I still don’t really understand how couples can live, travel, pay taxes, medical expenses, utilities, etc. spending less than $10, 20 or $30K a year. Even if you live in a state with no income tax, sales taxes and RE taxes tend to be high. Even assuming they have no taxable income (no 401Ks, Ibonds, etc), live in a remote area, own a paid off home with no debt of any kind, how is it possible to live comfortably with that low level of spending? I understand cutting the cord, having one very low cost cell phone, no trash, electric or water bills, growing your own food, but how many people really live like that. And why would they with $1M in savings? No interest or dividends? Never sell any of the assets?
I know I would not want to live that way. We travel a lot, including internationally, pay over $40K a year in SALT plus federal taxes a year (and, of course another $7K or so in Medicare, Medigap and associated medical and dental costs).
So we are nearly at $50K in those fixed costs without taking into consideration utilities, repairs/maintenance for car and house, food, clothing, etc. We prefer to use a washer and dryer, microwave and stove which all use electricity. In the summer we use A/C as 95 degree temps with 90% humidity is not tolerable. In the winter, it can get very cold and snows on occasion - oil heat costs less than electric heat, but it still isn’t cheap. We do live in a HCOL area, but we have always lived in one and still managed to accumulate decent savings. The only times I can remember living on less than $15K a year were in the very early ‘70s, when I was stationed overseas in the Army and housing and utilities were free and I was driving a beater ‘63 VW bug. But I also made less than $15K a year, so spending more wasn’t an option for me.
To those who live extremely inexpensive lives, more power to you. It’s just a lifestyle that’s not for us and one we would never strive for.
2 people, 1 dog. 5BR/3BA house, 2900sqft. Car, pickup, 3 motorcycles.
Arizona climate = heavy use of the A/C in the summer.
33K spending quite comfortable with room to cut if needed (2 smart phones, Cable TV, drop vehicles, etc.)
Food & Dining $6,082.91
Bills & Utilities $5,931.45
Auto & Transport $4,289.08
Insurance $3,486.51
Property Taxes $2,764.62
Health & Fitness $2,455.09 (had a root canal and a MRI)
Home $2,250.18
Entertainment $2,133.00
Gifts & Donations $2,042.88
Travel $1,034.23
Shopping $615.85
Pets $326.60