As of late I have been looking into what it costs me to live the life I lead. I generally don’t spend a lot of money, a lot less than most of my peers, but I still don’t think where I am at with my spending is good enough. Then I went over to Early Retirement Extreme where I reread some of their articles and I was very impressed on how little Jacob lives on…. $8,000 a year!
Come this summer I will have a yearly cost of living of $15,000. Like Jacob, I am single with no kids, which inherently drops my costs significantly. Here is a general summary of my costs:
- Cell phone $80
- Food (grocery and eating out): $350
- Utilities (power, water, gas, internet): $150
- Car (savings): $200
- Spending/Entertainment: $200
- Insurance (employee portion): $45
Monthly Total: $1175
So obviously I am almost double the cost of Jacob’s spending, but I have elected for some things that he’d label as “luxuries”. Namely a car, eating out and I also have a much more comprehensive insurance package. For the things not included: taxes and car insurance, that is where I get the difference between monthly ($1175 x 12 months = $14,100) and yearly of $15k.
For retirement savings, paying off student loans etc I make a lot more than my costs; so right now I focus on double and triple paying my student loans each month. Once that is gone I will be shifting that focus to building my retirement account.
Part of what ERE points out is if you can drastically minimize your monthly costs, you can retire much earlier than most. It certainly is a balance of living comfortably vs saving so much that you don’t enjoy it, but I think living comfortably is much less than most people think.
- How little can you live on (what does that cover)?
- What are things you gave up or wish you could give up?