Y’know, it’s funny the little things we remember for no rhyme or reason. Back in 1972, when I was around 11 years old, I was watching The Newlywed Game with my mom and it was time to get serious: Bob Eubanks was asking the final question in the game. “And finally ladies, if you could choose a dream salary for your husbands, what amount would it be?”
The first wife said $25,000 a year and I was amazed when every other wife gave the same amount. I can’t remember what the husbands guessed their wives said, but I do recall asking my mom if she thought that was a lot of money.
Mom said not if you were a rocket scientist, which answered my question!
28 years later in Oct 2000, I was working at BNY Mellon (tracking foreign currency conversions to dollars, loved the work, hated my boss) when I got an offer to come over and talk to the folks at UPMC Healthplan about a new job.
When I was asked how much I earned at Mellon, I said around 45K. UPMC offered me 50K and I thought “I bet I could live on half of that” and was reminded of that old Newlywed Game question about 25K. I accepted UPMC’s offer.
I had no real life goals then, other than seeing how long I could live on 25K a year. I loved to save and enjoyed tracking my spending and living on various budgets. I’m such a nerd—but it did help me get out of the rat race 10 years ahead of schedule!
So every year in June, I track my annual spending for the year ahead. (I go by fiscal year, not calendar and for me that’s July 1 2021 – June 30 2022.)
JULY 2021 – JUNE 2022 SPENDING FORECAST
| RENT | 790.00 |
| TV/PHONE/INTERNET | 205.00 |
| HEALTH INSURANCE | 151.00 |
| GROCERIES | 230.00 |
| ELECTRIC | 45.00 |
| KEURIG COFFEE SUBSCRPT | 35.00 |
| BARBERSHOP | 25.00 |
| CHARITY 225/12 | 20.00 |
| RENTERS INS 120/12 | 10.00 |
| DENTAL INS 110/12 | 9.00 |
| AMBULANCE INS 100/12 | 8.00 |
| PRESCRIPTIONS | 15.00 |
| NETFLIX | 10.00 |
| CELLPHONE | 20.00 |
| DINING OUT | 50.00 |
| MISC SHOPPING | 300.00 |
| WHAMMO 3500/12 | 290.00 |
MONTHLY TOTAL……… $2275.00
YEARLY TOTAL $27,500.00
I added $50.00 for dining out to this year’s monthly budget as I’ve only eaten out one time since June 2018 (because of a long-term jaw disorder). That is changing this year!
But darn it, my fifth year in a row of going over my budget. When I began a 25K budget 21 years ago, I had no problem keeping it below 25K—often by a couple thousand—for 15 years. That “Whammo” category (for a sudden big expense, like a new couch, a new computer, a new dental bridge) often ran about a grand a year.Not anymore though; since 2016, what with moving a couple times, medical deductibles I never had to face before, extensive oral work, the Whammo in my budget has increased to around $3500 annually. My 25K budget years are over.
Why am I making a big issue about this? Should I say to hell with it and stop tracking my spending? It’s not like I’m trying to save for retirement anymore, I’m already there. I’ll be getting social security in a few more years too.
Oh well, I apologize for this blah blog. My friend Danielle always says “Don’t do number blogs, they’re boring. I hate your blogs when they contain numbers.”
That just makes me want to do them more.
Impressed with your numbers and can see that maybe the pandemic is inflating them a bit and probably will more. Hang in there.
ReplyDeleteI can remember when $25K was good money but then I am way older than you. Just glad you aren't dealing with a car for that could really jack up the totals. However I was a bit pleased that lock down really did lower my gas budget. Just didn't go anywhere:(
Thanks Patti, and I know just what you mean about saving money (like you and your gas bills) but not going anywhere in the process. That was me and my food budget for a couple years (when my tmj was at its worst), not fun. I think things are staring to look up for everyone now. :)
DeleteI find other people's budgets FACINATING! Wow, your rent is very reasonable. What, no transport allowance at all? Kept a detailed account of every penny for years after I retired. I wanted to know where I had 'wiggle room' if needed. Hobbies/Entertainment was a chunky category for me. Excellent accounting skills, Doug!
ReplyDeleteFlorence thanks so much, this made me feel a lot better about sharing this stuff! As for transportation costs, I sold my car a couple years ago, now I just walk or take the bus (and my bus pass has around $75 on it from a year or so ago, so I'm good). Anyway, thanks for the kind words here from a kindred spirit :^)
DeleteOh yeah, if i could reasonably do without car expense, but that's not happening. But it could be worse, with car payment bondage.
