What does your optional spending look like?

[sol]

it'd be a depravation.

Like a twisted cannibal clown?

Maybe you meant deprivation.

[arebelspy]

it'd be a depravation.

Like a twisted cannibal clown?

Maybe you meant deprivation.

I'm sure I did.  :)

[brooklynguy]

What about you?  What does your optional spending look like?

While a lot of people are being pedantic asbergers , I understand what you are asking, and I can answer it without being a twat.

My current 'optional" spending (per month):

- $33 on life insurance that I don't really need (no dependants) I just like to have in place for my family members and GF so they get a sweet death-bonus if I check out in some spectacular way

- $40 a month gym - I don't even need a gym membership with my home gym, but the university jiu jitsu club moved to the gym so now I have to pay for a membership to go.

- ~ $40 a month Alcohol

- ~$100 a month eating out, mostly social

- $10 a month for UFC fight pass (I am a huge MMA fan)

- ~$150 miscellaneous stuff that I could probably cut out if i eliminated every occasional expenditure that wasn't really necessary (occasional movie, book, replacing broken headphones, clothing, whatever)

- $100 travel expenses

Thank you very, very much for that.

What was the purpose of starting this thread (and the myriad others like it) if not to seek alternative viewpoints?  Some of our more cynical members have already suggested an ulterior motive, and this post does not help to counter that suggestion.

it'd be a depravation.

Like a twisted cannibal clown?

Maybe you meant deprivation.

I dunno, "depravation" works too.  Is it depraved to spend less than the optimal amount?  I could see Rebs making that argument.

[arebelspy]

I could see Rebs making that argument.

You could probably see me making any argument at this point!

What was the purpose of starting this thread (and the myriad others like it) if not to seek alternative viewpoints?

I genuinely do think though that people who have optional spending should think about what optional actually means, and why they're spending the way they are, and if any of that "optional" spending is actually waste, or if it's contributing to happiness (and if it is, what makes it optional versus something else that is also).

It's something to consider for those posting here.  :)

[Retired To Win]

I took the OP's version of "optional vs. mandatory" spending to be individual for each person dictated on how a person chooses to live - be that Daniel Sueto grubbing nekkid in his cave for worms to Dave Ramsey living in his uber-McMansion-Behemoth house. Basically what are your mandatory "basic/barebones" expenses to support the lifestyle you are currently living. What does it cost you to keep whatever type of roof you have over you, to pay for whatever utilities you use and taxes and insurances you must pay, food you must eat, etc... to feed, clothe, shelter and protect you.   Then what do you spend beyond that on fluff (i.e. optional) to enhance your life...

That is exactly correct.  Thanks for clarifying what I tried to convey.

[Daisy]

I find arebelspy's comments on all spending being optional quite zen-like. It made me think of my spending and what's important to me.

I kind of get RTW's mental separation of "basic" and "optional" so that one can figure out what needed to be cut out in stressful financial times. I like to think more of what I would cut out if finances became an issue while FIREd and living on my stash. RTW seems to be living on a pension, so may not have thought about the necessary stash to obtain their desired lifestyle. I don't have a pension to fall back on, so I want to build my stash to cover my desired lifestyle. There will be no "optional" extra income coming in.

A lot of what people are saying is "basic" spending is still quite optional as others have pointed out. Buying steak instead of beans at the grocery store, for example. I just don't go through the mental effort of separating out these grocery expenditures in my spending analysis because I don't think it brings me much use for the effort involved.

I know if it came down to it, I could sell my "basic" living arrangement and move to something smaller, move to a lower cost of living area (but away from family and friends), cut out some expensive items on my grocery list, reduce some gift giving, etc. I'd cope with whatever came my way. No need to detail that out as "optional" right now. It would be more life-dehancing to have to think of every expenditure that way.

BTW, what I have a problem with is the statement "I live happily on $15k a year." Well now we find out there is some "optional" spending on top of that which is what RTW lives on. So how does RTW know that they could live happily on $15k per year? Why not try it out and cut out all optional spending since $15k is enough?

