Once frugal, always frugal?

[wildbilly]

First off CONGRATULATIONS! Being close to FIREing is great.

I've been living on $30K/year before I retired and have kept that pace despite inflation since I retired 6+ years ago. I did have another extra fund that is for larger expenses and I spent maybe $20K total of that. I live in the Minneapolis SW metro. The cost of living is average to slightly above only because of the cost of homes and mine is paid off.

I did have a girlfriend for awhile who liked to spend and her lawyer job and ex supported that. She didn't like that I was more frugal amongst other things. At the same time she was jealous that I was retired.

Even though I have missed a lot of the stock market gains. I have come to realize that I have more money than 30K a year. The trouble for me is that I owe taxes/have income to claim, from my taxable accounts. Thus it has always been a balancing act of keeping my "income" low enough to stay on Minnesota's "medicaid (MinnesotaCare)." Otherwise I have to go to the exchange which costs a lot more and gives me less. I have some medical issues even though I am a very active person.

That's the basics of my story but I believe you can make it fairly easy if you stay "frugal." Healthier helps a lot too Good Luck!

 

[Out of Steam]

My wife and I have flipped the frugal and non-frugal roles in the past few years. After 20+ years as the frugal one, I'm now more inclined to spend than my wife. This may be because I've been the one doing the retirement planning numbers and feel more confident about our income being adequate.

She has been doing the routine bill paying and checking account management all along.

 

[TEO]

Those who live to spend remain that way.

Those that are frugal stay frugal

I agree with Tight. But I've spent 3 years of my retirement trying to change. I have double the money I had three years ago and I need to enjoy it. So this year I'm spending 120k on a kitchen and buying my first helicopter 80k plus ?. I'm actually enjoying not being a tightwad. It can be done but only with effort, I think your golden.

 

[Ramen]

Happy new year, and thanks for the new flurry of replies!

What about dating costs, if any?

I'm pretty cheap with those too! Museums, walks, free live music, maybe a movie when the pandemic is over.

I started an experiment about 2 years ago since I, like you, have seldom increased my total spending despite have a good amount of money as compared to many others. . . .

This is a fascinating post above, thanks! Before reading YMOYL, I was less frugal and sometimes splurged on things like a new car or nicer clothes. It was still on a small scale, but for me it was a lot.

As I think back to how it made me feel, I realize now that I can take it or leave it. I'm very happy with $20 jeans from Walmart and $60 work boots from Kroger.

As for experiences, I have rarely splurged on them and tend to value the ones that were not planned and cost some incidental amount of money that I don't recall now. The ones I've spent the most on I would be unlikely to repeat.

You might want to hunt up some posts by Imoldernu. He died this past year, but his descriptions of his very frugal lifestyle (and second home - it's fascinating!) and his enjoyment of life with his wife were inspiring. He retired early before anybody called it FIRE, with an old-fashioned frugal way of living.

Thanks, I will look up some Imoldernu posts!

I also recommend Direct Primary Care, combined with something like Mira, or Sedara for health care instead of ACA. FMMA.org also. Oklahoma City is a magnet for low cost elective everything health care.

I just read a thread here about health shares. I looked into them a while back and feel some anxiety about deviating from traditional insurance -- even though I have a long track record of bad luck with mainstream medicine and do much better with alternative medicine, which is seldom covered. Long story. Still thinking this over.

BTW, side note, there are now some secular health shares. Not all are "ministries" anymore. One I found is zionhealth.org.

The trouble for me is that I owe taxes/have income to claim, from my taxable accounts. Thus it has always been a balancing act of keeping my "income" low enough to stay on Minnesota's "medicaid (MinnesotaCare)." Otherwise I have to go to the exchange which costs a lot more and gives me less.

My state also has expanded Medicaid, and I've heard it's very good, better than a Bronze plan. I could qualify if I'm strategic about managing taxable proceeds. Still investigating this avenue too.

So how are you planning on filling your days, weeks, months and years if you retire and will those activities or new hobbies come at a cost you haven’t budgeted for?

