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Old 06-24-2021, 03:18 PM   #21
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Now that I have paid off my mortgage my largest fixed cost is home property tax and insurance which is about $3500/yr. That is at least 1/4 of my total non-discretionary spending. If I don't go South for the Winter I should be able to spend $12-15K/yr all inclusive but I would like to spend $3-10K by snowbirding if I can afford it. I don't spend much so there isn't a lot to cut but there is always something to cut. I could live in my basement during a heat wave to save money on A/C and wear more clothes or wrap in blankets to keep heat down in winter. I could spend even less than the $150/mo on food I typically spend now but at a point it really has a negative impact on quality of life so you have to draw a line somewhere.
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Old 06-24-2021, 03:34 PM   #22
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I like bargain shopping for healthy and gourmet food. The prices at Walmart and Costco in our area tend to be below the supermarkets, but shopping at ethnic markets, restaurant supply, the retail store loss leaders, and close out stores can get 50 - 75% off supermarket prices. We eat a lot of stir fries, salads and soups so the exact ingredients don't matter. Like this week Grocery Outlet had a bunch of fancy cheeses like brie for $1.50 a package that would normally cost $8 at Safeway and grapes for $1 a pound that usually cost $3. My goal is to eat healthy for $5 a day per person. On paper I can do that, but then when we get to the store we see other things we like so usually spend more, but it is still a big savings over how we used to shop. Our last shopping trip to GO to stock up the freezer we spent $144 and I think saved $133.

$133 is almost enough to pay for my annual U.C. Berkeley Garden membership ($150), which through all their reciprocal programs gets us and guests into not just the gardens all year but most other museums, gardens and some historical attractions in California and across the U.S. for free.
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Old 06-24-2021, 05:17 PM   #23
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Home improvement had been number 1 for the last 2 years. And since we're getting close to the finish line (maybe another 50 grand) that will be decreasing.

But I gotta buy me a boat and a slip to park it in. Good thing the landscaping is ending.

The food expense is going up! My second favorite sushi bar has opened and I dropped the car at the full service place (also now open) and got me a 35 dollar car wash and then a $40 lunch. God it's good to be done with this covid crap!
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Old 06-24-2021, 06:01 PM   #24
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Quote:
Originally Posted by KingOfTheCheapos View Post
......
I've spent the last few weeks looking at what states minimize sales and income taxes (even visited the South). But then I got back and whilst at the grocery store realized I easily spend $10K a year on groceries (we eat at home a lot).

So groceries are by far my major expense (no mortgage to speak of) but I easily would spend $15K it wasn't for:

.....
How many folks do you buy for ? $10K - $15K seems pretty high to me.

As a couple for 2017 -> 2020 , each year we spent $4,000 -> $5,598 for groceries + restaurant meals per year.

Surprisingly to me, 2019 at: Groceries: $3,828 and Restaurants: $1,602 and takeout food: $168
Was our highest spend year a total of: $5,598 on food.

Even though in 2020 we spent an extra $1,000 on groceries (Toilet paper ) the restaurant eating fell to zero after the start of the year. So the total went down.
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Old 06-24-2021, 06:15 PM   #25
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What I like about using Quicken is that I can look up anything I am curious to know, regarding personal money matters.

For example, for the past 5 years, what percentage of our total expenses is for food, meaning groceries and the occasional restaurant visits?

Answer: 5.4%.

Without Quicken, I would never know.


PS. What do I do with the knowledge gaining from using Quicken? Nothing much right now, other than to make posts like the above.

Seriously, knowing what we spend on gives me a comfortable fuzzy warm feeling that we are way LBYM, even though we don't need to.
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Old 06-24-2021, 08:10 PM   #26
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We spent $11k last year at grocery stores - but I include most grocery store purchases in that category - and there are clothes, and booze from costco in that figure. I also have 2 adult sons under roof - one was only home part of the year last year - so our grocery bill dropped during that window.

Our highest category is insurance. Health, car, home, rental policy, umbrella, earthquake. - Hit $20k last year just for all of the different types of insurance premiums. (This includes DH's medicare B payment deducted from his SS.)

Second highest category last year was education - had a kid in college, and another kid who was doing competitive swim and piano lessons. (I tag them as education because swim was for the school swim team, piano lessons were private - but I consider them educational.)

Groceries came in third - 12% of total spending.

I don't skimp on groceries. We cook from scratch and make really tasty food. Skimping would mean lower quality.

