How low can you go?

[armor99]

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...

 

[jim584672]

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.

 

[dunkelblau]

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.

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

 

[garyt]

My real estate tax is $15k a year.

Mine is $1500

 

[pacergal]

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.

 

[ShokWaveRider]

We have no debt at all. In North East Florida, the best we can do is $39k actual spend.

 

[ShokWaveRider]

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?

 

[athena53]

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.

 

[mountainsoft]

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.

 

[jimbee]

Looking at my spice rack folks the the 13th century would assume I was at least a Duke

Or a witch.

 

[Gumby]

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.

When I was a boy, the principal incentive I could see for becoming rich is that I would be able to buy anything I wanted in the grocery store without worrying about the price.

 

[garyt]

Our basic expenses are about $26K but that includes $2K for cable that we could drop at any time. Also includes Christmas and birthday presents for family. We spent about $32K last year including a new furnace, mostly due to covid keeping us from travelling much. Also caring for an aging parent so we can't go away for the winter as we'd like. My wife retired in december so we plan to get away more in the summer for short trips. We'll likely spend $45K in 2021 barring anything unforseen.

 

[cyber888]

My real estate tax is $15k a year.

Jezz .. my cousin in Illinois pays $10,000 a year for an old 1970s house. What's your state.

 

[jldavid47]

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.

We're "low-spenders" but I include money put into "sinking funds" as spending. I started doing that 30 years ago. I throw specific dollar amounts into into a variety of categories where spending is non-monthly, sporadic or a "surprise" every month then draw on them when that category of expense comes up. I am happy to report that both our house and our cars are in good repair despite being "low-spenders" because of that. We've always saved for a rainy day.

 

[calmloki]

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

Oh man! if you still happen to have any of that ham left in your freezer this is a killer cold wet weather recipe:

https://www.allrecipes.com/recipe/2...eferringContentType=Search&clickId=cardslot 3

Been wanting to make it again but used up the ham we had already.

 

[cyber888]

This all depends if you have kids, grandkids to support or help.

We live well below $57K including health insurance and budget for yearly travel to Europe for 7 - 10 days ($7,000-$8,000 per year), but that's just DW and myself (2 persons). Without the European travel, we can live below $50K.

I guess if you have dependents or give money to your kid or grandkid, budget could go to $100K - $120K.

 

[jldavid47]

I think it is also personality type. Some people view it as some sort of wierd game of “how cheap can I be”?

Excuse me. I'm not cheap. I'm frugal.

 

[Nemo2]

Excuse me. I'm not cheap. I'm frugal.

And we....are...abstemious.

 

[pjigar]

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.

I was going to say this. Lot of people living in big cities need significant more money for the living expenses. This is the primary reason we are moving to the fringes of the suburbs of a metropolis. I wish we could have moved further out but I don't want to move too far away from friends and the hospitals.


Several other factors results in a logarithmic decline in expenses after a certain point: Healthcare subsidies, low/no income tax, no tax on SS, may get other low-income benefits depending on the state, etc. It really "pays" to stay in the lower expense band after a point.

 

[Digger1000]

I retired 4 years ago at 51. My average yearly spending since retirement has been 14k including taxes which are $0. I rent in a big city. I'm not a cord cutter, I have Directv.

 

[kevink]

Interesting thread.

Lacking other viable choices as too-early retirees from the corporate world we've long lived on between 24-40K a year all-in. At the lower end of that scale are ~5 years in Mexico (pre-ACA/Obamacare) where 2K a month went very far indeed (not so much so anymore in popular expat havens there due to folks fleeing the U.S.).

The key differences for us vs. most who've posted here are radically lower housing, car and health care/insurance costs. Living solely off of investments until taking early SS a little while ago it's been pretty easy to keep our MAGI in the 23-30K a year range, meaning ACA silver premiums for us (married filing jointly) have been less than $125 a month total for years. Preparing for a sizable INCREASE in expenses when I go on Medicare next year.

One car, a 9 year old Mazda 2 we paid less than 9K in cash for (used, low-mileage, 1 owner) and finally dropped collision coverage on. Cheap to run, reliable, fun to drive.

40K tied up in a thoroughly updated (pergo floors, newer applicances) mobile home with great views in a 55K park with hiking trails out our front door in Tucson. Space rent including some utilities is $500 a month. Property taxes a whopping ~$150 a year.

These low baseline expenses allow us to spend pretty freely on food and drink, especially with Trader Joe's and Costco close by (wouldn't live anywhere in the U.S. without 'em). Socking away money to buy a condo or small house eventually if we decide owning real property again is worth it. Our current ~40K spending includes renting a casita or cabin at high altitude in New Mexico or Colorado for three months to escape the summer heat here, at $1500-2000 a month.

Agree wholeheartedly with others who point out the huge differences between costs in "flyover" states like ours vs. the coasts. We visit family in coastal CA and WA most summers and baseline grocery prices for produce and staples start at 30-40% over what we pay here.

 

[pjigar]

My real estate tax is $15k a year.

Our property tax has touched $12K this year. One of the reason I planned a move to a large (to me) country property with a half the size of the house. Property tax is going to be $3K in the new place. House hack if can call that: We realized that lot of the space in our current huge house was not even used which we pay tax and utility for. So we built a small dwelling on a large land, plan to build a huge "shop" with play/storage areas and the empty land has use-based agricultural valuation which has close to zero property tax.

 

[Digger1000]

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.

You and I are a lot alike. I never made 30k a year until I was 41. I retired at 51. Made in the upper 40's the last 5 years before retirement.

 

[Digger1000]

No one who is cheap will be going to a restaurant in the first place, unless it is for a dollar Whopper or something.

I've had food from a restaurant once in the last 3 years. I spent $3 for 3 burgers to go at Burger King in 2019 when I was travelling out of state.

I usually spend under $50 every 2 weeks when I do my grocery shopping which I always do at Aldi.

 

[Chuckanut]

When I started this life, I lived in a council flat (for Americans, public housing) in the slums of London, the bastard son of an uneducated, teenaged Cockney mother. Things did not get substantially better when we emigrated to the USA and lived in a series of cheap apartments and trailer parks. I often cannot believe how fortunate I have been in my adult life. If my mother were still here, she probably would be appalled at my spendthrift ways.

You mom must have worked hard and done her best. You are proof of that.