Been thinking a lot about this as well! I have several interests and a couple of hobbies, all cheap or free thus far. It's hard to know what one will become interested in, though, so I'm not assuming anything.

Of course, we're talking about this when the Dow is above 30,000 and memories of the Great Recession have faded. If we enter a prolonged downturn, frugality will return with a vengeance. Likewise, if inflation gets out of control, which I happen to think is a real possibility with the current Fed strategy.

I hear you.

Did anyone else read the original version of Your Money or Your Life? It had a chapter called something like The Myth of Inflation that was removed from the current/revised edition. It had some charts of consumer prices on things that really had not risen much over the years for the authors. This would have been in the 1970s and '80s, leading up to when the book came out in 1992. This seems odd given the runaway inflation and interest rates of that era.

Yet now, sure enough, as I look back on my own spending, I can see that there are several things I'm still spending about the same amounts for.

Clothing and technology, for example, have gotten cheaper (thus $20 Walmart jeans, my laptop, hobby gear, etc.). But even big things, such as housing, have stayed relatively stable for me. For example, 25 years ago I lived in a small rental for less than $600 in a MCOL area. Now I'm paying about that much for an apartment in another MCOL area. I've paid more than that before (up to $1,400 mortgage), but on average, for 30 years, somehow my monthly housing costs have not jumped the way real estate values seem to have jumped.

Not sure how to explain this other than the frugality effect. Maybe some of us just have elastic money.

I agree with Tight. But I've spent 3 years of my retirement trying to change. I have double the money I had three years ago and I need to enjoy it. So this year I'm spending 120k on a kitchen and buying my first helicopter 80k plus ?. I'm actually enjoying not being a tightwad. It can be done but only with effort, I think your golden.

Wow! This will have to be another life for me!

 

[smihaila]

Ramen, income-wise, I know you mentioned only that "Definitely in my 20s, when my annual earnings averaged about $25K", but would you mind a question: What ballpark level of income are you currently at?

I find it amazing that you managed to save 1.2 million. Was that solely through the stock market increases?

My income is an average middle class income, non-executive/non-management, about 24% overall tax rate, one breadwinner, family of 4, 70% savings rate, no debt, 45 years old, and renting like you. And for the 7 years I've been in the U.S., I managed to save only a mid 6 figure. But I must admit I'm not in the stock market, due to other circumstances in my life.

 

[Ramen]

Ramen, income-wise, I know you mentioned only that "Definitely in my 20s, when my annual earnings averaged about $25K", but would you mind a question: What ballpark level of income are you currently at?

I find it amazing that you managed to save 1.2 million. Was that solely through the stock market increases?

My income is an average middle class income, non-executive/non-management, about 24% overall tax rate, one breadwinner, family of 4, 70% savings rate, no debt, 45 years old, and renting like you. And for the 7 years I've been in the U.S., I managed to save only a mid 6 figure. But I must admit I'm not in the stock market, due to other circumstances in my life.

A 70% savings rate sounds amazing for a family of four. That's great.

Before my layoff, for the past 12 years (ages 40-52), my wages averaged in the $80Ks, peaking in the $90Ks for the last few years. Basically, I lived on a quarter or so, paid taxes with a bunch, and saved the rest.

Most of the savings went into a 60/40 balanced mutual fund. I'm super lazy, and my portfolio shows it. But Jack Bogle once said there's nothing wrong with lazy portfolios, so I stuck with it.

I still think following YMOYL did me the most good. In my experience, there's nothing like clarifying your personal values for getting your finances in order.

 

[Rambler]

The only worry I see is health insurance. DW and I are Bronzing it at $750 a month each. Our income is too high for subsidies and we are healthy enough to not want to go to a silver or gold plan. My own previous research has shown me that if you are healthy the bronze, silver, and gold end up costing about the same if you have a big expensive year, like a heart attack or something like it. But you save on the bronze plan if you rarely reach the deductible. We’ve only hit DW’s deductible once, barely, but have never hit the combined family deductible. If you have an ongoing health issue where you always hit the deductible, a silver or gold plan may help spread the expenses more evenly. And at 52, your premium will be less than ours, and you may get a subsidy, but count on the premium going up.

