Living Expenses - what's "reasonable"?

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The Wizard
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Re: Living Expenses - what's "reasonable"?

Post by The Wizard » Thu Aug 24, 2017 4:04 pm

LiterallyIronic wrote:
Thu Aug 24, 2017 3:45 pm
The Wizard wrote:
Thu Aug 24, 2017 2:38 pm
delamer wrote:
Thu Aug 24, 2017 2:20 pm

You spend $205/month to feed two people? That's pretty amazing to me -- it is less than $7 per day.
Amazing is right. Apparently no eating out of significance is involved.
And there's no attempt to budget for vehicle replacement...
Correct. The goal is $1/meal/person. No eating out, except once per year at a place that does a buy-one-get-one-free on your birthday month. No alcohol/coffee/soda/juice - water or milk only. Dessert is rare and always homemade cookies. Off-brand foods only.

We also don't budget for car replacement. That'll just come out of our emergency fund. Don't really need to budget for ten-year-old clunkers with 100,000+ miles already one them - they only cost $1,000 or less. Current car doesn't have air conditioning, for example.

Someone posted in a different thread that (age * income / 10) = net worth. I'm at about half that. If you have low income, you need low expenses. Not much I can do about that.
Thanks for updating us.
We should give you a special Frugal Award at the next gathering...
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DaftInvestor
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Re: Living Expenses - what's "reasonable"?

Post by DaftInvestor » Thu Aug 24, 2017 4:11 pm

LiterallyIronic wrote:
Thu Aug 24, 2017 12:07 pm
RetiredMule wrote:
Wed Aug 23, 2017 11:33 pm
Assuming no dependent children, no other debts, no mortgage to pay and not including property taxes and health care expenses (wide variability based on regional demographics, and very personal health status) from the question here, how much do people budget for their "essentials' (needed to live) and "leisure" (hobbies etc.)budgets?
This is our monthly expenses, striking out those you don't want included:
Taxes: $976
401k: $100
Roth IRAs: $916
Rent: $400
Utilities: $150 (includes electric, gas, trash, sewer, Internet, and phone) (but we'll have to add ~$20 for a cell phone for my wife one of these days)
Car maintenance: $160 (two cars, both very old. Most months are zero maintenance, but infrequent large fixes.)
Car insurance: $40 (two cars; two drivers).
Groceries: ~$170
Snacks: ~$35
Health care: $200
Personal care and toiletries: $60
Gifts: $40 (the cost of Christmas and birthdays divided by twelve)
Clothes: $30
Hobbies: $40
Miscellaneous: $30

Total: ~$958

That being said, in retirement, we won't be renting but owning a home. The home we're currently under contract to buy comes with annual insurance of $390 ($32.50 per month) and annual property tax of $906 ($75.50 per month).

Add those to the total above and you get $1,066. But I imagine utilities would be higher in a house. And then there is house maintenance. So that $1,066 is on the low side, but I hope we're still left with plenty to spend on "leisure."
What's amazing to me about this budget is the $170 monthly for Groceries. I'm happy if we can keep it under $200 per week. I can't fathom on how my wife and I could live on <$50 weekly for Groceries.

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Re: Living Expenses - what's "reasonable"?

Post by The Wizard » Thu Aug 24, 2017 4:18 pm

DaftInvestor wrote:
Thu Aug 24, 2017 4:11 pm

What's amazing to me about this budget is the $170 monthly for Groceries. I'm happy if we can keep it under $200 per week. I can't fathom on how my wife and I could live on <$50 weekly for Groceries.
Eating more rice can help.
I don't try to keep my food costs that low, but I do like my recently purchased rice cooker.
This will sound odd, but there are times when I've had a nice bowl of rice with that pungent Chili Garlic sauce and a little soy sauce mixed in. That's it, nothing else for an informal snacky meal...
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DaftInvestor
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Re: Living Expenses - what's "reasonable"?

Post by DaftInvestor » Thu Aug 24, 2017 4:24 pm

The Wizard wrote:
Thu Aug 24, 2017 4:18 pm
DaftInvestor wrote:
Thu Aug 24, 2017 4:11 pm

What's amazing to me about this budget is the $170 monthly for Groceries. I'm happy if we can keep it under $200 per week. I can't fathom on how my wife and I could live on <$50 weekly for Groceries.
Eating more rice can help.
I don't try to keep my food costs that low, but I do like my recently purchased rice cooker.
This will sound odd, but there are times when I've had a nice bowl of rice with that pungent Chili Garlic sauce and a little soy sauce mixed in. That's it, nothing else for an informal snacky meal...
We do make rice frequently. Looking at some recent receipts it is primarily the meats that are driving the cost - my spouse likes grass-fed beef; good fish; etc - these are the most expensive items. My current effort is to get our wine spending down to $200 monthly (need to either open wine less often; or drop price-per-bottle - neither is easy to do) - I'll work on food after that :)

mptfan
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Re: Living Expenses - what's "reasonable"?

Post by mptfan » Thu Aug 24, 2017 4:30 pm

Jags4186 wrote:
Thu Aug 24, 2017 3:55 pm
With so many people in this country and so many different groups of people, these median and average numbers are really worthless IMO.
You should compare yourself to your peer group.
When it comes to spending, I simply disagree. I've had this disagreement before, with a former girlfriend, and I think this comes down to how you view the world in terms of keeping up with the Joneses. I make significantly more than the average household income, but my spending level is not significantly higher than the average household spending and I don't see the need to "keep up with my peer group" in terms of spending. I admit that I could spend more than I spend now, given my relatively high income, but I choose not to, instead, I choose to save the difference. A former girlfriend would criticize me for being too frugal with my money, and she would point out that I could afford to spend more. I would point out that I was already spending somewhat more than the average household spending, and she would say that was an unfair comparison because those numbers include people who make much less than me and are not my peers. To me, how much someone makes is irrelevant to whether their spending is reasonable, or whether their level of spending provides a comfortable lifestyle. I think that if you live in a moderate cost of living area and you spend more than the average household spending, then objectively you should have a comfortable lifestyle. If you spend $75,000 per year in a moderate cost of living area, you should have a comfortable lifestyle regardless of whether you make $100,000 or $500,000. She would disagree and point out that I am spending less than my income peers and I just didn't see how that mattered.

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Re: Living Expenses - what's "reasonable"?

Post by Jags4186 » Thu Aug 24, 2017 8:45 pm

mptfan wrote:
Thu Aug 24, 2017 4:30 pm
Jags4186 wrote:
Thu Aug 24, 2017 3:55 pm
With so many people in this country and so many different groups of people, these median and average numbers are really worthless IMO.
You should compare yourself to your peer group.
When it comes to spending, I simply disagree. I've had this disagreement before, with a former girlfriend, and I think this comes down to how you view the world in terms of keeping up with the Joneses. I make significantly more than the average household income, but my spending level is not significantly higher than the average household spending and I don't see the need to "keep up with my peer group" in terms of spending. I admit that I could spend more than I spend now, given my relatively high income, but I choose not to, instead, I choose to save the difference. A former girlfriend would criticize me for being too frugal with my money, and she would point out that I could afford to spend more. I would point out that I was already spending somewhat more than the average household spending, and she would say that was an unfair comparison because those numbers include people who make much less than me and are not my peers. To me, how much someone makes is irrelevant to whether their spending is reasonable, or whether their level of spending provides a comfortable lifestyle. I think that if you live in a moderate cost of living area and you spend more than the average household spending, then objectively you should have a comfortable lifestyle. If you spend $75,000 per year in a moderate cost of living area, you should have a comfortable lifestyle regardless of whether you make $100,000 or $500,000. She would disagree and point out that I am spending less than my income peers and I just didn't see how that mattered.
I agree with you. I was referring to the income numbers not the spending numbers.

