Thursday, May 2, 2013

The Downsized Budget .....Or The Joys Of Fixed Income Living (And A Surprise!)

As a retiree who reads many blogs, I am constantly and consistently amazed by the generalizations out there about what retirees are and are not and what they can and cannot do (financially and otherwise). Most recently, I read a blog where the author implied that she did not want to be retired because she wanted to be with people of all ages, go to "real concerts", buy good food and do all the things other retirees cannot do.  Honestly, when I read things like that, my first thought, is "get out in the world and meet some new people".

I say that as a person living on a regular, fixed income, who chooses not to "work" I  do sell items that I make, but that profit goes back into my hobbies, not into the budget as a whole or into savings.  If I stopped tomorrow, I would manage. 

Now, this is not to say I think working in retirement is bad, or even that some folks may not need to work in retirement to afford extras. I'm just objecting to the idea that EVERYONE needs to continue working-especially for someone else. For lots of retirees working is enriching .........more about that soon.

For most of us in the real world, compromises need to be made when it comes to financial planning and desires. Frankly, this is true during the working world for most of us. Very few of us made, or have made, enough that we have never had to make budget choices. The median family income in the United States is around $50.000. Even those who have made more still have to set priorities. I have lived on much less as a young stay at home wife, and on more and still had to set priorities always. 

Before I talk about financial priorities though, let me say that I associate on a regular basis with people of all ages in my volunteering, my water aerobics classes, my art classes, my travel groups, my university classes and much of my socializing. It is not necessary in retirement to only socialize with other retirees, even during the supposed work days.  That said, all the retirees I know are as active, if not more so than before they retired. I do some things that involve only retirees (my dinner and book group) and those things are no less interesting than anything else. The only place I sit around at is my home/castle, and that my friends is by choice, lazy me.

In order to afford all the things I want and like to do, I make compromises and sacrifice those things that are of much less importance. I've talked about some of adjustments before, in my downsizing series.  As previously mentioned I downsized my home, saving me almost $500 per month alone (although I still may change my living arrangements, as mentioned below). I simplified my beauty regimen and clothing requirements as much for convenience and because I like a classic easy look as for cost. I meet those needs inexpensively through self care, discounted purchases and second hand requirements. I have chosen to eat and cook at home or at relatives' homes with the exception of the rare holiday (travel being the exception) or spur of the moment dining offer. I have chosen to moderately downsize holidays and give mainly handmade and consumable gifts now that kids are grown (admittedly I have a large family that appreciates my skills and what I make). Most of my "social events" are through church or an artists group, either in my home or someone else's. I exercise by walking in the neighborhood when able and using the YMCA pool for an extremely low fee when not.  Finally, I spend a small amount of time every day checking on discounts, group buying, cutting coupons and looking for other deals that allow me both to enjoy the areas mentioned below and cut costs further on the items listed above (without impacting lifestyle).

I made all of the above choices with little pain or discomfort (although the moving itself was an experience to say the least). I made them by choice so I could put my retirement  and energies towards those areas that were most important-the fun stuff (entertainment and culture, travel, my myriad of hobbies) and savings. Here is a general idea of what those categories look like now, and how I got there. I have not necessarily given specific dollar amounts in all categories.

In order to have a full and active entertainment and cultural life, I've made the choice to intersperse lots of free and low cost or discounted activities with a few expensive full price choices (still generally purchased at a discount).  I'll add here that I don't particularly consider "free" to be less worthy or "real" than a hundred dollar ticket. This week I can see the Colorado Symphony for free, along with a university jazz quartet. I've also seen three one dollar movies from Red box, gone to a free "people's fair" and garden expo.  In the next two weeks though, I will see two opening night movies with all the added food, and in the next two months I intend to see a real stage musical and an expensive rock concert.  Frankly, I expect I will have enjoyed the first as much as the last. In other words, in order to afford those few expensive tickets, I am happy to do the free stuff the rest of the time. Deprivation? I guess it depends on your definition. So, my budget allows for lots of free and discount events and one full priced entertainment ticket every month or so-and I often save that for a travel event. I also allow one college level course per semester which generally costs around two hundred dollars.

