Author Topic: Is anyone here still actually aiming for under MMM's original 25k a year figure?  (Read 21331 times)

BookLoverL

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When I first joined the forum - which was only 2017! - I feel like there was a lot more useful advice for lower spending levels around. It seems like every time I come back more and more people are pushing their target spending higher and higher. MMM was originally $25k, and even though inflation is a thing, that still doesn't get anywhere near these 100k a year per person or more figures I keep seeing.

I'm disabled and can only work part time, so I've never earned more than £10000 a year, which is equivalent to about $13400 dollars according to the exchange rate I just googled. My intended spending amount next year once I sell my car is less than £6000 which is equivalent to around $8000 dollars. So I'll still be getting over 30% savings rate while living officially quite a way under the poverty line.

Admittedly this is helped by presently living in a paid-off house with no mortgage or rent payments - if I were trying to rent somewhere myself alone with no housemates I'd expect my spending to be about £10000 dependent on where the rental was. And there are no large health insurance payments needed in the UK.

But still, this is a long way under 100k. What are people even spending that much on? Is there anyone here who still has actual MMM-range spending or threads that aren't just about "go into software engineering while investing your firehose of money into VTSAX, and don't worry about learning new skills or cutting back on things you thought you needed but don't"?

Zamboni

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I have a friend in the US who has been living fine on about $8K a year for the past decade. Like you, he has a paid-off house. He is self-employed, but hasn't worked more than part time from home the whole time I've known him. Most of his time is invested in his music hobby (which truly is a hobby because he doesn't try to earn money doing it.)

So it's still a thing.

I have to keep reminding myself that I could make the choice to do that . . . right now . . . and quit working right now. The only debt I carry is my mortgage, so I'd have to sell my house and move to a cheaper house, but I could do it. So technically I am FI. Every dime I add is just padding for wants at this point.

clarkfan1979

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With no mortgage, I would still pay $600/month for taxes, insurance and utilities. If I don't have any government assistance for health care, I think I would budget $1,000/month for the monthly health insurance and another $500/month for actual health costs. Add another $800/month for a basic food budget and another $200/month for gas, insurance and repairs for 1 car. We currently spend $1200/month on food, so $800/month would be cutting back quite a bit.

I think my lowest possible budget is $3,100/month or $37,200/year.

I would be very happy on $6,000/month. My wife would prefer $7,000/year (month). These numbers could be lower if we spent less than $1500/month on health care.
« Last Edit: November 16, 2021, 04:44:28 PM by clarkfan1979 »

BookLoverL

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With no mortgage, I would still pay $600/month for taxes, insurance and utilities. If I don't have any government assistance for health care, I think I would budget $1,000/month for the monthly health insurance and another $500/month for actual health costs. Add another $800/month for a basic food budget and another $200/month for gas, insurance and repairs for 1 car. We currently spend $1200/month on food, so $800/month would be cutting back quite a bit.


$800 a month for 1 person seems pretty high for food tbh - I'm paying £20 a week (so about £80 a month or apparently $107 per month) for food at the moment. That's a compromise with my mum who I live with (should note here: we are both paying 50% of all household bills. Her money did most of the buying of the house, but in terms of the future I am not being subsidised by her moneywise). If I were buying just my own food then I could get it down to £15 per week per person by shopping at budget supermarkets only. This is all for a nutritionally balanced diet btw, I don't eat junk food.

The health costs seem like a reasonable thing to have as extra cost, though.

lhamo

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Our total spending for a family of 3-4 (DS has been in and out of the house the last couple of years) has hovered between 50-60k/year.  That has included some major projects of 10-20k/year (sewer line repairs and lining in 2020, main water line replacement in 2021) and, pre-covid, a similar chunk on travel annually (we have family in Asia).  We don't really skimp on food -- though I do try to shop sales -- and spend about $1000/month between groceries and take out or restaurants 2-4x/month.  We get a lot of our clothing and household items free or used, but buy what we need when we can't find it second hand.  Aren't huge consumers of stuff, though.  We own our house outright, get a significant exemption on our property taxes, and have health care almost fully covered due to low on-paper income. If we didn't qualify for those various discounts and had taxable income our spending would be significantly higher -- probably closer to 80-90k, if not 100k depending on the tax burden. 

I think it is much easier to drop expenses in a shared living situation.  Heating the house costs the same whether you have one person living there or four (though you are probably heating a larger space for four).  The amount of energy it takes to cook something is the same regardless of how many people will eat it.  Lots of foods are cheaper in bulk.   

never give up

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Yes there is certainly a wide range of spending here BookLoverL. I've averaged a £9k spend (about $12k) since finding this place back in 2017. I'm single and like you have no mortgage/rent. For me it's not just the freedom from work but also a desire to own less, be mindful of the environment and enjoy a simpler life.

