How low can you go?

[Digger1000]

Finally ran my 2020 spending numbers. My total spending in 2020 was $13,205.94. I retired 4 years ago at age 51. Taxes are of course included in total spending after you retire. My taxes are $0.

 

[NW-Bound]

Wow, some posters can go pretty low. I would like to think I could be as resourceful if need to be, but have my doubts now.

 

[Perryinva]

What you spend and why are tied to so many things, I’m not sure what the point of this discussion is, except to prove that point. I never lived poor, and don’t want to. We enjoy not being spendthrift, but spend what we want on what we want. Less than $130k, I estimate.

 

[Sunset]

From what I've seen, that equation applies to a number of states. They have to get money somehow. Sales tax, income tax, and/or property tax.

IL solved that problem, it has the highest property tax rate in USA, a 4.95% income tax, and sales tax is 10.25% (State and city/town).

 

[Sunset]

For all you cheap folks

We have AllState insurance, I was talking to my agent and he told me about the new mileage pricing for auto insurance.
Since we drive the Camry about 500 miles per year normally, and during covid drive the van perhaps 1,500 miles per yr. It will save us a couple of hundred.

For us, the pricing is $30/month basic for both cars, and then the old Camry is 1.9 cents per mile, and the Van is 3.9 cents per mile.
So our Camry will be for 6 months (500 miles): $99.50
The Van will be for 6 months (1,500 miles): $148.50

We can switch back to normal payment insurance so it seems like a good idea during Covid times.

 

[FANOFJESUS]

Finally ran my 2020 spending numbers. My total spending in 2020 was $13,205.94. I retired 4 years ago at age 51. Taxes are of course included in total spending after you retire. My taxes are $0.

Very impressive. Do you live in an apartment or house? If house what are your property taxes?

 

[Music Lover]

What you spend and why are tied to so many things, I’m not sure what the point of this discussion is, except to prove that point. I never lived poor, and don’t want to. We enjoy not being spendthrift, but spend what we want on what we want. Less than $130k, I estimate.

I guess the point is that not everyone has the opportunity to earn $130k a year. When you earn a modest income you can:

1. LBYM making smart choices and still enjoy a good quality of life. If successful you can live as good or better than many people making twice as much.
2. make poor choices and live in debt or cheque to cheque.

Some people that don't know me very well think I'm fairly well off. Many of them would be shocked to know that for 25 of my 34 years working I made less than $40k, and only exceeded $50k 4 times. I retired shortly before I turned 54.

I never made close to $130k a year, but I'm able to live on $40k better than some people that make $80k.

 

[Time2]

There always ways to save. Me for example:

Never purchase new vacuum bags. When it is full, spend a few minutes manually emptying the bag into the trash instead of buying new bags.

Use shoe glue to prolong the life of the shoes.

I have probably fixed 35 pairs of shoes for my wife, she buys shoes cheap at the local Salvation Army store and it always seems the sole is coming loose. I fix them and she gets some use out of them. But why my Imelda needs 60 pairs of shoes I'll never figure out. At least they are cheap. If I looked I may be able to find a fault in myself, I'm sure she could!

Save on toilet paper expense with a $20 bidet.

Haven't done that, but my wife always stocks up on any TP sale.
If we had sold her stock during the paper crisis, we coulda been millionaires, oh, wait!

Buy reliable cars used.

Never owned a new car. But lots of nice cars.



[/quote]

I think it all comes down to the mindset about money and how to maximize it's efficiency.[/quote]

 

[Dtail]

What you spend and why are tied to so many things, I’m not sure what the point of this discussion is, except to prove that point. I never lived poor, and don’t want to. We enjoy not being spendthrift, but spend what we want on what we want. Less than $130k, I estimate.

My dining all in budget is 13k, so we enjoy our eating. Not to the Robbie B level, but nevertheless we enjoy it.
Our typical all in spending is in the mid 80's pre covid.
If we had 5m in investments, I am sure we could eventually get to a 150k spending with a 3%WR.

 

[skyking1]

Those high property taxes are the killer. Ours is just climbed up to 3000, our house has been paid off for 17 years. I just tracked our spending at the bank, money comes in the money goes out I use their tools. We really average about $3,000 monthly expenses. We last bought a car for $15,000 3 years ago so that amortizes out to 400 additional dollars. We just traded that car in and got 11,000 for it towards a $30,000 car that we will likely have well into retirement.
It's neither fair nor accurate to ignore those expenses but we never do have car payments. I think it would be accurate to say we would have a $300 a month allowance towards these cash car purchases on top of the 3000.
That puts us at about 40K for the year and we will have to add in medical once we retire.
I also think we're initially going to spend a whole lot more money than that in our retirement because this stupid working thing has really gotten in the way of having fun

 

[teetee]

What kinds of vacuums still use bags? Mine have had a container that collects it for disposal for decades. Best $50 ever spent (now it would be $85 w/o the always available coupon or sale)
View attachment 37639or was that post tongue in cheek?