DeleteI understand Sue, cars (even ones you own) can be a money pit.
DeleteWell, we don't have exactly your budget, but we live well. Hopefully, we won't outlive our savings!
ReplyDeleteGigi that's what's important, you & David live well-- you do that just by living in Hawaii! 🙂👍
DeleteHey Dug, thanks for sharing. Makes me feel like I can retire on just my SS, but I'm aiming to 70 (in 3 years) for the bigger check. Aging cars and bodies make some categories get WHAMMED. LOVE that category! Linda in Kansas
ReplyDeleteWow Linda, good for you! I mean it, waiting till 70-- not many do that, I don't know if I can, but you'd be set. I'm keeping my fingers crossed 🙂
DeleteI've been curious about how you could retire so young, so I found this post(and the numbers) fascinating. Remember that 21 years ago $25,000 was worth a LOT more, so you're doing very well at keeping to a comparable budget. And you're already retired so you're not saving for it any more. Carpe diem, Doug!!
ReplyDeleteThanks Margaret, I always worry I share too much here (too much boring stuff,I mean). I could probably raise that budget even more, but when you're used to a lifetime of frugality...
DeleteI enjoyed this post Doug and I am quite impressed by your budgeting and saving skills! As far as still living on $25,000, you do have to remember inflation! I retired at 63 but not before we had our house paid off and had taken care of some major expenses like a new furnace and air conditioning system. We do have 401Ks but likely not as large as they should be. Because we took care of some major expenses before we retired we are able to live off our SS checks with only occasionally dipping into savings. I think it is so cool that you were able to save enough to retire ten years early! You are amazing!
ReplyDeleteThanks Bonnie, you're way too kind and I like what YOU guys did, tackling those bigger debts like your home and furnace) before taking the big leap. It must give you a tremendous feeling of security. To be honest, I DO worry about inflation--it sneaks up on you and I see it every year come lease time! Thanks again :^)
DeletePerhaps you could cut back on the Misc. Shopping? If that's just impulse buys online, it shouldn't be too hard, but then you also should take into account somethings these days cost so much more than they used to, and maybe you could allow yourself $30,000 per year instead, then you could be pleasantly surprised when you mange on less.
ReplyDeleteI'm jealous of your cheap electricity. My state has the highest electricity costs of my country, and I'm told, the highest in the world. It's ridiculous what we pay. Too many of our elderly people on very little income are having to decide between heating or eating, according to the newspapers.
Thank you River, and that's just what I'm doing--raising my budget to 30K! I think it's high time. But I'm sorry to read about Australia's electric, gosh I had no idea. I wonder why it's so high? I'm going to google that..
DeleteWow! You and Art are so alike. He charts a ton of stuff too. He keeps every receipt and keeps track of all our expenditures. He’s made it a point to always live under our means. So here we are now… retired and getting on in years and the kids are saying he needs to enjoy life a bit more instead of still watching every penny. But it’s become such a habit that it’s hard to change. He does tell me to get whatever I want… but what do I need? Hmmm…. I do need a new cutting board. Excuse me. I have to get on Amazon.
ReplyDeleteKay, thanks for the giant compliment (about me being like Art, haha)! You know how I feel about him, I very much admire him. Your kids make a good point, but like you said, watching every penny IS hard to break--I'm writing more about this in my next blog! I hope you got your cutting board, haha!
DeleteNope. He didn’t like the reviews and wants to go somewhere to actually check out the cutting board to make sure it would work. He doesn’t want to waste any money on a wrong purchase. 🙄 I told you.
DeleteP.S. I think my first teaching job at a private school in 1973 here in Hawaii gave me a salary of $5,000 or so a year. Art doesn’t think it could have been so low, but I’m pretty sure it was. I think. Then, when I got my first job in Illinois in 1984 teaching at a public school, I got about $19,000 and I thought I was rich! But Art made me put a lot of it into a 403B which was a good thing. However, one of my really early jobs was working at the Dole Pineapple Cannery where my salary was about $1.15 an hour. The big clock was right in front of me and I’d watch that clock as I trimmed the pineapples and mentally think, “I just made 10 cents. Now I have 20 cents…” So I suppose I like to count my pennies to this day too.
DeleteLove this post! I'm fascinated by budgets and how others allocate their money. In the early 70's I was applying for my first "real" job. I remember thinking that if I could only get to $10,000/year, I would be doing great! Good for you for your savings all of these years and living below your means. That really is the key, isn't it? I'll be 70 next year and will finally claim my social security. I'm hoping that the delay was worth it. So far, the grim reaper is not knocking on my door, but we never know, do we!