I just worry that some people reading this, or that MMM only lives on $25k/year (but doesn't include his home upgrade costs, entertainment value provided by blog-related travel not included in the $25k, etc.) is misleading to people new to the FIRE movement and dreaming about reaching FIRE very soon.

It's also very different to have optional spending when pulling in a pension with a fixed amount ALWAYS coming in vs. someone having to live off of more variable-income generated from a pension-free stash.

[Bob W]

At 67 you are blessed to have hair to cut.   Have you tried a Wahl number 3 trimmer?     Feel free to spend however you like and classify however you like.

[RetiredAt63]

He has a generous Y chromosome.

At 67 you are blessed to have hair to cut.   Have you tried a Wahl number 3 trimmer?     Feel free to spend however you like and classify however you like.

[Rural]

ETA: In my case, when I say I can happily live in $18K a year - or my income is $1500/month, I mean that is what my actual income is and I spend that amount on average for the year. Often times, many months each year, I spend much less (seriously, like a two or three hundred bucks/month some months). The extra gets stashed.  Once the mandatory stuff like prop taxes, insurances, etc... are covered, anything left can be spent on fun stuff like travel. So when I say here my spending and income is $X amount/month, that's my total average spending for everything - mandatory as well as optional.

How far do you drive to the beach, Spartana (assuming you drive)? I'm wondering if your largest budget line item isn't gasoline - I know it's ours, but that's driven (hah) by my work commute.

[sleepyguy]

I'm not gonna get all mandatory vs optional etc...

OP: I would say my breakdown is as follows

35% - sports and sports equipment
15% - electronics, games, movies, etc (This is used to be HUGE, I've really cut back)
40% - vacation
10% - high risk gambling (ie sports betting)

[The Money Monk]

What about you?  What does your optional spending look like?

While a lot of people are being pedantic asbergers , I understand what you are asking, and I can answer it without being a twat.

Maybe some day you'll decide to assume good intentions for other people, and perhaps even learn from their different points of view.  :)

Don't worry, people with Asberger's can still live long, fulfilling lives.

[arebelspy]

What about you?  What does your optional spending look like?

While a lot of people are being pedantic asbergers , I understand what you are asking, and I can answer it without being a twat.

Maybe some day you'll decide to assume good intentions for other people, and perhaps even learn from their different points of view.  :)

Don't worry, people with Asberger's can still live long, fulfilling lives.

I don't mind that you're being rude to me personally, but I am offended, having worked with a number of children with this syndrome, of your choice for an insult.  It's quite disappointing in this day and age.

[forummm]

A lot of the most successful people have some level of aspergers. Probably the richest man in the world is on the spectrum. People who can focus on one particular thing and get really good at it can go far in this world. You may not always be able to tell by looking at them. Many have worked hard to overcome any limitations in certain areas. I suggest a great book called The Autistic Brain by Temple Grandin for another perspective on this.

[arebelspy]

A lot of the most successful people have some level of aspergers. Probably the richest man in the world is on the spectrum. People who can focus on one particular thing and get really good at it can go far in this world. You may not always be able to tell by looking at them. Many have worked hard to overcome any limitations in certain areas.

I suggest a great book called The Autistic Brain by Temple Grandin for another perspective on this.

Thanks for the book recommendation!

[Daisy]

ETA: In my case, when I say I can happily live in $18K a year - or my income is $1500/month, I mean that is what my actual income is and I spend that amount on average for the year. Often times, many months each year, I spend much less (seriously, like a two or three hundred bucks/month some months). The extra gets stashed.  Once the mandatory stuff like prop taxes, insurances, etc... are covered, anything left can be spent on fun stuff like travel. So when I say here my spending and income is $X amount/month, that's my total average spending for everything - mandatory as well as optional.

Yep, that's what I'm talking about. You are being honest about what you need to live your life. I think that's the important point - know what you are realistically going to spend (including the not-so-regular expenses) so you can build a stash that will support that.

Again, coming from the viewpoint of a person with no pension, knowing your exact expenses averaged out over time is very important for building the correct stash.

