy to stay at 60/40. For me to get to 60/40 now I could do that in 1 easy way, move my tIRA/t403B and Roth IRA money out of stocks. Obviously Roth IRA money would be the last thing you would want to not have in Risk assets, at least thats my thoughts. With almost 60% of my money in regular taxable mutual funds I really am not wanting to take a tax hit. I didnt plan out years in advance to retire before 65. It happened fast. I started looking into it 3 1/2 months before I did it. One other thing is I dont understand bonds at all. I asked about bonds on here awhile back but I dont think I asked the question very well. I'm 90% sure I would do the Vanguard total bond Index if I ever did do bonds, whether I ever actually understand how bond funds work or not. But I am comfortable at 99% stocks. I had always planned on being 99% bonds until death. But since retirement I do have some thoughts about bonds. If the worse happens to me money wise I am set with SS at 70. Feel like I would be living like a Prince with SS alone at 70. But I dont count on SS being there either. Nothing in life is guaranteed.

 

[NW-Bound]

"Once frugal, always frugal"

Mostly true.

The corollary is:

"Once LBYM, always LBYM"

 

[Ramen]

So it's been a year since I started this thread. Just thought I'd post an update.

To recap, I was laid off in summer 2020 and was pondering whether to seek another job or go ahead and FIRE at 52 (I'm now 53, nearing 54). I decided to start a lean FIRE as a trial run to see how it would feel.

While the layoff was unsettling at first, I lucked out with the pandemic relief measures. UI was extended for several months, and I got an ACA Silver plan for less than $50 a month. After UI ran out, I got some unexpected freelance work and earned a few extra grand. All of this allowed me to get through the year without drawing from my portfolio.

On top of this, my year-end portfolio distributions came in last week, adding to previous quarterly dividends and totaling more than a year's worth of living expenses. This was a surprise, much more than usual.

So now I'm preparing to continue my lean FIRE for real.

As of a year ago, I had been living on about $22K per year for more than a decade, renting a cheap, small apartment in an old but nice enough complex.

A few weeks after starting this thread, I took a major leap and moved to a rented modern condo. This was a whopping increase in monthly housing costs -- from about $600 to more than $1,500. Yet somehow total living expenses this year have remained below $30K. I was able to trim expenses elsewhere (without really trying) to offset the higher housing costs. Average monthly expenses this year were about $2,250 (vs. the previous $1,800) for a total of $27K.

While I have felt comfortable with this, my current rent will jump by 10% at the end of the lease. At that point, I can renew or move again. Although the pending rent hike alone does not rattle me, it makes me nervous to think such housing inflation could continue.

Also, while the new place is aesthetically nicer, not to mention 80 years newer, it's not as peaceful and quiet as I was hoping. I feel like I'm spending a bunch more money for not that much better of an experience. In some ways it's worse, basically a toss-up overall.

So I'm already pondering whether to act on this. The old place was not so bad for the price, and I have not ruled out going back. I would opt for a larger unit, and of course my formerly super low rent would be higher, since I'd be a "new arrival" again. But I could still cut my housing costs in half.

OTOH, my very lazy portfolio, which was $1.2M a year ago, is now $1.4M, meaning my spending this year ($27K) is less than 2%. Even with the coming rent spike, I should be able to come in below $30K in spending in 2022. If I declare 2022 my first official year of FIRE, with a planned WR of between 2% and 3%, then some rent inflation will be manageable.

Periodically I revisit buying a home again but have opted not to. Not ruling it out but still prefer renting for now. This is a topic for another thread, so I will leave it here.

The bigger issue for me right now is an inner restlessness that's making me feel unsettled in general. I've wasted a lot of time this year pondering housing and where to live, etc., based on factors I can't control or predict. I moved to my current place hoping for more peace and quiet and ended up getting mostly different kinds of noise. At least the old apartment's noise didn't cost as much.

I've also thought about returning to small-town or rural living, but I've been there and done both. Not ruling it out but not wild about it either. I seem to be stuck in a limbo of chronic dissatisfaction with housing. Probably just need to get busier doing other things so I'm not thinking about it so much.

Anyway, details aside, after a year of FIRE practice, it seems that for me the answer to the original question is yes: Once frugal, always frugal. At least so far.

 

[Winemaker]

Ramen, Good for you! Glad to see things are working out for you.

 

[captain3d]

A valid observation on the expensive place not being a ‘better’ experience over all.

I remember moving from a cheap manufactured home to a more expensive apartment and missing the detached walls of the old place