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Re: Living Expenses - what's "reasonable"?

Post by Jazztonight » Thu Aug 24, 2017 8:53 pm

mptfan wrote:
Thu Aug 24, 2017 4:30 pm
Jags4186 wrote:
Thu Aug 24, 2017 3:55 pm
With so many people in this country and so many different groups of people, these median and average numbers are really worthless IMO.
You should compare yourself to your peer group.
When it comes to spending, I simply disagree. I've had this disagreement before, with a former girlfriend, and I think this comes down to how you view the world in terms of keeping up with the Joneses. I make significantly more than the average household income, but my spending level is not significantly higher than the average household spending and I don't see the need to "keep up with my peer group" in terms of spending. I admit that I could spend more than I spend now, given my relatively high income, but I choose not to, instead, I choose to save the difference. A former girlfriend would criticize me for being too frugal with my money, and she would point out that I could afford to spend more. I would point out that I was already spending somewhat more than the average household spending, and she would say that was an unfair comparison because those numbers include people who make much less than me and are not my peers. To me, how much someone makes is irrelevant to whether their spending is reasonable, or whether their level of spending provides a comfortable lifestyle. I think that if you live in a moderate cost of living area and you spend more than the average household spending, then objectively you should have a comfortable lifestyle. If you spend $75,000 per year in a moderate cost of living area, you should have a comfortable lifestyle regardless of whether you make $100,000 or $500,000. She would disagree and point out that I am spending less than my income peers and I just didn't see how that mattered.
And this is why she is a former girlfriend. I have a good friend who has a ton of money invested, mucho real estate holdings, and a good university pension + social security. But he's thrifty, likes to eat at ethnic restaurants, travel on a budget, and spend what he feels comfortable with. He had a rocky relationship with a "former girlfriend" who was an indiscriminate spender and chastised him for being upset when she'd order 2-3 glasses of $12/glass wine, and other stuff like that. She'd say, "well you spend plenty on your cars and motorcycles," etc. Which he did. Relationships are tough when it comes to money and spending.
"What does not destroy me, makes me stronger." Nietzsche

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Jazztonight
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Re: Living Expenses - what's "reasonable"?

Post by Jazztonight » Thu Aug 24, 2017 9:00 pm

My response to the OP is that how much you spend in retirement depends a lot on what you spent (and how you spent it) before retirement. It also depends on your spouse if you have one, and his/her spending habits. It also depends on whether or not you're the kind of person who pays for your grandchildren's private school/college expenses, how you like to travel, and whether you care about leaving an inheritance to your heirs.

I retired 4 years ago and I'm still figuring all of this out. But I haven't all of a sudden started spending indiscriminately on stuff I would not have purchased before retirement. I like my 2002 car (130k miles) and feel no need to run out and get a new one.

Travel is where a lot of people spend money in retirement, and I'm not alone. DW and I will add a trip or two per year, but only if I feel comfortable with the costs, e.g., "Can I afford it."

Bogleheads are generally sensible people when it comes to spending, both before and after retirement. The numbers will vary greatly, just like the amount of wealth each of us has when we retire.
"What does not destroy me, makes me stronger." Nietzsche

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Re: Living Expenses - what's "reasonable"?

Post by The Wizard » Thu Aug 24, 2017 9:14 pm

Jazztonight wrote:
Thu Aug 24, 2017 8:53 pm
[ And this is why she is a former girlfriend. I have a good friend who has a ton of money invested, mucho real estate holdings, and a good university pension + social security. But he's thrifty, likes to eat at ethnic restaurants, travel on a budget, and spend what he feels comfortable with. He had a rocky relationship with a "former girlfriend" who was an indiscriminate spender and chastised him for being upset when she'd order 2-3 glasses of $12/glass wine, and other stuff like that. She'd say, "well you spend plenty on your cars and motorcycles," etc. Which he did. Relationships are tough when it comes to money and spending.
We're getting off topic here, but what if she was a wealthy girlfriend and paid for her own drinks?
We need to be careful to avoid sexism (or whatever it's called) in these discussions...
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VictoriaF
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Re: Living Expenses - what's "reasonable"?

Post by VictoriaF » Thu Aug 24, 2017 9:26 pm

"Reasonable" is personal. Here is my idiosyncratic example.

I don't particularly like eating out and I eat healthfully. Earlier in August I spent two weeks in Barcelona where I was buying blackberries and raspberries for €1.50 per pint. I was staying at a hostel which had a large refrigerator and so I had my berries daily. Now that I am back at home, I have curtailed my berry habit because in my local supermarkets they go for $3.99/pint. I can afford any amount of berries I may wish, but it's psychologically difficult to pay more than twice of what I was paying so recently. I have the same problem with kefir: in Barcelona I was buying it at €1.40 per bottle and here the same size is $4.49.

Produce and milk products were even cheaper in Prague but at that time, I justified it by much lower incomes in the Czech Republic. In contrast, I perceived the Barcelona prices as "normal" and now have to readjust to the expensive local food.

Victoria
Last edited by VictoriaF on Thu Aug 24, 2017 9:32 pm, edited 1 time in total.
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VictoriaF
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Re: Living Expenses - what's "reasonable"?

Post by VictoriaF » Thu Aug 24, 2017 9:30 pm

The Wizard wrote:
Thu Aug 24, 2017 9:14 pm
Jazztonight wrote:
Thu Aug 24, 2017 8:53 pm
[ And this is why she is a former girlfriend. I have a good friend who has a ton of money invested, mucho real estate holdings, and a good university pension + social security. But he's thrifty, likes to eat at ethnic restaurants, travel on a budget, and spend what he feels comfortable with. He had a rocky relationship with a "former girlfriend" who was an indiscriminate spender and chastised him for being upset when she'd order 2-3 glasses of $12/glass wine, and other stuff like that. She'd say, "well you spend plenty on your cars and motorcycles," etc. Which he did. Relationships are tough when it comes to money and spending.
We're getting off topic here, but what if she was a wealthy girlfriend and paid for her own drinks?
We need to be careful to avoid sexism (or whatever it's called) in these discussions...
The way I've read it the girlfriend expected Jazztonight's friend to pay for her wine.

Victoria
WINNER of the 2015 Boglehead Contest. | Every joke has a bit of a joke. ... The rest is the truth. (Marat F)

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Re: Living Expenses - what's "reasonable"?

Post by The Wizard » Thu Aug 24, 2017 9:57 pm

VictoriaF wrote:
Thu Aug 24, 2017 9:30 pm
The Wizard wrote:
Thu Aug 24, 2017 9:14 pm

We're getting off topic here, but what if she was a wealthy girlfriend and paid for her own drinks?
We need to be careful to avoid sexism (or whatever it's called) in these discussions...
The way I've read it the girlfriend expected Jazztonight's friend to pay for her wine.

