Thanks for the update,
Errollyn
Have question about your budget as I am working on our own for retirement and really!!!! love that I can learn from your experience
Looks like you are overshooting almost every month so far. Do you expect to rightsized the outflow by end of the year? Or that will most likely run the same way slightly above the target? If you expect it to match first 6 months - can you tell where you underestimated your expenses? What should be accounted for in addition or should I just add some % as "other random"? Looks like 10% extra would cover.
We are overspending my pre-retirement estimates, but there are a couple good things going on. First, our total spending is still only 85% of what the "4% Rule" allots us, so I don't feel as if we're spending beyond our means by any stretch. Second, my "expected" costs were
estimates I made prior to retiring, so I never thought they'd be spot-on. That being said, we're still within 10% of those expectations, which might be better than I would've guessed.
So where am I consistently overspending?
Charity/Gifts, Public Charging/Gas, Eating Out, Travel/Hotels: I've been doing a lot of volunteering, paying out-of-pocket to move homeless animals to homes. This is impacted these categories more than I could've anticipated, because I didn't know I'd be doing so many long-distance transports that require overnight hotel stays. But I could easily cut back or eliminate this volunteer work if I needed.
Property Maintenance: It was probably silly of me to think I'd only spend $200 to maintain a small farmstead. The real number so far is over $400, and I think the correct number over the long term is going to be between $400-$500 per month.
Car Maintenance: My wife drives a 2011 Ford Fiesta, and it increasingly needs major maintenance work. I've currently got reservations on four different pre-production vehicles to replace her Fiesta. We're just trying to keep her car alive long enough to take delivery of one of those, at which time our vehicle maintenance costs should drop.
Groceries/Household: This was my perhaps my biggest blind spot when I initially planned our expenses. I had planned for $500 per month, but we're averaging over $900 per month here. If it were just my wife buying groceries, we'd be closer to the $500 (she shops at Walmart), but I tend to be more free-wheeling when I get groceries (I don't shop at Walmart). There's a Costco about 45 minutes away, and on my to-do list is to go check it out and see if it's worth joining. So maybe that would help bring this expense down.
Health Care & Insurance: I wasn't using my wife's health insurance before I retired, so I wasn't totally sure what the cost would be. I underestimated, but it's still pretty reasonable at under $600 per month for both of us.
And what do I do about this overspending? Nothing really, because it's well within our means, and certainly not the result of unnecessary extravagance. If we were to reset our available funds today based on the 4% rule, we'd have about $6,700 to spend each month. Our spending so far this year has averaged $5,160 each month, so there's lots of leeway to absorb unexpected cost increases moving forward.
Truth be told, I'll probably rely heavily on our 2025 spending to set a new baseline spending level in the future. So this is exposing our reality, it's well within our means, and we've got plenty of room to treat ourselves or splurge when we want.
The real interesting thing to me moving forward will be to see how our spending fluctuates in the future compared to this first year of retirement.