Obviously the maths works regardless of income levels and market performance has been phenomenal since the forums were launched. There have been some polls around average spend but they don't reveal a great deal as differences between countries, household sizes, HCOL v LCOL etc all distort things a little.

Zikoris

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We've historically spent around 28K, so our FIRE numbers are based on that, though our spending has been substantially lower since the pandemic started (24-25k). But my numbers are also in Canadian, so I guess we're actually lower than him if you do the USD conversion. We've never had any trouble spending at that level, since it's just the natural amount to spend for people with our lifestyle choices - no effort required.

jim555

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Well under that for many years now.

lonegun

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 BookLoverL ,

  In 2007, $25,00 is equivalent to $32,365 in 2021 according to  https://smartasset.com/investing/inflation-calculator

GodlessCommie

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I'm paying £20 a week (so about £80 a month or apparently $107 per month) for food at the moment. <skip> This is all for a nutritionally balanced diet btw, I don't eat junk food.

I'm very impressed by the number! Do you mind sharing your typical weekly shopping list? I would appreciate a PM if you don't want to make it public.

Answering your question - we don't aim for that number, for two reasons:
- hedonic adaptation.
- It is easier to stay the course until we hit the # to support higher spending than to work on lowering the spending.

And the biggest part of hedonic adaptation isn't what things we buy - it's where we want to live.
« Last Edit: November 13, 2021, 11:33:09 AM by GodlessCommie »

BookLoverL

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I'm paying £20 a week (so about £80 a month or apparently $107 per month) for food at the moment. <skip> This is all for a nutritionally balanced diet btw, I don't eat junk food.

I'm very impressed by the number! Do you mind sharing your typical weekly shopping list? I would appreciate a PM if you don't want to make it public.

It's hard to make a precise example right now because Mum does about half of the shopping trips and keeps buying things I wouldn't (her half of the food budget is technically usually more than mine, the compromise was I told her what my hard limit of what I wanted to spend on food was and if she wanted to splurge on extra things she could). But there's a couple of example weekly shops if you go back in my journal thread of my spending when I was living alone for a while during the first half of 2020, when I was averaging under £15 a week.

Some of those are a bit random because I was having a lowkey mental health crisis at the time and was buying a lot of things that wouldn't need complicated cooking, such as some days my carb intake was mainly coming from biscuits and pizza. But it was still nutritionally balanced. Actually a healthier diet would have been cheaper, because if I'd had more ability to cook at the time I could have bought ingredients in bulk.

MudPuppy

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Planning an admittedly cushy FIRE at roughly 40-45k (we are a ways out) and a fair portion of this is healthcare. Presently, I spend 1500 a month on insurance and healthcare and we are two people in our early 30s. If we had single payer, I’d be nearly FIRE already since that would reduce our costs by 1/3-1/2!

BookLoverL

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It's definitely good to hear that there are still people with lower expenses on here, btw. I've been reading over a bunch of the latest hot threads the past few days and feeling like I'm drowning in a sea of absolutely baffling expenditure.

SpreadsheetMan

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It has got super spendy on here. The usual justification is that it is ok if it “aligns with your values” or involves gratuitous international travel.

DW and I are running at about £28k all-in (UK) but that includes a lot more house maintenance than usual (but less holidays). About £30k has been the target for a while, so we are a little under.

BookLoverL

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It has got super spendy on here. The usual justification is that it is ok if it “aligns with your values” or involves gratuitous international travel.

DW and I are running at about £28k all-in (UK) but that includes a lot more house maintenance than usual (but less holidays). About £30k has been the target for a while, so we are a little under.

I definitely feel like international travel shouldn't be an exception from consideration. Unless it's all done by trains and boats, travelling regularly is contributing a huge amount of CO2 towards the climate crisis. If someone's slow travelling that's different, but if someone's jetting about all over the place many times a year, that's absolutely a wasteful lifestyle, just that the spending's going on slightly different things than your standard consumer model. Just because travel is quite romantic doesn't mean it's excluded from ethical considerations.

I get that not everyone here is on board with the environmental angle, but both MMM and Jacob from ERE have the environment as part of their perspective for trying to get people to reduce spending, at least.

£28k for two is £14k per person, so good job on that for sure!

snowball

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BookLoverL ,

  In 2007, $25,00 is equivalent to $32,365 in 2021 according to  https://smartasset.com/investing/inflation-calculator

...which today converts to just over $40K CAD, huh.  Plus if I remember correctly, that didn't include rent or mortgage payments, as he had a paid-off house.