The other problem you may or may not have would be what to do with your time, since you are single, no exes, no kids. My DW keeps me pretty busy, but I still get bored sometimes so I’m currently looking for a light j@b to occupy some time and my mind. I wouldn’t be able to bring myself to do much travel with assets you describe...we like to travel, do so not too expensively, but we do travel a lot (except this year, of course). Personally, I’d want more assets if the plan is to travel a lot. Given the above couple of points, if it were me, I might want to work a few more years, albeit part time but enough to cover the healthcare at least, if not all of your expenses, so your nest egg could expand a bit more on its own, even if you aren’t adding any more.

That’s my two cents, but probably not even worth that much. Good luck with the decision making process.

 

[kbst]

When you estimated SS did you enter in data that included earning nothing between 52 and 67? If not, the estimator probably estimated that you would keep making your current income for those 15 years. I don't think it will bust your FireCalc success rate, but something to consider if you didn't already.

Jerry’s right, they take 30 highest years to figure your Social Security.

 

[imnontrad]

I am retired and still living waaaay below what I could spend (plus I like watching the net worth go up). So I am starting to identify an amount each month that I will set aside for frills like an e-bike. Plus, hopefully I can start travel later this year. A trip to Portugal/Spain is already planned but I may extend that 10 day trip out a few weeks.
In addition, I have a self-directed charitable trust that I set up with appreciated securities and enjoy giving some away. In fact, when I DO give some away, my net worth seems to go up!

 

[Birdie Num Nums]

My "net worth" might fluctuate hundreds or even thousands of dollars on any day, yet I still feel bad if I find old food in the fridge that I gotta thow out.

 

[Ramen]

My own previous research has shown me that if you are healthy the bronze, silver, and gold end up costing about the same if you have a big expensive year, like a heart attack or something like it. But you save on the bronze plan if you rarely reach the deductible.

Thanks, Rambler. I read a bunch of health threads last week and determined that if I don't go with my state's expanded Medicaid, I'll probably just get the cheapest Bronze HSA plan. I forgot that I already have a few grand in an HSA from when I was freelancing years ago.

Jerry’s right, they take 30 highest years to figure your Social Security.

Right, thanks. As I replied above, I did make sure the SS estimator was factoring no more income from now on.

In fact, when I DO give some away, my net worth seems to go up!

I've experienced this too, and it seems to me similar to the elastic money effect I mentioned above.

My "net worth" might fluctuate hundreds or even thousands of dollars on any day, yet I still feel bad if I find old food in the fridge that I gotta thow out.

Me too!

 

[NW-Bound]

My "net worth" might fluctuate hundreds or even thousands of dollars on any day, yet I still feel bad if I find old food in the fridge that I gotta thow out.

Wasted food is bad and unnecessary, and can be prevented by better planning.

My wife has no problems with giving away many $K in gifts and donations year in year out, but she still looks for weekly sales by grocery stores.

 

[audreyh1]

Doesn't the FIREcalc account for inflation? I selected Constant Spending Power and 3% rate in the Spending Models tab of the calculator. Or am I misunderstanding this?

Yes, FireCalc accounts for inflation.

 

[tenant13]

While I generally agree with everyone else here: people don't change, they just become more of themselves, I happened to fall in love with travel pretty late in the game and it's been a serious part of my budget today (I mean pre-pandemic). While I mix frugal and upscale while traveling (I don't like economy flights anymore) I was able to find a happy a medium that fits my personality. Anyway, the point is - even if you develop new interests, it's unlikely they will ruin you.

 

[shafer9]

Hmmm. I’ll play devil’s advocate.

If you retire, what will you retire to?

You live on 22k a year. You say you don’t like travel. (that one I don’t get, I’ve been retired 20 years and the high point of it all has been the amazing things and people we’ve seen all over the world)

So what’ll you do? Seriously. Existing on $22k a year for another 30-40 years? Doesn’t sound like a lotta laughs.

