Living Expenses under $10k/year - can it be done?

[firemachine69]

Originally Posted By: crinkles
if I am lucky I can save only $650 per month LOL.

you guys saving half your income must be miracle men, have working wives or/and no kids, and have jobs paying 100k out of university...




My income is highly variable (bus driver, most income comes from mileage).

I became quite the nazi when it came to money-issues back when I lived with my former partner. Then I realized I was so unhappy never doing anything, I said "to [censored] with this", and built a better budget around actually enjoying life.

Essentially:

I pay my bills on time every month, then keep about $200 bi-weekly for my travelling and personal expenses. Whatever's left of the $200 I don't spend stays in the checking account for later.

Anything left over from my paychecks after bills and the personal two-hundred goes to my debts. I'm just waiting for my tax return to come on to finish off the $1300 of CC debt - down from $12k eight months ago. It's a beautiful thing to watch $38K of debt fall like dominoes.

Now my "spending" cash is steady, and I lead a very happy life (for now

.)

 

[severach]

The cheapest food is often the worst food. Eat for $20 a week and your medical bills will astronomical. The good part is that you'll die so early that expenses later in life won't be a problem.

 

[SecondMonkey]

Originally Posted By: PandaBear
4) tax?

Good point. If you're making $110,000/year, you're paying WAY more than $10k in taxes alone.

 

[Chuck1986]

Originally Posted By: severach
The cheapest food is often the worst food. Eat for $20 a week and your medical bills will astronomical. The good part is that you'll die so early that expenses later in life won't be a problem.


Take a closer look at my grocery list. The idea that cheap = unhealthy is a complete myth. Let's see, beans, oatmeal, fruit, whole wheat bread...oh since they're so cheap I better eliminate them from my diet! Nevermind the fact they're free of saturated fat, full of cholesterol-lowering soluble fiber and are complex carbohydrates.

I better shell out more money and go with some Pilsner beer and Salisbury steak if I want to eat healthy!

 

[PandaBear]

I don't think cheap food is worst food. Cheap takeout food is bad for you is usually true, but a 20lb bag of white rice for $12 can last you 3 months and is much cheaper and healthier than top ramen noodle (processed).

The cost is mainly along the line of processed (expensive) vs raw ingredient (healthy when cooked correctly). Expensive food taste better, but aren't necessarily healthier.

 

[Chuck1986]

Originally Posted By: SecondMonkey
Originally Posted By: PandaBear
4) tax?

Good point. If you're making $110,000/year, you're paying WAY more than $10k in taxes alone.


As the subject of this thread is "living expenses under 10k", I'm referring to staples such as shelter, transportation and food. Taxes and elective expenses aren't included.

 

[Chuck1986]

Originally Posted By: Pop_Rivit
Originally Posted By: Chuck1986
Apartment rent: 749/month
Heating & Electric: 50/month
Food: 15-20/week
Car Insurance: 1200/year
Fuel: 5/week


I don't see health care or dental costs in there. Even if you get health care insurance through an employer you don't mention day to day things, co-pay's, asprin, etc. What kind of an apartment can you get for $749/month? Any chance your car will need repairs? Tires?

What about vacations? Planning on sitting at home eating banana's and Ramen Noodles for your vacation?

Originally Posted By: Chuck1986
18 oz peanut butter 1.49
16 oz kidney beans 1.75
42 oz raw oatmeal 1.79
(4) 5-oz cans chunk lite tuna 2.76
8 oz cheese 1.99
2.5 lbs bananas 1.24
loaf whole wheat bread 1.69
(6) packs ramen noodles 0.99
1/2 gallon milk 1.60
(2) 16-oz spaghetti 1.38
29 oz tomato sauce 0.89
(2) 16-oz frozen veggies 2.00
1 can frozen orange juice 1.29


Ramen noodles as a diet staple? Packed full of sodium and not much else-those are some pretty empty calories. Not to mention they taste like flavored cardboard. I can't imagine living on a diet like that for a year, let alone for the rest of your life.

