Living on a lot less

[Sheryl]

I have been tracking expenses for about 1 1/2 years. It has been very eductional to see. My weak points are classes - Spanish, Tennis, etc. and I only see that (or the desire for that) increasing in ER.

We will be doing way more home improvement projects once we have time (and there is A LOT to be done!).

And we will be traveling. We refuse to RE until we are sure we have enough to enjoy lots of travel.

So I have started doing budgets based on what we spend now PLUS allowing increases for those things.

Just 3 weeks ago started tracking groceries more carefully. (Obsessively, SO would say). So far getting thru a week on under $100 is just not happening. I'm not trying to really reduce, just be reasonable so it will be interesting to start focusing on that.

 

[Zipper]

Ex, the 440 brings back long ago memories.

I recall it being the toughest of all races.

The "rubber legs" effect at the finish line was always a wierd feeling

One of the Profs at Western told us your legs will give out before your heart does so "let 'er rip!

I still run................but no 440's!

 

[Mr._johngalt]

Hey Petey, good to see you here.  Interesting point.  I haven't read the book but I wonder what it was based on---what kinds of cost increases, what kinds of lifestyles did these people lead after retirement and what kind of planning did they do.  If that statement is accurate then the avg US citizen 50s-60s is in big trouble.

The "statement" is bunk. I cut back very severely, I don't know anyone as happy to be retired as I am, and I am never going back to work. I may be prickly and easily annoyed, but my retirement? Why I'm happy as a pig in slop.

JG

 

[SteveR]

The "statement" is bunk.  I cut back very severely,  I don't know anyone as happy to be retired as I am, and I am never going back to work.  I may be prickly and easily annoyed, but my retirement?  Why I'm happy as a pig in slop. 

JG

JG, with all due respect, I believe your lifestyle is far from the one being suggested in Wildcats' post. His reference was to the "average 50-60 year old" in retirement. Based on many polls done by various media sources (and taken with the appropriate grains of salt) it would appear that most (not you or most of the people on this forum) will be in for quite a shock when they try to live at the same level in retirement as they did before without adequate resources to fund that kind of spending.

Based on personal observation of my peers and family, I would agree that most people are not saving and investing enough to maintain their current lifestyle over the 25-30 years they will spend in retirement (assuming retirement at age 65ish). They will have to lower their spending to match their level of income (which they have yet to do in their working life) or will have to continue to work at some level to have the income needed to support their lifestyle.

If everyone were as frugal as you and some of the others here, the economy would come to a screeching halt.

 

[haha]

Based on personal observation of my peers and family, I would agree that most people are not saving and investing enough to maintain their current lifestyle over the 25-30 years they will spend in retirement (assuming retirement at age 65ish).  They will have to lower their spending to match their level of income (which they have yet to do in their working life) or will have to continue to work at some level to have the income needed to support their lifestyle. 

I meet a number of people who have good pensions. They tend to assume that with a pension they don’t need savings, so they go wild on very large houses, $100,000 motor homes, big boats. Stuff they might never have bought when still working. I guess for the retired government workers this will work out OK. But the others could get gradually poorer due to our old friend inflation.

Also, although folks on this board seem pretty immune to "stuff envy", some of these retired couples can be quite the snobs based on nothing more than the costliness of their crap. At least when you are still working you have a reality that you must deal with. If you are retired it seems possible for some people at least to get pretty far out.

Ha

 

[Martha]

Isn't it much easier to be free with the spending when you are working? I am much more worried about spending if I have to rely only on our investments for income. I anticipate I will reduce spending when I fully retire simply because I am a worrier.

 

[Jay_Gatsby]

Isn't it much easier to be free with the spending when you are working?  I am much more worried about spending if I have to rely only on our investments for income. I anticipate I will reduce spending when I fully retire simply because I am a worrier. 

Although I don't speak from personal experience, I think people who are working are worried that they don't have enough to spend as they would like (or will need) in retirement, whereas those who are retired are convinced that they do.

 

[justin]

Although travel expenses may go up in retirement, when you have plenty of time to travel (if you want), you are more able to save money on travel. Off-peak vacations can save lots of money. This applies to hotels, cruises, airline tickets, beach rentals, even admission tickets and restaurants. You may be able to drive somewhere instead of fly and save a little money. Or take the train. Spend a few extra hours but save $100 or $200. And enjoy the scenery while you're at it.