Victoria
Nonetheless, we should strive for a balanced viewpoint when discussing expenses involving more than one person...
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VictoriaF
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Re: Living Expenses - what's "reasonable"?

Post by VictoriaF » Thu Aug 24, 2017 9:59 pm

The Wizard wrote:
Thu Aug 24, 2017 9:57 pm
VictoriaF wrote:
Thu Aug 24, 2017 9:30 pm
The Wizard wrote:
Thu Aug 24, 2017 9:14 pm

We're getting off topic here, but what if she was a wealthy girlfriend and paid for her own drinks?
We need to be careful to avoid sexism (or whatever it's called) in these discussions...
The way I've read it the girlfriend expected Jazztonight's friend to pay for her wine.

Victoria
Nonetheless, we should strive for a balanced viewpoint when discussing expenses involving more than one person...
Yes, of course. And thank you for bringing it up, The Wizard,

Victoria
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Re: Living Expenses - what's "reasonable"?

Post by RetiredMule » Fri Aug 25, 2017 11:42 am

IMO wrote:
Thu Aug 24, 2017 12:04 am
I think it may be more reasonable to break down the essential category, since their is so much variation. But even then, there can be overlap on items, for example, food. Some don't eat out a lot, others quite a bit.

Perhaps following would help people trying to better plan?:

Qualify if LCOL, MCOL, HCOL and marital status (1 or 2 people budgets)
Again, with the assumption, kids are adults, no other people to support.

Essentials:
a) Food (keep it simple, all food groceries and eating out)
b) Housing (whatever your housing entails, rent, mortgage, no mortgage, insurance, utilities -even cell phones since landlines were common past,
maintenance, cable, internet, Netflix, etc)
c) Transportation related day to day (auto's/gas/insurance/subways/Uber/taxi's)
d) Health expenses (insurance/out of pockets, even long term care insurance, etc)
e) Other types of "essentials" such as life insurance/other that are required to allow self/spouse to maintain lifestyle in retirement

Non-essentials:
-Everything that essentially is not related to the above, travel, hobbies, etc. Doesn't matter what your vice is, just how much is everything that if
you cut out all non-essentials (again, there's that food issue on eating out or not eating out).


Otherwise, just seems like too much variability. The real bottom line is it is very individual. Budgets are so variable during working years, one would expect a similar level of variability on the retirement budget.
In my list of "essentials" budget, I have included all of what IMO lists under (a), (c) and a few items from (b) - Internet, phones, utilities like gas/elec/water/garbage), but no other "housing costs". Of course, one needs to have a separate budget/funds for home repairs and the items like prop tax/home ins/health care expenses etc. Though they'd be part of "essentials" budget, I excluded them as they're highly variable per region/state as well as health factors.

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Re: Living Expenses - what's "reasonable"?

Post by RetiredMule » Fri Aug 25, 2017 11:49 am

Jazztonight wrote:
Thu Aug 24, 2017 9:00 pm
My response to the OP is that how much you spend in retirement depends a lot on what you spent (and how you spent it) before retirement. It also depends on your spouse if you have one, and his/her spending habits. It also depends on whether or not you're the kind of person who pays for your grandchildren's private school/college expenses, how you like to travel, and whether you care about leaving an inheritance to your heirs.

I retired 4 years ago and I'm still figuring all of this out. But I haven't all of a sudden started spending indiscriminately on stuff I would not have purchased before retirement. I like my 2002 car (130k miles) and feel no need to run out and get a new one.

Travel is where a lot of people spend money in retirement, and I'm not alone. DW and I will add a trip or two per year, but only if I feel comfortable with the costs, e.g., "Can I afford it."

Bogleheads are generally sensible people when it comes to spending, both before and after retirement. The numbers will vary greatly, just like the amount of wealth each of us has when we retire.
Fully agreed; again, my original post acknowledges the variability due to a bunch of factors and spending traits; my post was also aimed at many of the other "personal investing" posters who try to get a grip on how they're doing w.r.t retirement savings (asking if saving enough or not) etc. and to sorta make some of them look at the retirement budgets categorized along the lines many of the folks have responded with so far. So, I'm hopeful that these great responses from fellow BHs are painting an overall picture for those who're still trying to figure out things - the best forum for such discussions is BH, of course!

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RetiredMule
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Re: Living Expenses - what's "reasonable"?

Post by RetiredMule » Fri Aug 25, 2017 11:53 am

VictoriaF wrote:
Thu Aug 24, 2017 9:26 pm
"Reasonable" is personal. Here is my idiosyncratic example.

I don't particularly like eating out and I eat healthfully. Earlier in August I spent two weeks in Barcelona where I was buying blackberries and raspberries for €1.50 per pint. I was staying at a hostel which had a large refrigerator and so I had my berries daily. Now that I am back at home, I have curtailed my berry habit because in my local supermarkets they go for $3.99/pint. I can afford any amount of berries I may wish, but it's psychologically difficult to pay more than twice of what I was paying so recently. I have the same problem with kefir: in Barcelona I was buying it at €1.40 per bottle and here the same size is $4.49.

Produce and milk products were even cheaper in Prague but at that time, I justified it by much lower incomes in the Czech Republic. In contrast, I perceived the Barcelona prices as "normal" and now have to readjust to the expensive local food.

Victoria
very personal indeed! I've experienced what you mention above when traveling esp. to other countries - some of the prices shock you in a +ve (sometimes -ve) way :shock:

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Re: Living Expenses - what's "reasonable"?

Post by 3feetpete » Fri Aug 25, 2017 12:42 pm

I recently retired and found it very helpful to track my actual expenses using Mint. I tracked credit cards and checking account transactions then adjusted up to account for things that were paid via payroll deductions (income tax and healthcare) The results surprised me. Because I have no debt, I can live comfortably on 6k per month which is far less than the 80% of salary that a lot of financial advisers say. And I am in a HCOL area. This exercise convinced me that I could retire earlier than planned.

It also had the added benefit of showing me what I spend my money on and I have made adjustments. For the guy that misses buying berries in Spain. Try BJ's. I get my berries there for about half the supermarket cost.

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Re: Living Expenses - what's "reasonable"?

Post by mptfan » Fri Aug 25, 2017 1:17 pm

3feetpete wrote:
Fri Aug 25, 2017 12:42 pm
For the guy that misses buying berries in Spain...
I don't think that was a guy. Just sayin.

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Re: Living Expenses - what's "reasonable"?

Post by VictoriaF » Fri Aug 25, 2017 5:44 pm

mptfan wrote:
Fri Aug 25, 2017 1:17 pm
3feetpete wrote:
Fri Aug 25, 2017 12:42 pm
For the guy that misses buying berries in Spain...
I don't think that was a guy. Just sayin.
I don't think that was a guy either.

Victoria
WINNER of the 2015 Boglehead Contest. | Every joke has a bit of a joke. ... The rest is the truth. (Marat F)

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Re: Living Expenses - what's "reasonable"?

Post by Volkdancer » Fri Aug 25, 2017 6:00 pm

If you want a baseline amount that reflects the differences among areas, the Living Wage data base maintained by MIT is useful: http://livingwage.mit.edu/

That gives a picture for different family sizes before and after taxes and the average income for different types of job.

