$50 a day? No way!

[patnbj]

When I was in the planning stages for ER, I thought I could live on expenses of $50 per day.

After eight months of retirement, I have to come clean and admit--was I ever wrong. What was I thinking?

You see, I've only managed to spend $41 per day. And that includes much higher than anticipated entertainment and fuel costs.

That per day cost should be even lower by years end since most of my expensive variable costs for the year have already been paid.

 

[Cut-Throat]

That's great if you can do it!  - My medical insurance and property taxes, and utilities put me over that without even eating, so I need around $40K per year, which works out to about $110 dollars a day - which I need.

Actually if we downsized our lifestyles, we could get by on a few bucks a day. People all over the world do it. But that is not how I planned my ER.

I'd like around $70K per year at least for the next 30 years, after which I'll be 80 something and will curtail some lavish travel.

 

[unclemick]

We started out(1993) around 50 dollrs per day BUT now we blur the lines-went from used vehicles to a new Chevy Silverado, remodeled and added sunroom/greenhouse, guest room for visiting friends and relatives. Run the A/C extra when fellow 'dam yankee's' come to town. We entertain in spurts but try to keep a rough year to year budget.So our dividing line between catigories is hazy.

 

[Mr._johngalt]

My opinion still is that the $50.00 per day is easily doable with a little effort. I'm not saying we do it, but
I've done enough number crunching to know we could.
And I'm talking without any dumpster diving or
surviving on water and peanut butter sandwiches.

 

[proud_texan]

WOW! Does that include budgeted items or just actual expenses? I've worked up a budget (we retire in January) and my figures are considerably higher. I guess I could get that low if I cut out all descretionary expenses...but what's the fun in that?

 

[patnbj]

proud_texan asked,

Does that include budgeted items or just actual expenses? I've worked up a budget (we retire in January) and my figures are considerably higher.

Yes that's actual expenses. And yes I do have a lot of discretionary spending in my budget. Entertainment (traveling, social activities, dining out, etc) was the biggest line item in my budget.

However so that you can properly compare my budget to yours, I need to disclose the following:

- I'm single. I noticed you said "we", so I'd imagine that a couples expenses would be higher than mine..

- My fixed costs are rather low. I live in a paid-off house with low property taxes, have no debt and carry high deductible health insurance.

Good luck on your upcoming retirement!

 

[Mr._johngalt]

Yeah, I agree it's tough, which is probably why we don't do it. But, yes it includes "everything". Re. "cutting all
descretionary items", what's the fun indeed. I think you
would need to shift your tastes to mostly "free"
entertainment, and of course budget like crazy. Let me give you an example. My oldest son is 37. He has
never married, but manages to live very comfortably
with little visible means of support. He might work for
years and then take a year off. Right now he is back in
college and thinking of doing graduate work. Almost the entire cost of college has been covered by others
(not me), and he presently lives with a retired couple
in a nice country home rent free. All he needs to
do is keep an eye on the house and dog while the owners travel. He has had similar deals in the past.
Now, I admit this is easier for him being single. The
point is that a little creativity can go a long way in
the quest for a $50 per day lifestyle.

 

[patnbj]

My opinion still is that the $50.00 per day is easily doable with a little effort.  I'm not saying we do it, but
I've done enough number crunching to know we could.
And I'm talking without any dumpster diving or
surviving on water and peanut butter sandwiches.

Yes that's right. I haven't been living a life of deprivation. I've gone on three trips so far this year--one to Hawaii. I also eat out in some of the finest restuarants around.

 

[newellcr]

$50/day crowd,

Do you live in the US? If you are comfortable with posting one, I'd love to see a basic budget for this type of existance.

Cheers,

Chris

 

[Mr._johngalt]

Hey Chris! Lived in the US my whole life. $50.00
a day for a couple is a slam dunk, if you do your homework and live on a bare bones budget.
Remember, lots of people are living on a lot less.
Anyway, I accept your challenge and will follow up with
a budget showing how it can be done. Hell, I may even have money left over!

 

[Cut-Throat]

This dollar per day number is variable based on your desired lifestyle. This is not a contest. It is what you are comfortable with.

I could probably have retired 8 years ago, but I chose to keep working because I wanted (not needed) a higher standard of living.

I also have no debt as well as a paid off Home Mortgage. The standard of living that I desire may be higher than some folks, lower than others, but it is what I have defined as right for me. Everyone has there unique standards and there is no right amount for everyone.

 

[patnbj]

$50/day crowd,

Do you live in the US?  If you are comfortable with posting one, I'd love to see a basic budget for this type of existance.  

Cheers,

Chris

Yes, I do live in the US.

