I recently came across a Financial Independence blog introducing its extreme 21 day financial makeover. It features good advice — and a goal I shan't match.
[Quote] "The goal here is to cut your expense level to <$10,000/year/adult. I live on $6000/year/adult. It can be done."
This is a pretty common ceiling (floor?) in the frugal community. The personal-finance blogger I regularly follow has claimed that a family of 4, in the US, can live well on $24k/yr (IF that family is living mortgage-free). His family of 3 lives large on ~$25k/yr.
Okay. I live on <$20,000/yr. I wondered, what's keeping me from $6,000/yr? I looked through my finances and made a comparison to MMM's 2013 spending.
After my medical costs and my food costs (which I consider a medical cost*) I spend $300/month. That $300 breaks down into fixed/steady costs like this:
public utilities
- $50/mo water and waste
- $65/mo gas and electric (in the cold half of the year I pay ~$100/mo, in the warm half I pay ~$35/mo)
stuff wif plugs
- $50/mo 'Net + phone
warm fuzzies
- $30/mo dog!
- $35/mo gifts
homesteadying
- $50/mo into a medium-term savings envelope (with an eye toward house maintenance and repair)
...
leaving $20/mo to be split to cover clothes, lightbulbs, other household supplies, garden supplies, bus fare, library fines (I'm a fine kind of patron), play tickets.
In sum, all my non-medical, non-food expenses are $3,600/yr. (These numbers are from my finance spreadsheet, where I track every cent in and every cent out.)
I could save money by not having a dog and not giving away $35/mo. But those things contribute massively to my happiness and my feeling of wealth. Even if I gave them up I couldn't get to $6,000/year, because I have major health costs.
* To round, my grocery+medicine bill is $1,250/mo. In 2014 60% of that is food, 40% is drugs, druglords, and then the little anodynes. In 2011 it was a similar total, but I was sick all the time and it was more like 30% went toward food and 70% went toward drug(lord)s. My total co$ts are the same; my health is better.
In another year I'll have more solid numbers, because I
will have been living this way for longer so I'll have longer-term averages.
Maybe in another year I'll be healthier, too.
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