Originally Posted By: Chuck1986
assuming it earns about 3% interest per year, compounded monthly - I would have $1.2 million by the time I am 40 and I could certainly retire and live off that for many years


Retiring at age 40 with 1.2 million will allow you to live-just about like you budgeted already. And if you can't do better than a meager 3% return then you should let someone manage your money who knows what they're doing.

There are so many day-to-day costs that are missing from your list that it starts to become funny. It's completely unrealistic.

And I have to ask, since you're so eager to retire from your choosen career at age 40, why didn't you choose a career that you like?


I am choosing a career I like. It would be nice to retire and do something at my leisure such as write scholarly articles.

And for all the people telling me 1.2 mil isn't enough to retire off of: If it earns as little as 3% interest yearly, well, that's 36k per year! 36k is close to the net income of someone earning a gross income of 50k/year. Thus, the interest alone is more than enough to sustain a comfortable living. Not to mention the fact that some living expenses decrease (ex. transportation) once one retires.

 

[demarpaint]

Originally Posted By: Chuck1986


And for all the people telling me 1.2 mil isn't enough to retire off of: If it earns as little as 3% interest yearly, well, that's 36k per year! 36k is close to the net income of someone earning a gross income of 50k/year. Thus, the interest alone is more than enough to sustain a comfortable living. Not to mention the fact that some living expenses decrease (ex. transportation) once one retires.


Keep in mind that $36,000 a year interest income is taxable. So figure out your tax rate, because Uncle Sam will want his cut, and it will be a pretty healthy cut.

Your list is missing some items:

18 oz peanut butter 1.49
16 oz kidney beans 1.75
42 oz raw oatmeal 1.79
(4) 5-oz cans chunk lite tuna 2.76
8 oz cheese 1.99
2.5 lbs bananas 1.24
loaf whole wheat bread 1.69
(6) packs ramen noodles 0.99
1/2 gallon milk 1.60
(2) 16-oz spaghetti 1.38
29 oz tomato sauce 0.89
(2) 16-oz frozen veggies 2.00
1 can frozen orange juice 1.29
-----------------------------------------------------------------------------

Missing: clothes, shoes, tooth paste, soap, toilet paper, shampoo, laundry detergent, to name a few, and other personal items. I'm sure others can add to it

 

[Patman]

Retiring at age 40 would certainly be nice (that would mean I would be retired right now!) but realistically wouldn't it be better to set that goal to age 50 or even 55? That would give your money an extra 10-15 years to grow, and then you wouldn't need to pinch pennies so much. Trust me, pinching pennies is not that much fun, I've been doing it for a year now (got laid off in Feb 09, it took six months to find another job, have one now that I absolutely love but am making almost half of what I used to make) Sure some aspects of pinching pennies can be fun (I love the thrill of finding a good sale on stuff in the weekly flyers for instance) but other aspects really suck, such as the fact that my 10th wedding anniversary is coming up in March and I can't afford to take my lovely wife on a nice vacation that she certainly deserves, and I would also love to replace her ten year old rattletrap Civic with something fresh and new. But those two things just aren't going to happen on a pennypincher budget.

Another thing that boggles me is why anyone would want to go to such extremes if they are making $110k a year? I'm not saying you should spend like a king, but for pete's sake the whole point of making good money is to live the good life! If I made that kind of money I would certainly put a ton of it away for retirement, but I would also enjoy life as well and take a good vacation every year or two, and buy moderately nice new cars for my wife every 5 or 6 years. I certainly wouldn't live in a cheap apartment either! Even on my pennypinchers budget I still manage to eat good food, we just cooked a nice prime rib on Saturday (got it on sale for $3.97 a pound) and we go to the Keg steakhouse for dinner about once every other month (I use my air miles for free dinners) That's one thing I could never give up, is good food.