One could say that any amount above the living wage any given area and family unit size is discretionary.

Karl V

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Re: Living Expenses - what's "reasonable"?

Post by The Wizard » Fri Aug 25, 2017 6:37 pm

Volkdancer wrote:
Fri Aug 25, 2017 6:00 pm

...One could say that any amount above the living wage any given area and family unit size is discretionary.

Karl V
One could, but realistically, the actual details matter.
I'm a single retiree living in a house that used to hold more people than it does now.
So I deal with my actual expenses and go from there...
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Re: Living Expenses - what's "reasonable"?

Post by Sandi_k » Fri Aug 25, 2017 7:29 pm

We live in a HCOL area, and we're targeting a goal of $120k per year. If and when we move to a state with no state income tax, that can be reduced to more like $110k per year.

We *could* reduce those expenses, quite clearly. But for us, that will be a very comfortable and very nice lifestyle.

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Re: Living Expenses - what's "reasonable"?

Post by BanquetBeer » Sat Aug 26, 2017 5:59 pm

VictoriaF wrote:
Fri Aug 25, 2017 5:44 pm
mptfan wrote:
Fri Aug 25, 2017 1:17 pm
3feetpete wrote:
Fri Aug 25, 2017 12:42 pm
For the guy that misses buying berries in Spain...
I don't think that was a guy. Just sayin.
I don't think that was a guy either.

Victoria
Y'all are reading too much into this - this just tells me that the OP is a guy (people tend to think of others on the internet as same gender and age as themselves)

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Re: Living Expenses - what's "reasonable"?

Post by VictoriaF » Sat Aug 26, 2017 6:04 pm

BanquetBeer wrote:
Sat Aug 26, 2017 5:59 pm
VictoriaF wrote:
Fri Aug 25, 2017 5:44 pm
mptfan wrote:
Fri Aug 25, 2017 1:17 pm
3feetpete wrote:
Fri Aug 25, 2017 12:42 pm
For the guy that misses buying berries in Spain...
I don't think that was a guy. Just sayin.
I don't think that was a guy either.

Victoria
Y'all are reading too much into this - this just tells me that the OP is a guy (people tend to think of others on the internet as same gender and age as themselves)
.
.
.
The comment about berries was in reference to this message:
VictoriaF wrote:
Thu Aug 24, 2017 9:26 pm
Earlier in August I spent two weeks in Barcelona where I was buying blackberries and raspberries for €1.50 per pint. I was staying at a hostel which had a large refrigerator and so I had my berries daily. Now that I am back at home, I have curtailed my berry habit because in my local supermarkets they go for $3.99/pint. I can afford any amount of berries I may wish, but it's psychologically difficult to pay more than twice of what I was paying so recently.
.
.
.
I have insight in the gender of this particular poster.

Victoria
WINNER of the 2015 Boglehead Contest. | Every joke has a bit of a joke. ... The rest is the truth. (Marat F)

Porter01
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Re: Living Expenses - what's "reasonable"?

Post by Porter01 » Sat Aug 26, 2017 6:29 pm

One cost of living item is med costs related to obesity due to of exercise and exercise i.e. Not investing in life style. Diabetes is very expensive and some meds are priced so high and rising without reason. For the majority it's avoidable by lifestyle but folks don't do it. Med costs can be a large drain.

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Re: Living Expenses - what's "reasonable"?

Post by JGoneRiding » Sat Aug 26, 2017 6:47 pm

VictoriaF wrote:
Sat Aug 26, 2017 6:04 pm
BanquetBeer wrote:
Sat Aug 26, 2017 5:59 pm
VictoriaF wrote:
Fri Aug 25, 2017 5:44 pm
mptfan wrote:
Fri Aug 25, 2017 1:17 pm
3feetpete wrote:
Fri Aug 25, 2017 12:42 pm
For the guy that misses buying berries in Spain...
I don't think that was a guy. Just sayin.
I don't think that was a guy either.

Victoria
Y'all are reading too much into this - this just tells me that the OP is a guy (people tend to think of others on the internet as same gender and age as themselves)
.
.
.
The comment about berries was in reference to this message:
VictoriaF wrote:
Thu Aug 24, 2017 9:26 pm
Earlier in August I spent two weeks in Barcelona where I was buying blackberries and raspberries for €1.50 per pint. I was staying at a hostel which had a large refrigerator and so I had my berries daily. Now that I am back at home, I have curtailed my berry habit because in my local supermarkets they go for $3.99/pint. I can afford any amount of berries I may wish, but it's psychologically difficult to pay more than twice of what I was paying so recently.
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.
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I have insight in the gender of this particular poster.

Victoria
Esp bad considering you sign the bottom of all your posts! But then i guess you never know now a days! ;)

But isn't 1.50 euro and 4$ us almost the same thing? Or has the dollar really gained

User avatar
VictoriaF
Posts: 18184
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Location: Black Swan Lake

Re: Living Expenses - what's "reasonable"?

Post by VictoriaF » Sat Aug 26, 2017 6:50 pm

JGoneRiding wrote:
Sat Aug 26, 2017 6:47 pm
VictoriaF wrote:
Sat Aug 26, 2017 6:04 pm
BanquetBeer wrote:
Sat Aug 26, 2017 5:59 pm
VictoriaF wrote:
Fri Aug 25, 2017 5:44 pm
mptfan wrote:
Fri Aug 25, 2017 1:17 pm

I don't think that was a guy. Just sayin.
I don't think that was a guy either.

Victoria
Y'all are reading too much into this - this just tells me that the OP is a guy (people tend to think of others on the internet as same gender and age as themselves)
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.
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The comment about berries was in reference to this message:
VictoriaF wrote:
Thu Aug 24, 2017 9:26 pm
Earlier in August I spent two weeks in Barcelona where I was buying blackberries and raspberries for €1.50 per pint. I was staying at a hostel which had a large refrigerator and so I had my berries daily. Now that I am back at home, I have curtailed my berry habit because in my local supermarkets they go for $3.99/pint. I can afford any amount of berries I may wish, but it's psychologically difficult to pay more than twice of what I was paying so recently.
.
.
.
I have insight in the gender of this particular poster.

Victoria
Esp bad considering you sign the bottom of all your posts! But then i guess you never know now a days! ;)

But isn't 1.50 euro and 4$ us almost the same thing? Or has the dollar really gained
At the moment:
€ 1.50 = $ 1.7895

When I was buying my berries in Barcelona the exchange rate was similar.

Victoria
WINNER of the 2015 Boglehead Contest. | Every joke has a bit of a joke. ... The rest is the truth. (Marat F)

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Nestegg_User
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Re: Living Expenses - what's "reasonable"?

Post by Nestegg_User » Sat Aug 26, 2017 9:22 pm

VictoriaF wrote:
Sat Aug 26, 2017 6:04 pm
BanquetBeer wrote:
Sat Aug 26, 2017 5:59 pm
VictoriaF wrote:
Fri Aug 25, 2017 5:44 pm
mptfan wrote:
Fri Aug 25, 2017 1:17 pm
3feetpete wrote:
Fri Aug 25, 2017 12:42 pm
For the guy that misses buying berries in Spain...
I don't think that was a guy. Just sayin.
I don't think that was a guy either.

