Leisure Spending??

[haha]

finally got around to using Microsoft Money. I believe it has helped me with one of my most difficult areas-staying within reasonable spending limits.

I found that it is not exactly obvious what is leisure when you are retired. I classify an activity as leisure if it isn't directly related to survival. If I enjoyed painting my house, that would still not be a leisure expense. If I took a still life painting course, even if I hated it, I would classify it as leisure.

The only thing I wasn't sure of was my pool membership.
I love swimming even more than eating. Still, I think if I weren't convinced of it's health benefits, I might let it go if I were really tight on money. So I did not count it as leisure, I counted it as health.

So with that out of the way, here are my average monthly expenses in leisure and it's separate categories.

Books.......................$47.25
Drum Equipment......$86.88
Entertainment..........$103.25
Lessons....................$70
Videos(rent)..............$1.13
Sporting Goods.........$20
CDs, Players, etc.......$54.13
Total..........................$382.63

Books will be less going forward becaue I have gotten a lot more serious about using the library. A lot of the books are drum books, transcriptions etc. If I buy an investment book, I count it as investment expense, not leisure. CD spending should lessen, again thanks to the library and the miracles of modern electronics. Also, I bought an MP3 player this year.

Lessons are drum lessons, and a few Cuban salsa lessons.

Entertainment is my spending in bars, dances, clubs, plus an occasional movie. I don't go out to eat, or take people out to eat. If I fix food for a group, I still call it a food expense, feeling that it will probably eventually come back as food. If I were to buy an espresso it would go in the leisure category. But I do this rarely.

If I serve someone a drink at home, it isn't counted as leisure. if I buy someone a drink in a club it is. The wine I buy for home is not leisure.

I would be interested in hearing about how others define what is leisure spending, as well as how much and in what fashion different people spend in this category . BTW, all the above are for one person, although some of it may be for the pleasure of another. It is still MY leisure spending.

If I took a trip for any purpose other than a wedding, funeral, or to make money, it would be leisure. However, I haven't gone anywhere this year.


Mikey

 

[John Galt]

Hi Mikey! Good post!

I don't draw a very fine line vis-a-vis leisure expenses, partly because
I don't really have a budget and am too lazy
to keep one. I do run "projected" spending going
forward at times. I kind of throw everything that
doesn't fit elsewhere into T and E (travel and
entertainment).

JOhn Galt

 

[Jane]

I use Excel spreadsheet for budgetting, tracking, etc.
Anyway, there are some sections that could be considered "leisure"

Entertainment - where I put everything from dvd rental, buying books (which not often anymore since the local library is amazing), meals out, coffees out, ice cream, movies, etc. Basically I withdrew a certain amount of cash every week as "spending" money (logged in spreadsheet as "entertainment") and I spend it on whatever. When it's gone, it's gone.

Vacation - it comes under saving (as in $$ needed to be saved biweekly before I can go for a big exotic trip).

Gift - do you have any category for this? I do. I determine early in the year how much money I want to spend on gifts (to other people) and biweekly I set aside $$ for it.

Education - I also have this category for all the classess I took whether they are fun (painting, ballroom dancing etc) or not so fun (computer programming, 3-d software etc). The "not-so-fun" courses are usually very cheap as my company will pay for them.

Grooming - for clothes, shoes, toilettries. Once in a while I go to a spa with friends to get facial etc and I consider it "grooming" (which is probably cheating as it should be considered "entertainment"  ).

Being lazy, I do have "misc" section (I don't want to have too many sections in my spreadsheet you see). I do try to keep this section as detailed as possible to keep it from getting too big. Last year for example I had entries for: new skates, bike tune-up at the shop, fabrics for curtains, paints, some kitchen stuff, you name it.

Jane

 

[haha]

John,

Thanks for your comments. I find using Money quick and easy, and it cuts down on what bothers me, which is not knowing where it all goes. I know, and in time to vary my spending patterns.

Cut-- Throat,

Money has a hierarchical structure, with pre-chosen baskets. All the subcategories I have above are Money categories. You can also delete, rename, and make new categories, or sub-categories. So it is very flexible. I formerly just used Excel, but for me this is much less time consuming, and I can get many different reports. I imagine Quicken is very similar.