When I was interested in cutting expenses I looked at recurring bills. Changed cell phone plans, renegotiated cable/internet, figured out ways to drop our gas/electric utilities and water bills. These little changes add up.
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Old 06-24-2021, 09:54 PM   #27
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We went to the local dollar store today that always has a nice selection of fresh produce. Some of our purchases included eggplants ($1 dollar store / $1.68 supermarket), living lettuce ($1 / $3), oyster mushrooms ($1 / $4.49), leeks ($1 / $3), Wolfgang Puck Soup ($1 /$3.50), squash ($1 / $1.79), and cream cheese ($1 /$2.49), which were all the same quality and freshness as the local supermarkets but $1 each instead of the local supermarket price. For lunch and dinner we had pad thai with organic eggs for the protein for lunch and organic chicken for dinner; a big side salad with assorted veggies, fresh basil, cranberry goat cheese and macadamia nuts; and fresh grapes and papaya for dessert. We try to eat plant based, Blue Zone kind of meals so for us we wouldn't eat any different than this if even if we paid more.

I think we save about $6K a year on groceries over what we used to spend and now we buy healthier food, mostly from keeping track of prices and changing where we shop. Over a 40 year retirement that is $240K in after tax money. YMMV but $240K is a tidy sum to me.
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Old 06-24-2021, 11:32 PM   #28
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Our highest is mortgage at 30k/yr, of which 8k is for property insurance... not really flexible.

Then groceries for two at 4k and restaurants at 2k. I'm not in charge of the groceries, and it's more than my life's worth to try to poke my nose into that business, so I consider it a fixed cost. Besides, we're not poor, and food is daily quality of life.

Utilities wind up at 3k year and they're mostly fixed... 80% of the bill is fixed and not dependent on how much we use. Of that, internet is 1k and could probably be reduced if I shopped for deals, but I rely on it heavily. Phone is 0.5 for two and I think it's already pretty low... Google Fi with fixed 40/mo plus 10 per gb of data.

Then there's "house things", from 1k to 4k depending on how much things need to be repaired. About 1k for education, classes and the like.

The biggest thing I should look at is car insurance at 0.8k and house insurance at... not sure how much. So the way I see it, really only the insurance and some utility costs have wiggle room, and not much. The rest is mostly just an expensive area (CA Bay Area). It winds up being 60k so if I made 40k/year we'd be in trouble, but realistically in that case we'd either move someplace cheaper, or both work, or do both things!
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Old 06-25-2021, 07:30 AM   #29
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Quote:
Originally Posted by KingOfTheCheapos View Post
Hi,



As for major expenses I can NOT reduce within reason:

i) Home and car insurance
ii) Water, Gas and Elec costs
iii) Property tax
iv) Health insurance
1. I reduced home and car insurance from 1900 per year to 1080
by getting competitive quotes, using an online offering from
a major insurer's subsidiary, and raising my deductibles to what
I really could afford.

2. I was able to reduce my electric bills(all electric home) from 2800
per year to 1200 per year by installing geothermal heating and cooling
in a home built in 2011. The 4000 additional cost(after 4000 Tax credit)
was offset in about 36 months.

3. Property tax freeze was obtained for the last two years and I am
currently considering moving from Illinois (6000 per year) to
Tennessee(1350 per year) to reduce property taxes.

4. Prior to Medicare I was able to qualify for substantial subsidies
for Affordable Care Act including cost subsidies by controlling
my taxable income. My cost went from 1400 per month for COBRA
to 0 per month on the ACA. Once medicare age, I went with Medicare Advantage from
UnitedHealthCare with a premium of 348 per year for 0 ded
4400 OOP max.

These decisions were made for me and may not be suitable for
everyone. All expenses are subject to reduction depending on
how aggressive you want to pursue savings.

Best,

VW
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Old 06-25-2021, 09:06 AM   #30
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Our typical spending is about 1/3rd discretionary, in several categories. We could easily cut back significantly on groceries, wine/liquor, travel, dining out (at least 3X per week), charity, gifts, boating, golf and entertainment (live theater & concerts mostly for us). It would be harder to cut back on auto, home, utilities, insurance, HOA, prop taxes, fitness but we could if we had to. Even harder to cut back on medical, but as a last resort. I planned all along, well before retiring, to build significant discretionary spending into our spending budget so we wouldn’t be caught flat footed in an unprecedented economic downturn/geopolitical event. Thirty years in retirement is a long time, and going back to work just becomes less and less of an option as the years go by.
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Old 06-25-2021, 09:36 AM   #31
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We have reduced our home and auto insurance by 25 percent. Simply by not renewing insurance that has large premium increases. We shop the policy every few years, or sooner if a large increase comes along.

Last year it was a 25 percent increase in home insurance. We remained with the same insurer but compared rates for a new policy (on the internet) vs the renewal rate. We asked to become a 'new customer' vs a new one. They reluctantly agreed.
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Old 06-25-2021, 10:05 AM   #32
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I break my expenses out into fixed & variable.