Victoria
Y'all are reading too much into this - this just tells me that the OP is a guy (people tend to think of others on the internet as same gender and age as themselves)
.
.
.
The comment about berries was in reference to this message:
VictoriaF wrote:
Thu Aug 24, 2017 9:26 pm
Earlier in August I spent two weeks in Barcelona where I was buying blackberries and raspberries for €1.50 per pint. I was staying at a hostel which had a large refrigerator and so I had my berries daily. Now that I am back at home, I have curtailed my berry habit because in my local supermarkets they go for $3.99/pint. I can afford any amount of berries I may wish, but it's psychologically difficult to pay more than twice of what I was paying so recently.
.
.
.
I have insight in the gender of this particular poster.

Victoria


:D :D (queue the "mansplaining " thread here) :D :D

{Coors (ie."Banquet Beer") might be a newb. VictoriaF has been on longer than this "newb" (joined in '09, lurked for probably a year and a half before then). She's recently retired about 2 years ago, uses Washington DC as home base, and although English might not be HER first language ( if I remember she speaks at least four, the first being either Russian or Ukrainian ) she definitely knows the gender of the poster "VictoriaF"}

BTW, I also enjoyed Barcelona when I was there a couple of years ago (I think the exchange rate was ~$1.35/€ then) and was saddened by the recent events-- I stayed closer to the harbor about a block from Las Ramblas.
Last edited by Nestegg_User on Sun Aug 27, 2017 2:49 am, edited 1 time in total.

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HomerJ
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Re: Living Expenses - what's "reasonable"?

Post by HomerJ » Sat Aug 26, 2017 9:48 pm

Sandi_k wrote:
Fri Aug 25, 2017 7:29 pm
We live in a HCOL area, and we're targeting a goal of $120k per year. If and when we move to a state with no state income tax, that can be reduced to more like $110k per year.

We *could* reduce those expenses, quite clearly. But for us, that will be a very comfortable and very nice lifestyle.
Most of the states with no state income taxes are LCOL or MCOL areas. I bet you'll be able to save much more than just the $10k in taxes.

Bigbonds
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Re: Living Expenses - what's "reasonable"?

Post by Bigbonds » Sat Aug 26, 2017 10:36 pm

Porter01 wrote:
Sat Aug 26, 2017 6:29 pm
One cost of living item is med costs related to obesity due to of exercise and exercise i.e. Not investing in life style. Diabetes is very expensive and some meds are priced so high and rising without reason. For the majority it's avoidable by lifestyle but folks don't do it. Med costs can be a large drain.

Agree. I have no idea how healthy bogleheads are in comparison to the general population but the statistics for the general population are insane. Investing in your health through diet and exercise is every bit as important as investing in your 401k.

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Top99%
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Location: Austin, TX

Re: Living Expenses - what's "reasonable"?

Post by Top99% » Sun Aug 27, 2017 8:33 am

It looks like many of the common fixed expenses have been covered but here are a few more for OP to consider:
1) replacing major appliances every 15 years or so
2) exterior painting of your home
3) roof replacement if you have a typical asphalt shingle roof. The number of years ranges from 15-30 depending on location.
While amortized over the expected number of years these aren't huge they can and do add up and apply even when living in a "paid for" house. Many people are probably used to DIY to minimize these but at some point in one's retirement that may no longer be an option.
Adapt or perish

JGoneRiding
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Re: Living Expenses - what's "reasonable"?

Post by JGoneRiding » Sun Aug 27, 2017 10:55 am

HomerJ wrote:
Sat Aug 26, 2017 9:48 pm
Sandi_k wrote:
Fri Aug 25, 2017 7:29 pm
We live in a HCOL area, and we're targeting a goal of $120k per year. If and when we move to a state with no state income tax, that can be reduced to more like $110k per year.

We *could* reduce those expenses, quite clearly. But for us, that will be a very comfortable and very nice lifestyle.
Most of the states with no state income taxes are LCOL or MCOL areas. I bet you'll be able to save much more than just the $10k in taxes.
I can't speak for all the states but since I live in 1 of them (and off the top of my head I think there are only 7) I would say no. "seattle" makes up the majority of our state and drives prices across the state higher.

LadyIJ
Posts: 496
Joined: Thu Mar 06, 2014 8:00 pm

Re: Living Expenses - what's "reasonable"?

Post by LadyIJ » Sun Aug 27, 2017 11:29 am

Jazztonight wrote:
Thu Aug 24, 2017 9:00 pm
My response to the OP is that how much you spend in retirement depends a lot on what you spent (and how you spent it) before retirement. It also depends on your spouse if you have one, and his/her spending habits. It also depends on whether or not you're the kind of person who pays for your grandchildren's private school/college expenses, how you like to travel, and whether you care about leaving an inheritance to your heirs.

I retired 4 years ago and I'm still figuring all of this out. But I haven't all of a sudden started spending indiscriminately on stuff I would not have purchased before retirement. I like my 2002 car (130k miles) and feel no need to run out and get a new one.

Travel is where a lot of people spend money in retirement, and I'm not alone. DW and I will add a trip or two per year, but only if I feel comfortable with the costs, e.g., "Can I afford it."

Bogleheads are generally sensible people when it comes to spending, both before and after retirement. The numbers will vary greatly, just like the amount of wealth each of us has when we retire.
Yes, I agree - we look at whether we want to spend "x" amount of money on a luxury item or a trip based upon our returns in the portfolio and that determines our comfort level. Yes, Bogleheads are "generally sensible people". My husband and I want to error on the side of spending a bit less - especially early in retirement - we have a friend that told us she "deserves" to spend the winters in Florida. Obviously not a Boglehead.

2015
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Re: Living Expenses - what's "reasonable"?

Post by 2015 » Sun Aug 27, 2017 12:57 pm

Top99% wrote:
Sun Aug 27, 2017 8:33 am
It looks like many of the common fixed expenses have been covered but here are a few more for OP to consider:
1) replacing major appliances every 15 years or so
2) exterior painting of your home
3) roof replacement if you have a typical asphalt shingle roof. The number of years ranges from 15-30 depending on location.
While amortized over the expected number of years these aren't huge they can and do add up and apply even when living in a "paid for" house. Many people are probably used to DIY to minimize these but at some point in one's retirement that may no longer be an option.
Good points. What I did before retirement was look back over the history of my life to gauge approximately what major outlays occurred for replacement items (for everything from furniture, to appliances, to autos, to technology). I then created a spreadsheet to roughly predict when these same replacements would be necessitated throughout retirement, and amortized the costs for the duration of retirement. I included padding for the unexpected. It doesn't fit the typical BH fallacy of precise numbers narrative, but it's good enough for my purposes.

Matt62
Posts: 9
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Re: Living Expenses - what's "reasonable"?

Post by Matt62 » Sun Aug 27, 2017 1:11 pm

I'm looking at an annual budget of 63k living in a HCOL area. Approx. breakdown looks like this and is based on four years of tracking plus some speculation once retired.
  • Home (Taxes, maintenance, insurance, utilities (no cable) etc) = 15k
    Food (Groceries, dining out, beer & wine) = 9.6k
    Shopping = 3.6k
    Auto (Gas, maintenance, tolls) = 3k
    Health (insurance, pharmacy, gym) = 19.8k
    Entertainment & travel = 12.5k

pasadena
Posts: 173
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Re: Living Expenses - what's "reasonable"?