ReplyDeleteThanks very much Carole (I like others budgets too, so I appreciate you saying that)! And that's too funny about hoping to earn 10K a year, but I'm old enough to remember when that WAS real money! Anyway, hope you keep that Grim Reaper at bay for a long time! :^)
DeleteThe guide to retirement is knowing your expenses. Once you know those, just multiply them by 25 and if you have that much in savings, you can retire. Unfortunately so many people don't know their annual expenses.
ReplyDeleteEd, you summed it up so well--I couldn't agree more, know your spending, time it by 25--I must've done this 100 times the last couple years of working. And I'm shocked about that too, how few know their spending. I could never NOT know.
DeleteDear Ed, but the reality is: most 60-somethings don't have even near some 1/2 million in savings. As for continuing in the workforce, the mind may be willing, but the body ... that's another matter - one that is taking a toll on medical availability and (tax-payer) funds.
ReplyDeleteIn addition, young people want us plain old gone (from the limited labor market) - can't really blame 'em ... for being fed up with us boomers; sadly, our age-group is really big on boa$ting, entitlement and greed.
We passed on the works-based religion of social darwinism to our children (well, the ones that didn't get murdered over at) womynkare klinic). It's all coming home to roost.
We retired in 2009 and 2011 and made sure our house was paid off first. But Wow! $45/mo for electricity? We pay 5-6 times that a month. And your grocery bill is way below ours too... of course there are 3 of us. The rest seems pretty normal. But it's those Whammo's that can get you (foundation work, new roof, house generator, etc.)
ReplyDeleteThanks Rian... well, it gets lonely in here sometimes but at least I have low food & electric bills I suppose. (Though I don't know if my situation is better.) And yes, I guess no one is safe from those whammos!
DeleteI admit that I do not keep a budget. I just try to spend a little less than whatever comes in every month (SS + IRA) and keep the leftover for my WHAMMO money. So far, so good, but I haven't been WHAMMED too bad lately. Anyway, thanks for the eye-opening post.
ReplyDeleteThank you Tom, I am really wondering if I should track my own numbers... the good thing is, you're living comfortably, you travel... that's all that matters.
DeleteMy maths is appalling so your figures meant very little to me but I'm just glad you have enough money to live comfortably. :D
ReplyDeleteThanks Joe, to be honest I thought if you saw this you'd think I was a pauper or something, haha. I know you do pretty well in life. :)
DeleteI don’t mind numbers in columns, after all, my degree was in Pure Mathematics (with a minor in Applied Maths – the useful kind).
ReplyDeleteHowever, your numbers are monetary, which to me is accounting, so I’ll just skip over those – we Pure Mathematicians are real snobs about numbers.
Hahaha!! Gosh Peter.. I dont know what to say! ;^)
DeleteMorning Doug, I love number blogs! I always enjoy seeing how other people budget. We have kept a “budget book” since about 1990. We were saving up for a house and wanted to track everything. Your rent is very reasonable and I love the whammo column. Smart! Probably 30 years ago we watched a movie about a young family who lost everything in an apartment fire. No savings, nothing to fall back on. The movie didn’t end happily. Just showed them walking off into the dark carrying everything they owned. That scared us silly and we have been very good savers ever since.
ReplyDeleteHave a good weekend Doug!
Robin
Robin--thanks very much for this message, and I love meeting kindred budget folk! Interesting about that movie, if you think of the title please let me know. I DID go thru a homeless phase in the mid-80s and had to stay with friends for nearly a year while I got back on my feet. I don't know what I'd do now, so yes budgets are necessary. Hope you have a good weekend too.
DeleteDoug, the movie is called “No place like home” Jeff Daniels and I can’t think who played his wife.
DeleteI will never forget that movie!
Doug, the name of the movie is “No place like home” . Jeff Daniels and I forget who played his wife.
DeleteDefinitely never forgot this movie!
Robin, thanks so much! I am going to look for it! (I'm sorry about my blog not letting you comment too! After 3 days, the blog doesn't allow comments until I read them in email first, to prevent spam on older blogs.)
DeleteThe comments are almost as interesting as the post itself. I think you are amazing to be able to do so well on such a small amount of money. I don't do numbers myself. :-)
ReplyDeleteDJan you're very kind as I know my blog was pretty boring stuff--so nice to get all the feedback on here. I don't know if I live on a small amount of money though, I seem to have plenty! :^)
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