[Retired To Win]

ETA: In my case, when I say I can happily live in $18K a year - or my income is $1500/month, I mean that is what my actual income is and I spend that amount on average for the year. Often times, many months each year, I spend much less (seriously, like a two or three hundred bucks/month some months). The extra gets stashed.  Once the mandatory stuff like prop taxes, insurances, etc... are covered, anything left can be spent on fun stuff like travel. So when I say here my spending and income is $X amount/month, that's my total average spending for everything - mandatory as well as optional.

Yep, that's what I'm talking about. You are being honest about what you need to live your life. I think that's the important point - know what you are realistically going to spend (including the not-so-regular expenses) so you can build a stash that will support that...

When you categorize Spartana's total average spending as what she needs to live her life you are overreaching.  Her total average spending is what she wants to live her life.  There's a difference.  For her. For me. And (IMHO) for you.

[Cougar]

 My goal is to get a paid off house and then live on between 2k and 3k monthly.

 I figure without a mortgage and car payments, most people can live on around $1,000 a month and that gives 1 to 2k to spend on whatever(most likely traveling).

 I figure if you save a couple months spending, you could probably take whatever trip you wanted every three montths. The rest of the time you can just hang out at the house and watch the daily traffic reports and snicker at those in bumper to bumper.

[Clean Shaven]

For us, "optional" has a pretty wide range from just above necessity (food, shelter, clothing) to adequate (status quo, sort of like living paycheck-to - paycheck but at Mustachian level), to comfortable but not wasteful extravagance.

Like Cougar, our FIRE involves a paid off house, which we will hopefully meet in January 2016.  A corollary question to the OP's post is, for us: how bad would things have to get for us to sell the house earlier than expected (we're planning on selling and downsizing a lot, but not for another 20 years or so),  vs.  going back to work, in order to maintain a comfortable level of optional spending. I don't know the answer for us.

[MLKnits]

Hmm, I see the debate but I think it's an interesting question, if not precisely the way others would frame it.

If the question is "how much of your spending could you cut back if you had to," say in a bad investments year for ER folk or a layoff situation for the rest--that's a question well worth considering.

Unlike the OP, a lot of my spending is tied up in "baseline" that doesn't need to be. I could live in a much smaller apartment, in particular, or in shared housing. I don't mean that in an "I could eat rice and beans three meals a day way"--I'm legitimately overspending on housing, living by myself in a generous one-bedroom with a big balcony. If I were in a crunch, I would have to give serious weight to moving to a smaller, cheaper place.

Beyond that--hmm! I think I haven't been "in the lifestyle" ;) long enough to put a fair figure on most of the rest. I've got "what I spent last year" (too much) and "what I spent this winter" (probably unrealistically trimmed), and I'm still working on what the longterm picture will be. But this is an interesting way to analyze it on my own, even if I'm not ready to air my dirty laundry here.

[Daisy]

ETA: In my case, when I say I can happily live in $18K a year - or my income is $1500/month, I mean that is what my actual income is and I spend that amount on average for the year. Often times, many months each year, I spend much less (seriously, like a two or three hundred bucks/month some months). The extra gets stashed.  Once the mandatory stuff like prop taxes, insurances, etc... are covered, anything left can be spent on fun stuff like travel. So when I say here my spending and income is $X amount/month, that's my total average spending for everything - mandatory as well as optional.

Yep, that's what I'm talking about. You are being honest about what you need to live your life. I think that's the important point - know what you are realistically going to spend (including the not-so-regular expenses) so you can build a stash that will support that...

When you categorize Spartana's total average spending as what she needs to live her life you are overreaching.  Her total average spending is what she wants to live her life.  There's a difference.  For her. For me. And (IMHO) for you.

Semantics, yes. I guess I meant to say "what you need to live the life you want".

I'm still in the camp that most of what most of us spend money on should be classified under wants, as our needs are truly very minimal. But that has been hashed around this thread quite a bit already.

My main point is that I try to be realistic about what life I want to live (needs and wants) and then plan for my stash accordingly...knowing that I can slash just about every category I have if the need to do that arises. There is fluff everywhere...but it's my fluff AND I LIKE IT.

[APowers]

Regarding Optional vs. Necessary: I tend to agree with Arebelspy, but on another hand, I think about it this way: If I decided to do "nothing" what would I be absolutely mandated to pay for?