In 2016 before I left Canada, I was averaging about $20K CAD per year; that did include housing.  (I'm looking back to 2016 because I don't consider my expenses while an expat to be a good baseline for anything; they're skewed for various reasons.)  I didn't need to budget for health insurance though, which I recognize is a huge factor for some people.

I don't think I can really relate to six-figure spending either;  it's too far outside my frame of reference.  I just FIREd and I'm aiming for a $20K-ish budget ongoingly (or about $16K USD).  In my opinion that still allows a fair bit of room for fluff;  it is not a bare-bones budget by any means.

It definitely helps to not have a car, to cook your own food from staples, and to not have children ;) - all of which are lifestyle choices I prefer for their own sakes anyway.  I'll probably also be moving back to Canada next year, which means health insurance will not be a significant line item in my budget.

The non-spendy crowd is still here! lol.  Though I kind of see myself as being a bit spendy;  I don't aspire to ERE levels of frugality, after all.  Well, maybe some part of me does.  We'll see if I can dial it down more over time.

I also have mixed feelings about international travel, for the reasons you state;  and yet here I am, half a world away from home...I'm not exactly jet setting back and forth, but still.  I eat meat and cheese, too.  I think this is an imperfect world in which we all make imperfect choices, but we can always strive to do better.  And that is one of the good things about keeping your spending super low...your spending really reflects your footprint on the planet.

(I also think systemic problems need systemic solutions, but individual choices do matter too.)

caleb

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Little of our income goes toward consumption spending, but we may spend a bunch by some measures.

Discretionary spending on food, clothing, transportation, entertainment, travel, vet bills, etcetera are a little over $2k/mo, so we'll call it $30k/year to be safe.

We pay about $23k for our mortgage + insurance + taxes.  Plus another couple thousand in maintenance.  Call housing $30k/year all in.

Now we're up to $60k, but discretionary and housing expenses are pretty far down our list of expenditure categories.  Here are the big ones, all of which are >$30k/year:

Student debt: $$$$
Income tax: $$$
Savings: $$

Are we thrifty?  I don't know.  By some measures of spending, we're living on $30k.  But, counted up differently, we're living on $200k+.

People are at such different stages of the consumption smoothing curve that comparisons aren't particularly helpful.

« Last Edit: November 13, 2021, 01:34:23 PM by caleb »

2Birds1Stone

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My wife and I spent <$18k combined last year......whilst traveling more than half the year.

PS; been reading your journal over on ERE for a while now. This forum's definitely gotten soft and the demographic has changed a LOT over the past 3-5 years. There are still some outliers here, but it's mostly upper middle class folks patting themselves on the back for........I'll stop there before this turns into a rant.

BookLoverL

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Little of our income goes toward consumption spending.

Discretionary spending on food, clothing, transportation, entertainment, travel, vet bills, etcetera are a little over $2k/mo, so we'll call it another $30k to be safe.

We pay about $23k for our mortgage + insurance + taxes.  Plus another couple thousand in maintenance.  Call housing $30k all in.

Now we're up to $60k, but discretionary and housing expenses are pretty far down our list of expenditure categories.  Here are the big ones:

Student debt: $$$$
Income tax: $$$
Savings: $$

Are we thrifty?  I don't know.  By some measures of spending, we're living on $30k.  But, counted up differently, we're living on $200k.

People are at such different stages of the consumption smoothing curve that comparisons aren't particularly helpful.



I think your savings definitely don't count towards your spending figure - by definition they're the part that you're *not* spending. I'm also inclined to consider people's budgets post-income-tax. About the debt, that won't be a permanent part of your necessary annual spend in the future - debt is more like having negative savings, so you have to save your way out of the debt hole before you can accumulate positive savings. So it adds extra time before you reach your final FIRE figure, but if it's old debt and not new items that you're buying it's not really adding to your yearly spend.

Actually, university, like health, is another thing that's a lot more expensive in the USA than elsewhere. Technically I have some student debt here in the UK, but I've never had to pay back a penny of it, because the rules when I graduated were that I only start paying it back if I earn over some number around £21,000 and I've never earned that much. And even if I did hit that threshhold, I'd be paying back 9% of everything I earned over it, which makes it more like a graduate tax than a typical loan. And a lot of places in Europe, such as I think Germany?, have the entire year of university only cost less than a few thousand euros, much cheaper than the typical USA figures.