Something else: Don’t put anything off. You might get sick. It happens. In 2006 I got a very rare cancer. Five surgeries and loads of radiation later, I’m in the clear. For now. But it’ll probably get me one of these days, but I’m living in the bonus round and grateful for it.

To me, you’re planning a small and (to me) boring future. I’d think about what you really love, what delights and fascinates you, and plan to do a lot of it. You have no kids. Who you gonna leave that money to? Enjoy it. The clock is ticking, dude. Good luck with it all.

 

[Nemo2]

I happened to fall in love with travel pretty late in the game

Me too.....geez, I was 17 before I hit the road...I often reflect on all that wasted pre-travel time!

 

[Music Lover]

Hmmm. I’ll play devil’s advocate.

If you retire, what will you retire to?

You live on 22k a year. You say you don’t like travel. (that one I don’t get, I’ve been retired 20 years and the high point of it all has been the amazing things and people we’ve seen all over the world)

So what’ll you do? Seriously. Existing on $22k a year for another 30-40 years? Doesn’t sound like a lotta laughs.

$22k isn't a lot I agree but if you have a paid off house or low rent in a LCOL are without expensive hobbies it can be enough for a lot of people. And of course, not everyone had the ability or opportunity to earn a high wage. For some living retired on $22K a year beats working another 10 years to increase it to $28K a year.

Regarding travel, one thing I've noticed is that a lot people who love travel just can't understand that some people have no interest. What's so hard to understand? Travel is just another hobby, it's not some magical calling. I don't expect people to learn to play a musical instrument or to golf 40 times every summer.

 

[tmitchell]

Hmmm. I’ll play devil’s advocate.

If you retire, what will you retire to?

You live on 22k a year. You say you don’t like travel. (that one I don’t get, I’ve been retired 20 years and the high point of it all has been the amazing things and people we’ve seen all over the world)

So what’ll you do? Seriously. Existing on $22k a year for another 30-40 years? Doesn’t sound like a lotta laughs.

Something else: Don’t put anything off. You might get sick. It happens. In 2006 I got a very rare cancer. Five surgeries and loads of radiation later, I’m in the clear. For now. But it’ll probably get me one of these days, but I’m living in the bonus round and grateful for it.

To me, you’re planning a small and (to me) boring future. I’d think about what you really love, what delights and fascinates you, and plan to do a lot of it. You have no kids. Who you gonna leave that money to? Enjoy it. The clock is ticking, dude. Good luck with it all.

Good point!

 

[Nemo2]

Regarding travel, one thing I've noticed is that a lot people who love travel just can't understand that some people have no interest. What's so hard to understand?

We're just the opposite - the less people traveling the better....more room for us.

 

[Ramen]

@shafer9: Thank you for saying out loud some things that have been on my mind. As I wrote originally, $22K has never felt like deprivation. I've just been lucky to find good deals on various living expenses. I live a full, rich life that is exciting and stimulating to me. The money is just a number, as are the FIREcalc results.

I traveled a lot in my 30s for work and attempted pleasure and hated almost all of it. Different strokes. But I do travel a lot internally.

Something else: Don’t put anything off. You might get sick. It happens. In 2006 I got a very rare cancer. Five surgeries and loads of radiation later, I’m in the clear. For now. But it’ll probably get me one of these days, but I’m living in the bonus round and grateful for it.

Right, this is what got me thinking in the first place. I had a month's notice before my layoff and spent the next few weeks scrambling to line up another job -- until I realized I didn't need to find one right away.

After some rest, reflection, and number crunching, I realize what a huge freedom I have, if I choose to take it. If my $22K creeps up to $30K or $40K, I still have flexibility.

To me, you’re planning a small and (to me) boring future. I’d think about what you really love, what delights and fascinates you, and plan to do a lot of it. You have no kids. Who you gonna leave that money to? Enjoy it. The clock is ticking, dude. Good luck with it all.

Thank you, I know it. My life might seem small on paper, as I acknowledged at the top, but on the inside it is huge, basically to the point that right now I'm having trouble focusing. My interests and passions are deep and a little arcane, so it could take some time. It's dawning on me now that full-time work was kind of a drug clouding my awareness of what I really want to be doing.