Here's our budget now:

=======================
$000-- Paid off house
$230-- Utilities
$200-- Food & Dining
$150-- Gasoline
$106-- Property Tax
$76-- Personal Care/Diapers
$70-- Household Supplies
$58-- Auto Insurance
$46-- Home Insurance
$42-- Clothing
$30-- Auto maintenance
$22-- Internet
$20-- Birthday Presents
$20-- Fun Activities
$17-- Life Insurance
$15-- Education Supplies
$10-- Home Phone
$10-- Vision/Glasses
$9-- Auto License/Registration
--------------------------------------
$1121-- Total Monthly Budget
=======================

If we decided to do "nothing"--- i.e., voluntary state of financial emergency (I quit my job and refuse to look for another one, but am otherwise able-bodied), we could cut out some things, while others we could not (at least, not without doing something equally drastic like selling the house. Which would be dumb, because we can't rent or camp anywhere nearly as cheaply).

Here's what a financial emergency budget would look like:

$000-- Paid off house
$230-- Utilities
$150-- Food & Dining
$150-- Gasoline We wouldn't drive anywhere, and resort to bicycling.
$106-- Property Tax
$76-- Personal Care/Diapers
$70 $50-- Household Supplies This would be reined in by about half.
$58-- Auto Insurance Gone.
$46-- Home Insurance
$42 $20-- Clothing Halved, and likely we wouldn't spend this amount, except to replace clothes outgrown by the kiddos.
$30-- Auto maintenance Gone.
$22-- Internet We'd use the (free) internet access at the library
$20-- Birthday Presents Gone.
$20-- Fun Activities Gone.
$17-- Life Insurance I'd consider letting this lapse, but I think it'd be prudent to keep it.
$15-- Education Supplies
$10-- Home Phone We'd go to all email/social media, and look into snagging a free service like Freedompop.
$10-- Vision/Glasses
$9-- Auto License/Registration Gone.
--------------------------------------
$720-- Total Monthly Budget

So our "optional" spending is ~$400. We do sometimes spend on other optional things (like ice creams at Costco yesterday), but I don't count them because (1) they're not often, and (2) they're funded by optional income (I sell a batch of cookies or something), and if there was no money for them, we wouldn't be any less happy or miss it at all.

[mathlete]

This will be tough for me w/o logging into my girlfriend's Mint (which I'd feel icky about) and/or cross referencing our shared spending GoogleDoc (which I just don't want to do) but here is a rough idea of 2015 based on my Mint.

$1,750 on electronics (new laptop, new phone, new TV, and video games. A big year for upgrades)
$900 on new furniture
$350 on misc. Amazon purchases (some of this is cat food which you may or may not consider optional)
$160 on new clothes
$100 on home decorating (new posters and frames)
$1,000 on eating and drinking out
$2,600 on travel
$500 on misc. entertainment (concerts, shows, etc.)
$500 on gifts and charity.

In the second half of the year I look to have a big travel expenditure ($5000+ trip) and my giving and charity will pick up in December for reasons that are really arbitrary since I'm not religious.

New TV replaced one that was 5 years old. New couch replaced one that was heavily damaged and 7 years old. new laptop is (sort of) for work.

Everything else is pretty typical though. Not doing too bad.

[Daisy]

Well you guys are sort of both right about me. When I did quit work I really was just planning on a long sabbatical of about 5 years and so had it set up financially to provide just enough money to support my "needs" for that and not a lot for "wants" other than to play beach volleyball as a pretty inexpensive professional "hobby" (i.e. I probably wouldn't earn any income doing it). But somewhere along the way a magical thing happened - I discovered web sites like the former SLN (very much like MMM back 10 years or so ago) and started to easily make some lifestyle changes and found I didn't need as much for "basics" as I had budgeted for (by more than half) so could either stash the rest and extend my sabbatical, or spend it on wants.