BikeFanatic

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I have friends who are retired, and or only work part time and live on incomes of 8-10 K a year. They each have unique housing
where they pay very little rent, and they also have free health insurance which is huge in USA. When I try to compare  my spending with theirs, I calculate in an extra 10 K for my situation ( a have a Paid off house but needs repairs and I pay my own heat and electric, health insurance , water and home insurance.) SO as a solo person I figure I can live as they do on 20K a year. That means no big vacations, ( unless camping) not eating out much, no luxury items, thrift store clothing.  I feel inspired that I can do this. I was spending 48-75K per year with my spouse, she was not on board with MMM type spending. Well now that I am getting divorced I do feel I have the chance to live like this and be happy and I am inspired by people here and my low income friends.
Like many of you I also feel like low consumption lifestyle alligns with lowering my environmental footprint and really I do not want to encourage excessive manufacturing with my spending. We will see where I shake out, but if I can live on 20-25K a year I can stay retired.

Dave1442397

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Personally, I could move somewhere cheap and live cheap if I had to, but for now we're in an expensive part of the country.

Mortgage, property taxes, insurance and utilities (gas/electric/water/sewage) for the year comes to $41,600. Health insurance is another $14,500.

That's $56,100 before we buy food, gas, clothes, etc. And then there are the medical expenses not covered by insurance, which came to just over $7,000 this year.


cannotWAIT

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Thank you for asking this! I question my sanity a lot when reading FIRE forums, blogs, etc., because according to the "rules" I'm already well past FI but I see very, very few examples of people spending as little as I do (I budget $18K but that includes sinking funds that I rarely tap so my actual spending is thousands less) or retiring on as little as I have (paid-off home worth about $300K and a little over $600K in liquid assets).

It's baffling because I feel like I have a very luxurious life. I have a lovely little house in a historic neighborhood, nicely furnished. I buy expensive organic groceries, wine, etc. (although not in huge amounts, as it's just me and I'm quite small). I have cute clothes, an electric bike, a newish car, eat out once in a while, subscribe to Spotify and Peloton, have all the fancy kitchen stuff, etc. I really cannot imagine what everyone is spending so much on. Kids, sure. But beyond that, I'm totally confused.

The main reason I'm continuing to work and save is to cover the potentially enormous expense of hiring care in my old age. I don't have kids or close extended family and my partner (who lives in his own house, just to clarify--my finances are my own) is 15 years older than me so I will be on my own. I would like to be able to buy into a continuing care retirement community and they're expensive.

If anyone can point to specific case studies, blogs, etc., of people currently retired on this amount of spending/assets, I'm sure those of us at the more frugal end of the spectrum would love to see them!
« Last Edit: November 13, 2021, 02:16:42 PM by cannotWAIT »

Cranky

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Little of our income goes toward consumption spending.

Discretionary spending on food, clothing, transportation, entertainment, travel, vet bills, etcetera are a little over $2k/mo, so we'll call it another $30k to be safe.

We pay about $23k for our mortgage + insurance + taxes.  Plus another couple thousand in maintenance.  Call housing $30k all in.

Now we're up to $60k, but discretionary and housing expenses are pretty far down our list of expenditure categories.  Here are the big ones:

Student debt: $$$$
Income tax: $$$
Savings: $$

Are we thrifty?  I don't know.  By some measures of spending, we're living on $30k.  But, counted up differently, we're living on $200k.

People are at such different stages of the consumption smoothing curve that comparisons aren't particularly helpful.



I think your savings definitely don't count towards your spending figure - by definition they're the part that you're *not* spending. I'm also inclined to consider people's budgets post-income-tax. About the debt, that won't be a permanent part of your necessary annual spend in the future - debt is more like having negative savings, so you have to save your way out of the debt hole before you can accumulate positive savings. So it adds extra time before you reach your final FIRE figure, but if it's old debt and not new items that you're buying it's not really adding to your yearly spend.

Actually, university, like health, is another thing that's a lot more expensive in the USA than elsewhere. Technically I have some student debt here in the UK, but I've never had to pay back a penny of it, because the rules when I graduated were that I only start paying it back if I earn over some number around £21,000 and I've never earned that much. And even if I did hit that threshhold, I'd be paying back 9% of everything I earned over it, which makes it more like a graduate tax than a typical loan. And a lot of places in Europe, such as I think Germany?, have the entire year of university only cost less than a few thousand euros, much cheaper than the typical USA figures.

University costs vary wildly in the US, though. You can spend a lot, or not so much. For most people, it’s not so much the cost of tuition as it is the cost of housing and food for four years.