The ability to travel is something important to many retirees. Different folks afford travel in different ways. In my life I have traveled in almost every way, from camping to staying in student dorms in the summer in Norway to sleeping cars on trains to staying in hostels (yes, as an adult) to staying in the best hotel in Berlin. All had their own advantages and all worked.  I travel mainly by car and train, which means my costs will be more per trip than someone who has purchased an RV or camper - how that averages in the long run I am not sure. I afford this travel by cutting on expenses of lesser import to me personally (staying in comfortable but inexpensive hotels when possible, and limiting myself to one "tourist cost" a day), so that I can spend money in the important areas (really good food in local restaurants, for example, or the occasional inner city hotel to save on driving and parking). My next major trip will be a train trip from Denver to San Francisco. I'll use off travel prices, and sleep on the train, stay in a hostel in Salt Lake City and take my large cooler with homemade gourmet food on the train-all so I can stay in the city center in San Francisco and afford the seafood my heart desires. Again, it works for me. In general, I allow myself an average of $175 a day for travel and end up spending much less in the total. Certainly San Franciso will be more expensive than Texas Hill country.  Extra money returns to the travel fund. This includes gas and car maintenance. I generally take three week to two week long trips per year. 

I have expensive hobbies. It's no secret at all. Almost all the things I enjoy doing (quilting, paper crafts, photography,canning and preserving,  genealogy) cost a certain amount of money. This does not mean the costs are insurmountable even on my budget. Admittedly, I began some these hobbies prior to retirement, and a new retiree might have to budget more. I have recently looked at taking metalsmithing classes which would be another expensive choice. What can I say!  I afford these hobbies they way most people do-I take advantage of sales when purchasing supplies. I socialize with friends, and we often swap materials. I go to every free event possible, be it a workshop at my quilt store, a demo at the yarn store or a free scrapbook class. I use the Internet for free patterns and ideas. If I sell an item, most of that money gets put back into the proverbial pot for hobbies. Finally my large family (all of whom do gifts) knows that I really and truly need almost nothing at this point in my life. My Christmas, birthdays and Mother's Day gifts almost always consist of gift cards or supplies that family members know I wish for (pressure canner, anyone?). So, I don't officially budget for hobbies. I take advantage of free resources and put gifts and profit back into the hobby fund. This is the one advantage of my occasional hobby sales, and one I will have to adjust if I stop selling my homemade items. I believe I can do that with minimal sacrifice.

So there you have it, my personal systems of checks and balances-all on less than $3000 a month. I haven't talked about savings, or making my new home my castle because, frankly, I don't know where that will be. And that my friends is the surprise! In the next week or so I'll share my complete estimated budget for the year, and how I got there, but for today I wanted to share that fun stuff. I wanted to be clear that a fun and full life is possible and that deprivation is often a state of mind-one that I refuse to consider.

For those of you following my downsizing journey, let me say that life is still an adventure. Last week, my sister asked me if I would be interested in buying a large home with her (at least five bedrooms and three baths).  No sooner had she mentioned such a thought than my brother the money manager stated that if I didn't follow through with that, he would like to buy a house or condo with me as an investment. It seems he's decided not to put any more money in the market and had planned to buy a college house for his son as investment-but reconsidered on that one. So, for the moment I have put my condo rental on hold and am investigating the logic and logistics of sharing a home with someone not my spouse for the first time. Who knows where this will end, but I am willing to find out. Meanwhile though, I am without my stuff. I think we've decided to have a storage unit exploration party as a group in the next week or so, with the two college students climbing through the waste land after the adults help move some things. I need my camera, my son needs his golf shoes and we both need our summer clothing.

Life is an adventure, I always say!

18 comments:

  1. One of the best books I read about retiring on little is "Get a Life: You Don't Need A MILLION to Retire Well." You say it just as well as he does. He interviewed all ages of retirees all over the country with all ranges of income. Mostly, it's a mindset. How much money you have has little to do with the success of retirement.

