My parents live on $30K USD per year ($40k AUD) + paid off house in a low cost area. They get by fine 90% of the time, and can afford a couple of short holidays each year, usually a small cruise every year and maybe a short getaway up the coast. They have dinner out with friends from time to time (certainly not every week), have gym memberships (with a pensioner discount) and spoil their grand children a little bit. They are happy enough but certainly wouldn’t mind having a little more financial means.
Occassionally they face some financial stress like when my BIL wrote off their uninsured only car and had no money to pay for a replacement car for them. My parents managed to sell some of their stash to buy a new car, but I could see the financial angst it caused. My sister will prob pay back my parents for the smashed car one day, maybe she already has, I don’t know.
But I don’t want my parents life. I want to have greater financial freedom. I want to fly to Europe or Noth America for a couple of months at a time if I choose. I want to live in a more expensive location if I choose. Maybe one day I’ll want a fancier car, maybe I want to have season tickets for the theatre, or to drink at fancy city bars from time to time without worrying about the money.
So I have decided I want double the budget of my parents.... this then creates the need to budget for some taxation as well. I’ll try to structure my affairs to minimise taxes, but expect their to be some leakage.
The biggest difference in budget though is housing. I don’t want to live where my parents live, despite growing up there. After much debate on the topic DW and I still can’t bring ourselves to accepting living the rest of our lives in a small 1 BR apartment or studio in a desirable area. We want a little more space. Not clown house size, but maybe a place that will have a clown purchase price purely due to location. We are setting aside $750,000 USD ($1M AUD) for a home post FIRE.
So I add all our wishes and dreams up, and consider that as I am in my mid 40s and DW is not quite yet 40, it makes sense to us to work a little longer to give us the extra choices later in life.
So here we are on this thread and not already FIRE.