Tues/Thurs cheap plane tickets are hard to take advantage of when you have to use your weekends for vacation when you are working.

 

[MJ]

Being a worry wart and a past poor investor, I had concerns about my nest egg, while I was working and now being recently retired, I still have the same concerns.
When I was working, I worried about saving enough money to last me 40 years.
Now that I have been retired for 8 months, I have the same worry. I know the concerns is more perceived than real but my emotions are still dominating me. Like unclemick, it may take a couple of years (hopefully less) to feel more comfortable. I haven't gone "spending" crazy and am still LBYM.
Of course, there is always the option of going to a shrink to "fix" my perceived worry. It would only cost $25k and then with $25k less in my nest egg, I would definitely have something to concrete to worry about.

MJ

 

[Martha]

Being a worry wart and a past poor investor, I had concerns about my nest egg, while I was working and now being recently retired, I still have the same concerns.
When I was working, I worried about saving enough money to last me 40 years.
Now that I have been retired for 8 months, I have the same worry. I know the concerns is more perceived than real but my emotions are still dominating me. Like unclemick, it may take a couple of years (hopefully less) to feel more comfortable. I haven't gone "spending" crazy and am still LBYM.
Of course, there is always the option of going to a shrink to "fix" my perceived worry. It would only cost $25k and then with $25k less in my nest egg, I would definitely have something to concrete to worry about.



MJ

Xanax.

We both share the defective work gene and it looks like we share the worrier gene. My prior strategy to dealing with it was to simply ignore all matters regarding investing and leave them to my spouse. I am someone who likes to make decisions based on facts and I feel there is never enough facts to make good investment decisions. So I worry instead.

 

[greg]

Xanax.

We both share the defective work gene and it looks like we share the worrier gene. My prior strategy to dealing with it was to simply ignore all matters regarding investing and leave them to my spouse. I am someone who likes to make decisions based on facts and I feel there is never enough facts to make good investment decisions. So I worry instead.

Xanax, Shmanax! Worry is the beginning of keeping the bad stuff at bay. If you're worried about bad things happening in a foriegn country, don't go there or prepare yourself for what might happen so that you know what to do if/when it does. If nothing bad happens, what a pleasant surprise and trip. If you're worried about your retirement portfolio not outlasting you, fix it so that it does (or be prepared to fix the spending side). Worry isn't a bad thing; it's just a natural part of me that shouldn't be suppressed. It tells me that there is still plenty more to do. That's a good thing.

--Greg

 

[Michael Moore]

I meet a number of people who have good pensions. They tend to assume that with a pension they don’t need savings, so they go wild on very large houses, $100,000 motor homes, big boats. Stuff they might never have bought when still working. I guess for the retired government workers this will work out OK.

Since my pension is a bit under half what my final salary was, I'm sure not going to throw myself back into the debt briar patch if I can avoid it. I've had some post-retirement expenditures that were already in the budget, and some others that are being financed by converting other resources into the new one (selling some stuff and using that money for the new stuff = no actual change of financial status).

Even with a pension, you still have to be able to last through the month until the next check shows up.

cheers,
Michael

 

[MJ]

Xanax, Shmanax! Worry is the beginning of keeping the bad stuff at bay. If you're worried about bad things happening in a foriegn country, don't go there or prepare yourself for what might happen so that you know what to do if/when it does. If nothing bad happens, what a pleasant surprise and trip. If you're worried about your retirement portfolio not outlasting you, fix it so that it does (or be prepared to fix the spending side). Worry isn't a bad thing; it's just a natural part of me that shouldn't be suppressed. It tells me that there is still plenty more to do. That's a good thing.

--Greg

I agree. Worry can be good. My father is a control freak and worries about anything he doesn't understand (drives me crazy) but I attribute his longevity (95 1/2 and lives alone) to his worry gene (which I share). That's why I worry about my money lasting at least 40 years.

MJ

 

[cj]

Isn't it much easier to be free with the spending when you are working?  I am much more worried about spending if I have to rely only on our investments for income. I anticipate I will reduce spending when I fully retire simply because I am a worrier. 