Some fixed costs are beyond my power to reduce (e.g. property tax, HOA fee)

Others require effort (research or capital outlay) to reduce, so I classify them as fixed for budgeting purposes (e.g home/auto/umbrella insurance, utilities)

Things like food I do consider a truly variable expense.
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Old 06-25-2021, 10:22 AM   #33
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Quote:
Originally Posted by VanWinkle View Post
. I



4. Prior to Medicare I was able to qualify for substantial subsidies
for Affordable Care Act including cost subsidies by controlling
my taxable income. My cost went from 1400 per month for COBRA
to 0 per month on the ACA. Once medicare age, I went with Medicare Advantage from
UnitedHealthCare with a premium of 348 per year for 0 ded
4400 OOP max.






VW



You're forgetting your Part B payment unless UHC pays it for you.
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Old 06-25-2021, 10:27 AM   #34
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Our major discretionary fund is for travel, so if money was tight, we could travel less. We could trim other recreational items in addition, but we probably wouldn't want to do that. Our homeowners and auto insurance have come down some during the pandemic, but I'm sure they will come back up soon. If money was tight, I'm sure we would tighten our grocery budget, but hopefully, we never have to do that.
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Old 06-25-2021, 10:43 AM   #35
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I break my expenses out into fixed & variable.

Some fixed costs are beyond my power to reduce (e.g. property tax, HOA fee)

Others require effort (research or capital outlay) to reduce, so I classify them as fixed for budgeting purposes (e.g home/auto/umbrella insurance, utilities)

Things like food I do consider a truly variable expense.
YMMV, but for us food cost is not that much, and perhaps of that, is somewhat inelastic.

We do not eat out much, so there's not a lot there. For grocery, my wife is so adept at shopping for bargains that there is not a lot to cut.

Our other discretionary spending such as the 2nd home, travel, and gift/donation dwarf food costs. If we get to the point of having to cut food costs, our quality of life really suffers.
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Old 06-25-2021, 11:24 AM   #36
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We always lived below our means when working, and didn't spend a lot on extras like luxury cars, but weren't good at watching all the regular, little expenses like energy use and cable bills. Since we retired and the kids grew up, some of our expenses naturally decreased like no more commute costs and lower car insurance with the kids not on the policies, but we also cut another $40K off our annual run rate through optimizing expenses and trying to live better for less.

I probably have another $5 - $10K potential at least. Some of our neighbors have electric cars and solar panels, so they not only pay $0 for energy but make a little extra off selling the excess electricity they make. Other neighbors have replaced their lawns with food gardens. Sustainable living is popular here so we don't have any shortage of future projects like those to add to our to do list, plus a lot of other smaller projects like learning to make our own yogurt, experiment with solar cooking and growing microgreens. Those kind of projects are both hobbies and extra ways to lower expenses.
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Old 06-25-2021, 12:40 PM   #37
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I'm fortunate- there's a ton of slack in my budget. I have not attempted to reduce the mortgage (via refinancing), I don't shop insurance around, I buy what I want at the grocery store. I'm pretty "no-frills" with utilities (keep thermostat at 80 in summer, e.g.) and have pared monthly expenses down to just what I need- Ting for cell phone, Netflix my only TV subscription, no Sirius, Pandora, Amazon subscriptions.

The "All Other" is a large bucket that adjusts as things change. Travel wasn't much last year, charity up a bit, major home improvements and maintenance where they fit (quartz countertops last year, exterior paint and deck rebuild this year). Then there are the "oh, crap" expenses- replacing the car last year, some major dental work this year. What's left over from what I withdraw goes into the grandkids' 529 accounts and occasional gifts to DS and DDIL- I gave them $3K this year and may do more.
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Old 06-25-2021, 03:56 PM   #38
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We found the "Open Space" tax incentive here in WA for property tax. The application fee isn't cheap, but depending on how "wild" your yard is you can get a significant reduction in assessed value for the "voter approved" taxes. This is not dependent upon income, disability, etc. as many other programs are. Interestingly, it turns out that there is not a minimum lot size requirement, and the discount goes as long as the legislature doesn't muck it up. Of course you'll owe some back taxes if you exit the program to build something...
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Old 06-25-2021, 04:44 PM   #39
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Travel is our biggest expense, and has been more than half of our post income tax spending in the four years since we retired. (By far, most income taxes are due to Roth conversions, which are also kind of discretionary). This past 18 months, however, it was only about 40%, due to inability to do much international travel.

Granted, we are in a great position, but in a pinch, we would have discretion to axe over half of our spending.
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Old 06-25-2021, 05:16 PM   #40
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Granted, we are in a great position, but in a pinch, we would have discretion to axe over half of our spending.
And this is the key to solvency in retirement. When I read about retirees who "lost everything" in a crash such as the financial crisis, I suspect it's because the % of their portfolio they had to withdraw became unsustainable as the portfolio value dwindled.

My spending in a normal year is about 20% travel, 20% charitable. I could cut both back substantially but life would be a little less fun and our church Treasurer would cry.
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