Here's a sample annual "$50 per day" budget for one person:

Housing/utilities------------ 3600
Transportation------------- 1800
Groceries-------------------1800
Entertainment/travel------- 6000
Health (Includes insurance) 2400
Misc ----------------------- 2400
------------------------------------
Total ---------------------- 18000


Note: I agree with previous poster--you shouldn't shoot to live on $50 a day. Rather aim to retire on a budget with which you are comfortable. I had originally calculated that to be a figure near $50 a day. YMMV

 

[proud_texan]

I guess my situation is a little different from those posted. We'll have two pensions along our various investments. We own our home and have no debt. An added plus is that our health insurance is 100% paid for life. :

We already take advantage of "free" things like walking, biking and camping. Our hobbies are all of the creative sort and cost us very little. I'll be the first to admit that we've been blessed.

We plan on doing a lot of traveling and spoiling of the grandchildren...all of which is discretionary.

 

[Mr._johngalt]

And here's mine (theoretical)::

Housing 4200
Utilties/phone 2400
One car inc. insurance 2000
Groceries/household 3000
Medical inc. insurance 4000
Travel and Ent. 1800
Income taxes 600
Total 18000

And, this is for a couple. I have used actual figures
either for us or what I know is doable in this area.
Other areas are cheaper I know. Believe it or not,
for someone truly motivated there is fat in these
numbers. Loafers of the world, unite!

 

[Telly]

Count me as a skeptic on this $50 dollars a day talk.

Is this TOTAL, or PER PERSON in a multi-person family unit (which would allowing pooling of income vs. the relatively fixed portion of the costs)?

In the USA, and not under an Interstate bridge or in a tar paper shack?

People can be led astray by totalling "expenses" over a small window of time, then extrapolating that amount out over a long period. What can get left out is maintenance costs, and amortization (help me here, Ted, is amortization the proper financial term?) of new/used replacements for capital goods.

Some examples... Just because you didn't have any housing maintenance or replacement costs last month, think of some of these that will be needed over time, and they surely will:

Water heater, stove/range, refrigerator, microwave, dishwasher, clothes washer and dryer, lighting, furnace, air conditioner, overhead garage door, flooring incl. carpeting and pad, Roof (they don't last forever), inside and outside surfaces renewal/replacement, plumbing and fixtures repair/replacement, "must have" electronic items, all just as a quick and certainly not complete example!

Then move on to car(s):
Gas, insurance, license plates, safety inspection and/or emissions tests if applicable, expected wear-outs (tires, brakes, battery), expected changes (oil & filter, AF, ATF & filter etc.), long term wear-out items if the car is held "long", and the unexpected maintenance/repairs that will surely happen. Include labor and well marked-up parts costs if you don't do the work yourself. Also include the intangible "opportunity cost" of you getting sheared when someone else does the work.
Now include the amortized cost on a per-month basis to acquire a suitable replacement vehicle whether new or used. Because yours will need to be replaced. Don't suddenly predict long car lifetimes if you have been switching cars every few years.

I could keep going on and on...

So I'm in the skeptic gallery

 

[newellcr]

Interesting, thanks!

Patnbj and John,

Thanks for sharing. Interesting. Like Telly, I'm a skeptic from the gallery. However, if someone is happy with this, I'm happy for them. I am sure it is liberating. My plan calls for about 3 times this amount with a paid for house and hopefully no debt, a couple of newer cars, and a paid for boat.

Currently we don't run a budget. Once upon a time, it was very helpful, but we did away with that about 7 years back. We knew what our budget was and could hit it without the need to follow a written one. Recently, we discussed revisiting the budget to see what's changed.

Cut-throat, I agree that it isn't a contest or a game, but it is interesting to learn the low-end numbers that someone can actually spend in ER/FI and feel comfortable and happy. John's (theoretical) and Patnbj's (one person) numbers are interesting to me because they represent a doable sprint of drastically reduced spending habits. After being ERed for a few years, we might experience a few bad years. Knowing that I could drastically reduce the budget for a year or two, if I really had to do, it might encourage me bolt a little earlier. I imagine that this would be more palatable than calling the ex-employer asking about a job. My goodness, would that be a sorrowful day, or what?!

Thanks for sharing.

Cheers,

Chris

 

[Mr._johngalt]

Being skeptical is good. I was assuming a couple
living in a very low rent area (like where we are)
and driving a "junker". Most of the housing related
costs mentioned should be covered by your landlord.
The costs associated with keeping one set of wheels on
the road forever would have to be squeezed out
of one of the categories somehow. Being a DIY guy
would help an enormous amount. Hopefully we will
never be forced to do it ($50 per day), but I'm sure we
could.

