My $15K Middle Class Budget

[JoeP]

With the right choice of location and a serious down payment, couldn’t anyone do just as well or better?

You are missing a lot of other factors that some are simply not willing to relinquish. My post above lists a few. I don't see any mention of children nor pets. Especially when you have both, there are considerable expenses associated with them.

[Retired To Win]

It's About Showing What's Possible

I feel like you spend a lot of effort convincing everyone how well you can live on $15k a year...

It's not about convincing anyone of anything. It's about showing one example of what can be possible to those who might be interested in exploring how much they could do about their expenses and still feel okay about how they are living.

It is not my intent to show off that I spend very little. It is, after all, not that little (at least not to the superfrugal people telling me my spending is "extreme".) Instead, I want to document by one more example (mine) how much you can have and do -- how good a daily life you can have -- on less money than most (middle class?) people have coming in. To show that financial independence could be a lot closer than generally assumed.

[Reggie]

It might be more relatable as a percentage of total income, since higher COLA areas tend to have higger incomes. Can you live on 25% of your total household income? or something like that. im trying to get my expenses down so i can retire when my first grandchild is born. Im not taking my husbands income into account at all. I need to get my individual expenses down to make this happen. we are already financially independent but I want to have a very nice standard of living after I retire.

Living on less without sacrifice is always a good thing. the difference is everyones definition of sacrifice.

[rigz]

To get where I am, the first two -- and probably most important -- things I did were (1) to CHOOSE exurban Virginia as a place to live and move there from suburban within-commuting-distance-from-DC Maryland, and (2) to systematically go over my entire living expenses budget line by line and in the process cut it down from more than $30,000 a year to its present $15,000 or so (without making any sacrifices).[/I]

How is that not making any sacrifices?

The idea of living on 15,000/year is insane to me (granted I live in a HCOL area) but even double that is not possible under any circumstances. Even if it was that is not a life I want to live.

[Retired To Win]

My Vehicle and What It Costs

My family size is my largest impact...

From many "case studies" I've read on this Forum, another really large impact on people's basic living budget is their choice of vehicle(s).

I think my most powerful budget-lowering tactic is my textbook Mustachian vehicle ownership strategy. In my book too, a vehicle is for safe, reliable and comfortable transportation of people and stuff. Social status preening through one’s choice of vehicle is in no way a legitimate basic living expense. So my vehicle is a 1996 Dodge Dakota extended-cab pickup that I have driven since 2003. It is paid for, utterly reliable and totally practical. (I haul a lot of stuff.)

My monthly costs for that vehicle are as follows:
[] insurance (top-of-the-line)... $ 35
[] maintenance (and repair).... $100
[] fuel (for 300 basic miles)...... $ 50

[] TOTAL....................................... $185

(My wife drives and pays for a similarly thrifty 1998 all-wheel-drive Subaru Forester.)

Opting out of a new, fancy-schmanzy vehicle has drastically reduced my monthly outlay for installment payments (I have none), insurance (much cheaper to insure a $4K vehicle) and maintenance (simple systems mean simpler work). AND my older non-status vehicle has reduced my magic FI stash number by about $150,000. (!!)

Ego stroking aside, what justification can there be for hardwiring the monthly costs of a late model status vehicle into one’s basic expense budget? How can that be worth the many extra years it adds to reaching financial independence?

[disneysteve]

My monthly costs for that vehicle are as follows:
[] insurance (top-of-the-line)... $ 35

Although again, I would point out that location makes a huge difference here. I drive a 2006 Toyota Camry. My wife has a 2010 (maybe 2011) Toyota minivan. Neither would be mistaken as status vehicles. But our insurance runs about ten times what you are paying - about $350/month.

It's great that you are able to live so cheaply and seem very content to do so but understand that in much of the country, that simply isn't possible. Yes, we could pick up and move out to the sticks somewhere and spend a lot less money but that isn't the life we want. We like where we live. We like being close to family and friends. We like the conveniences that exist here. Sure, the cost of living is higher but that's the trade-off for everything else that comes with it.

[97guns]

recently downgraded my vehicle to this




i used to work with a guy that was making a $750 car payment making $20 an hour

[Zedon]

How much would your house cost right now if someone were to move there to try that lifestyle? I've never heard of a $25k mortgage in recent times. Mobile homes around here cost 5 times that. I have more than 20% of my home paid off and it's still 10 times that.

[~bs]

Like people have mentioned, location & lifestyle matters a great deal. For me, just housing cost + maintenance + property tax is over $20k. I have no other debt, but probably costs another $5k or so per year just living my normal lifestyle, which is not extravagant at all.