Post by pasadena » Sun Aug 27, 2017 1:22 pm

I'm single, living in a HCOL area. If I exclude rent, my monthly expenses amount to $1,300 (includes utilities, though). Add some irregular expenses like car maintenance, vet visits and the occasional splurging (travel home (Europe), vacation, new computer *sigh*, misc entertainment) and I'm probably around $20,000 a year.

My rent is higher than that :shock:

wrongfunds
Posts: 1687
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Re: Living Expenses - what's "reasonable"?

Post by wrongfunds » Mon Aug 28, 2017 2:30 pm

VictoriaF wrote:
Sat Aug 26, 2017 6:04 pm
BanquetBeer wrote:
Sat Aug 26, 2017 5:59 pm
VictoriaF wrote:
Fri Aug 25, 2017 5:44 pm
mptfan wrote:
Fri Aug 25, 2017 1:17 pm
3feetpete wrote:
Fri Aug 25, 2017 12:42 pm
For the guy that misses buying berries in Spain...
I don't think that was a guy. Just sayin.
I don't think that was a guy either.

Victoria
Y'all are reading too much into this - this just tells me that the OP is a guy (people tend to think of others on the internet as same gender and age as themselves)
.
.
.
The comment about berries was in reference to this message:
VictoriaF wrote:
Thu Aug 24, 2017 9:26 pm
Earlier in August I spent two weeks in Barcelona where I was buying blackberries and raspberries for €1.50 per pint. I was staying at a hostel which had a large refrigerator and so I had my berries daily. Now that I am back at home, I have curtailed my berry habit because in my local supermarkets they go for $3.99/pint. I can afford any amount of berries I may wish, but it's psychologically difficult to pay more than twice of what I was paying so recently.
.
.
.
I have insight in the gender of this particular poster.

Victoria
Unless you plan to offer "proof", you should let this one go :-)

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VictoriaF
Posts: 18184
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Location: Black Swan Lake

Re: Living Expenses - what's "reasonable"?

Post by VictoriaF » Wed Aug 30, 2017 1:03 pm

VictoriaF wrote:
Thu Aug 24, 2017 9:26 pm
Earlier in August I spent two weeks in Barcelona where I was buying blackberries and raspberries for €1.50 per pint. I was staying at a hostel which had a large refrigerator and so I had my berries daily. Now that I am back at home, I have curtailed my berry habit because in my local supermarkets they go for $3.99/pint. I can afford any amount of berries I may wish, but it's psychologically difficult to pay more than twice of what I was paying so recently.
UPDATE:

Earlier today I visited Costco to stock up on various food and supplies. I was pleased to find 2-pound packages of organic strawberries for $4.99 and 12-oz packages of blackberries for $3.79. These prices are much closer to what I consider fair. For the next few days I will resume my berry habit, then I'll see.

Victoria
WINNER of the 2015 Boglehead Contest. | Every joke has a bit of a joke. ... The rest is the truth. (Marat F)

Lynette
Posts: 1702
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Re: Living Expenses - what's "reasonable"?

Post by Lynette » Wed Aug 30, 2017 1:50 pm

I retired in December 2016 and still haven't figured out my expenses as I've been updating my house and garden. I have spent far too much on perennials that I know won't be perennials next year. While working I used to go overseas four to five times a year. I've visited most of the places I want to see. Now it is a privilege to stay at home and study at a community college. I was most annoyed that my county's community college cancelled the Intermediate Spanish class but I found one in a nearby college. I pay will pay more as the community college is not in my county - $775 - $200 senior citizen discount. I paid $200 for a book that will last 2 semesters. In my county I'm enrolled for photography (basically Photoshop) for $400 - no book - but likely software. So for about $1,400 I will keep myself entertained for 3 months. My Spanish teacher grew up in Italy and also speaks Spanish fluently. She is very nice and insists we speak Spanish. So this should be very interesting.

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Leif
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Re: Living Expenses - what's "reasonable"?

Post by Leif » Wed Aug 30, 2017 2:25 pm

The OPs questions prompted me to check the internet. I found the following. In a quick search I did not see anyone else posting this.

Here's What the Average Retired American's Budget Looks Like
What follows are the average household expenditures for those age 65 and older (Bureau of Labor Statistics), per month. Keep in mind, the average American retires at around 62 years old.
Housing ($1,294 per month). Including upkeep, utilities, insurance, and furniture.
Transportation ($571 per month). Includes all costs for insurance, maintenance, and even airfare for the occasional trip
Healthcare ($480 per month).
Food ($459 per month)
Personal Insurance/Pensions ($228 per month)
Cash Contributions ($191 per month)
Other ($294 per month). Covers everything from books to alcohol to personal apparel
In all, this means the average American retiree (or those 65 and older) is spending about $3,700 per month -- or about $44,600 per year.
Investors should diversify across many asset-classes so that whatever happens, we will not have all our investments in underperforming asset classes and thereby fail to meet our goals-Taylor Larimore

charleshugh
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Re: Living Expenses - what's "reasonable"?

Post by charleshugh » Wed Aug 30, 2017 2:33 pm

Here is my actual budget for 2017. I am retired and my wife and I own our home in a HCOL area. I will be about $10,000 under budget this year.

Health Insurance $6,000
Medical /Dental / Vision - Out of Pocket $6,000
Income Taxes - Federal/State/Local $3,500
Real Estate Taxes $6,500
Homeowners Insurance $1,000
Car Ownership $3,500
Car Insurance (with umbrella policy) $1,000
Car Maintenance & Repair (AAA Membership) $2,000
Car - Gasoline (10,000 miles @ $3per gal / 30mpg & Tolls) $1,500
Grocery - Food $8,000
Internet Access $750
Mobile Phone $1,000
Charitable Donations $5,000
Gifts $5,000
Gas/Electric $1,800
Alarm Service $200
Water (Utility) $800
Wine/Beer $3,600
Entertainment (Dining out, Movies, etc.) $3,500
Music/Video Subscriptions (Google, Netflix, Amazon Prime) $500
Clothing $2,000
Personal Care - Haircuts, non-food items, etc. $750
Gym Membership $600
Vacation $5,000
Home Repairs/Appliances/Furnishings/Lawn Service/Gardening/Household items $5,000
Contingency $2,500
Miscellaneous (Newspaper, Books, Registration/License, Exterminator, etc.) $1,000
TOTAL $78,000

Admiral
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Re: Living Expenses - what's "reasonable"?

Post by Admiral » Wed Aug 30, 2017 2:40 pm

VictoriaF wrote:
Wed Aug 30, 2017 1:03 pm
VictoriaF wrote:
Thu Aug 24, 2017 9:26 pm
Earlier in August I spent two weeks in Barcelona where I was buying blackberries and raspberries for €1.50 per pint. I was staying at a hostel which had a large refrigerator and so I had my berries daily. Now that I am back at home, I have curtailed my berry habit because in my local supermarkets they go for $3.99/pint. I can afford any amount of berries I may wish, but it's psychologically difficult to pay more than twice of what I was paying so recently.
UPDATE:

Earlier today I visited Costco to stock up on various food and supplies. I was pleased to find 2-pound packages of organic strawberries for $4.99 and 12-oz packages of blackberries for $3.79. These prices are much closer to what I consider fair. For the next few days I will resume my berry habit, then I'll see.