Jane,

I have a separate gift category. Also I am wary of "educational" as a category for something I enjoy. Pretty soon I would be doing all sorts of educational things, and busting my budget. It would become an attempt to end-run my Puritanism.

Mikey

 

[Jane]

John,

I have a separate gift category. Also I am wary of "educational" as a category for something I enjoy. Pretty soon I would be doing all sorts of educational things, and busting my budget. It would become an attempt to end-run my Puritanism.

Just an idea: how about setting up early in the year how much you want to spend on fun educational things? You can take any classess you want until the "education" fund runs out? Then you wait until the next year to take more classes.

Jane

 

[Nords]

"Home Improvement" or "Entertainment"?

Thank goodness power tools don't count as entertainment!

I finally generated a Quicken budget based on our last years' spending.

Entertainment for me, spouse, & 12-year-old came to $66/month. (Of course, th, before the kid arrived this was easily $250/month.) Dining is $115/month, $65/month if you subtract the weekly pizza dinner.

Spouse's tchochke spending is about $10/month, which could be far worse. In my engineer's view, a tchochke is any display or decor that doesn't provide a perceivably useful function yet still requires dusting. Of course this couldn't possibly include any of my submarine memorabilia-- I don't dust it. (And yes, I traded vacuuming, floor-cleaning, & lawn-mowing for dusting so I think I'm ahead.)

We do budget $6000/year on family vacations.

Surfing has only been a $600 longboard in the last 2+ years. So far I've put off the surf trips but I'm starting to weaken...

 

[gayl]

Knew I was spending too much in Gifts / Dining / Travel! But I'll continue doing so:
Monthly figures based on year to date:
Coffee Card: 25
Dining Out: 85
Gifts: 45
Leisure: 15
Miscellaneous: 10
Personal (haircut): 21
Travel:  850
no idea where it goes: 100 a month

when you add in remodeling <12507 year to date>, this definitely defines my spending excesses.

 

[dex]

I think there is something magical about the $18 - 20K range of basic expenses living for a single person - no debts (including mortgage).
My current annual expense totals estimates (excluding vacation costs) are:

$13.6K while working; company pays health ins
$15.6 while working plus amotizaion costs - car, appliances
$18.8 Retired - I pay insurance & includes amort costs.
All the numbers include $2.4K in cash/yr - I don't track
I'm sure I can get this "basic" total down when I retire. But, I expect other costs will go up - food, wine, hobbies so I may still be close to the $19K number. My goal is an annual after tax income of $40K.

 

[dex]

So are you saying that when you are retired you will be saving about $20K per year?  If so, why?  - Gold plated Hearse?

Cut-Throat,
My "basic living expense" of about $20K is just for living no "adventure" if you will. The other $20K is for th adventure - travel, school, theater, fun...

As I get closer to giving notice at work I think I will need even less for the "basic living expenses". I won't know until I live it.

Of course I expect there will be phases to my early retirement and the "basic living expenses" may change.
My first phase is now:
1. health check up
2. financial organization
3. getting house ready to sell
Next phase I plan to do a little traveling. I've taken a year off from work before an traveled around the world and I plan to do something similar. Nothing is written in stone - but - I'm thinking of a trip to Alaska (in the summer) then New Zealand/Southeast Asia/India/etc.

I'm sure I'll be posting more as I get closer to giving notice.

 

[indymom]

So, is around $20,000/year for a single person with no debts some sort of magic number? How doable is that?

 

[haha]

So, is around $20,000/year for a single person with no debts some sort of magic number? How doable is that?

If I were to absolutely stop my leisure spending, which would seem like a really awful idea, I would then be living on about $20,000 or even a little less than that. That would not include sinking funds for a new car, appliances or major house repairs. It would include fairly expensive health insurance, and all house expenses other than mortgage, which I have paid off. So from my point of view it is possible, but not desirable.