I do have a bagless one of my own. But the vacuum cleaner at my grandfather's apartment uses bags and its suction power is way better than mine. It is not an old machine either (only had it for two yrs or so).

That actually brings a good point on saving money: never retire things solely because it is old fashioned. You may argue why using mini or micro USB when usb-c is popular and doesn't have to be plugged in a certain orientation to work. Well that is a lot of money spent (replacing the device and the cable) on some minor improvement.

I am not a crusader on this but do dislike manufactured demands/trend for the sake of being modern. There is a thin line between making new stuff with sustainability in mind and having tons of consumer items in working order in the landfill replaced by the more efficient and easier-to-use items.

 

[Perryinva]

My point was not to set a level. I could just as easily live on 75k a year. I did for many years, and wasn’t unhappy at all. I only accumulated any wealth to assure a stress free and successful retirement that DW enjoys. In line with what my Dad said when he divorced my mother at 65 “It’s only money. I can always make more”, I don’t HAVE to have a $2k/mo mortgage. I could pay it off with after tax funds and continue merrily along. I just don’t see the point. In my lifetime, 2.75% money has always been cheap money, and that loan deflates over time.

Because I have pensions, I will pay income taxes forever. On the order of $20k fed&state, if I even just take $20k from tIRA which is about what RMDs will be in 8-9years, even after converting what I can by then. So between mortgage, those taxes, property taxes, HOA, utilities, insurance, food, I’m at $70k right off the bat. And yet, from there, spending whatever I want on vacations, gifts, fun, whatever, my accounts continue to grow. And I have NOWHERE near the amounts that the “blow that dough” crowd has. Low 7. The reason is easy. We’re old(er). I didn’t retire until I was 61, 2 years ago. I only have so many years left to spend. Leaving an estate is very low priority. COVID has screwed up a lot of my planned spending. But I don’t complain, as, like most people here, I am a zillion times better off than so many and know it. In fact, my old employer would like me to consult on some short term projects (6 months) and I am considering it. For some reason, it seems stupid to pass when so many are unemployed. Easy money (more per hour than what I was making) for less than 20hrs a week that I choose 90% of and I get out of the house occasionally. It’s not for the money, but the ego stroke, mind work, & social part is very tempting, and I admit, I miss some of it. All with essentially no corporate BS or accountability. Once travel opens up, I drop it and a net $40k or so for some phone calls and reviewing drawings I can do in my sleep, is there for more luxury travel.

So since none of this applies to probably everyone here, there’s an example as to what my point as to “how much to live on” is of zero use to compare against.

 

[Nick12]

I have that exact vacuum. It, by far, is the best vacuum I've ever had. And priced ridiculously inexpensive.

Love it.

I have a 15 year old what feels like a 40 pound Hoover vacuum. It is near impossible to order vacuum bags. The vacuum still works well. When the bag is half full, I use gloves, a face mask and glasses when I empty the bag into the garbage. It takes a few minutes to do but I have saved money over the years never to order new bags. I just reuse the same ones. Thinking out of the box to save more $$.

 

[teetee]

Well this guy supposedly goes pretty low as in zero.
https://www.becomingminimalist.com/the-man-who-quit-money-an-interview-with-daniel-suelo/

Two comments about the man decided to quit money.

He must have come to a compromise that his life will be his belief. In other words, he will likely get disease and die for his belief of not interact with money, the major means of exchanging objects and services (e.g. healthcare).

He takes great risks by treating his own body with garbage. The article doesn't show that he expects great rewards from doing it. So it just co.es down to how much he wants to live. It will show when he is extremely ill and the only two choices are being left untreated (and die from it) or rely on others' donation to save his sorry ass. Neither option is smart especially when you can spend a little bit of money by eating healthier to avoid costly procedures for repair the preventable disease from malnourishment or infections.

Money is not forbidden item or evil. It is a tool. The evil is the love of money, not the money itself. In the modern world, money becomes more critical for survival because it acts as a buffer and as something of value that can be used to extend you life and prevent early termination.

The man is courageous but not smart.

 

[FANOFJESUS]

I have a 15 year old what feels like a 40 pound Hoover vacuum. It is near impossible to order vacuum bags. The vacuum still works well. When the bag is half full, I use gloves, a face mask and glasses when I empty the bag into the garbage. It takes a few minutes to do but I have saved money over the years never to order new bags. I just reuse the same ones. Thinking out of the box to save more $$.