People yell at me all the time “you don’t know what it’s like for millenials! They’ve got student debt!” Except that we put 3 millennials through college with no debt… (And I don’t begrudge anyone who made different choices, and does have debt from that, but it’s definitely not a one size fits all thing.)

habanero

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Thank you for asking this! I question my sanity a lot when reading FIRE forums, blogs, etc., because according to the "rules" I'm already well past FI but I see very, very few examples of people spending as little as I do (I budget $18K but that includes sinking funds that I rarely tap so my actual spending is thousands less) or retiring on as little as I have (paid-off home worth about $300K and a little over $600K in liquid assets).

It's baffling because I feel like I have a very luxurious life. I have a lovely little house in a historic neighborhood, nicely furnished. I buy expensive organic groceries, wine, etc. (although not in huge amounts, as it's just me and I'm quite small). I have cute clothes, an electric bike, a newish car, eat out once in a while, subscribe to Spotify and Peloton, have all the fancy kitchen stuff, etc. I really cannot imagine what everyone is spending so much on. Kids, sure. But beyond that, I'm totally confused.


Most folks idea of frugality is quite relative. I guess. I think I'm pretty good at saving money because I live waaaay below my means but my numbers say I spend more than my country's average pycheck every month so I live quite the lavish lifre compared to the average in reality. Its like playing the game on easy mode, if you like whcih I guess a lot of folks here are and much kudos to those who don't. And since my means are much higher than my spending the money piles up over time.



JJ-

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I always thought the $25k/yr was a bit unrealistic for the area we live, especially when you consider he was still the MMM personality pushing no health insurance / self insure when you're healthy I'd I recall. I think his house was paid off too?

In any case, we were targeting $50k with mortgage, but daycare kinda added 40% to that.  We might get back to it once kids are out of day care.

Mr. Green

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Did MMM still have a mortgage in that 25k? I can't remember. I feel like the answer was no but I could be wrong.

We're buying a house and could pay cash if we wanted but that doesn't make financial sense when we can borrow at 3%. If we bought our house with cash our yearly spending would be under 25k. So it's totally possible.

fell-like-rain

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We spend about $38k per year as a couple. It's a very expensive area, however, so housing costs are like 2/3 of that. If our mortgage was paid off, we'd be at $20k/year, including all donations. Our state has pretty good health insurance cost support, so if we weren't covered at work, we'd pay $6500 or so for insurance at our current income level, probably <$1500 if living off investment income.

I noticed someone asking about low grocery costs and what to eat at that level- we spend about $98 per month per person based on my spending tracker, so I can talk a bit about our groceries. Pretty much every day for breakfast I have oatmeal with some peanut butter and a banana. Lunch is variable- we used to be good meal preppers, but now it's often noshing on various things. Often some combination of yogurt, fruit, and toast, or just leftovers from the night before.

For dinner, typical meals include a sheet pan of roasted root veggies, chana masala, coconut curry, black bean soup, or rice with fried eggs and greens. We're pretty low-meat; we might add some pork dumplings to a rice+veg meal or toss some sausage in on a sheet pan bake, so it's generally more of an accompaniment. Occasionally we'll get a pack of chicken thighs (bone-in, of course, for making broth). Or tuna steaks if they're way on sale. But other than that, it's mostly just shopping at the cheapest grocery store around and making sure we use what we buy.

Kwill

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BookLoverL, I think the exchange rate between dollars and pounds can be deceptive when you try to compare the cost of living. I moved from the US to the UK to take a job several years ago. I ended up eventually inventing my own exchange rate to understand better how the people around me related to money in the beginning--things like how they thought about a particular salary or what items were expensive or cheap. I can't remember now, but it was maybe something like the pound being worth 25% or 30% over the official exchange rate.

Even with that adjustment, food in UK supermarkets is amazingly cheap compared to the US, especially when it comes to fresh fruit and vegetables and also things like bread and packaged biscuits/cookies. I started eating much more fresh fruit when I moved to the UK, and I bought things like mushrooms just because they were so affordable compared to the US.

If you do that kind of adjustment to the numbers you see being posted from the US, I think it could help to put things into perspective.

Michael in ABQ

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Family of 8, our annual grocery spend is $15-18k. That includes toiletries and diapers but not restaurants (which is rare). So no, $25k/year is probably not realistic for us. Maybe once we have a paid off house and the kids are grown and gone.

BookLoverL

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BookLoverL, I think the exchange rate between dollars and pounds can be deceptive when you try to compare the cost of living. I moved from the US to the UK to take a job several years ago. I ended up eventually inventing my own exchange rate to understand better how the people around me related to money in the beginning--things like how they thought about a particular salary or what items were expensive or cheap. I can't remember now, but it was maybe something like the pound being worth 25% or 30% over the official exchange rate.

