Author Topic: MMM was right - expenses DO drop in retirement!  (Read 12574 times)

FIKristen

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MMM was right - expenses DO drop in retirement!
« on: October 08, 2015, 09:45:17 AM »
Entering month 3 of early retirement and I'm happy to see a few of MMM's predictions come true.  Namely:
-spending HAS gone down!  Mainly, food & beverage spending has dropped about ~$100 / month so far, probably due to being at home and cooking more.  I am not tempted to eat out more now that I have extra time, as I feared might be the case.
-Income opportunities DO keep trickling in!   Although I planned to rely only on savings, I've already had a few unexpected opportunities to generate extra cash (managing a vacation rental, helping out with a grant application, etc.) Consistent with my goals, I'm only taking the opportunities that appeal to me. No turning around and going right back to full time work!
-In addition, I have been getting more exercise and I am generally more satisfied with life.

What MMM predictions have come true for you in early retirement?  Any surprises?

ysette9

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Re: MMM was right - expenses DO drop in retirement!
« Reply #1 on: October 08, 2015, 12:24:15 PM »
That is fantastic news! I am not FIRE yet but have spent lots of time going over and over my estimated budget at retirement. It is super difficult for me to put myself in such a different situation and imagine how our habits might change. Our current plan is to take a sabbatical for a year to do a test run of FIRE to make sure the numbers work out for exactly that reason.

Can you elaborate more on what other areas you are spending less on? Were there surprises? What had you planned on spending less on that turned out to be true. Did any categories go in the opposite direction?

BTW, if you don't mind sharing, how old are you?

Exflyboy

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Re: MMM was right - expenses DO drop in retirement!
« Reply #2 on: October 08, 2015, 03:43:38 PM »
I found that even though I thought I had cut our expenses to the bone while working, I found that when I had more time to become even more frugal I wiped out a little bit by shopping for even better deals on car insurance internet provider etc.

Once the word got out that I was retired... To employers this sounds like "available" then the phone didn't stop ringing.

I took what I thought was a pt job.. but just lately that has turned into an almost 60 hour work week for the last 6 weeks and will continue till the end of this month.

Great for $$, but that's like a nomad in the desert having a third overcoat!..:)




pbkmaine

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Re: MMM was right - expenses DO drop in retirement!
« Reply #3 on: October 08, 2015, 05:42:42 PM »
So, Exflyboy, why do you keep doing it?

Exflyboy

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Re: MMM was right - expenses DO drop in retirement!
« Reply #4 on: October 08, 2015, 06:28:46 PM »
So, Exflyboy, why do you keep doing it?

Well because I said I would do it, not knowing a giant mess this latest project would turn into.. it WAS a fun pt job before this project.. arg..:)

My personal value is when you commit to doing something, you see it through.. That's the only reason basically.

MoonShadow

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Re: MMM was right - expenses DO drop in retirement!
« Reply #5 on: October 08, 2015, 07:01:38 PM »

My personal value is when you commit to doing something, you see it through.. That's the only reason basically.

That is a good reason, but you should put your foot down before this project ends.  Let them know you don't want any more major projects.

Exflyboy

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Re: MMM was right - expenses DO drop in retirement!
« Reply #6 on: October 08, 2015, 09:30:16 PM »

My personal value is when you commit to doing something, you see it through.. That's the only reason basically.

That is a good reason, but you should put your foot down before this project ends.  Let them know you don't want any more major projects.

Yes we have already had that conversation today actually

FIKristen

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Re: MMM was right - expenses DO drop in retirement!
« Reply #7 on: October 09, 2015, 08:11:17 AM »
That is fantastic news! I am not FIRE yet but have spent lots of time going over and over my estimated budget at retirement. It is super difficult for me to put myself in such a different situation and imagine how our habits might change. Our current plan is to take a sabbatical for a year to do a test run of FIRE to make sure the numbers work out for exactly that reason.

Can you elaborate more on what other areas you are spending less on? Were there surprises? What had you planned on spending less on that turned out to be true. Did any categories go in the opposite direction?

BTW, if you don't mind sharing, how old are you?