I agree with Martha, or I should say my DH would definitely agree with her.  I've told my boss I'm definitely leaving 5/1/2006.  I am so OK with that, but DH is the worrier.  He keeps saying, "let's get <fill in the blank with something he wants to buy> while you're still working" (since I have always had the bigger salary).  I keep telling him we'll be fine, and have run our numbers through FireCalc every which way, including totally without Social Security, and it always comes up that we're 100% covered.  But DH will say every so often, "we have to cut back on our groceries" or other things.  And I have to remind him that we are already so careful about what we spend in some areas that there isn't much room to cut back!  I can see him wanting to stay home all the time to avoid spending any money.   

I do think that it will be hard to move from saving mode to spending mode, as we have been diligent savers for more than 30 years.  I'm hoping to get over that quickly!

CJ

 

[Nords]

Worry is the beginning of keeping the bad stuff at bay. 
Worry isn't a bad thing; it's just a natural part of me that shouldn't be suppressed.

Good post, Greg.

I don't worry about Murphy's Law. I worry constructively. I know that Murphy's Law exists and that it will find me every chance it gets. When it does, I won't be surprised or disappointed but I will be ready.

 

[sgeeeee]

Good post, Greg. 

I don't worry about Murphy's Law.  I worry constructively.  I know that Murphy's Law exists and that it will find me every chance it gets.  When it does, I won't be surprised or disappointed but I will be ready.

I'm pretty sure one of the corollaries of Murphy's Law is that no matter how many possible things you consider that can go wrong, there will always be another one that develops.

Further application of Murphy tells us that the new possibility will be worse than all the ones you considered.

And don't forget, every solution breeds a new problem.
. . .
But smile . . . tomorrow will be worse.

 

[modhatter]

As the original poster of the question --- I am not hearing very favorably to making such a drastic cut. Not what I wanted to hear. But, I'm a realist too, so I guess I'll just join the rest of you and continue to worry.

I have cut back on the "eating out" portion of my budget (and I don't like it one bit), but my food bill is still quite high, so maybe I need to eat oatmeal and peanut butter and jelly sandwiches for dinners once in a while too. (ugh)
Thought this would be a little easier.

 

[Sheryl]

As the original poster of the question --- I am not hearing very favorably to making such a drastic cut.  Not what I wanted to hear.  But, I'm a realist too, so I guess I'll just join the rest of you and continue to worry.

I have cut back on the "eating out" portion of my budget (and I don't like it one bit), but my food bill is still quite high, so maybe I need to eat oatmeal and peanut butter and jelly sandwiches for dinners once in a while too. (ugh)
Thought this would be a little easier.

Just curious, how high do you consider "quite high," if you don't mind saying? We're spending about $125 a week, and I think I could get to $100 without feeling it, but maybe that's still pretty high compared to what some have said.

 

[Nords]

I'm pretty sure one of the corollaries of Murphy's Law is that no matter how many possible things you consider that can go wrong, there will always be another one that develops.

Further application of Murphy tells us that the new possibility will be worse than all the ones you considered.

And don't forget, every solution breeds a new problem.
. . .
But smile . . . tomorrow will be worse.   

SG, just show this post at any submariner's bar in the country and drink all night for free. You're one of us!

I wouldn't brag about your new status to the neighbors or family. They wouldn't understand and they might try to hurt your feelings...

 

[modhatter]

Reply to Sheryl

I estimate they are running $150 per week or more. Now that includes paper products, garbage can liners , cleaners, etc and dog food for two large dogs. In fact, I would say that is a conservative estimate. I have had some difficulty tracking exactly, as I sometimes buy other things if I go to Costco for example or Wall Mart Super store. So I know it's not all groceries. I can look on my computer and see what I spent, but it's convaluted with other stuff. I think I may need to start saving receipts and add it up monthly.

I cook twice a day now. (Lunch and dinner) Lunch, sometimes tuna fish sandwich, sometimes oatmeal (my son loves oatmeal. Have a variety of things for dinner, chichen, fish, steak, hamberger (the usual I think) Usually fix one starch and one vegitable. I assume that is somewhat normal.

I am trying to wean my son off soda and get him to drink the ice tea I now make, but he is resisting. He drinks a lot of diet soda. I tried lime aide, but he wouldn't go for it.

I'd love to see a typical weeks meals for the poster that said he now spends only $300 a month for groceries. Maybe he means, just food items and not all that other stuff we need.