Mikey

 

[John Galt]

I just may be the only person left alive who believes this. I still say $50 per day for a COUPLE is doable.
Little or no insurance, and maybe no car, and your leisure activities would need to be mostly free. I
wouldn't want to do it myself, but with a little creativity
and some luck.............come to think of it, that's how I ERed in the first place. Early planning/saving had no role in it whatsoever

JOhn Galt

 

[cute fuzzy bunny]

A lot of whats being consider 'base' expenses are high because of situational items that could be changed.

For example, I keep seeing "my high xxx tax/insurance/car payment" etc.

Its all a matter of taste, but its quite doable to live on under 24k and live quite well. If you choose to live in an area that requires high payments or with a luxurious amenity or two then the number goes up.

But by choice, not by necessity.

I get an awful lot of leisure without spending much money. $20-25 a month will rent you all the movies you can possibly watch. Free gets you all the books you can read. You can walk all over the place for nothing. An afternoon sitting out in the yard chatting with friends is free.

It all depends on what floats your boat...

 

[Marshac]

This low 20s number that everyone keeps kicking around.... is this net, or gross income?

I seem to be spending about $200/mo in alcohol.....no, i'm not about to join AA, but I do want to take some 'home bartender' day classes at the local CC.... and for that, I need some 'supplies'......

 

[dex]

IndyMom,
This is an example of how I get to $20K - It is what I call "Basic Living Expenses" - basically stay at home a drive around money. It is light in some areas such as home and auto repair but this is a work in progress. It is a combination of current spending and estimated retirement spending.
As you can see there is no $ for travel and education but, $2,888 in unidentified costs (misc & cash)

150 Homeowners Ass
149 Car Taxes
539 Home Insurance
25 Auto Inspection
405 Hobbies
699 Auto Ins
298 IBD Newspaper
219 Economist Magazine
2,768 Home Taxes
300 Terminte Bond
556 Natural Gas
154 Water
278 Electric
174 Sanitation Pick up
600 Cable
362 Telephone
444 Misc
914 Auto Gas
1,436 Food in Credit Card
486 Dinning out in cc
144 Internet
111 Vitamins in cc
244 Clothing
172 Home Repair
6 Books
336 Gifts
30 Medical Services
2,400 Cash
3,200 Est Medical Insurance
Contingency/Amort
400 Home items Amort
2,000 Car Amort
20,000 Total

 

[Cut-Throat]

This low 20s number that everyone keeps kicking around.... is this net, or gross income?

I seem to be spending about $200/mo in alcohol.....no, i'm not about to join AA, but I do want to take some 'home bartender' day classes at the local CC.... and for that, I need some 'supplies'......

Since these are expenses outside of income taxes, it would be Net.

Those are the courses I should have taken in College. Mom - I need some money to buy some school supplies

 

[Marshac]

244       Clothing      

It's nice to know that someone else out there spends as much on clothing as myself. Most months, I'm way under that $20 budget.

 

[dex]

I've sliced the numbers another way - they don't match exactly - but still come back to the same $20K
Total
Monthly Annual Home
150 Homeowners Ass
539 Home Ins.
2,768 Home Taxes
300 Terminte Bond
606 Natural Gas
154 Water
278 Electric
174 Sanitation Pick up
600 Cable TV
362 Telephone
- House Security
311 Lawn care misc
Home Repair below
420 DSL Service - Estimate
6,662 Total
Car
178 Car Taxes
25 Auto Inspection
699 Auto Ins
1,560 Auto Gas - cc
249 Oil Changes misc.
Auto Repair - Est below
2,711 Total

Hobbies
405 Club dues
Vacation
219 Economist Magazine
- Membership fee
91 Books
364 Newspaper
52 Lottery
120 Target shooting
300 Shooting Supplies
298 IBD Newspaper
1,849 Total

Living
1,436 Home Food/Wine/Soap etc
111 Vitamins in cc
600 Clothing
2,147 Total
Misc
Dining Out
Gifts
Computer pgm, exercise equip
- Total
13,369 Subtotal

Medical
3,000 Blue Cross & Shield
200 Dental
3,200 Total
16,569 Subtotal

Amortized Items
400 Home Repair
500 Car repair
2,000 Car Replacement
2,900 Ten Years 20,000 base

1 531 Rounding
Total
19,470 20,000

 

[Marshac]

52            Lottery                  

That pretty much sums up the retirement 'investments' of most americans....

