Monthly expenses

[eyetri2]

Weird topic and I know everyone is different in their standards of living and all, but just want to get a rough idea on what monthly expenses are for people currently in the wife, kid(s), 1 dog category? I am getting out of the military this summer and my expenses have been so absurdly low that I don't even know what is realistic anymore. I am in the health field as well, so to give examples of my current situation:

Health insurance - free
Malpractice - free
Disability - free, I guess
Life insurance ~ 28/month (high for what they give you)
Car insurance - 250/yr for 2 people, 1 car
Housing - free, live on base and can run the A/C, heat, water, and lights all day

Because of living in Japan, we get COLA of around 1300-1400/ month and if I had to add it up, that might be our monthly expenses. If not it is close. Thus, everything else has been take home knowing the day (about 4-5 months now) where we will be buying a house, 2 cars, day care, helath insurance, life, disability, malpractice, etc. (Need I go on!!!)

So, knowing this a LBYM type of group, what's the damage per month?

Thanks.

eyetri2

 

[SC]

Hi eyetri2,
DW & I are at $4.5K/mo in Texas for what we think is a fairly modest middle-class lifestyle. There was a great thread on this forum a while back, here:
http://early-retirement.org/forums/index.php?topic=6589.45
In particular see the posts by CFB and sgeeeee (on the next page).

SC

 

[Nords]

Weird topic and I know everyone is different in their standards of living and all, but just want to get a rough idea on what monthly expenses are for people currently in the wife, kid(s), 1 dog category?

The number that comes up most frequently is about $2000/month, but it's a flattish bell curve with very fat tails that varies from roughly $1000/mo to $5000/mo. Housing & grocery costs are probably the biggest components of the total. Someone is probably working on $500/mo now and I'm sure others can't imagine existing on less than $8000/mo.

I am getting out of the military this summer and my expenses have been so absurdly low that I don't even know what is realistic anymore.

Is this where we're supposed to point out all the personal, financial, & camaraderie advantages of continuing your career/pension by joining the Reserves/Guard?

If you're doing that then a lot of the benefits transfer right over... for example the Reserves now includes unlimited commissary/exchange access. I believe TRICARE is available for active-duty periods over 30 days. I'm a little fuzzy on the details but there may also be family dental insurance available. The details are supposed to be covered during the Transition Assistance Program and a current summary is on military.com. After five years the pendulum has swung too many times for me to keep track...

If you're not doing Reserves/Guard then I believe you still have a chance to convert SGLI over to VGLI within a couple months of separation. Some companies are better insurance deals than others and claim to beat VGLI or at least supplement it. If you have any possibility of any disability, no matter how slim, get those referrals & specialty clinics now. I don't know how familiar you are with the rest of the healthcare system but getting all my body & fender work taken care of was a full three months of consults, referrals, appointments, and paperwork. It's a lot easier to complete the process on active duty than it is to get caught up through the VA, especially if disability is involved.

Before you separate you should get all the final medical/dental exams & cleanings for you & family. And if you have anyone in your extended family (parents, parents-in-law) who may be interested in the Federal Long-Term Care Insurance Program, then signing up should be done while you're on active duty.

Hopefully you've already heard all you care to about your MGIB benefits.

If you're still in Japan and not already a member of them then you should seriously consider joining NFCU or PenFedCU, USAA, and perhaps Armed Forces Insurance. Once you're in you can stay in after separation.

And finally, I don't think there's a cheaper investment program than the TSP. You'll probably want to max out whatever you can before you leave.

 

[Ed_The_Gypsy]

If you do sign on with the reserves, keep a duffle bag packed and make sure the fatigues always fit. They are busy these days.

 

[youbet]

Hi eyetri2,
DW & I are at $4.5K/mo in Texas for what we think is a fairly modest middle-class lifestyle. 

The inevitable question........  Is the $4.5K/mo gross with fed taxes being considered an expense you pay out of that? Or is it net with fed taxes being paid out of a larger gross number yielding this net number?

We spent $58K/yr average the last three years to cover everything other than income tax.  These were years with no unusual peaks or valleys and didn't include any major purchases.

 

[rs0460a]

$6,666/mo (current gross) + 3% increase/yr (inflation), for DW & me (plus 2 dogs - a lot of kibble!)...

Note - we're debt free (no mortgage, credit card, or any other loans).  It does include $400/mo budget for future car purchases (current average age of our cars is 10+ years, so yes, we don't buy many).

Biggest "hit" is travel expense (foreign/US travel 1-2 times/yr) at around $1K/mo budget.

- Ron

 

[ShokWaveRider]

I am in the health field as well, so to give examples of my current situation:

Health insurance - free
Malpractice - free
Disability - free, I guess
Life insurance ~ 28/month (high for what they give you)
Car insurance - 250/yr for 2 people, 1 car
Housing - free, live on base and can run the A/C, heat, water, and lights all day


eyetri2

I really do not think your situation is realistic for most people. We have to pay REAL insurance costs for both health and Auto and Home. Plus we do not get housing and utilities for free. I am not critizing your situation because those are BENEFITS to you. The average Joe (Not GI Joe) simply has to pay for everything.