Great plan to take a sabbatical as a test drive! To answer your question, the other big category we are spending less on is cars & gas: we downsized from 2 cars to 1 car and we drive much less; I had originally budgeted ~$2000/ year for vehicle related expenses, and now it looks like we'll be able to get by on ~$1000 as long as we keep the driving to a minimum.    I do fear that when we sign up for private health care next year expenses will go up, but that remains to be seen.  We're currently budgeting $300 a month for a very basic high-deductible plan, but we intend to get an inexpensive supplemental accident insurance plan too just in case (seems prudent because we do a lot of mountain biking and skiing).   I'm in my early 30s.


Jon_Snow

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Re: MMM was right - expenses DO drop in retirement!
« Reply #8 on: October 09, 2015, 08:34:48 AM »
As a general rule, I found I spent more money when I was unhappy - on gadgets, food, booze. Thankfully, despite this pattern during my career our savings rate was still very high and it didn't prevent me from reaching my goal to retire early.

Now FIRE'd and most often deliriously happy I find I am content spending very little. Actually, it's shocking how few "material" things I need to feel joy these days.

frompa

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Re: MMM was right - expenses DO drop in retirement!
« Reply #9 on: October 10, 2015, 03:41:54 PM »
Thank you all for posting of your experiences.  We are on the cusp of making the big jump (few months away for both of us), and hearing all of your positive experiences goes a ways toward quieting the voice of doubt that creeps in, regardless of how strong the numbers are. 

clarkfan1979

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Re: MMM was right - expenses DO drop in retirement!
« Reply #10 on: October 18, 2015, 10:08:55 AM »
So, Exflyboy, why do you keep doing it?

Well because I said I would do it, not knowing a giant mess this latest project would turn into.. it WAS a fun pt job before this project.. arg..:)

My personal value is when you commit to doing something, you see it through.. That's the only reason basically.

You can see it through without putting in 60 hours a week. Try to work on saying "no". It can be hard.

Mr. Green

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Re: MMM was right - expenses DO drop in retirement!
« Reply #11 on: October 19, 2015, 06:34:02 AM »
As a general rule, I found I spent more money when I was unhappy - on gadgets, food, booze. Thankfully, despite this pattern during my career our savings rate was still very high and it didn't prevent me from reaching my goal to retire early.

Now FIRE'd and most often deliriously happy I find I am content spending very little. Actually, it's shocking how few "material" things I need to feel joy these days.
I have noticed this trend in my own life. The gratification of buying something overrides the feeling of unhappiness for a short while. I know it's a temporary reprieve yet I still find myself doing it. The mind is a powerful thing.

Miss Prim

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Re: MMM was right - expenses DO drop in retirement!
« Reply #12 on: October 19, 2015, 08:10:40 AM »
I have found that some areas of expenses are lower, but some are higher.  My auto gas expenditures went way down as my commute was 30 miles each way.  (I know, not very mustachian).  My food bills have gone way down as we grew a huge garden this year and ate and canned our way through it.  But, we have booked a lot of travel for this year and next and just got back from a 1 month camping trip out west.  We did it as mustachian as possible, but it still ended up costing quite a bit. 

We have also done a lot of maintenance and updating to our house that we had been putting off mostly due to lack of time, not money.  But, it still ate up a lot of our budget.  With all these things combined, we are actually spending more per month than when we were working!  I am hoping this trend will not continue, but we are starting to pull from our stash to pay for things.  Still have not pulled even 3% though, so things are good money wise.  Does anyone find it hard to touch your stash, even though you know you can safely pull out 3-4%? 

I am finding that I actually have less tolerance for being frugal, and find I have this pent up need to buy things and do updates to the house that I have put off for years!  We have enough money to do this, but I need to get over this feeling that I have been deprived all these years saving and saving!  Hopefully, this will go away with time.

                                                  Miss Prim

Evgenia

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Re: MMM was right - expenses DO drop in retirement!
« Reply #13 on: October 19, 2015, 12:08:39 PM »
Our experience has been much like that of FIKristen. Our food expenses are down, as we have more time to cook for more (often all) meals. We have to keep an eye on our food budget, because now that all of our socializing happens with friends (most of whom work during the day) instead of some of it happening at an office, it can be easy to eat out in the course of seeing people. If we do go out to eat, though, it's usually at pretty inexpensive places (ramen, etc.).

We had two unexpected sources of income, one consulting gig each for DH and me. This added up to $8,400 pre-tax. This will unfortunately be heavily taxed, due to our combined income from earlier this year and self-employment tax, but not all of it will be taxed, after we claim business expenses.