You can find most bags on ebay at a fair price. My vacuum is over 30 years old I can still get bags for it on ebay. I think I am paying less than $2 for a bag.

 

[Alex The Great]

Those high property taxes are the killer. Ours is just climbed up to 3000, our house has been paid off for 17 years.

Everything is relative. My property tax bill hit $13,200 this year and keep climbing 2% each year. And this is on top of other high taxes we have in Santa Clara county in CA. I wish I have had property tax $3K and retire yesterday
Of course I can sell this home and move to other cheaper place, but it is hard to do by many reasons. Instead, I choose another path to save money enough to pay property tax this high. The war is going on, will see where it goes.

 

[Perryinva]

There you go. It’s choices and the cost of those choices. My cousin in Westchester County, NY pays similarly crazy property tax. I believe she is up to $2k/mo for less house than we have, and the house has been paid off forever. But she will never leave there. That’s where she has lived most of her life, all her friends, kids, grands, and employment is. Everything she wants & knows is there. It’s just normal. If she has to work longer, she doesn’t care. Her mother & grandmother both worked in to their 70s and grandmother died a millionaire and her mother now in her 80s has even more money and would work if she could. I know her mother has taken maybe 3 vacations her whole life and they were for weddings. Everyone is different with different priorities and different levels of success and acceptance of costs. Not anything new here, I know.

Ironically, my father was a workaholic but still retired at 52 to Florida when his arthritis got too bad (contractor). He did all kinds piecemeal work because he wasn’t happy unless he was doing productive things. He hated free time and wanted to die once it was obvious in his mid- late 70s, he couldn’t do most anything like that anymore. I’m sure that lack of a will to live contributed to his death at 81.

So “How low can you go?” For me really translates to “what are you willing to do to live as cheap as possible?”

 

[Music Lover]

There you go. It’s choices and the cost of those choices. My cousin in Westchester County, NY pays similarly crazy property tax. I believe she is up to $2k/mo for less house than we have, and the house has been paid off forever. But she will never leave there. That’s where she has lived most of her life, all her friends, kids, grands, and employment is. Everything she wants & knows is there. It’s just normal. If she has to work longer, she doesn’t care. Her mother & grandmother both worked in to their 70s and grandmother died a millionaire and her mother now in her 80s has even more money and would work if she could. I know her mother has taken maybe 3 vacations her whole life and they were for weddings. Everyone is different with different priorities and different levels of success and acceptance of costs. Not anything new here, I know.

Ironically, my father was a workaholic but still retired at 52 to Florida when his arthritis got too bad (contractor). He did all kinds piecemeal work because he wasn’t happy unless he was doing productive things. He hated free time and wanted to die once it was obvious in his mid- late 70s, he couldn’t do most anything like that anymore. I’m sure that lack of a will to live contributed to his death at 81.

So “How low can you go?” For me really translates to “what are you willing to do to live as cheap as possible?”

$2k a month for property taxes alone is insane. A lot of people here, myself included live very comfortably all in for $2 - $3k a month. I guess living in NY translates to "what can you do to live as expensively as possible"

 

[GenXguy]

So “How low can you go?” For me really translates to “what are you willing to do to live as cheap as possible?”

Although the subject of the thread asks how low you can go, the OP is asking about current budgets, which can be entirely different. So, just because someone may be willing to relocate and have lower bills, to really answer the OP in the body of his OP, it's a matter of what the current budget is. As he asks:

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

So he also asks about "couples", yet gives an example in his OP that is not regarding a couple:

I saw one guy said his annual budget is $15k!? How is that even possible in America.

Also, as I've mentioned a couple times earlier, it also matters what you are including, such as discretionary spending, health insurance that comes out of your paycheck before you get it, sinking funds for long term expenses, etc. My expenses range from $13,200 to $20,000 on that matter alone:

https://www.early-retirement.org/forums/f28/how-low-can-you-go-107543.html#post2549078

 

[bolt]

There you go. It’s choices and the cost of those choices. My cousin in Westchester County, NY pays similarly crazy property tax. I believe she is up to $2k/mo for less house than we have, and the house has been paid off forever. But she will never leave there. That’s where she has lived most of her life, all her friends, kids, grands, and employment is. Everything she wants & knows is there. It’s just normal. If she has to work longer, she doesn’t care. Her mother & grandmother both worked in to their 70s and grandmother died a millionaire and her mother now in her 80s has even more money and would work if she could. I know her mother has taken maybe 3 vacations her whole life and they were for weddings. Everyone is different with different priorities and different levels of success and acceptance of costs. Not anything new here, I know.