It cost me and DW at lease $2500 per month + Rent. We are very Frugal but do not go without food etc. And we are lucky as heat and air are included in our $800 pm rental.

SWR

 

[SC]

The inevitable question........ Is the $4.5K/mo gross with fed taxes being considered an expense you pay out of that? Or is it net with fed taxes being paid out of a larger gross number yielding this net number?

We spent $58K/yr average the last three years to cover everything other than income tax. These were years with no unusual peaks or valleys and didn't include any major purchases.

That's what we've budgeted for total spending including federal tax. It comes to $54K/yr which is just a little less than your number.

We based that on about five years worth of spending data, with pro-rating for big ticket items (car, roof, etc). The federal taxes are an estimate from a simulated return with TaxCut, which roughly matched the estimate used by Vanguard when we took advantage of their free financial planning service.

SC

 

[astromeria]

This is my current presumed (and padded) monthly budget if DH retired at the end of the current semester and no lifestyle changes (I'm already retired):

Health = $1500
Income taxes ~ $750?
Travel = $750
Home = $500 (property taxes, insurance, maintenance/repairs on house & yard)
Groceries & supplies = $300
Utilities = $250
Cars = $250 (insurance, gas, maintenance & repairs)
Entertainment = $250 (cultural events, restaurants, Netflix, books, CDs, DVDs, admission fees)
Gifts & charity = $250
Personal = $200 (haircuts, clothes, massage, art class, gizmos, whatnots)
==================================
$5,000/month-->$60,000/year

We could cut back on almost everything pretty easily; for example, we could easly manage with one car if we're both retired. I have a separate stash for future big-ticket expenses (replacement cars/appliances/electronics, hurricane deductible, emergency travel, 5-year stock market crash<eek!>).

 

[Andre1969]

Here's kind of a quick and dirty expenses list for me...
HELOC $700.00
elec $110.00
cable $80.00
phone $60.00
cell $110.00
Oil $80.00
Taxes $220.00
Ins $75.00
Home Total $1,435.00

Insurance $200.00
maint $100.00
gasoline $200.00
Car Total $500.00

Food $150.00
Misc $100.00
Health Ins $250.00 (a rough guess if I had to cover it myself)
Other TTL $500.00

TTL $2,435.00

My insurance actually went down a couple months ago and now only averages out to $131 per month, but I figured I'd keep that bit of padding in there, just in case.

Also, as it is my two roommates buy most of the food, but I'm pretty sure I could make it on around $150 per month if I had to pick up the whole thing. I'm really not an extravagant eater. And the Misc isn't going to cover much, but I don't buy clothes or shoes very often.

And this doesn't cover any major one-time expenses, such as buying a new tv, major repair to the house, etc. But I figure it's a rough guideline, and a rough one is probably better than none at all!

**edit: almost forgot...reason the cell phone is so high is because I have my roommates on my plan, and then they just reimburse me.

 

[SC]

I'll post mine in more detail too. These are the quicken categories we use, and the budgeted numbers for the year.

Auto fuel & repair $2000
Animal food & care $1000
Charity $1200
Christmas $800
Computer $700
Gifts $700
Groceries $6000
Home Improvement $2000
Home Repair $1100
Household $2000 (appliances, furniture)
Insurance:Car $1800
Insurance:House $1100
Insurance:Medical+ $4000
Insurance:Umbrella $230
Discretionary $5600 (all entertainment, recreation, dining out, hobbies, etc. for 2 people, or about $50 per week per person)
Tax:Federal $3000
Taxroperty $3100
Telephone $450
Travel $2300
Medical:Non-insured $1000
Mortgage $10000
New car fund $2000
Utilities $1800

That's about $54K/year, which sounds like a lot to us, but we never seem to find good ways to cut back on that without really feeling it.

We figure when the mortgage goes away in ~10 years, we'll be older and have higher health costs, so it might be a wash. And if not, that gives us some margin of safety.

SC

 

[unclemick]

Wow SC

Looks like same ballpark - now with mortgage and health insurance in MO. Filing single this year - with the bulk of funds coming from trad IRA this time - expect to get hosed at lot more than LA.

It's only April - but estimating 48-56k range - depending on remodeling 'entertainment!'

heh heh heh

 

[SC]

It's only April - but estimating 48-56k range - depending on remodeling 'entertainment!'

Entertainment... ugh. What projects do you have planned?

Seems like most of my remodeling projects turn into quagmires - hidden water damage, erroneous assumptions ("now why did he build it that way?"), feature creep...

I always swear it's the last time, but a year later I'll forget all that and am ready to start another one. "Really, honey, we can do this ourselves..."

She's very kind to put up with this...