Even with that adjustment, food in UK supermarkets is amazingly cheap compared to the US, especially when it comes to fresh fruit and vegetables and also things like bread and packaged biscuits/cookies. I started eating much more fresh fruit when I moved to the UK, and I bought things like mushrooms just because they were so affordable compared to the US.

If you do that kind of adjustment to the numbers you see being posted from the US, I think it could help to put things into perspective.


Hmm, interesting. If someone wants to do these kind of calculations they can but it sounds like more work than I can be bothered with right now, though.

I have heard about things like food deserts in the USA where there's large areas where things like fresh veg just can't be found at all.

Alternatively, I think there are some products where the USA has a much wider choice of product for each type of product than most other countries do, so there's that.

Either way, an extra 25-30% on the exchange rate would still have me spending less than MMM by some way. Actually, the £6000 I quoted above was my extreme maximum amount - a more realistic amount if I don't spend on a bunch of extra frivolous stuff will be more like £5300, and that's only because I haven't cancelled a few old subscriptions yet. (Remembering to cancel subscriptions is my nemesis, which is why I only ever got a debit card and not a credit card.)

BookLoverL

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Family of 8, our annual grocery spend is $15-18k. That includes toiletries and diapers but not restaurants (which is rare). So no, $25k/year is probably not realistic for us. Maybe once we have a paid off house and the kids are grown and gone.

Yes, I imagine that if you have 6 kids, you will be spending higher than someone with 0 to 2 kids. There's probably some sort of conversion factor for converting the cost of kids into equivalent cost of adult household members somewhere.

bmjohnson35

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Our base expenses in our budget indicate around $19k.  That is based on detailed analysis, but no traveling.  Our actual spend as of end of Oct is $18.2k and will probably fall around $24k by the end of 2021. Our MAGI will probably be around $34k, even if we didn't spend that much.  We plan to spend $35-$40k in 2022, but may spend more if we feel safe enough to travel.

We rarely eat out, but I wouldn't really call us frugal when compared others on this site.

secondcor521

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If I am permitted to exclude the college category (because that's all spending on my kids' college), the kids category (because that's all spending on my kids), the recreation category (because that's anything I do for fun), and half the food category (because my DS26 lives with me and eats at least half the food in dollar terms), then my current run rate is $23K per year.

Paid off house and car, essentially zero income taxes.  Does include all house expenses, half food, auto, medical, utilities, clothing, and pet.

spartana

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Before I sold my house (coastal SoCal) I had very low bases expenses for the past decade or longer. Less then $10k/year for everything (paid off house, no debt, free/low cost medical, etc). So whatever I spent beyond that went to fun discretionary spending like travel. Probably averaged $18k/year. Since I sold and am currently renting a shared place (also coastal SoCal) my expenses are higher but probably under $20k/year or less. My stash has increased ALOT though with house sale so I am actually earning more passive investment income now but don't need it (yet) for anything so stashing it.

American GenX

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$25K/y had been enough to pay my bare bones and still have a few grand left over as of a year ago.   But with inflation skyrocketing and prices soaring, about 15% in the last year alone, that won't even pay the bills much longer.

Steeze

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Out TTM spend is at $2700/mo currently, family of 3 in NYC. Our “budget” spend is $4500/mo. including healthcare and depreciation on our possessions, but we are under that for the most part. We own our condo, housing expenses are around $700/mo for taxes/insurance/hoa. Target FI# is 1.2-1.5M + paid off house. Savings rate around 75%.

Fish Sweet

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I live in VHCOL SoCal and have averaged 20-25k spend per year for the last... 10 years, I want to say? Not deliberately, this is just about how much money I need to live a happy and very luxurious life. This figure includes rent, a lot of eating out, travel domestic and international, expensive (to me) hobbies, expensive electronics, car repairs, etc.

I live with roommates/my partner, which isn't for everyone but has saved me huge buckets of money over the years. My dinky new-to-me hybrid gets driven once or twice a week, and I walk pretty much anywhere else I need to go. Delicious and affordable food from everywhere in the world is also easily within walking distance, as are groceries, and cooking is fun and keeps eating out from getting old. A lot of the available amenities and convenience of a VHCOL area make it well worth living here, and there are choices you can make to lower the expected costs.

External factors that help: No college debt, thanks to my parents, and the fact that CA has healthcare subsidies for low income earners, which takes a lot of the pain off being self insured while being self employed (and not making a ton of money.)

runningthroughFIRE

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As FIRE has become a bit more mainstream and more people learn about this forum, the median expense level of posters has definitely increased.  I'd like to think that a lot of the low spenders just don't post as much because they're out living their FIRE lives or prefer to lurk rather than post.  I started reading the forum/blog back in I think 2014 but didn't actually make an account and start posting until almost a year later; it's been weird to see boglehead level spending becoming so common here.

