While I'm still sitting on my sister's proverbial doorstep, I have a future home and a future plan. I know many of you have enjoyed and followed the journey, but after these budget posts, I'll be more than ready to ge back to blogging about travel, quiltig, cooking and everything else-sharing how I do it and do it frugally. Time to get back to livng richly in retirement. Meanwhile..........
Budgeting, in retirement or anytime, is not necessarily for the faint of heart. I am neither a budget nor a finance person per se (as history shows). However, I am good at setting priorities and recognizing what is important to me. To that end, I have downsized my life (at least temporarily). The purpose of my downsizing, of my limiting and eliminating certain expenses was so that I could both be comfortable and have time an energy for the things that are really important to me.
It's worth noting than when I budget, my budget is not based on a percentage taken from investments or savings. My budget is fixed, and comes from social security and a small pension (and intermittent earnings of various types). I adjust the budget to the monthly income, not the other way.
It's also important to note that what is important to me is not important to others. Some folks don't like to travel, have pets or hobbies that are not cheap. For some people, not being able to see all the channel available on TV would be deprivation. Some people simply must have the latest technology, all of it. Some people enjoy working in retirement, some hate it (I don't mind as long as it fits into everything else in my life). We all have times when we will not "sacrifice" or accept "second best". It depends on the person. I've learned that I enjoy local theater as well as Broadway, and that the crab shack with the newspaper tables is as good as a lobster restaurant with white.
With that in mind, and following Tamara' general guideline of fixed vs discretionary expenses, my new fixed financial budget is below. Basically, I have been able to lower or keep everything at last year's level (even medical), with one exception.
Housing Costs-for the next year I will live in a large two bedroom ground level condo apartment with a huge patio. My square footage was cut in half and I lost my yard but gained a huge patio facing a reservoir. This is a one year solution while I look further. Rents are not much lower than morgtage payments, but I eliminated four thousand dollars in taxes, lessened my insurance costs,and eliminated my home improvement and yard budget. Difference between house payments: a mere $150. Total Cost differential I have yet to figure, but let's just say bunches.
Utilities: My water, sewer and trash will be about half of what it was before, as a direct result of downsizing and climate change. In truth, no real thermostat adjustments here. I still keep my heat above 70 when it's cold. Still, my gas/electricity will be less than a third of previous costs, with total costs somewhere around $150 monthly in the winter, and a monthly savings of between $300 an $400.
Food at Home: This is an area where I have been low. I budget $250 a month for food. I (we) eat well and more cheaply than many of my fellow bloggers. For those who are interested, I do that buy shopping loss leaders and having a full pantry and freezer at all times. I only shop weekly or twice a week for produce and milk and plan my meals from what I have rather than making a list. I eat seafood, lamb, and wine. Changes here will be made on eliminating waste rather than cutting costs. I enjoy eating at home most of the time. Good food is one of my requirements, but cooking it myself is no problem. Cost: $250 -no change.
Cable TV-Internet: I adore movies and many TV shows. Almost all of these shows can be streamed or rented very soon after they appear on TV. I am not a person who minds waiting-in fact in lived in no English TV land for years and am used to watching a TV series in a week or so-it has it's advantages. I'm not quite ready to stop watching the evening news or sports though. My solution is so called "basic cable" with high speed Internet. Having said that, what will I do about Homeland?? End result? Cutting these costs by half -from just over $100 to about $50.
Car Expenses: Costs are pretty fixed even with geographical change. I compare insurance prices twice a year, use an app to find the cheapest gas. On the other hand most of my travel is driving, requiring a fairly recent model and maintenance on the "high schedule". Costs will not change with my new lifestyle for the next year. (note that my car is not four wheel drive and will have to be addressed with sinking funds at some point). No Change in Cost-$75 for insurance and $60 in fuel when not traveling!
Cell phones: Like the auto expenses, this is a "stagnant cost". I'm not a person who goes crazy over technology. I have a smart phone and a smart phone contract with unlimited calls and texting in the US and consider it a wise decision. I don't use a GPS, or other technology. My phone has GPS and maps. It has an app for the lowest prices, making dinner reservations, scanning items to see if they are the cheapest price. it has a app for my bank, apps or all buying sites, and an app to scan credit cards and receive payments. Monthly Cost:$100
Medical Care: My costs have not gone up (knocking on wood). Premiums and co-pays have remained the same, and my medical copay did not change this year. I have no dental/vision and have considered adding it. I pay $200 monthly for family insurance, five dollars per prescription with some exceptions and $10 or $20 per copay with a $5000 catastrophic limit. Obviously medical issues affect these costs. Based on last year I budget $20 monthly for medicines and $30 for co pays, for a total of $50.
So there you have it. My downsizing move has probably saved me conservative $500 per month, and if I average out the $4000 property tax and various home improvements not landing at my door I've probably saved $ 500 a month in variable expenses. Yes, it required life style changes. For the most part, these changes have been painless and more about rightsizing than downsizing. In fact, the only place I see my lifestyle dramatically affected is when it comes to the pups. No more will I open the door for them and go back to bed! On the other hand, three time a day walks may eliminate my need for water aerobics-who knows? Coming next, the fun stuff-travel, hobbies, volunteering, dog costs, clothing replenishment and the lot. .......