Victoria
I might gently suggest that you not let excessive price sensitivity keep you from eating something you enjoy (and that's good for you). Prices fluctuate. If the cost is that much of an issue, maybe consider cutting back on something else to fund your berry habit.

2015
Posts: 1526
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Re: Living Expenses - what's "reasonable"?

Post by 2015 » Wed Aug 30, 2017 7:20 pm

Admiral wrote:
Wed Aug 30, 2017 2:40 pm
VictoriaF wrote:
Wed Aug 30, 2017 1:03 pm
VictoriaF wrote:
Thu Aug 24, 2017 9:26 pm
Earlier in August I spent two weeks in Barcelona where I was buying blackberries and raspberries for €1.50 per pint. I was staying at a hostel which had a large refrigerator and so I had my berries daily. Now that I am back at home, I have curtailed my berry habit because in my local supermarkets they go for $3.99/pint. I can afford any amount of berries I may wish, but it's psychologically difficult to pay more than twice of what I was paying so recently.
UPDATE:

Earlier today I visited Costco to stock up on various food and supplies. I was pleased to find 2-pound packages of organic strawberries for $4.99 and 12-oz packages of blackberries for $3.79. These prices are much closer to what I consider fair. For the next few days I will resume my berry habit, then I'll see.

Victoria
I might gently suggest that you not let excessive price sensitivity keep you from eating something you enjoy (and that's good for you). Prices fluctuate. If the cost is that much of an issue, maybe consider cutting back on something else to fund your berry habit.
One person's "excessive" price sensitivity is another's smart consuming. We are now in the Age of Superabundance, where "surplus" has migrated from producers to consumers in many, many areas (their risk of loss = your gain). The paradigm for the consumer has completely changed. We now have unprecedented power to optimize most purchases/choices in terms of satisfaction, price, and experience. No need to cut back on anything. Instead, elevating one's expectations in most areas of human endeavors can lead to much higher levels of freedom, satisfaction, and fulfillment.

You just have to think before you choose (or buy, or pay attention to). Your time is your attention is your money is your life. If you're not viewing choices in these key areas strategically, you're going through life like a one-legged man in an ass-kicking contest (to paraphrase Charlie Munger).

Bacchus01
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Re: Living Expenses - what's "reasonable"?

Post by Bacchus01 » Wed Aug 30, 2017 9:22 pm

For a family of 5, we spend $25K per person per year all-in (food, shelter, etc.) excluding savings.

I would expect that for 2 of us, that number would be a bit higher at around $30k per person per year. In retirement, I'm planning for $45K per pers per year (in today's dollars)

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VictoriaF
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Location: Black Swan Lake

Re: Living Expenses - what's "reasonable"?

Post by VictoriaF » Wed Aug 30, 2017 10:34 pm

Admiral wrote:
Wed Aug 30, 2017 2:40 pm
VictoriaF wrote:
Wed Aug 30, 2017 1:03 pm
VictoriaF wrote:
Thu Aug 24, 2017 9:26 pm
Earlier in August I spent two weeks in Barcelona where I was buying blackberries and raspberries for €1.50 per pint. I was staying at a hostel which had a large refrigerator and so I had my berries daily. Now that I am back at home, I have curtailed my berry habit because in my local supermarkets they go for $3.99/pint. I can afford any amount of berries I may wish, but it's psychologically difficult to pay more than twice of what I was paying so recently.
UPDATE:

Earlier today I visited Costco to stock up on various food and supplies. I was pleased to find 2-pound packages of organic strawberries for $4.99 and 12-oz packages of blackberries for $3.79. These prices are much closer to what I consider fair. For the next few days I will resume my berry habit, then I'll see.

Victoria
I might gently suggest that you not let excessive price sensitivity keep you from eating something you enjoy (and that's good for you). Prices fluctuate. If the cost is that much of an issue, maybe consider cutting back on something else to fund your berry habit.
My comments about berries are an illustration of what is and is not reasonable. Obviously, "reasonable" is in the eyes of the beholder. Furthermore, we all have cognitive biases, such as anchoring, that affect our judgements. After paying €1.50 ($1.80) per pint we anchor on that price, and $4.00 per pint seems obscene. We make these judgments even when we can easily afford to pay hundred times that much.

As a side comment, I buy only things that are good for me. If I buy fewer berries, I get more cauliflowers.

Victoria
WINNER of the 2015 Boglehead Contest. | Every joke has a bit of a joke. ... The rest is the truth. (Marat F)

lynneny
Posts: 162
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Re: Living Expenses - what's "reasonable"?

Post by lynneny » Wed Aug 30, 2017 11:27 pm

I calculated my living expenses a while ago to help me figure out whether I can afford to stay in my HCOL city after I retire.

So, to cover my living expenses I need $5,000/month AFTER taxes and EXCLUDING healthcare. I know healthcare will be a much bigger expense when I'm paying for it all myself; currently employer pays for most of it. More than half of the $5,000/month is housing, between mortgage and monthly co-op maintenance.

In case you're wondering, I concluded that no, I can't afford to stay in HCOL city and will retire to a more affordable area (and since I'm moving, I'll definitely be going somewhere without winter). My budget for a new home will be whatever I walk away with after I sell co-op and pay off mortgage, so getting rid of the mortgage will be a big factor in lowering living expenses after retirement.

Tamales
Posts: 1220
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Re: Living Expenses - what's "reasonable"?

Post by Tamales » Wed Aug 30, 2017 11:47 pm

Don't know if it has been mentioned yet, but BLS.gov has boatloads of living expenses data broken down in every imaginable way, including expenses specifically for retired people as one category.

One of their tables I have saved is Table 1904, from the 2015 Consumer expenditures survey. Normally I copy and paste the link into documents I save, but unfortunately I didn't in this case.

edit: link to 2016 table 1904: https://www.bls.gov/cex/2016/combined/occup.pdf
or excel version: https://www.bls.gov/cex/2016/combined/occup.xlsx

I'd note from the 2016 data and a quick calculation, the mean expenses range from 71% to 91% of mean after-tax income across all the categories except retired, where that figure is 118%.

Admiral
Posts: 1139
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Re: Living Expenses - what's "reasonable"?

Post by Admiral » Thu Aug 31, 2017 8:37 am

2015 wrote:
Wed Aug 30, 2017 7:20 pm
Admiral wrote:
Wed Aug 30, 2017 2:40 pm
VictoriaF wrote:
Wed Aug 30, 2017 1:03 pm
VictoriaF wrote:
Thu Aug 24, 2017 9:26 pm
Earlier in August I spent two weeks in Barcelona where I was buying blackberries and raspberries for €1.50 per pint. I was staying at a hostel which had a large refrigerator and so I had my berries daily. Now that I am back at home, I have curtailed my berry habit because in my local supermarkets they go for $3.99/pint. I can afford any amount of berries I may wish, but it's psychologically difficult to pay more than twice of what I was paying so recently.
UPDATE:

Earlier today I visited Costco to stock up on various food and supplies. I was pleased to find 2-pound packages of organic strawberries for $4.99 and 12-oz packages of blackberries for $3.79. These prices are much closer to what I consider fair. For the next few days I will resume my berry habit, then I'll see.

