Jacob at Early Retirement Extreme recently posted an example $500 a month retirement budget. It is displayed below.
- Rent $200-250
- Health insurance $75 (get the cheapest possible and stay healthy!)
- Food $50-75
- Transport $0-$75
- Utilities $25-100
I found this very interesting because I’ve been making over $500 a month in alternative income lately. If I could get my budget down to $500 a month I could “retire” and live off my alternative income. Here is one possible budget.
- Rent $250
- Health Insurance $70
- Food $75
- Transportation $25
- Utilities $80
It is possible to rent an apartment for $250 in some areas. I think there are even some place in KC that rent that cheap but I wouldn’t want to live there. A better alternative is to move to a small town or live with a roommate. The health insurance is what I actually pay now. The food budget would require a little more self-discipline on my part. I used to spend about $100 a month on food and if I were to cut out fast food I could get that down to $75 or lower. The transportation cost is for an occassional bus or giving a friend gas money for a ride. Ideally I would live somewhere I could walk to most places I needed to go. The utilities expense of $80 would include a phone. This amount would vary somewhat but an average of $80 seems easily achievable.
An alternative would be to live in Guatemala (or any low-cost country) for part of the year. Or to spend several months hiking. Both would allow me to live on about $300 a month. A possible budget would be.
- Rent $100 (if hiking would be for hostels, hotels, showers, etc.)
- Food $75 (would probably be more while hiking)
- Health Insurance $70 (this would be the same although I could consider going without in Guatemala since health care is so cheap there. I wouldn’t want to take the chance of being uninsurable upon a return to the U.S. though.)
- Miscellaneous $55 (entertainment, postage, gear replacement, transportation, etc.)
The $300 budget would allow me to spend a little extra when visiting the U.S. or not hiking. Some of the difference would have to go airfare to get to Guatemala or transportation to and from the trailheads but the savings would more than make up for this amount. These budgets might seem a little extreme but based on my experiences living in Guatemala and hiking long distances I’m confident that they are feasible. I’m planning on doing a $200 a month hike for several months next year.
For now though these budgets are just musings but after I get out of law school they could very well become reality.
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very interesting TFM. But just curious as to how you would repay any law school loans?
Also would your lady friend be up for the extreme lifestyle that this budget would entail?
Under the repayment plan I’ll be signing up for my law school loan payments would be capped at 15% of my income above 150% of the US poverty level. At $500 a month I wouldn’t have any income above poverty level and my payments would be zero.
There is about zero chance my GF would go along with these extreme budgets. She is willing to let me go on a long distance hike but I’m not sure she would like me doing that every year and I wouldn’t want to be away from her for that long every year. That makes these budgets just interesting exercises for now but things might change.
Have you considered retiring in one of those quiet missouri university towns. I went to school in such a town and I could definitely guarantee you that you could get an apartment with heating and water included for $250/month there (your only cost would be electricity for $30/month).
Everything was within walking distance and there is always a lot of cultural activities to do for free. The only issue is that going to Wal Mart requires a car but it was closer than waht it is in KC for you.
Nice budget. I love seeing how little I, and other people can live on. I will be very interested to see how your hiking months turn out next year.
Good post.
I’m not from the US (UK person here) and I have worked out that $500 is around £280 or so and that sounds pretty brilliant to me.
How would you include entertainment/going out in the budget?
One of my budgets includes entertainment in the miscellaneous category. In the other budget entertainment would have to come out of another category’s surplus or be free.
Try giving up the health insurance. you don’t need it. I live part time in Nicaragua. Recently my wife had to go to the ear,nose,troth specialist $15. I had 128 skin taks removed cost $150.00. a hospital private room is $50.00 per day. Dental is really cheap as well cap removed repaired and replaced theeth cleaned total $16.00
quit sending HMO exec’s on vacation and you can live fine on $500.00
Darvin- Since I still live here I need the health insurance. I’d consider giving it up if I permanently moved to a foreign country. When I lived in Guatemala I got a filling for $13 so I know health care costs can be much lower in Central America.
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