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Old 01-25-2021, 06:04 AM   #41
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I lived on about 13K in 2020. That includes EVERY expense, everything I paid to live during the year. I keep a record book monthly of where all my money goes as I have for years. I live in a very low cost area compared to most places. Also, when I was working all these years, I never made more than 40k. My average salary over 39 years of working was probably less than 30k. When I was working, my expenses were usually around 17k or 18k. I always lived within my means. I Really didn't start investing seriously until 22 years ago. Single and managed to attain financial freedom even on my relatively low income. I live in a very inexpensive home that is paid for and have two used cars, one that is 26 years old and one that is 17. Taxes and insurance on a cheaper home and cars is lower.
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Old 01-25-2021, 06:16 AM   #42
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We all suffer a bit from selection bias.

I don't know that my parents ever made 60k a year. Very few of my aunts and uncles are likely to have done so. All seem to have handled retirement well enough. (All that made it that far, of course.). Mom remarried and their spend rate definitely appears to be well under 60k--a couple of car trips a year, a paid for small place near St. Louis, and maybe a flight (in economy) to somewhere every couple or three years
Not what DW and I do, but...
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Old 01-25-2021, 06:19 AM   #43
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My budget is $100K. Last year we spent under $90K. When I really got serious about retirement and the budget, I separated out necessary and discretionary spending and really hammered the necessary expenses. I could live a good life with a roof over my head, good food and a little bit of entertainment and be in at around $50K, definitely under $60K.



Key in my case is to have a paid off house (1700sqft) and cars, and no other debt. Property taxes are around $4500 and utilities are reasonable here. Good food (healthy food) is not expensive and you don’t eat out much which would be fine if necessary. Necessary did include some sinking funds for home maintenance (roof and such) and auto (repairs and replacement). Healthcare insurance is subsidized (employer sponsored retiree healthcare) but not free. About $500 per month for me and DW with reasonable out of pocket costs. Of course that’s a big help.



I’m thankful I can live above that level, but there is a great deal of comfort in knowing that there is a pretty good life even if I had to tighten up my spending significantly.


This ☝️. There is no greater feeling of financial freedom than knowing you can afford to do as you please.
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Old 01-25-2021, 06:30 AM   #44
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I/we live on exactly $60,000/yr. We live in a $245,000 condo home/cottage of almost 2000/sqft in Summerville, SC. We have 14 years left in our 15 year mortgage. We have 2 cars. A 2014 VW Tiguan loaded with sunroof, Nav and everything else. It is paid for. We just turned 50K miles on it. It is our “local” car.
We also have a 2018 Audi Q3. Loaded again. Low miles yet we have traveled to every state east of the Mississippi, to Maine, to Florida a dozen times or more. I owe $19,000 on it. At 1.9 interest rate.
We have no consumer debt. Our 4 chi are grown and in their own. Each has a family. They all went to premium universities. 3 are done with student loan payments, the youngest has 2 years left. Each had $25,000 in loans so they learned how to handle debt.
We take several vacations a year. Last year we went to Naples, Florida, Apalachicola, Florida, Michigan, Wisconsin and California (flew) rented car there.
We are fortunate. We have enough. Nice home, nice cars, nice furniture, nice friends. We have our health. And we have each other after 59+ years.
Nice first post!
You seem to live a very full and fulfilling life on 60k.

DW and I do very similar on only $40-42k per year tough we never had kids.
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Old 01-25-2021, 06:44 AM   #45
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Well, Income taxes are certainly an expense for most people in retirement. And income taxes are far more variable than property taxes for us. There are really two ways to look at income and spending.


1) Take gross income and include taxes as part of annual spending.
2) Take disposable income (gross income minus taxes) and exclude taxes as part of annual spending


Before retirement I used (2) (except property taxes were counted as spending) and after retirement I use (1). Both work. YMMV.
While I consider income taxes a part of my annual spending, when I put together my projections for spending, I split my income taxes into two parts - a "basic" part which is based on the regular, monthly dividends from my main bond fund and annual dividends from my main stock fund, and an "excess" part which is based on the more erratic cap gain distributions and any irregular distributions from all of my mutual funds. This "excess" part can be very large (in prior years, not so much any more), and I was never worried about being able to pay the income taxes on them because the income from those distributions was always there to pay them.
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Old 01-25-2021, 08:43 AM   #46
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Need 80k no if ands or buts. How does any couple only spend 4K on groceries
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Old 01-25-2021, 08:46 AM   #47
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IMHO, many folk in the developed world have relatively high expectations for their material standard of living. To be clear, I have absolutely no problem with people spending what they can afford. Compared to what my ancestors in England and Ireland accepted as an adequate standard of living in the early part of the twentieth century, most of us are living in the lap of luxury.
Looking at my spice rack folks the the 13th century would assume I was at least a Duke
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Old 01-25-2021, 08:50 AM   #48
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It all depends on where you live. We live out in the county where the property taxes are low ($800/yr on a $200K house). Our house and cars are paid off and we take 2 modest vacations a year. Our annual budget including health and dental care is between 30-35K. We live very comfortably.
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Old 01-25-2021, 08:53 AM   #49
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Need 80k no if ands or buts. How does any couple only spend 4K on groceries
If you are an aggressive shopper it isn't hard. If you never shop sales or just buy on impulse with no planning it's probably impossible.
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Old 01-25-2021, 08:54 AM   #50
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depends on the definition of "spend". roughly 14% of our monthly income is earmarked either for recurring bills like utilities, food, gas, etc. but another 59% is set aside in various sinking funds either for specific long term goals such as a new car or for certain types of regular spending like entertainment, out-of-pocket medical, vacation, etc.
Yeah, I've got "sinking funds", too. I think the low-spenders get into trouble if they have big-ticket items such as cars and houses that may need maintenance or replacement once in awhile and no resources to cover them. It always saddens me to see houses that are occupied but are falling apart- probably because the owners can't afford needed repairs.

