The closer I get the less I save.

[SteveR]

Quote:

Originally Posted by trixs I cant imagine how some of you guys think living on 28k is impossible.. Well, yes I can as its all just the area. ...All of the bills above are actually my expenses.. Averages out to $1300 a month for everything :

So, how many kids are you feeding?
Health insurance?
Medical bills?
College fund?
Car and house insurance?
Fed. and State income taxes?
Vacations?
Savings?
Christmas and other gifts?
House repairs?
Car repairs?
Gas for cars?
Etc.

Not saying you CAN'T do it....only that I would not want to.

[DangerMouse]

Does your increased expenditure bother you or are you more bothered that it conflicts with FIRE and LBYM?

As Steve mentioned, balance is what it is all about. With regards to your expenditure on dining out, I am just wondering if this is for you and the wife or are you spending this taking the kids out?

[maddythebeagle]

Quote:

Originally Posted by rw86347 I track my spending very closely. I am very frugal, but not extreem. I change my own oil, and my wife cuts my hair, but I don't feel deprived. I have a $1100 mortgage, and commute 100 miles per day. In total I spend $33,600/yr. I have 18 more house payments, then It will cost me $20,400/yr. After I quite work, I think it will cost me $16,800/yr (1/4 the driving) All of this without changing my lifestyle. I do worry that once I quit working I will be more temped to shop. rw

No doubt that you have been tracking...you certainly can have a much reduced tax bill in FIRE with planning....it seems after reading a lot of folks...it comes down to the wildcard of health insurance and expenses...for that a working spouse is in order

[rw86347]

Quote:

Originally Posted by Maddy the Turbo Beagle ..it comes down to the wildcard of health insurance and expenses...for that a working spouse is in order

I have racked my brain over Health care. I can't figure out how i will do it after I quit my job.

RW

[megacorp-firee]

Quote:

Originally Posted by rw86347 I have racked my brain over Health care. I can't figure out how i will do it after I quit my job. RW

I've just gone through my own 'figuring' ... it is a lot more expensive.
I will be doing COBRA for 18 months which will cost me about 5x what I am paying now for DW and I. Then I get the opportunity to do MegaCorp retirement health care for about 8x the working rate.
I have looked into BCBS ppo and a 'like plan' to what I have today will be about 6x of working rate. This is not good, but I am fortunate to have the funds to do this.

Do you have a COBRA option? Are you retiring or quiting and do you have any company options? Try this as a starter: http://www.bcbs.com/coverage/
Good luck.

[spideyrdpd]

Most of the retirement calculators look at your savings not your spending.
Of course you have to plug in what return you expect on those savings. As long as your expectations are reasonable. I dont see why it would be an issue.
Most people on here seem to plan on saving a % above their true target. SO they have breathing room.
Rob

[Spanky]

This is a list used to estimate annual expenses for a family of four. Some items are not applicable, e.g., pet care and liability insurance. It is definitely more than $28K per year.

Savings for kid's college
Savings for new car
Rent or Mortgage Payments
Property Taxes
Automobile payments
Other loan payments
Credit card payments
Electricity
Gas
Telephone/Cell Phone
Cable TV
Internet service
Water
Sewer/Garbage
House/Yard maintenance
Automobile maintenance & license
Gasoline
Other transportation costs
Automobile insurance
Homeowner's insurance
Life insurance
Liability insurance
Medical insurance
Uninsured medical/dental
Groceries
Drugs & other essentials
Restaurants
Support of others
Clothing
Vacation and travel
Entertainment & hobbies
Gifts and charities
Subscriptions and education
Other discretionary items
Home furnishings
Pet care
Long-term-care insurance
Music Lessons

[brewer12345]

Quote:

Originally Posted by trixs I cant imagine how some of you guys think living on 28k is impossible.. Well, yes I can as its all just the area.

This is it in a nutshell. I live in a pleasant, but decidedly middle-class neighborhood. Real estate taxes alone are over $6k, let alone mortgage, groceries, utilities, etc. I know I could live in a number of other areas for considerably less cash outlay, but 28k would be impossible here.