 

[Pop_Rivit]

Originally Posted By: Chuck1986
And for all the people telling me 1.2 mil isn't enough to retire off of: If it earns as little as 3% interest yearly, well, that's 36k per year! 36k is close to the net income of someone earning a gross income of 50k/year. Thus, the interest alone is more than enough to sustain a comfortable living. Not to mention the fact that some living expenses decrease (ex. transportation) once one retires.


And after taxes that works out to about $23,000 to $25,000. While that's double what you're currently allocating, you're not factoring in inflation. Your $25,000 in 20 years will probably be worth about what your $10,000 is now.

You're right-some costs decrease, but others increase. Transportation will decrease if you sit around doing nothing, But if you actually plan to go anywhere while you're "retired" your costs will go up.

Originally Posted By: Chuck1986
It would be nice to retire and do something at my leisure such as write scholarly articles


And who would actually read "scholarly articles" from someone who retired with so little experience? When I read professional articles, I expect them to be from someone who actually has experience to back up what they're writing about. And 40 years old isn't anywhere near enough experience.

But then it is your choice to live like a pauper. But imagine all the things in life you'll miss out on.

 

[Cutehumor]

just like Patman asked.. why retire at 40? if you push that to 55 years old, you may be able to make your money last.

 

[Quattro Pete]

Originally Posted By: Chuck1986
Thus, the interest alone is more than enough to sustain a comfortable living.

I guess it depends on the definition of "comfortable living", but I highly doubt it. Taxes will reduce it by 1/4, and the older you get, the more money you will be spending on doctors, meds, etc. Medicare won't pay for everything. You might be able to get by on this interest if you live at your kid's place, but then again, you're not planning to have any kids from the sound of it...

I still commend you on having a plan. I just think it's somewhat detached from reality. Make sure you take some personal finance classes while in school.

 

[L_Sludger]

You could retire in a foreign country where local interest rates are high and costs of living are quite low, and enjoy a higher living standard than you would in the US. Start learning a foreign language now

 

[Big_Ed]

Maybe this has also been mentioned, but there's more than just groceries that you need to buy on a regular basis. Like soap, laundry detergent, toothpaste, toilet paper, shampoo. Also, you will probably have to replace things like your computer, cell phone, toaster, lightbulbs, flashlight batteries, blender or tv every so often, (internet service isn't free either) and buy Christmas gifts for family and maybe friends. What about life insurance? That costs money too. I think there are many monthly expenses or expenses every so often that get forgotten.

Also maybe something that should be considered - don't fully retire, just work part time when you turn 40. See if you like working 20 hours a week instead of 40 or whatever. Then you'll still be making money while having more time to work on the writing.

And all those food prices people are putting up here are bound to increase as time goes by.
Take care.

 

[L_Sludger]

I recommend getting in good with the local food banks and community shelters - they supposedly give really good food away.

 

[MarkC]

Originally Posted By: PandaBear
I don't think cheap food is worst food. Cheap takeout food is bad for you is usually true, but a 20lb bag of white rice for $12 can last you 3 months and is much cheaper and healthier than top ramen noodle (processed).

The cost is mainly along the line of processed (expensive) vs raw ingredient (healthy when cooked correctly). Expensive food taste better, but aren't necessarily healthier.



I wouldn't say white rice is a particularly healthy food choice, though I realize it's a staple for millions (billions?) of people. It has little nutritional value other than carbs. I think it's use is mainly as filler when people don't have much of the other stuff--meat and veggies-

Some Buddhist somewhere has written something to the effect that if a man wants to die, he eats rice.

 

[Shannow]

MarkC, there's a problem when you compare western eating white rice and semi third worlders.

Ours is "clean"

Once infected with weevels and stuff, there's heaps of animal protein and Omegas present (up to 10%ish) that will be consumed rather than the pure stuff that we eat.

Vegeterians in the third world don't just eat vegetables, and DO eat a fair bit of animal (albeit vegetarian animal).