My total expenses typically range from $25-30K/year with about $13K of that being housing expenses.  That's expenses for 1 adult living alone - I have a car, eat out with friends maybe once a week, and take a handful of travel vacations per year.  I sometimes have a hard time imagining how some people are getting these six figure spending amounts per year without massive portions of it being from living in a very HCOL area.

maisymouser

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My wife and I spent <$18k combined last year......whilst traveling more than half the year.

PS; been reading your journal over on ERE for a while now. This forum's definitely gotten soft and the demographic has changed a LOT over the past 3-5 years. There are still some outliers here, but it's mostly upper middle class folks patting themselves on the back for........I'll stop there before this turns into a rant.

Yeah, I'm just going to leave this here...

maisymouser

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OK, so to answer the OP question... without mortgage, easy peasy. I aim for <$20k for myself still even in a bad year. Childcare has stretched that for me a lot; half my entire spending 'budget' for a year is eaten up by preschool for one kid. But apart from that? $25k is still plenty.

Granted, I'm married which also comes with lots of subsidized costs. And with a mortgage on a house in our area, I don't think I could make it happen.

Wolfpack Mustachian

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My wife and I spent <$18k combined last year......whilst traveling more than half the year.

PS; been reading your journal over on ERE for a while now. This forum's definitely gotten soft and the demographic has changed a LOT over the past 3-5 years. There are still some outliers here, but it's mostly upper middle class folks patting themselves on the back for........I'll stop there before this turns into a rant.

Yeah, I'm just going to leave this here...

So true! I commented on this in a thread recently.  It was about expensive smartphones and someone questioned why we should focus on people spending $1000 on a smart phone and another called it a sickness to look at spending now in terms of future potential value of the money you spent (wasted) if you has invested it.

GodlessCommie

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People yell at me all the time “you don’t know what it’s like for millenials! They’ve got student debt!” Except that we put 3 millennials through college with no debt… (And I don’t begrudge anyone who made different choices, and does have debt from that, but it’s definitely not a one size fits all thing.)

a) not every parent wants to or can pay for their children college
b) for children of parents w/o degrees, navigating this whole college thing is extremely confusing
c) there is a lot of counter-productive - even if well-meaning - advice coming from older generations

We, too, put children through college w/o debt (it helped that Uncle Sam picked up 3/4 of the tab for one). But I am still very sympathetic to people who, upon becoming an adult, discovered that they were guided into a pile of debt.

Holocene

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For the last 9 years, my expenses have averaged around $23k.  That includes a mortgage, charitable donations, and a few large house maintenance items.  I'm in the midwest and I'd say a pretty average COLA.  I bought a house at the right time which kept my largest expense quite low.  Other than that, most of my hobbies are cheap/free.

My estimated FIRE spend is $25k + mortgage ($7.2k):
$13k for bare minimum predictable expenses (property tax, homeowners insurance, food, utilities, clothes, gas, bicycle parts)
$5k for house maintenance and car sinking fund (lumpy, less predictable expenses)
$2k for healthcare (assumes cheap ACA health insurance for being <200% FPG)
$4k for travel/entertainment
$1k for fed/state income taxes

Since I'm leery of relying on the ACA and feel a bit bad about using it with the assets I have, I set my goal higher assuming I'd need to pay more for healthcare and income taxes.  I'll still use the ACA while available and be able to donate more if nothing changes.  I just want to be prepared.  Now I'm at ~3.25% WR of my higher goal thanks to the crazy market lately.  So time to FIRE.  Plan is next spring.

swashbucklinstache

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I think you'll find more numbers like that among users from a long time ago, which probably means hanging out in the journal subforum.

I'm definitely spending more. Mix of reasons. Laziness, treating people a bit more, some social expectations I'm more than happy with. I still don't drink much but I'm going to go ahead and drink a nice craft beer when I do. I now get digiorno's instead of store brand. I made my own squat rack, but replaced it with a used one. I don't want to limit myself to dating people that spend a very low amount of money, and not saying others are but that there are simple choices I've made here. Inflation is on the list I'm sure, but I think that's going to rear its head in the next few years in the form of higher rent in my location.

Here's where I'm at, living with roommates and spending $500-$900 on rent, 2-3k on healthcare post-insurance, and a $220 car payment until 2017, and eating lots of protein. On track for $23.5 for 2021.