SC

 

[aaronc879]

After deducting taxes, health insurance, and $550 every two weeks for 401k contribution my take home pay is $1500/mo. I feel I get by quite reasonably on that amount.

Rent- $405
Roth Ira- $333
Car insurance- $75
Cable/internet- $150
Electric- $40
Cell phone-$40
Gas- $75
Groceries- $150
Eatting out/ entertainment- $232
Savings- what ever is left from the $232 (usually about $100)

Total- $1500/mo


As far as saving for big purchases, because this budget is based on bi-weekly checks I get two extra checks per year so that's $1500/yr for savings. Then there's another $1500+ in tax returns plus $100+/- left over each month totaling at least $1000/yr. So that's $4000/yr in cash savings for large purchases.

 

[haha]

I spend cash expenses of about $2000 - $2200/Mo. for one person. My home is paid for, my medical insurance is about $225. If I need to paint the house or something, that would need to be added. No sinking funds for car or appliances, these might push it quite a bit higher.

I suppose I could get by on less; alternatively I could very easily and pleasantly spend quite a bit more.

Ha

 

[unclemick]

SC

Mission creep has a whole new meaning when it comes to remodeling. Light kitchen redo - new counter top plus patch the floor grew to a new floor - to what heck - Bellawood the whole house. Going to record breaking 90's early this spring - a little turf builder and reseed the neglected lawn will grow to ?

There's a reason they have those shows on tv.

heh heh heh

 

[SC]

a little turf builder and reseed the neglected lawn will grow to ?

...new sod, might as well put in a sprinkler system while you're at it, wouldn't a few trees look nice over here?, maybe a nice stone wall around a raised garden bed, and you can save a few hundred bucks by buying rough-cut stones and shaping them yourself...

Hey, wouldn't the house look nicer a few feet to the left?

Good luck...

 

[free4now]

I'm budgeting $2k/month for all my expenses except housing.

Edit: that's for one person.

 

[eyetri2]

Thanks to all. I'll guess with the one kid and who knows when kid #2 will be, that the ballpark should be in the 5K/month. I would rather be high than low, that's for sure.

Nords, thanks for the thought about the LTC Insurance. Skipped my mind and I have the TAP class in a couple of weeks. But Ed is right. I think the Reserves are a HUGE gamble at a time where I will eventually be owning my own business. As far as I see it, I used the Navy for what I needed and they used me for what they needed. No rah-rah miltary stuff, purely business. And the way it is going, those precious perks which they try and tell the young officers to stay in for are slowly going away or will be so drastically altered that people retiring in 20 years from now will say, "Boy, that's not what I thought I was going to get after risking my life." They take away the freedoms of the people who are defending the freedom of the US. At least that's how it has felt out here. I will gladly pay more for cereal and baby food to be able to go to a grocery store after 7 PM or that is not closed on Wednesdays or always have their credit/debit card system working (Can you imagine your Safeway or Kroger NOT being able to do transactions for a whole day?). Call me selfish, but my family and I have had enough.

eyetri2

 

[unclemick]

Let me repeat an old point again.

In LA we ran in the 2k/mo - 24k/yr ballpark and now estimate double that in MO. Once in the early 90's - a once only low of 12k/yr.

If you're willing to 'step outside the box' - it's surprising how much you can alter spending - if necessary.

Remember the Bear: 'Agile, mobile and hostile.'

Of course if you get sucked into the remodeling mode? Well?

heh heh heh

 

[Eagle43]

UM,

I'm into the backyard... resodding.

signed: unagile, immobile, but definitely hostile.

 

[rogersteciak]

My basic living expenses are $2,000 a month (one person), which means I need enough investment income on a pre-tax basis to cover this after-tax amount.  But it makes sense to plan for monthly expenses (and the associated investment income to cover them) that are two or three times the basic expenses to deal with contingencies such as illnesses and special projects (e.g. home repairs).

 

[haha]

My basic living expenses are $2,000 a month (one person), which means I need enough investment income on a pre-tax basis to cover this after-tax amount.  But it makes sense to plan for monthly expenses (and the associated investment income to cover them) that are two or three times the basic expenses to deal with contingencies such as illnesses and special projects (e.g. home repairs).

Hi Roger. Maybe not a bad idea, but this degree of margin of safety implies that you will need a pretty hefty wad.

$2000*12=$24,000 pa. For a 4% SWR, this implies almost $1mil.
Twice that $2 mil, 3x $3 mil!

Ha

 

[LOL!]

$2000*12=$24,000 pa. For a 4% SWR, this implies almost $1mil.
Twice that $2 mil, 3x $3 mil!

Since $600K is now almost $1mil, I guess I am a multi-millionaire now.
Twice that $1.2 mil, 3x $1.8 mil

 

[haha]

Since $600K is now almost $1mil, I guess I am a multi-millionaire now.
Twice that $1.2 mil, 3x $1.8 mil

  I often use a 40x figure myself; I forgot that 4% swr is considerably less demanding.