[dgalbraith100]

Just pulled my budget from MS Money, edited it to remove taxes (explained below) Sometimes we go over the amounts listed (usually not by much, I cover that with the Misc here, or it gets "noted" and I include it into the budget. (or decide it is a one time event)

Last year we over spent by $4K, but I did that when we bought the 50 year old house and redid the windows/new heating system, new air conditioner... blah blah... that sort of remodeling can only go on for so long. I don't put these in the annual budget because I plan on being done this year. This year it will be 6K or so over again because I'm doing the kitchens and bathrooms, once those are done, I'm done. I am doing the work myself which is why its so cheap

This budget is meant to be a "retirement" budget.. Ie. I remove taxes I wouldn't pay in retirement. The only other thing I took out was parking because if we aren't working, we ain't paying for parking at work. (yes I know, its funny how some places charge you to park to work, but they do)

Also, internet is paid for by a startup company I'm part owner in since they put the server here. So for the forseeable future, I won't have to pay for that. Sometime I will, and thats where misc and wiggle room comes in play discussed below

Mortgage 7945.08
Healthcare : Dental 574.8
Healthcare : Physician 480
Healthcare : Prescriptions 120
Insurance : Health 4035.84
Dining Out 3600
Groceries 2600
Cash Withdrawal 720
Insurance : Life 502.84
Miscellaneous 2400
Insurance : Homeowner's/Renter's 450
Taxes : Federal Income Tax 0
Taxes : Medicare Tax 0
Taxes : Real Estate Taxes 1254
Taxes : Social Security Tax 0
Taxes : State Income Tax 0
Bills : Cable/Satellite Television 0
Bills : Cellular 0
Bills : Electricity 1296
Bills : Water & Sewer 540
Automobile : Gasoline 659
Automobile : Maintenance 720
Insurance : Automobile 895

Total 28792.56

Maybe my not counting the taxes is what is throwing people off on the budget of 28K just not possible.... With taxes counted, its about 38K, but after we retire, we won't have to pay that extra 10K of fed/state/ss/medicare taxes... (damn thats alot of $ isn't it)

So subtract those out of your budget, and see where you end up. I cover some things out of Misc that don't get tracked otherwise (probably should track them more). So there ya go, thats my current budget, I wouldn't retire on that tight of a budget, this is more to control/track my current spending.

My budget for FIRE is 40K. I figure with the budget above, even with creep, a little extra here (new "used" car) that sort of thing, I have plenty of wiggle room if I use the above budget as track and control, but plan for enough savings to goto 40K if need be.

Laters,
-d.

[runchman]

Quote:

Originally Posted by dgalbraith100 Mortgage 7945.08 Taxes : Real Estate Taxes 1254

Here would be a big difference if I were to retire today:

Mortgage 16,236 (principle & interest only)
Real Estate Taxes 5,000

Right there I have $21,236 vs. your $9,199

So you can see for some of us, $28k is hard to believe !

And I don't live in a mansion by any means, just a decent house in the Chicago suburbs.

Granted though my mortgage will be gone when I retire, so maybe it isn't fair to compare.

- John

[Spanky]

Quote:

Originally Posted by dgalbraith100 My budget for FIRE is 40K. I figure with the budget above, even with creep, a little extra here (new "used" car) that sort of thing, I have plenty of wiggle room if I use the above budget as track and control, but plan for enough savings to goto 40K if need be. Laters, -d.

$40K seems doable. Just curios -- no taxes?

[dgalbraith100]

If I were to actually take the full 40K out, my tax estimate would be $766. 4 exemptions, 2 kids. 21K taxable income, 2K credits, tax left $766. Thats with standard deductions.

So taxes are very low (until I lose the kids) Once that happens I'll be almost a 3K tax bill, but not having the expense of kids will more than offset that won't it

-d.

[Edit]
I missed the Married filing jointly switch, that estimate above is for filing single. Filing jointly makes it 15K taxable income. And taxes owed is zero. (Thats what I remembered it being)

[modhatter]

dgalbraith100

Your budget you posted includes most of the predictable monthly expenses with only $2,400 allocated for miscellaneous. That means only $2,4000 to cover
Christmas presants, decorations and entertaining
Birthday presants etc.
Home repair
Any purchases whether it be a new computer, clothes, shoes, socks, a haircut, a movie, a new toaster, a new washing machine, etc. etc.

That miscellaneous number in my budget is over $13,000. I can't emagine covering it on $2,400. I'd like to know your secret.

[dgalbraith100]

Quote:

Originally Posted by modhatter dgalbraith100 Your budget you posted includes most of the predictable monthly expenses with only $2,400 allocated for miscellaneous. That means only $2,4000 to cover Christmas presants, decorations and entertaining Birthday presants etc. Home repair Any purchases whether it be a new computer, clothes, shoes, socks, a haircut, a movie, a new toaster, a new washing machine, etc. etc. That miscellaneous number in my budget is over $13,000. I can't emagine covering it on $2,400. I'd like to know your secret.

Christmas/B-day's we spend about $200 or so. (Not a big believer in buying things).

Home repair right now is "removed" from the budget because of remodeling. I expect once the remodeling is done I'll be left with $200-$500 a year. I do 99% of the work on the house myself. The only thing I'm not comfortable doing is Gas and flat tar roof.