 

[Gone4Good]

I've been thinking about this same topic the past few days.  I've been trying to figure out how much longer I'll work before I tell Mega Corp to shove it.  As everyone here knows, how soon you can retire is a direct function of how much you spend in retirement.  I have a good handle on how much I'll likely have saved but I have never really tracked my expenses that closely.  So over the past few days I've taken a closer look at what I spend and, more importantly, what I will likely spend once I retire.

My conclusion is that I don't think I will spend any less in retirement than I do now.  I've read several different places, including on these boards, about all the ways you save money once you no longer work.  But the nominal savings I get by not commuting to work, not having suits dry cleaned, etc. is completely overwhelmed by the cost of health insurance that I will bear directly once I quit my job.  I also expect my travel budget to increase pretty significantly - I'm not quitting work so I can sit home and watch Oprah, after all.

I started thinking about other ways I could save money, but most of them involved cutting back on things that I enjoy.  Is that really the answer?  For some people it may be.  But the way I see it, I've already sacrificed to put myself in a position to retire early.  If I push harder I may get to the finish line earlier, but once I'm there I may find that I've given up too much to enjoy it.

 

[haha]

Reply to Sheryl

I estimate they are running $150 per week or more.  Now that includes paper products, garbage can liners , cleaners, etc and dog food for two large dogs.  In fact, I would say that is a conservative estimate.

I heard a program on NPR discussing "Hunger In America". They interviewed some Public Health Doc from Tufts Medical School and BCH. He and his colleagues created a "barebones but nutritionally adequate" food budget for a lower income family of four. $597 per month. He then tried to buy the items on his list in suburban Boston. He found the items, but in every case even after quite a lot of effort he wound up spending over $600 per month.

I read the food budgets on this forum, and I think, "Ya sure, you betcha." I shop carefully, in several stores, almost never buy meat not on special, and I spend $325 to $350 or so per month, for one 64 yo man only. If broccoli is cheap, I get broccoli. If cauliflower is cheap, I get that. This does not include cleaning supplies and stuff I get at Wal-Mart.  I got that down from $400 to $425 several years ago, in spite of the fact that food prices have increased. If I had to spend less, even at my age, I would go back to work.

The Doc from Boston did say that it may be easier (read possible) to do in some sections of the country.

Ha

 

[sgeeeee]

. . .I am trying to wean my son off soda and get him to drink the ice tea I now make, but he is resisting.  He drinks a lot of diet soda.  I tried lime aide, but he wouldn't go for it. . .

Try this. Buy club soda in the large 2 liter bottles. It typically costs less than half what soda costs if you shop for it. Add real lemon and sucralose to taste. Satisfies the craving for carbonation and sweet at much lower cost.

 

[MJ]

I read the food budgets on this forum, and I think, "Ya sure, you betcha." I shop carefully, in several stores, almost never buy meat not on special, and I spend $325 to $350 or so per month, for one 64 yo man only. If broccoli is cheap, I get broccoli. If cauliflower is cheap, I get that. This does not include cleaning supplies and stuff I get at Wal-Mart. I got that down from $400 to $425 several years ago, in spite of the fact that food prices have increased. If I had to spend less, even at my age, I would go back to work.
Ha

My average monthly grocery (food and non-food) bill this year was under $150. I don't buy red meat but stock up on 4 to 6 weeks supply of chicken .49/lb and wild salmon $3/lb when it's on sale and freeze them. I also buy brand name tuna 7 oz cans (BB, chicken, starkist) on sale for .60 to .69. and buy a 3 to 4 month supply.
Fruits and vegetable are pretty inexpensive especially when they are on sale.

MJ

 

[haha]

My average monthly grocery (food and non-food) bill this year was under $150. I don't buy red meat but stock up on 4 to 6 weeks supply of chicken .49/lb and wild salmon $3/lb when it's on sale and freeze them. I also buy brand name tuna 7 oz cans (BB, chicken, starkist) on sale for .60 to .69. and buy a 3 to 4 month supply.
Fruits and vegetable are pretty inexpensive especially when they are on sale.

MJ

You must know what you spend, so I stand corrected. One thing however- I live on the NW coast, and I have not seen wild salmon except pinks for anywhere close to $3/# in at least ten years. This past summer the cheapest king or sockeye or even silver (Coho) I could get -on sale- was $6 or $7 per pound. I never saw halibut under $9. You should thank your fishmonger, he is selling it to you well under his cost.

Ha