As I write this, there are 53 shopping days until Christmas. So, what about my early retirement costs: under budget; over budget; will there be any money left for Christmas presents?
To recap why I write these posts - when I was thinking of quitting work to retire early, I didn't know how much it would cost each month and year. Would more free time mean more time to spend money? I'm tracking my costs to find out, and hope that sharing them may be helpful to others facing a similar question.
Some of our costs are now less
Before getting to the numbers, the overview is that my costs are no higher in early retirement compared to when I worked. In some cases they're less. For example:
I save by not having to commute to work. In fact I've just sold my VW Golf and now share Sally's car, which will cut a lot of cost going forward. I also use public transport which I'm quite enjoying so far. And an extra bonus, I've used the money I got from selling the car to buy some Vanguard index funds - I know the markets are high now, but I can keep them for 10+ years and they should do OK in the long term.
We used to pay for a cleaning and gardening service when I worked, but now I have more time I do these myself (to be honest, I could have done them when working). The garden is easy now that we've moved to an apartment ;)
Having extra time has let me look at some of our bills and get better deals. We've reduced costs by changing our cable TV and telephone contracts, and got a better car insurance deal. It's another thing I could have done when I was still working, but it's easier now I have the extra time.
Although I was never a reckless spender, I'm now more thoughtful with my spending, buying when I know I will appreciate something. I prefer this thoughtful way, I can't really explain it but it feels more rewarding. However, I'm conscious that there is a line beyond which one could appear mean, and I don't want to cross that line.
The October Costs
The total cost for October was £3,539 ($4,368) which is below our budget of £3,700 ($4,567). The costs can be split into two sections, our normal day to day living came in at £2,257 ($2,786) which I like, but then I booked a hotel for the 2018 Boston Marathon which cost £1,282 ($1,582) which seems a lot for 4 days - I guess the hoteliers know that there is a big demand that weekend and are pricing accordingly! The breakdown of the October costs, plus the total for January to October and a monthly average are shown below:
Other than the Boston hotel, the October costs fall within the normal range of what we seem to spend. If I were to highlight a few things, it would be:
Groceries - perhaps a little higher than I expected, but we know that our grocery stores are expensive and we would save at least 20% if we bought the same shopping list in Europe or North America.
Going out - we went out 4 times, so an average of once a week, which I think is OK, not too little and not too much. We also had a pizza night with my sister in law and nephew and another evening we had friends over for dinner, plus two barbeques at friends making it 8 events in total. We should have people over for dinner more often because it's good fun. Similar to groceries, going out is expensive here - I've price checked it and we would probably spend up to 40% less doing the same thing in Europe or North America.
Alcoholic Drinks shop - we spent and drank more than we should have. I blame my sister-in-law as she stayed with us for a week! I always seem to say something that gets me in trouble!
Holidays - I still can't believe how much we've spent on vacations and overseas running events, although I think it's probably an unusual amount as all the trips have been long-haul. So far this year, we've been skiing in France, had a five week summer vacation mostly to the UK, but also short trips to Switzerland and France, and I've been to Prague and Germany for running events. I guess that lot doesn't come cheap, but I don't think that will be our normal vacation plan going forward.
All in all, October wasn't a bad month bearing in mind it includes the expensive Boston hotel.
To be honest, I'm not sure that this graph adds too much because it shows much the same data as in the table above, but I guess it does show how the costs have fluctuated in different months. When we get to the end of the year it will be more interesting to analyse the data. But, I've included them in case someone finds it useful. Note that although there are 2 graphs, they are the same thing just in different currencies, the left graph is in GBP and the right graph in USD.
What it does reinforce is how much we've spent on vacations and the trips that I've made to Prague and Germany for running - the total of these come to a full one third of our total costs. That seems crazy to me!
Is Christmas still on?
I think we'll be OK to buy some Christmas gifts, but I'll try to wait until December because that's when Christmas should start in my opinion. I saw Christmas decorations in the stores last month which is way too early.
Posts that I plan over the next month or so include:
My daily early retired life - I've kept a diary of what I did during October, so I'm going to share that
Financial freedom - do you need as much money as you think?
My 2017 Christmas List - so Dad, if you're reading this, watch out for that post🤣