What is simple financial living?

[edpf]

Hi,

I have been thinking about this question as someone who is about to move from one very expensive country to another averagely expensive country. We all need money, well pretty much all of us do and this forum doesn't strike me as full of people prepared to go without money at all. So how much does one need? My goal is that I will be mortgage free by the time I am 45 - now 41 - but this doesn't mean i will have paid off my mortgage just that i will buy somewhere with the equity I have in my house at that time. So when I fully enter 'simple living' that aspect should be covered. Also i want to be able to drive a car - an old banger that I am able to fix and keep going. I would like to be able to grow and prepare my own food but its not practical to be able to do that 100% so there is another cost. I will probably want some sort of internet connection, so thats another cost. Birthdays, events, occassional travel all cost money. So what does one need to live on in order not to be stressed about money thus negating the positive aspects of a simple life?

Home upkeep costs (taxes, heating, repairs): £2500 a year
Car costs: £1000 a year
Food costs: £1500 a year
Internet/phone: £300 a year
Entertainment/travel: £1000 a year
Clothes: £400
Self sufficiency provision - tools etc. : £500

Do other people survive on such a relatively small budget?

(I think thats about $12000)

[razz]

Simple life can mean many different things.
*Living mindfully within a budget or
* concerned about our impact on earth and reducing consumerism accordingly or
* involved in a like-minded community that supports itself or
* generating self-sufficiency as much as possible or
* all of the above and more.

What I have discovered is that one has to change one's goals based on 'needs' as one goes through life. What I could do and wanted to do when DH and I had a young family and lots of energy is very different than what is possible at an older age.
I am not disagreeing with you but hoping to add to the content.

[larknm]

For DH and me, we forego entertainment and travel for homemade food expenses for 4 dogs and a parrot. And I learned from a friend's example decades ago that carefully picked-out cards on birthdays and holidays are all that's needed.

[awakenedsoul]

I estimated my budget to be about the same as yours. But, I usually end up spending $20,000. a year. Last year I had to put a new engine in my car. It's a great car, but had 130,000 miles on it. I also spend $3,000. a year on home maintenance. I tried growing my own food, but lost some of the plantings. My fruit trees do well, but since the drought, I've been buying veggies from our organic co op. I also take music classes and visit my family. So, for what I'm spending, I'm getting some luxuries. Another extra is buying nice yarn for knitting clothing and gifts.

It all depends on what you spend in the new location. So much of it is your habits.

[Gardenarian]

My property taxes are very high - around $7000, and income tax is quite high as well. Last year we spent over $22,000 on health insurance alone (family of 3.) We own our house, as well as a county cabin, and insurance for those is another $5000. Our mortgages are paid off so that is something.

We don't buy a lot of stuff, have older cars, have cheap cell phones, rarely eat out - but San Francisco is just an expensive place to live.

We are considering moving once our daughter is off on her own, though we would miss our community very much. We may just get a smaller house in the same neighborhood.

At any rate, we spend a great deal more than you!

[Spartana]

Ed - I also live on about $12,000 US/year (although my retirement income is higher then that but most is tax free or tax deferred so pay no income taxes to the Fed or state (Calif)). Have no debt, no mortgage, single (divorced) and no kids. I do pay sales tax but buy very little, and also property taxes but, because I own a house with my sister, we split most things so it costs me very little overall. I decided to retire early (42) and live on my savings (and then pension once I was 50) and forgo many material things in order to have that freedom from having to work. That is more important for me than anything money could buy at this time in my life. So keeping my financial needs and wants low allows me to be able to have all my time for myself. I do have to make trade-offs between things in order to be work-free and also to be able to do budget travel (so0mething I love and will spend money on). For example I don't eat out much or have cable TV or new stuff (old car, clothes, few electronics), borrow books, CDs and DVDs from the library rather than buy, have mostly free activities, hobbies, and entertainment, old cell phone (no Smartphone or I-Pad), etc... But it's all been worth it to me and I do enjoy seeing how low I can go and still have a great (often better) lifestyle on less money.

[Rogar]

edpf, my annual budget after taxes is about twice that, which by most accounts is still on the low end. I think I live pretty comfortably. I left work at 55 and my post work expenses are generally less than I'd anticipated. One category that has been more than my estimate is home maintenance. Every year it seems like there is a significant item or two. Last year my furnace went out and I replaced a crumbling driveway. Over the years it's been a new roof, upgraded windows, attic insulation, tree trimming (every couple of years that runs me about $1500), and so on. At some point a car will need to be replaced. There probably are ways around this by renting or going car less, or other creative solutions. If I were budgeting again, I'd add an imaginary piggy bank where a couple of thousand dollars or so would go each year to cover these upgrades or replacements of big items that eventually wear out or become outdated.

If you're think of an annual budget of $12,000, you have a few years to give it a try on an experimental basis to see how it works out.

[Jilly]

Expenses are less than my income and I try to be responsible with what is left over.

[reader99]

My spending this year will probably be a bit under $12k. This only works because the condo is paid for, and being a condo the maintenance and repair costs are confined to the interior. Also I have no kids, no pets, no addictions and no hobbies that cost money.

I send free ecards for birthdays and other occasions. I travel by 49cc scooter so I don't have to pay insurance, and gas and repair bills are minimal.

It could potentially have been less if I had already had the place fully furnished and if I hadn't had to see a doctor twice.

[Aroha]

Expenses are less than my income and I try to be responsible with what is left over.

What a good policy