I went back and looked at my 2020 expenses. Take out travel, all charitable deductions, the cost of installing quartz countertops in the kitchen, income taxes (assuming that if I were lower-income I wouldn't owe any) and half my Medicare premiums (assuming no IRMAA) and I get under $40K with no reduction in my grocery and utility spending, which I could pare down if I had to. My mortgage is $700/month. Still a pretty steep number for one person but more than covered by SS and two non-COLA pensions.
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Old 01-25-2021, 08:57 AM   #51
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I'm somewhat amazed on what people say they live on. I saw one guy said his annual budget is $15k!? How is that even possible in America.



Even after I pay off my mortgage, my property taxes, HOA, insurance and light maintenance will still run $20k/year. I'm sure my expenses will drop considerably once my kids are grown and hopefully financially independent but I can't see how DW and I can get any lower than 80k/year including health care costs and that is with cutting travel to the bone.



I'm not interested in a retirement where we have to live with roommates and live off ramen. I already did that in college.



For those couples living on less than $60k/year, how do you do it? What does your budget look like?


I think it is also personality type. Some people view it as some sort of wierd game of “how cheap can I be”?
These are the sorts of people that will go into a restaurant, get extra lemon wedges with their water, use 8 sugar packets, just to avoid spending $3.00 on a lemonade. They seem to take great pride on things like that. To each his own, but I have no desire to live my life that way...
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Old 01-25-2021, 09:15 AM   #52
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I think it is also personality type. Some people view it as some sort of wierd game of “how cheap can I be”?
These are the sorts of people that will go into a restaurant, get extra lemon wedges with their water, use 8 sugar packets, just to avoid spending $3.00 on a lemonade. They seem to take great pride on things like that. To each his own, but I have no desire to live my life that way...
No one who is cheap will be going to a restaurant in the first place, unless it is for a dollar Whopper or something.
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Old 01-25-2021, 09:47 AM   #53
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Need 80k no if ands or buts. How does any couple only spend 4K on groceries
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Originally Posted by jldavid47 View Post
If you are an aggressive shopper it isn't hard. If you never shop sales or just buy on impulse with no planning it's probably impossible.
Our grocery spend has been less than $200 per month for two adults, not that I'm on a budget, I know because I pay cash and monitor my ATM withdrawals for accuracy.

These days I try to minimize my trips to stay as safe as I can, so I now alternate between Aldi and 99c Stores. In my experience both offer a wide variety at favorable prices even though the major chains may win on one or two loss leaders. By contrast a shop at places like Bristol Farms or Mollie Stone's would run several times the cost, albeit you would be getting premium organics instead of just the basics.

A few years ago my brother told me that his family's grocery spend (two adults and one child) is well over 10x ours, and I know they're not foodies and they don't drink alcohol, so it really depends on where you shop.

Even though I don't aim for sales, I usually know a good deal when I see one, for example: https://imgur.com/a/Z3spZy9
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Old 01-25-2021, 10:01 AM   #54
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My real estate tax is $15k a year.
Mine is $1500
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Old 01-25-2021, 10:04 AM   #55
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We would do fine on $48000/year, I could get it even lower if I needed too.
I remember one of our most revered posters, imoldernu, and his frugal posts--with his 3 budgets.
I am blessed that we worked and saved so we can spend more.
Where you live is important, so are your priorities/likes/desires.
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Old 01-25-2021, 10:09 AM   #56
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We have no debt at all. In North East Florida, the best we can do is $39k actual spend.
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Old 01-25-2021, 10:10 AM   #57
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Our grocery spend has been less than $200 per month for two adults, not that I'm on a budget, I know because I pay cash and monitor my ATM withdrawals for accuracy.
What on earth do you eat? Ours is $500 a month for 2 people. I would hate to think what RobbieB's is?
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Old 01-25-2021, 10:11 AM   #58
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Our grocery spend has been less than $200 per month for two adults, not that I'm on a budget, I know because I pay cash and monitor my ATM withdrawals for accuracy.
I'm a single and spend $400/month. That excludes alcohol but includes cleaning products, etc. and dietary supplements. I'm practically a vegetarian so no crab legs or wagyu beef in there. I weigh 124 so it's not mass quantities, either. I'm sure I could whittle it down but glad I don't have to.
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Old 01-25-2021, 10:14 AM   #59
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We live in SW Washington state and spent just under 44K in 2020.

5K of that was property taxes. 6K was income taxes.

8K of that was for home improvement projects. 3K was for restaurants and recreation. We usually spend more on recreation and less on home improvement, but COVID changed our priorities last year.

9K of that was for groceries and alcohol. We do our best to keep expenses down, only buy what we need, clip coupons, etc. but we never seem to get much below that cost. We try to eat healthy, but nothing fancy, no organics, etc. Short of eating beans and rice every night there's not much we could cut back on.

I'm sure we could live quite comfortably on less than 40K, but don't know if we could get much lower than that without serious cutbacks. Our home, and our 17 and 20 year old used cars are paid off.
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Old 01-25-2021, 10:14 AM   #60
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Looking at my spice rack folks the the 13th century would assume I was at least a Duke
Or a witch.
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