That was where the trade-off for me was - do I want more time off work or do I want to have a few more luxuries. I decided I would rather have the time off work and forego the luxuries/wants like travel to extend my time off work - or find a way I could have both without having to go back to work. So  I sold my house and downsized to a smaller place in a LCOLA and had that extra money to add to the stash so could then have both needs met as well as wants without ever having to go back to work.  If I didn't have that option I probably would have lived a very low ERE style life and just met my needs as that is OK for me (lots of free and cheap things I prefer to do anyways so no biggie) but it's nice to be able to do both and for most people it's worth it to work longer to make sure they have everything in life they may want once they FIRE. And I do always try to qualify why my mandatory spending is so low (like having free/low cost medical and a paid for house) when I post about my budget here, as well as optional spending, so that I am covering my total budget when I talk about it. The fact that my current total budget (wants and needs) was about the amount I though I would need just for needs when I first quit work shows how far off my budgeting was - or that I'm bad at math.

TL;DR - budgeted to meet mostly my needs but ended up needing much less than I thought I did (thanks to the SLN forums, MMM, ERE, YMOYL, etc...) so had extra for wants/optional spending

Yes I think about this a lot, so it gives me some "mental" buffer to deal with. Your example and others is one of the best things I have gotten out of these forums. So if I got fired (not FIREd) from work in the near future, I'd find a way to adjust since I am so close to FIRE.

I could sell my house and move to something even smaller and therefore reduce my "basic" expenses if need be. I could be smarter with travel expenses. I try, but sometimes travelling with others means more expensive compromises. I could buy less steak and more beans. Every single category of spending has stuff to cut if need be. I don't think I have any major category that is all fluff.

[golden1]

I understand what you are driving at, I think.  I have been trying to simplify my budget approach as much as possible lately. 

Instead of micromanaging each budget category, I divide my budget into three major categories, fixed spending or bills (mortgage, utilities, car), savings (retirement, emergency fund, investments), and flexible spending which includes anything that isn't a fixed bill and can vary.  This includes groceries, gas for the car, eating out, entertainment, clothes, kid related stuff etc).  I pay for all of this stuff with one credit card and pay it off at the end of each month.  I like to use level money to track that budget, and anything left over gets rolled into savings. 

[Caella]

My main point is that I try to be realistic about what life I want to live (needs and wants) and then plan for my stash accordingly...knowing that I can slash just about every category I have if the need to do that arises. There is fluff everywhere...but it's my fluff AND I LIKE IT.

Yep! That's my problem on answering this question. The fluff is really everywhere. I could save on electricity, or on car related expenses, or on eating out, or even on housing.
And since it is fluff, most of it is not fixed. It varies accordingly to my "wanting" for fluffiness.

Some fluff would have a more abrupt impact on my happiness if cut. Some would marginally make me a little bit sad, but I would forget soon. So, as Arebelspy says, it's not waste, since all of them have some impact on my happiness, but obviously in varying degrees.

[Cassie]

We can & have lived on $40,000/year.  This year we have decided that we were taking 2 big trips so will spend $12,000 on that. We also decided to have more entertainment/go out more ,etc so now spend an additional $500/month.  If needed we could revert & be happy but we are enjoying spending additional $ on things we value. As we are aging we want to make sure that we get to do some of the things that we have wanted to do while both of us are healthy & capable.  When we were younger we were happy to put off traveling etc to the future. Well the future is now. Spartana, having your housing increase by triple would be unsettling but then you will also have your house $ to either add to your stash or to buy something cheaper.   

[Cassie]

We got into rescue work so have 3 old Maltese & 1 old husky/shepherd mix. Our old RV is only 27 ft so it has been challenging at times. Sometimes there is no where to walk:))  It has very low miles 41,000 now even though 22 yo. However, everytime we take it I call it the Chevy Chase vacation. This time we spent $3,000 to get everything fixed because it is nice to have heat/frig, etc.  Well we have flooded it 2x's by using the air. Mushy carpet for days not fun. Then a third time because the hot water was leaking so now no hot water.  HOwever we have had a blast for the past 32 days & home tomorrow.  This is a trip a decade in the making. Covered 4,000 miles. Stayed at rv parks, gas expensive & ate most meals that I cooked but have spent $5400.00.  Our first trip 7 years ago we mostly stayed at free truck stops but then no electricity, heat, etc if we got cold-which we did and a lot of eating out because no way to cook.  We are so happy we took the trip & knew in advance it would not be cheap. We did what we wanted because we won't go to these places again. However, the $ we spent was actually not on any touristy crap. For instance in Yellowstone there were all these activities you could do. Why not just hike & see all the natural things which is what we did.  When we stayed with family/friends we didn't have to pay. Also RV parks a lot cheaper if you stay a month instead of nightly.  If you are ever going to be in Reno/Tahoe area let me know because would love to have you come for dinner with your baby & meet all of ours:))   