I wanted to come back to this thread tonight.

Just heard a 22 year old at work one up another workmate.

"I have $20k in credit card debt, and have just taken out a $460k mortgage"...on $60k salary...

 

[crinkles]

Originally Posted By: Shannow
MarkC, there's a problem when you compare western eating white rice and semi third worlders.

Ours is "clean"

Once infected with weevels and stuff, there's heaps of animal protein and Omegas present (up to 10%ish) that will be consumed rather than the pure stuff that we eat.

Vegeterians in the third world don't just eat vegetables, and DO eat a fair bit of animal (albeit vegetarian animal).

I wanted to come back to this thread tonight.

Just heard a 22 year old at work one up another workmate.

"I have $20k in credit card debt, and have just taken out a $460k mortgage"...on $60k salary...


where's his bank??? they can lend ME some...

but really, i abhor debt.

 

[Shannow]

Rich family/security.

 

[IndyIan]

Originally Posted By: Chuck1986
Originally Posted By: Pop_Rivit
Originally Posted By: Chuck1986
Apartment rent: 749/month
Heating & Electric: 50/month
Food: 15-20/week
Car Insurance: 1200/year
Fuel: 5/week


I don't see health care or dental costs in there. Even if you get health care insurance through an employer you don't mention day to day things, co-pay's, asprin, etc. What kind of an apartment can you get for $749/month? Any chance your car will need repairs? Tires?

What about vacations? Planning on sitting at home eating banana's and Ramen Noodles for your vacation?

Originally Posted By: Chuck1986
18 oz peanut butter 1.49
16 oz kidney beans 1.75
42 oz raw oatmeal 1.79
(4) 5-oz cans chunk lite tuna 2.76
8 oz cheese 1.99
2.5 lbs bananas 1.24
loaf whole wheat bread 1.69
(6) packs ramen noodles 0.99
1/2 gallon milk 1.60
(2) 16-oz spaghetti 1.38
29 oz tomato sauce 0.89
(2) 16-oz frozen veggies 2.00
1 can frozen orange juice 1.29


Ramen noodles as a diet staple? Packed full of sodium and not much else-those are some pretty empty calories. Not to mention they taste like flavored cardboard. I can't imagine living on a diet like that for a year, let alone for the rest of your life.

Originally Posted By: Chuck1986
assuming it earns about 3% interest per year, compounded monthly - I would have $1.2 million by the time I am 40 and I could certainly retire and live off that for many years


Retiring at age 40 with 1.2 million will allow you to live-just about like you budgeted already. And if you can't do better than a meager 3% return then you should let someone manage your money who knows what they're doing.

There are so many day-to-day costs that are missing from your list that it starts to become funny. It's completely unrealistic.

And I have to ask, since you're so eager to retire from your choosen career at age 40, why didn't you choose a career that you like?


I am choosing a career I like. It would be nice to retire and do something at my leisure such as write scholarly articles.

And for all the people telling me 1.2 mil isn't enough to retire off of: If it earns as little as 3% interest yearly, well, that's 36k per year! 36k is close to the net income of someone earning a gross income of 50k/year. Thus, the interest alone is more than enough to sustain a comfortable living. Not to mention the fact that some living expenses decrease (ex. transportation) once one retires.

There are a few books around on how to retire early, but still live well before and during retirement.
I find its an interesting thinking exercise on how to live well on the minimum amount of money.

Another way to go is the country hermit route, buy some land with enough woods and workable area to cover food, water, heat, and shelter, and maybe fuel if you can figure out a still. There's areas just north of me where you could have a bike and snowmobile for transportation, live a 20 minute bike ride from from town and have a 30 minute bike ride to a dozen lakes stocked with 1000's of trout... Limit is 5/day. No more ramen noodles...
Odds are you would live to your 80's with minimum health problems(all that fresh fish!) and then if things start to go bad, pull out the .22 and call it a day.