I've got some planned lifestyle inflation post-RE regarding housing costs and want buffer for other potential lifestyle inflation e.g. a family or expensive hobbies. I also have goals about potentially giving away a lot of money. I'm hesitant about the ACA. I'm a bit nervous retiring after consecutive very strong market years with high valuations. If I want a permanent relationship I would like to make it permanent before RE or at least get to HilariouslyFI before pulling the plug.

Abe

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Our family's rough annual expenses:

$120k on federal taxes (will obviously go away once retired)
$24k on property tax (also will drop once we retire)
$48k on mortgage (will sell and buy in a much cheaper place in retirement)

Other spending:
$24k on food/house supplies/insurance: all expenses that aren't below
$10k for nanny
$7k on utility, cellphone, car bills
$4k on travel
$0 on healthcare

So a $45k target in retirement (nanny cost will be replaced by healthcare probably). Not great, but reasonable.
« Last Edit: November 13, 2021, 09:21:19 PM by Abe »

Zikoris

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Here's the budget breakdown for our household (for 2020), two adults + cat living in Vancouver:

Total - $24,429

$10,431 - Housing. Rent and insurance on a studio apartment.
$4,805 - Food. 86% groceries, more restaurant spending than normal to try to prevent local places from folding.
$2,517 - Health. Mostly some dental work.
$1,861 - Entertainment. Skewed towards whitewater rafting and bungee jumping, followed by an Xbox and a crapton of video games and ebooks.
$1,356 - Travel. Part of a trip to New York and Philadelphia pre-COVID, plus some local island hopping.
$1,013 - Bills. Two cell phones and internet.
$2,580 - Everything else. Biggest categories are cat stuff, personal care, and transportation.

Typically we spend closer to 28-29K due to international travel, but that's not likely for the forseeable future, so 2021 numbers are looking pretty similar to 2020.
« Last Edit: November 13, 2021, 10:30:35 PM by Zikoris »

thesis

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There was a time when my base expenses were around $24,000/year, which even included some fun money, but it seemed I was constantly dipping into existing savings for big-ticket items such as backpacking gear or car parts. I would refill these savings with bonuses and gift money, but it was still money spent. I have some nice things now and the spending on expensive one-off purchases has largely died down, but I do still often use OEM parts for my car, and those can become expensive. I would guess my real spending is more like $30,000/year these days. Not bad, but I could definitely cut my food budget and fun money down and be no worse off.

There was a time when I was gradually pushing my savings rate up, feeling the burn step by step, and I finally hit the big 50%. I remember how exciting that was. Then I changed jobs, got pay raises, etc, and saving 50% became a lot easier. That's when I got lazy. I should try to get back into it and see if I can push things to 60% and beyond. I kinda miss the challenge. It's entirely possible to enjoy your money while being sure to deliberately not waste any of it.

Anon in Alaska

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I live in Alaska, where everything is more expensive and this is what I spent in a typical month (September):
Internet/phone $116
Condo dues $475
Insurance (car/condo) $135
Things on Amazon $107 (about two thirds household, clothes, and medical and about one third luxury (mostly books)
Credit Card $514 (about $380 groceries and household, about $50 clothes, $45 prescription medicine copay, about $40 luxury (mostly games and books)
Electricity $109 (level pay, will probably be $10/month more by next August)
Laundry $28
set aside for property taxes (once/year) $105
Cash $11
Total $1,600 month x 12 months a year  = $19,200 + $1,000 a year towards replacement appliances and other hard goods, as needed + $800/year for medical as needed
Total $21,000/year
(This is not including anything for a new car. I drive less than 4,000 miles per year, so my current car should be good for at least another 15 years, I'll start budgeting for it in five years)

Freedomin5

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If housing is not included (we have no mortgage), our current expenses for a family of 3 are approximately:

Groceries     $200
Eating Out   $100
Phone         $10
Internet      $30
Housekeeper $107
DD’s Lessons $300
Transportation $15
Utilities        $50

$803/month; $9600/year

There’s a bit going into random miscellaneous stuff, so we probably spend closer to USD$10k a year. This affords us a super luxurious lifestyle - I mean, we could cut out the housekeeper and the expensive lessons and reduce our expenses by 50%.

We were able to optimize our situation so we pay $0 for rent, $0 for healthcare, $0 for private school tuition, and we get two free flights per year (though we haven’t flown anywhere in the past two years, so that’s just more money going into savings), using geographic arbitrage. Most people aren’t willing to do what we did though, I suspect.

BookLoverL

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Great to see everyone's spending breakdowns! Interesting what different people consider necessary for sure.