We have spent money (a few thousand dollars) on travel, but we had savings earmarked for this specifically, so we could travel when not working and watching vacation day limits.

I think we're also saving money because I have time to use up things I already have in the house (fabric, yarn) rather than buy more. I'm also making some Christmas gifts from these existing supplies, which will cut down on gift costs come the holidays.

The other surprise is that I need SO many fewer clothes and other things. I am in PJs into the late morning on many days, and am not wearing the slightly-nicer clothes I used to wear to the office, so I expect I'll be selling and donating even more items. I don't want to be too over zealous: we have a lot less than most folks, and I don't want to get rid of things I wear rarely but still need on occasion, lest I end up purchasing a new replacement item later.

I also have time to chase savings down: watch sales and coupons, argue over fees we shouldn't have been charged, find cheaper or free alternatives, do work ourselves instead of hire someone, etc. When I was working I did not have the mental overhead for that.

And, finally, it is true that you just don't spend when you're not miserable. I used to get occasional massages, facials and cocktails out, or buy a lipstick or some crap, when I had a horrible day at work. And that NEVER happens anymore.

patrickza

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Re: MMM was right - expenses DO drop in retirement!
« Reply #14 on: October 19, 2015, 03:12:41 PM »
I've have to agree with you, I'm not FIRE yet, but I've also noticed, the happier I am, the less I seem to want. Strangely, the reason for my ridiculous happiness lately was the sense of freedom I'm getting from being close to FIRE.

It seems the wealthier I become, the less I actually want to spend! Weird!

Evgenia

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Re: MMM was right - expenses DO drop in retirement!
« Reply #15 on: October 19, 2015, 06:41:15 PM »
It seems the wealthier I become, the less I actually want to spend! Weird!

Isn't it marvelous? We just have no desire for anything. People don't believe me when I say that I got everything I could ever want after moving into a house with a full-sized dishwasher, washer and dryer, none of which DH or I had had previously. Hey, it took us until age 36 to get those! I am like a 1950s Kitchen of the Future commercial as I sit, knit, and grin as I listen to the dulcet tones of my appliances whizzing away in the background. Nothing else will ever approach the appeal of laundry and dishwashing appliances, so it's game over for my spending.

Gunny

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Re: MMM was right - expenses DO drop in retirement!
« Reply #16 on: October 21, 2015, 07:58:58 PM »
We are spending about 55 % of what we were pre-retirement and we don't miss a thing.  We manage to cover our monthly living expenses with my pension.  Haven't touched the stash.  Of course moving to a LCOL area helped.  A lot.  We also enjoy finding new ways to cut expenses.  Yesterday we wanted to have a fast food picnic lunch by the lake.  We just bought hamburgers and brought water and chips from home.  Didn't miss the fries or over priced fountain drinks.  Cost was ten bucks for three as opposed to 20.  Today I did a home repair myself with materials I had laying around.  Saved probably 300 bucks.  We are cooking almost every meal at home using left overs for lunch.  Nothing goes to waste.  Food coast are down about 30 %.  I bought a used lawn tractor the other day.  It needed a new mower deck.  I bought the parts from Amazon and rebuilt it myself. Mower runs and cuts like new.  Saved a grand over a new tractor.  I guess it boils down to time.  I actually have more time now to save money.

RetiredAt63

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Re: MMM was right - expenses DO drop in retirement!
« Reply #17 on: October 22, 2015, 05:28:20 PM »
My expenses are also down, to the point that I have been stashing cash - no point doing major investments, it will all go to house maintenance next spring.  Like KoKo, I have a little list.  BUT - those maintenance items will not go on the LOC, I have the money to pay upfront.  Lovely feeling.

And yes, now that I am home all the time I do want to do some spiffing up - after all, I am here all the time, not at work.  Some is just effort (decluttering), some will cost a bit (paint).

FrugalFan

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Re: MMM was right - expenses DO drop in retirement!
« Reply #18 on: October 22, 2015, 07:21:28 PM »
I loved reading this thread, not only for the insight on costs, but also because the happiness is palpable among those of you that have FIRED. Inspiring!