Seriously though, $20k doesn't look bad at all, but only looks like it's possible if you have your house totaly paid off..... good reason to purchase a house ASAP I suppose.

 

[cute fuzzy bunny]

It's nice to know that someone else out there spends as much on clothing as myself. Most months, I'm way under that $20 budget.

I've got you beat. I dont think I've spent a buck on clothes for the last 2 years. I'm about ready for a minor wardrobe update next summer though. Might put me out $50 or so.

But then my wardrobe is sneakers year round, shorts and a tee shirt in the summer, and jeans and a sweatshirt in the winter. All bought at costco or sams club.

My wife (then my new girlfriend) laughed out loud the first time she looked in the giant walk-in closet in my old mcmansion. Bearing in mind this sucker was about 16' deep and 8' wide. On one side a long, long row of tee shirts on hangers. On the other wise a long, long row of sweatshirts on hangers.

 

[Hyperborea]

I've got you beat.  I dont think I've spent a buck on clothes for the last 2 years.  I'm about ready for a minor wardrobe update next summer though.  Might put me out $50 or so.

But then my wardrobe is sneakers year round, shorts and a tee shirt in the summer, and jeans and a sweatshirt in the winter.

After working for a good amount of time in Silicon Valley don't you have a lifetime supply of t-shirts, sweatshirts, bowling shirts, golf shirts, etc. all with company logos (some/many no longer in existence) and touting projects of which approximately half or more never shipped or flopped? I know I do and it drives my wife batty.

 

[cute fuzzy bunny]

I not only have that, I have a very fine and highly regarded collection of dead company and dead product shirts. Right next to my "foolish boasts" shirts (like: "Lotus 1-2-3...the winning choice in spreadsheets!").

Just north of my autographed Jim Cramer "Thestreet.com" tee shirt, from 1998 when the guy was practically a rock star.

Probably my best grab though was when my old company decided to run a big program. Chose a name, had realllly nice polo shirts made up, along with all the other accoutrements...pens, tins of mints and gum, you name it. Then some dickwad made a huge scene over the name, he already decided on a different name some years before, blah blah blah. Of course said dickwad was in line for a vice presidency, so after much wasted and worthless debate, we changed the name and all this stuff became expendable. I think I still have almost 100 of the polo shirts in a box out in the garage. And a lot of gum. I really enjoyed wearing one of those polos when I knew I was going to be in a meeting with the idiot who wanted the name change. Pretty much took him out of the discussion as he'd just sit in the chair and fume. Hee hee...

One of the very core reasons why I'm glad I dont work anymore.

 

[Nords]

th, Hyper, one word for you guys:

eBay.

 

[cute fuzzy bunny]

Just sold my old plasma tv, auction closed 2 minutes ago, and the wifes old imac is about to close.

Anybody want a 100lb crt front projector?

 

[Anon]

This low 20s number that everyone keeps kicking around.... is this net, or gross income?

For a family of 3 this is our historical annual budget.

RENT $9,600
HEALTH INSURANCE-NET 4,416
FOOD 5,400
CLOTHING 1,620
HOUSEHOLD 1,200
HEAT 1,135
ELECTRIC 614
TELEPHONE 660
CABLE 600
ENTERTAINMENT 10,000
CAR AND GAS-NET 2,400
LIFE INSURANCE 276
DISABILITY INSURANCE 180
CAR INSURANCE-NET 500
GIFTS & OTHER 1,260
-----------
TOTAL $39,861
======

I'm sure we could cut down on some things, but I like to live comfortably but not lavishly. I want to ER in my 40s, but I don't want to deny my family a normal quality of life. I don't need a Mercedes, but I don't want an old clunker either. I will buy good quality foods, but not expensive caviar. Even with this average spending, I am able to accumulate $50K a year in wealth between investment growth and savings.