Ironically, my father was a workaholic but still retired at 52 to Florida when his arthritis got too bad (contractor). He did all kinds piecemeal work because he wasn’t happy unless he was doing productive things. He hated free time and wanted to die once it was obvious in his mid- late 70s, he couldn’t do most anything like that anymore. I’m sure that lack of a will to live contributed to his death at 81.

So “How low can you go?” For me really translates to “what are you willing to do to live as cheap as possible?”

As Perryinva remarks, I've also known male elders over 80 that had purpose assisting their personal will to live.

Others w/few interests....
No purpose, no interest, declining recources, no family or dependents,... not so much.


One in particular lived in a (2000valuation-1M) beachfront home renting its rooming accommodations to assist in his states onerous taxation.
This was MA.
Many combat veterans are unaware of similar R.E's onerous taxations relief options in their elder yrs., it's unfortunate.

Good luck & Best wishes....

 

[Digger1000]

Very impressive. Do you live in an apartment or house? If house what are your property taxes?

I pay $695 a month in rent. So that means I spent $405 a month on everything else. I am not a cord cutter, I have DTV. I need to watch my 7 CFB games at once all day every Saturday during the fall.

My $13,205.94 in total spending last year includes everything in life.

$0 federal income taxes
$0 state income taxes
$0 health insurance premiums(8k deductible)

As far as the 8k deductible goes. 2 of the last 3 years I have spent $13,205.94 or less on everything in life. However in 2019 I developed a hernia and had surgery. So my spending that year was $15,600. I drove 365 miles one way to have surgery and the total cost of the surgery/trip including motel,gas, and $80 in tolls was $2500. That was 1/3 to 1/4 the cost of having it down here.

 

[skyking1]

Everything is relative. My property tax bill hit $13,200 this year and keep climbing 2% each year. And this is on top of other high taxes we have in Santa Clara county in CA. I wish I have had property tax $3K and retire yesterday
Of course I can sell this home and move to other cheaper place, but it is hard to do by many reasons. Instead, I choose another path to save money enough to pay property tax this high. The war is going on, will see where it goes.

There is nothing comfortable with upending your whole life, friends, family by moving to a lower cost area. No need to explain your reasoning.
Through circumstances that revolved around caring for my wife's ill and aging parents, we ended up near them and into relatively frugal living costs.
My family is from central Washington and also relatively low costs, but the nieces and nephews have all followed the tug of Seattle to costs more in line with yours.
Now my sisters in particular have felt that tug of family and have taken their pensions to that place of nearly triple the costs of housing.
For me that is pure insanity, but like your circumstances I can see it from their viewpoint.

 

[ArmchairMillionaire23]

But of course we cannot just ignore the housing costs, because how else can you compare between the dude who chooses to live in a $500/mo shack to someone renting a 4,000 sq ft house? And how else can you actually glean true information about what makes a High Cost area?

Like I said - no comparison of true living costs is actually possible IMHO.

We must live in a low-cost area.
We paid off our house last year. We bought it in 2009 for $42K. We put $12K down and financed $30K for 30 years. Our payment was around $300/month including escrow for taxes and insurance. And it's not a 'shack', either. Built around 1910 with 4 bedrooms, one bath. 1400 sq. ft. 9-foot ceilings. It's not a McMansion but there's only the two of us.
Our previous home was only 1152 sq. ft. and that mortgage payment was $290/month. Neither of these two homes are our 'forever home' but rather a nice place to live until we retire and decide where we want to live afterwards.

 

[calmloki]

We must live in a low-cost area.
We paid off our house last year. We bought it in 2009 for $42K. We put $12K down and financed $30K for 30 years. Our payment was around $300/month including escrow for taxes and insurance. And it's not a 'shack', either. Built around 1910 with 4 bedrooms, one bath. 1400 sq. ft. 9-foot ceilings. It's not a McMansion but there's only the two of us.
Our previous home was only 1152 sq. ft. and that mortgage payment was $290/month. Neither of these two homes are our 'forever home' but rather a nice place to live until we retire and decide where we want to live afterwards.

1910-12 is our favorite era for houses - 5-panel doors, transoms, real tongue and groove flooring...

 

[skyking1]

^My brother is hooked on Craftsmans^
His first was a 1935 multi story with fabulous built-ins, but clearly too large for retirement.
He then found a 1920 1200 sq foot home on a double lot, and then did a masterful addition to it to add a large garage/shop that is attached by a big pantry/laundry room. He copied all the cool details inside and out. It worked!
I dug the geothermal heat loops in the large lot before construction, and he has a big grid tied solar system on the south roofs.