Victoria
I might gently suggest that you not let excessive price sensitivity keep you from eating something you enjoy (and that's good for you). Prices fluctuate. If the cost is that much of an issue, maybe consider cutting back on something else to fund your berry habit.
One person's "excessive" price sensitivity is another's smart consuming. We are now in the Age of Superabundance, where "surplus" has migrated from producers to consumers in many, many areas (their risk of loss = your gain). The paradigm for the consumer has completely changed. We now have unprecedented power to optimize most purchases/choices in terms of satisfaction, price, and experience. No need to cut back on anything. Instead, elevating one's expectations in most areas of human endeavors can lead to much higher levels of freedom, satisfaction, and fulfillment.

You just have to think before you choose (or buy, or pay attention to). Your time is your attention is your money is your life. If you're not viewing choices in these key areas strategically, you're going through life like a one-legged man in an ass-kicking contest (to paraphrase Charlie Munger).
You misunderstand. I did not dismiss nor denigrate being a smart consumer. I am merely pointing out that some have a tendency to obsess over relatively minor costs/prices while not keeping things in perspective relative to what they spend and save overall. If one cannot AFFORD the $5 Whole Foods berries, or the $5 pint of craft beer, that is one thing. And clearly nobody likes to feel that they are being gouged. But life is short and time is money. I would rather (to use the present example) pay a bit more for my berries at WF if the alternative is to make an extra trip somewhere else in my car (which itself has a set of additional costs associated with it). Furthermore, if I am saving 30-40% of my income (as many on the board do), and that amounts to tens of thousands of dollars saved per year, my price sensitivity does not affect purchases of a few bucks. Hundreds, yes, thousands, yes...but not single digit price differentials.

To each his own, of course, and people have their own anchors--not to mention different incomes--but I try not to sweat the small stuff. There's an emotional cost to being overly price sensitive and I try (though admittedly not always successfully) to keep things in perspective relative to my income and savings.

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VictoriaF
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Re: Living Expenses - what's "reasonable"?

Post by VictoriaF » Thu Aug 31, 2017 2:42 pm

Admiral wrote:
Thu Aug 31, 2017 8:37 am
2015 wrote:
Wed Aug 30, 2017 7:20 pm
Admiral wrote:
Wed Aug 30, 2017 2:40 pm
VictoriaF wrote:
Wed Aug 30, 2017 1:03 pm
VictoriaF wrote:
Thu Aug 24, 2017 9:26 pm
Earlier in August I spent two weeks in Barcelona where I was buying blackberries and raspberries for €1.50 per pint. I was staying at a hostel which had a large refrigerator and so I had my berries daily. Now that I am back at home, I have curtailed my berry habit because in my local supermarkets they go for $3.99/pint. I can afford any amount of berries I may wish, but it's psychologically difficult to pay more than twice of what I was paying so recently.
UPDATE:

Earlier today I visited Costco to stock up on various food and supplies. I was pleased to find 2-pound packages of organic strawberries for $4.99 and 12-oz packages of blackberries for $3.79. These prices are much closer to what I consider fair. For the next few days I will resume my berry habit, then I'll see.

Victoria
I might gently suggest that you not let excessive price sensitivity keep you from eating something you enjoy (and that's good for you). Prices fluctuate. If the cost is that much of an issue, maybe consider cutting back on something else to fund your berry habit.
One person's "excessive" price sensitivity is another's smart consuming. We are now in the Age of Superabundance, where "surplus" has migrated from producers to consumers in many, many areas (their risk of loss = your gain). The paradigm for the consumer has completely changed. We now have unprecedented power to optimize most purchases/choices in terms of satisfaction, price, and experience. No need to cut back on anything. Instead, elevating one's expectations in most areas of human endeavors can lead to much higher levels of freedom, satisfaction, and fulfillment.

You just have to think before you choose (or buy, or pay attention to). Your time is your attention is your money is your life. If you're not viewing choices in these key areas strategically, you're going through life like a one-legged man in an ass-kicking contest (to paraphrase Charlie Munger).
You misunderstand. I did not dismiss nor denigrate being a smart consumer. I am merely pointing out that some have a tendency to obsess over relatively minor costs/prices while not keeping things in perspective relative to what they spend and save overall. If one cannot AFFORD the $5 Whole Foods berries, or the $5 pint of craft beer, that is one thing. And clearly nobody likes to feel that they are being gouged. But life is short and time is money. I would rather (to use the present example) pay a bit more for my berries at WF if the alternative is to make an extra trip somewhere else in my car (which itself has a set of additional costs associated with it). Furthermore, if I am saving 30-40% of my income (as many on the board do), and that amounts to tens of thousands of dollars saved per year, my price sensitivity does not affect purchases of a few bucks. Hundreds, yes, thousands, yes...but not single digit price differentials.

To each his own, of course, and people have their own anchors--not to mention different incomes--but I try not to sweat the small stuff. There's an emotional cost to being overly price sensitive and I try (though admittedly not always successfully) to keep things in perspective relative to my income and savings.
Stop using my messages as a premise for your theories. I have responded to you how the berry example came about, and that should be the end of it.

We all have our preferences for what we want to pay for and how we want to pay for it. Your own comments can also be construed as unnecessarily frugal, for example, this one:
Admiral wrote:
Thu Oct 08, 2015 9:56 am
...
I am a big saver and don't live beyond my means (no debt except mortgage). I have always been reluctant to take ANY money out of this account for ANYTHING (except the aforementioned shift to a non-taxable account).

That said, occasionally, things come up, and I need to buy (for example) a $1000 computer for my daughter. Our cash flow is such that there's not a ton of money left over each month after we get done paying for everything.

Perhaps I am just looking for confirmation...but am I crazy for not taking a little money out of this account now and then for essentials? Would it be reasonable for me not to beat myself up if I need to take out 3% per year to even out our finances on a month to month basis? Or, the counter argument: don't buy anything unless I can afford it from our monthly take home? We take quite a few vacations per year so most excess money goes for those.
This is a discussion forum. Discussions require some level of detail of what we do and why we do it. Sometimes, we doubt ourselves. Sometimes, we make fun of ourselves. But using someone else's personal examples as an opportunity to demonstrate your decision making superiority does not reflect well on you.

Victoria
WINNER of the 2015 Boglehead Contest. | Every joke has a bit of a joke. ... The rest is the truth. (Marat F)

ryman554
Posts: 1006
Joined: Sun Jan 12, 2014 9:44 pm

Re: Living Expenses - what's "reasonable"?

Post by ryman554 » Fri Sep 01, 2017 9:30 am

David Scubadiver wrote:
Thu Aug 24, 2017 3:02 pm
Expect to spend as much or more than you spend now.
Except you aren't saving as well. Otherwise, I tend to agree.

For me, I project ~$60k in today's dollars after income (not property) tax expenses for the "essentials" in a HCOL area, assuming a paid off home. We could move to a M-LCOL area and a cheaper house and reduce that to $50k, if needed, and likely desired.

It has been remarkably stable over the past 5 years that I have been loosely tracking it.

I plan on having 1 to 1.5x that in addition for all the fun and unplanned expenses, although how I would spend it all is still unclear.

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