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    1. Yes, I need to re-read that book again. I also ordered How To Retire Happy, Wild and Free on my kindle. I certainly don't have a shortage of time, but I can always use some inspiration.

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  2. WOW! What a story! i think that your willingness to follow your heart and make changes allowed the Universe to bring a few "surprise" opportunities to you! I know in the next few months you will make a good decisions on housing that will suit all concerned!

    My husband and I have been a bit lax with budgeting the past few years, while we both worked, and I've been whining about having to budget again as we move towards retirement.I remember when I was a young mom.. I made it fun! ANd I will again.

    I think it is a matter of getting clear on priorities and eliminating waste! Your blog is one of my inspirations.. truth is, our desires are simple compared to most, so the changes we need to make in retirement will not be so difficult.. we're getting there..

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    1. Waste can be a huge factor, I have learned that its only a good value if I will truly use it and appreciate it in relation to the amount I have spent. With the exception of some movies that must be seen wide screen, I get more bang from my buck sitting on my comfy couch with popcorn and wine and cheese. lol

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  3. The ideas for housing are getting better and better. I am glad they are working in your favor! I look forward to your decision in the end.
    Thanks for sharing your journey.

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    1. Its amazing what opportunities arise-who knows if they will work, but I am looking forward to exploring them.

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  4. Wonderful blog! I love your ability to "go with the flow" to use an old expression. I am also having changes; my daughter and her Aussie will be joining two Chi-weenies (chihuahua dachshund mixes), one cat, my significant other & myself in our two-story home.

    I'm looking forward to it & TOTALLY love that retirement allows me to change as circumstances change.

    Thanks for sharing your life.....I really enjoy it!

    Pam

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    1. Sounds like fun things are in store for you. You never know what will happen!

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  5. I love this post, Barb! You are full of wisdom! I agree with everything you said and love that you always live life to the fullest! :)

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  6. I too am amazed at the folk that think reaching financial independence (what most of us call retirement) = boring. Boring is what I was before I stopped working I'm afraid! My focus was my job for the most part, and it consumed far too much time, and was much too narrow in focus to make for much in the way of interesting dinner conversation.

    Now? Oh my. I can discuss current events, both domestic and global, and often on a personal basis as a result of our traveling. I'm learning new languages, new musical instruments, discussing literature with several discussion groups, training for several endurance events, and exploring, exploring, exploring galore.

    So, like you, I don't 'get' folk that fear retirement equates with either being bored or becoming boring. As I always say, only boring people are bored, and only boring people are boring.

    Continue to live your wonderful life, and let that be your last word on the subject. ;-)

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  7. Oh, and Barb, I should clarify that while our current San Francisco stay is primarily revolving around inexpensive activities like hiking, biking, etc., I've stayed many times in the city center previously, enjoying exactly what you plan to do during your visit - enjoying good quality food, theater and shopping. Well, maybe not the shopping. I've never been able to justify it, though I'll drop the same amount on a plane ticket!

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    1. Im not a recreational shopper in person as i shop mainly from the web. I think your month in one place stay very interesting and am watching your experiences.

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  8. Great post ….i retired a couple years ago and are saving more, living more and enjoy more every day and still asking myself, can I afford to retire…..most days to busy to look back….oh, I did take a part time job at the local hardware and it is wonderful, talking to old friends and making a little money….now off to find the book you talked about…..ronaldj

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    1. I agree, working can be both fun and give you some extra money-this is why I have my quilting business. I just don't want to rely on it as my income, so I budget it for extras..............

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  9. Life is an adventure, but you're certainly making a much better adventure than most.

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  10. I agree with everyone's posts, you are doing an amazing job of LIVING!
    I'm going to check out the books you mentioned. We are a ways off from retirement , still have 2 adult children living in our small home, but it's all good and were happy. I'd like to travel more, mostly with an RV. So as you say, you never know what lies ahead.
    Thanks for your posts.

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  11. I think that having the ability to do what you want when you want is the best thing about retirement. Subbing the way I do just gives me a bit extra.

    Retirement is not the end of a persons life, it is just the beginning of a new stage.

    God bless.

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