I mean, hell $15k would be easy for me if my personal situation was living with my parents rent-free, utilities paid for, no food cost. $15k in fun money is great living. But as was mentioned earlier, everyone's life situation is different.

And "how much can you stand" differs for everyone. For some people, shopping at goodwill is perfectly acceptable, some people not. For some people standing in food kitchen lines is acceptable, some not. Some may be ok with getting their furniture from the side of the road, ,some not. There's real savings that can be achieved by being "ultra frugal", but it's not worth it for everyone. For me, I'd rather pay a couple grand a year for food and not have to dig out of trash cans for my meals daily. And I'd rather pay a higher monthly mortgage than moving back in with my parents or living in a shoebox sized place in the ghettos.

So I do find attempting to limit my yearly budget to $15k unacceptable, especially as my income is multiples of that figure, and my savings rate excessive compared to my likely needs in retirement..

[hamchan]

What we paid for medical bills and insurance alone last year was more than 15k.

[disneysteve]

What we paid for medical bills and insurance alone last year was more than 15k.

Actually, if I add all insurance costs, we are also over 15K between auto, home, property, life, disability, and health insurances. And that doesn't include any out of pocket medical expenses.

[dawnwes]

Good point.

We currently spend $7,200 just in medical insurance. We spend another $3,000 or so on medical bills/costs as I have a child with some special needs and insurance does not cover all of it.

Car insurance is currently $1,500 but that is with just two drivers. In January, our two oldest boys will be taking drivers education and within another year of that, our car insurance will most probably go up very significantly.

Home owners insurance isn't too bad, maybe $,1000 per year? Taxes are an additional $3,000.

So, that puts us at $15,000 without my teen drivers.

Nope, we cannot live on $15,000 per year.....

Dawn

What we paid for medical bills and insurance alone last year was more than 15k.

[ua_guy]

From many "case studies" I've read on this Forum, another really large impact on people's basic living budget is their choice of vehicle(s).

I think my most powerful budget-lowering tactic is my textbook Mustachian vehicle ownership strategy. In my book too, a vehicle is for safe, reliable and comfortable transportation of people and stuff. Social status preening through one’s choice of vehicle is in no way a legitimate basic living expense. So my vehicle is a 1996 Dodge Dakota extended-cab pickup that I have driven since 2003. It is paid for, utterly reliable and totally practical. (I haul a lot of stuff.)

My monthly costs for that vehicle are as follows:
[] insurance (top-of-the-line)... $ 35
[] maintenance (and repair).... $100
[] fuel (for 300 basic miles)...... $ 50

[] TOTAL....................................... $185

(My wife drives and pays for a similarly thrifty 1998 all-wheel-drive Subaru Forester.)

Opting out of a new, fancy-schmanzy vehicle has drastically reduced my monthly outlay for installment payments (I have none), insurance (much cheaper to insure a $4K vehicle) and maintenance (simple systems mean simpler work). AND my older non-status vehicle has reduced my magic FI stash number by about $150,000. (!!)

Ego stroking aside, what justification can there be for hardwiring the monthly costs of a late model status vehicle into one’s basic expense budget? How can that be worth the many extra years it adds to reaching financial independence?

Why do you choose to insure/maintain/keep two vehicles when you're retired, don't work, and are on such a limited budget?

[Retired To Win]

Why do you choose to insure/maintain/keep two vehicles when you're retired, don't work, and are on such a limited budget?

We are not forced to be on what you consider "such a limited budget." My passive income is 3 times my $15K basic living expenses. My wife's passive income plus side gig is 4 to 5 times that much as well. If you reread the original post on this thread, you should see that we lack for nothing and are not "limited" by our incomes.

As far as the vehicles go, my wife NEEDS her car and I NEED my truck. We travel separately quite frequently. The vehicles serve different functions. And we have divergent outside interests that call for just one of us driving to the interest location all the time. (Retired does not mean porch-rocker-bound!) Neither one of us can be left stranded at home without any way of getting to where he or she might need to go while the other one is off doing his or her thing.

[disneysteve]

As far as the vehicles go, my wife NEEDS her car and I NEED my truck. We travel separately quite frequently. The vehicles serve different functions. And we have divergent outside interests that call for just one of us driving to the interest location all the time. (Retired does not mean porch-rocker-bound!) Neither one of us can be left stranded at home without any way of getting to where he or she might need to go while the other one is off doing his or her thing.

I'm with you on this one. I can't imagine going down to one car, retired or not. As long as we are both physically able to drive, we will have two cars.