No trades today.
music selection: “Karn Evil #9” — Emerson, Lake, and Palmer
weigh-in: 211.0 (1.4) – Doctor told me this morning “you’ve lost some ell-bees, didn’t recognize you”
Attaining Financial Independence is a world easier when you can control your spending. I have my spending dialed down somewhat but I don’t believe in being extreme about it. I still go to a movie most Saturday nights and I still regularly eat out. Like my diet, I have to maintain this for the rest of my life so it can’t cause misery or it isn’t sustainable.
The big two items on most budgets are housing and transportation. I have friends and former co-workers who fairly regularly “upgrade” both. It is costing them their freedom. Sure, they have nice houses and nice cars; but they are trapped in a never ending debt cycle. It’s a trap, and you shouldn’t fall for it. Cost of living in Houston is pretty low. My four bedroom two bath home was purchased in 2002 for $97k. Zillow seems to think it could be worth as much as 115k today. There are plenty of houses in the Houston area upwards of 250k. I’d be no happier (or less happy if I was still working to pay for it) in those homes.
I’d like to be able to do away with my car altogether but it isn’t practical in north Houston. Public transportation just isn’t quite up to snuff here. I could do it if I moved inside ‘the loop’ but that would double my housing costs. To my way of thinking, a well maintained and paid for compact car solves the need without costing me a fortune. I’m currently driving a 2002 Chevy Cavalier with 159k miles on the odometer. It has no mechanical problems and should be good for another 100k or more with regular oil changes.
I’m trying to save on the food bill by growing my own. Turns out, 4 years into FIRE, I still have a very “brown thumb.” Out of four plants, I got exactly 3 tomatoes so far this year. I finally have my first pepper on the vine. Nothing else has bloomed this year. I intend to research when to plant fruit trees in Zone 9 and see about planting 4 plum trees. I think I might have better luck. And with a surplus of plums, I can make homemade wine. Perhaps a nice honey and plum melomel.
The final major category for me is health insurance. Before Obamacare, I couldn’t get normal insurance and had an “indemnity” plan as an alternative. It worked OK and was cheap. I pay a little more for formal insurance through the ACA exchange these days but my Bronze plan with Blue Cross Blue Shield is a reasonable 243 a month. I collected the full subsidy for 2015 by doing some tax loss harvesting. I should be able to harvest enough tax losses one more time to collect the full subsidy and then back to paying retail after that.
I think for some FI/RE however, their main problem with spending is they aren’t spending enough. If you don’t have any fun and only eat Ramen noodles, it isn’t a very nice life. For those people, I think a budget that has some *minimum* spending categories is called for. If you really like live music for example, you might set a minimum of 50 dollars a month to spend on that. Let it be a guilt free indulgence. The key is to be mindful about your spending and to direct dollars to the things that truly make you happy instead of blindly consuming excessive amounts of mindless plastic crap.
So, if it is what matters to you, go ahead and have that double foam latte. Personally, I’m on an “anti-budget”. I don’t track my categories, I set a total spending goal for the month with a savings goal and then otherwise do whatever I want so long as I can come in on target. Some months I miss, and I make it up next month. That is what works for me. How are you managing your spending?
Devour your prey raptors!