Financial.Velociraptor

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Re: MMM was right - expenses DO drop in retirement!
« Reply #19 on: October 22, 2015, 08:22:45 PM »
I loved reading this thread, not only for the insight on costs, but also because the happiness is palpable among those of you that have FIRED. Inspiring!

:-))   Happiness!

o2bfree

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Re: MMM was right - expenses DO drop in retirement!
« Reply #20 on: October 25, 2015, 09:29:12 AM »
My expenses might go up. I live within walking/biking distance to work, and expect to drive more after retirement, going places for various activities, including more frequent road trips. Also, work freebies will end. Free food several times or more each month (no more free birthday cake, waahhh!), occasional meals at nice restaurants, free coffee and other drinks, free stuff that other people leave on the give-away table, free showers, free heat during the work day. I rarely buy clothes for work, and the past few years those have been "free", thanks to the post-project thank-you gift cards that project managers often dole out. Free laptop with a free service plan. Hmmm, I need to add all this to my post-retirement budget.

G-dog

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Re: MMM was right - expenses DO drop in retirement!
« Reply #21 on: October 25, 2015, 07:46:23 PM »
I am still collecting data since I am a recent FIRE. I hope some expenses go down, but it is OK if they stay about the same as before. But since the first post-FIRE years have a disproportionate impact on long term success, I am watching my expenses still.

BBub

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Re: MMM was right - expenses DO drop in retirement!
« Reply #22 on: October 29, 2015, 04:11:16 PM »
I have found that some areas of expenses are lower, but some are higher.  My auto gas expenditures went way down as my commute was 30 miles each way.  (I know, not very mustachian).  My food bills have gone way down as we grew a huge garden this year and ate and canned our way through it.  But, we have booked a lot of travel for this year and next and just got back from a 1 month camping trip out west.  We did it as mustachian as possible, but it still ended up costing quite a bit. 

We have also done a lot of maintenance and updating to our house that we had been putting off mostly due to lack of time, not money.  But, it still ate up a lot of our budget.  With all these things combined, we are actually spending more per month than when we were working!  I am hoping this trend will not continue, but we are starting to pull from our stash to pay for things.  Still have not pulled even 3% though, so things are good money wise.  Does anyone find it hard to touch your stash, even though you know you can safely pull out 3-4%? 

I am finding that I actually have less tolerance for being frugal, and find I have this pent up need to buy things and do updates to the house that I have put off for years!  We have enough money to do this, but I need to get over this feeling that I have been deprived all these years saving and saving!  Hopefully, this will go away with time.

                                                  Miss Prim

I could see this scenario playing out for us too... daily living expenses decrease, but travel & home maintenance gets a boost - especially for the first few years.  Any time I am at home for an extended period, even a 3 day weekend, I start to find a bunch of little projects.  "hmmm.. that crack in the plaster could be fixed, this room could use a fresh coat of paint, etc, etc".  I usually never get around to the little stuff due to our hectic work schedules, but once FIRE'd I would imagine a big push will be made in yr 1 to bring everything up to pristine condition.

Also travel. I've also found that even on a shoestring it can get pricey.  Especially if you are not a full-time traveler & maintain a primary residence.  The real thrifty ER badasses sell everything & travel the world.. Jeremy & Winnie style.  Not sure if we could swing that though.

I would bet the pent up demand thing will pass as you acclimate to your new routine.

If you are still in the 3% WR range you are rocking out.

Debbie M

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Re: MMM was right - expenses DO drop in retirement!
« Reply #23 on: November 20, 2015, 11:00:14 AM »
I figured I wouldn't be spending less, but I'm actually spending a bit more.  My work expenses were very low--thrift store clothes were fine, rare stress-eating of restaurant foods, free transportation (bus pass), no day care, etc.

Now I do a little more processing of food (such as making my own granola), so food expenses are a little lower.  But I've been taking Spanish class with friends.  And now there's a Spanish IV study-abroad course I can't resist.  I also have time to drive to places that are across town (and not have to do it during rush hour) and will take time to visit my family more (definitely the folks who live 200 miles away, maybe also the folks who live 1000 miles away).

(I'll also be doing home renovations, but I've got separate money saved up for that.)

Basically, I now have more time during which to spend money.  Most of what I do is still free (read, walk, video games) or super cheap (trhift store clothes, home made food).  I have not had trouble hanging on to my old thrifty ways of doing things, but I now have time to do more of them.