New computer ($399), haven't bought one in 2 years, the one before that I owned for 6 years. Clothes usually we buy at Goodwill/Savers places (recycled stuff). Shoes I buy one pair every year or so for $50, my wife buys a couple pairs, but they are these cheap $7 shoes she gets from Target/Walmart.

Haircut, my wife does mine+kids, her sister does hers.
Washing machine is currently 14 years old (dryer too).

So yes those things will have to be purchased... but as you can see from the examples you gave, we just don't buy those sorts of things very often. Misc generally seems to cover them. When it doesn't, I slide money from the Dining out to cover and we eat out a bit less, or we just go over budget. If something huge comes up (new roof at 5K) then we'll be over budget for that year. But thats the reason to plan for 40K in retirement, not 28K which is what we "normally" spend.

-d.

[Corporateburnout]

Quote:

Originally Posted by dgalbraith100 Christmas/B-day's we spend about $200 or so. (Not a big believer in buying things). Home repair right now is "removed" from the budget because of remodeling. I expect once the remodeling is done I'll be left with $200-$500 a year. I do 99% of the work on the house myself. The only thing I'm not comfortable doing is Gas and flat tar roof. New computer ($399), haven't bought one in 2 years, the one before that I owned for 6 years. Clothes usually we buy at Goodwill/Savers places (recycled stuff). Shoes I buy one pair every year or so for $50, my wife buys a couple pairs, but they are these cheap $7 shoes she gets from Target/Walmart. Haircut, my wife does mine+kids, her sister does hers. Washing machine is currently 14 years old (dryer too). So yes those things will have to be purchased... but as you can see from the examples you gave, we just don't buy those sorts of things very often. Misc generally seems to cover them. When it doesn't, I slide money from the Dining out to cover and we eat out a bit less, or we just go over budget. If something huge comes up (new roof at 5K) then we'll be over budget for that year. But thats the reason to plan for 40K in retirement, not 28K which is what we "normally" spend. -d.

Man, this is what I call frugal...

$2600 for groceries for a family of four ? What is your secret?

[martyb]

My wife would slap me silly if I told her she could only spend fifty bucks a week on groceries! We easily double that amount and then some for a family of three! 2 of my 3 kids are out of the house, leaving just DW & me plus a 17 yr old boy. Ain't no way in hell $2600 a year would work for us...plus we eat out some too. On the other hand, ya'll are probably skinnier than we are!

[rw86347]

I think my wife and I have a very simular budget...

My wife and I get an allowance. This money has to cover everything from clothing, to computers, to dinning.

I get $25 per week. My wife gets $60 per week. This week I spent $28 on clothing (I used some from last week). We find that $85 a week is enough that you can actually save up money week to week. When you hold the cash, you relize you could save more.

We spend $75/wk on groceries and necessities (toilet paper, oil for the car, bleach).

Once we started spending cash from envelopes we found tons of way to save a little extra each week. And we don't feel deprived.

[Corporateburnout]

Quote:

Originally Posted by rw86347 I think my wife and I have a very simular budget... My wife and I get an allowance. This money has to cover everything from clothing, to computers, to dinning. I get $25 per week. My wife gets $60 per week. This week I spent $28 on clothing (I used some from last week). We find that $85 a week is enough that you can actually save up money week to week. When you hold the cash, you relize you could save more. We spend $75/wk on groceries and necessities (toilet paper, oil for the car, bleach). Once we started spending cash from envelopes we found tons of way to save a little extra each week. And we don't feel deprived.

I guess we know who calls the shots in your household

[rw86347]

Quote:

Originally Posted by Corporateburnout I guess we know who calls the shots in your household

At first she didn't want to move to a pure cash system. I took less in order to lead by example. And truthfully, I expect her to pay of things when I am at work.

[Milton]

Quote:

Originally Posted by SteveR The last thing I want to do one my deathbed is think...."if only I had done...."

Generalizations are always subject to exceptions; but I suspect that most people on their deathbeds will not be concerned with regrets over not spending money ("if only I had gone on that drip to Bora Bora!"), or other material concerns ("I wish that I had treated myself to a new Jeep!").

Most regrets tend not to involve money at all. Dying tends to sharpen one's perspective, and many people find (sometimes too late) that human relations are the most important thing in their lives.

An argument can be made that if scrimping and saving allows someone to retire early, and they spend the extra time with family and friends, they will have enhanced the real value their lives far more than increased consumption could possibly achieve.

Quote:

Originally Posted by SteveR Don't cut so deep into your life style that you neglect to live and enjoy life. We don't know when the grim reaper will call our name. No one is promised tomorrow.

I do agree with the above. As always, finding a balance is key.