[Cassie]

Our tiny dogs are pad trained so only had to take out the big one although they all enjoy getting out. It really was a fun trip & worth the $. My 5lb dog is crazy herself but because she has no teeth she just gums hard:))  If you ever know you will be in the area let me know & maybe we can get together.  Our RV is old but only has 41,000 miles on it.  So I keep thinking we are having problems because it is 22 yo. Well no-I meet other people on this trip with very expensive RV's-think $200,000 and they having many of the same problems. Turns out flooding from various causes is common.  When I say flooding I mean squishy, wet carpet which starts to smell like wet dog until you get it dried out. I didn't even know it was possible to spend that much on a RV.

[MMMdude]

I basically am planning to have three buckets in retirement

Bucket 1 we can call basic recurring living expenses - food, utilities, etc.  For us that is around 20K
Bucket 2 is basic non recurring expenses - home, auto repair and medical - stuff that happens but not on an annual basis necessarily but it exists and has to be planned for.  For us approx 10K per year on average over the long run
Bucket 3 is discretionary - I believe this is what OP is asking about.  This would be stuff like hobbies, travel, etc.  Nice to have but not necessary

We plan to cut Bucket 3 substantially during down market years so in other words planning for a variable withdrawal rate.  It makes sense not to live overly extravegant during market downturns

[Retired To Win]

I basically am planning to have three buckets in retirement

Bucket 1 we can call basic recurring living expenses - food, utilities, etc.  For us that is around 20K
Bucket 2 is basic non recurring expenses - home, auto repair and medical - stuff that happens but not on an annual basis necessarily but it exists and has to be planned for.  For us approx 10K per year on average over the long run
Bucket 3 is discretionary - I believe this is what OP is asking about.  This would be stuff like hobbies, travel, etc.  Nice to have but not necessary...

Yep, that's it.  Although I really don't have a Bucket #2.  I throw the medical and auto repair into Bucket #1.  Home repairs get paid out of a Home Improvement Fund that we throw money into periodically... from Bucket #3.

[Albert]

I've never bothered to keep track of exact numbers to be honest. All I can say is that 40-50% of my take home income is for saving/investing. Another 25% is for housing/utilities and 7% goes to health insurance. The reminder is for food, clothing, public transport (I don't own a car) and various kinds of entertainment. I have a high salary and no dependants so there is plenty of fun money left. I've spent about 4,000$ for travel this year, for example. Of course I could live on much less than I'm currently living on even in this very expensive city if I had to.

[deborah]

This is a very interesting thread - and very funny too. Poor RTW!

When I look at my spending, each year I find that there are a lot of things I could have cut. For instance, I enjoy sewing, and love having an extensive range of thread. Any particular year, I could cut out almost completely any spending on sewing as I have enough thread, fabric, sewing machines, books... to make anything I make that year - or I could adjust what I make to the materials I have. Similarly, I like to keep house maintenance completely up to date. As soon as I notice something, it gets attention. So in any particular year I could probably drop all house maintenance expenses without too many problems (although my hot water service is probably about due for replacement - so when it dies it will not be a discretionary expenditure). I also want to do some things, like replace the ugly tiles in the bathroom, that can be put off almost indefinitely.

At the end of each year (I do things June to June, so it's only a week away), I work out how much I spent on things I didn't have to do. This year it will include an expensive international trip that has always been on my (short) bucket list, and next year it will include two of the three other things on my bucket list.

With Australian superannuation (sort of a 401k) I have to withdraw a minimum of 4% of its previous year's holdings. I count this as my maximum spend. I also have an amount I would like my baseline expenses to be under. Each year I track baseline expenses and actual expenses, and each year the baseline has gone down.