As for ticking clocks, for what it's worth, the average life span of my four grandparents and a few late aunts and uncles was 76. While my parents are older than that now, I can't bet on living to FIREcalc 92. I know the meter is running.

P.S. @trumpeting_angel: Thanks again for mentioning Imoldernu. I found his long thread and am reading through it now. Amazing that his own life expectancy was right on. With similar math, I could just go ahead and run my $22K up to $40K or so right now and let 'er rip.

 

[jollystomper]

My "net worth" might fluctuate hundreds or even thousands of dollars on any day, yet I still feel bad if I find old food in the fridge that I gotta throw out.

I agree. Not being frugal is not the same as being wasteful.

 

[winyaz]

You are wealthy enough, relative to your spending to do whatever you want, even if you spend more in retirement. If you like working you can keep working but if you want to retire, go ahead. You are young enough that if you miss working or decide you suddenly want to splurge on something, you could go back to work. You could think of it as a leave of absence to try it out.

 

[SecondCor521]

Hmmm. I’ll play devil’s advocate.

If you retire, what will you retire to?

You live on 22k a year. You say you don’t like travel. (that one I don’t get, I’ve been retired 20 years and the high point of it all has been the amazing things and people we’ve seen all over the world)

So what’ll you do? Seriously. Existing on $22k a year for another 30-40 years? Doesn’t sound like a lotta laughs.

Something else: Don’t put anything off. You might get sick. It happens. In 2006 I got a very rare cancer. Five surgeries and loads of radiation later, I’m in the clear. For now. But it’ll probably get me one of these days, but I’m living in the bonus round and grateful for it.

To me, you’re planning a small and (to me) boring future. I’d think about what you really love, what delights and fascinates you, and plan to do a lot of it. You have no kids. Who you gonna leave that money to? Enjoy it. The clock is ticking, dude. Good luck with it all.

This reply seems to include the premise that in order to have fun, one must spend money. It's a commonly held belief, but I don't think it's true.

There are quite a few things I enjoy that are literally free or extraordinarily low cost: reading, taking walks and hikes, playing bridge, volunteering at the Red Cross and for AARP Foundation Tax Aide, playing with my cat, watching TV, going to the gym (reimbursed through my health insurance), reading the forums, playing board games with my kids, cooking, are just a few off the top of my head.

Even travel can be inexpensive if you learn some tricks - I took a 13-day trip to the Caribbean for a total of $1,575 in November/December. And that was everything - plane ticket, rental cars, hotels/AirBnB, food, entertainment, etc.

ETA: Of course, some things that are fun can be expensive, and some things that are expensive can be fun. And also of course, it is nice to have the option to try expensive things to see if they are fun. But I have that option and generally don't find much correlation, although there is some - swimming with dolphins with my daughter in Hawaii was expensive and fun. Driving hypercars and attending Goodwood (not at the same time) with my son was also. Going to the Super Bowl for me would be expensive and not fun.

 

[Nick12]

Those who live to spend remain that way.

Those that are frugal stay frugal.

Exceptions are rare.

Change isn't something that easily occurs.

+1. I left MegaCorp a few years ago with similar background to @Ramen. My net worth almost doubled in the last two years in staying the course and my funds have done very well. I attribute that in still being aggresive in the markets. In a year I collect a company pension of $10K a year and at age 62 ear!y SS at approx $1.2K a month. When my pension kicks in my annual expenses are down to $12K a year, so I have to start blowing that dough but the frugal in me will usually be frugal. I own though and not rent. I still enjoy cutting out coupons and seeing the savings. It is a game for me.

 

[DrRoy]

Those who live to spend remain that way.
Those that are frugal stay frugal.
Exceptions are rare.
Change isn't something that easily occurs.

I was the frugal, investing one for my whole career. Started off that way the first year of RE. As the market climbs, I'm becoming less so as we get more 'overinvested'. We are remodeling the house and travelling a lot, some first class.