 

[unclemick]

I seem to have a foot in both camps In 1993 $ 50/day was easy. mainly because that was close to our (3) income budgeted for living. Now my 'need' for comfort is higher - ? is the new super duper Chevy Truck - totally transportation - or should some travel/entertainment value be counted? We sort of keep rough track yearly on spending and budget ahead for big ihings.

 

[newellcr]

Cut-throat,

Is that a my budget or an our budget? Unnecessary - No! Discretionary - maybe. If this is what it takes for a happy retirement, then it is as necessary as ER.

I like your fishing graphic. To be more accurate, every third cast, your line needs to get stuck in a tree or snag on a fish stick. 18 days to the salmon fishing trip...

Thanks for sharing.

Kind Regards,

Chris

 

[newellcr]

Cut-throat,

Ours, fantastic, that's good to hear. I was thinking the casual travel budget might be larger. I imagine that I'll have 350,000 frequent flier miles by then. That should help a bit. Again, thanks for sharing.

No, going fishing locally, the benefits of living in Michigan are sometimes in question, but not in salmon or sailing season. About 5 hours from Detroit is Baldwin, MI - I drive slow. The local Orvis shop is flooding the river with guides, but there is still plenty of good water for the other canoe-ers. Six years and running for me. While we are sitting around the camp fire, my college buddies are starting to talk about bringing the kids sometime soon. Kinda chokes you up a bit, no?

I'm looking forward to an Alaska trip. My same buddies have done hunting/fishing trips there. I'm not a "eat the heart out of your kill" kind of guy, but that trip does sound like eating out might not be too bad.

Kind Regards,

Chris

 

[Mr._johngalt]

Hi Chris. My wife lived in Michigan her whole life until
she met me. I lived there for many years. May be our
favorite northern state. We briefly considered moving back, but we just don't like the winters (never did to be
honest). Soooooooooo, we will soon be "gone to Texas."

 

[Barnstormer]

Here's my 2 cents on $50/day...if you are willing to live 50 years in the past you can comfortably live on 50 bucks a day. If you' give in to the commercialism of corporate american and the advertisement industry you are doomed from the get go.

Full Disclosure: We live on $72/Day with a wife and 3 children under 5...however, annual housing expenses are only $2800 for taxes and insurance. I will say it's not the easiest existence, but the freedom is worth the lost purchasing power.

 

[Mr._johngalt]

Re. "the freedom is worth the lost purchasing power."
So true! When I was last employed I drove Cadillacs.
Now I drive a 6 year old pick up. I lived in a luxury
apartment in an upscale part of Dallas (rent $1750 per month). Now we live in a cottage in the country that
I bought for $68,000 cash. In fact, we live on less
total than I used to pay for rent alone. Now, that's
downsizing.

 

[proud_texan]

My wife and I have been going over and over our retirement budget and have been able to categorize those things that are deemed as fixed expenses, i.e., taxes, insurance etc. and those that are discretionary.

We plan on a lot of discretionary spending going out of the gate, but will slow down our spending as we slow down. We can easily survive "bare bones" on our pension alone. But we will also have income coming in from our investments and from rental property.

To be in this position, we've lived simply and way below our means, paid off our debts and saved, saved, saved. We're fortunate that we don't have to live off $50 per day, but are confident we could if required. Heck, we did that when we were first married, living off love and peanut butter!

 

[Cody]

When I was in the planning stages for ER, I thought I could live on expenses of $50 per day.  

After eight months of retirement, I have to come clean and admit--was I ever wrong.  What was I thinking?  

You see, I've only managed to spend $41 per day. And that includes much higher than anticipated entertainment and fuel costs.  

That per day cost should be even lower by years end since most of my expensive variable costs for the year have already been paid.  

This was my experience also. I ended up only needing half of what I thought I would need. I live a pretty minimalistic lifestyle even when I owned my own home, but found that I was cutting down on things a lot (very happily) without even trying. Having a job was more costlier than I though! Just quitting work saved me a ton of money I hadn't counted on.

I live on A LOT less than everyone here - I lived on about $500/month (all basic living expenses except travel which was ariable but usually between $200 - $500/month) when I owned a paid for house and now, after selling the house over a year ago & now travelling full time or renting (shared condo) my total expenses (for everything) average $1000/month. I'm definentely not suffering either ! I've been tracking my expenses for years now and have been retired going on my 5th year so I'm not too delusional !
Cody
P.S. Emergency expenses (new water heater, new tires, vet bills, etc) would come out of an emergency fund or out of my travel expense fund which was set aside at $500/month