Christmas is not my favorite time of the year. Last year I wrote about how I had managed to mostly opt out of Christmas. I am not going to be so lucky this year. With the addition of a GF this year I’ve also picked up several more Christmas obligations. We will be attending four different family Christmas gatherings. My GF will be doing all the additional Christmas buying (except for my gift for her of course) so I don’t have much more obligation in that sense. I’d still rather receive no gifts and give no gifts but in order to stay sociable with family and friends I have to participate in Christmas at least on a minimal level.
Frugality
Finding Affordable Health Insurance
One of the challenges of retiring early or being self-employed is finding affordable health insurance. I’m very frugal and don’t spend a lot of money but I wouldn’t go without health insurance to save money. The risk is too great.
I currently have private health insurance and pay a little less than $70 a month. This is a good deal for someone who is 41 years old and overweight. It is quite a bit cheaper than my student health plan and it provides more coverage. The deductible is $5000 but I’m not too concerned about that since I rarely visit a doctor. If I do need to visit a doctor I can visit the student health clinic for free. The purpose of health insurance for me is to keep me from being wiped out financially if I suffer a serious injury or illness.
My insurance is cheap but as I grow older I’ll need to find more ways to keep the cost down. One option is to raise my deductible to $10,000 but I’m not going to do that until I have more savings. I could also open a Health Savings Account or possibly deduct some of the health insurance cost as business expense. I need to do more research on these. Right now I probably won’t owe taxes anyway so a Health Savings Account is of no benefit to me.
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A $500 a Month Retirement Budget
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.
Getting Rid of My Car
After much consideration I have decided to get rid of my car. My plan is to get rid of it after my last final for the semester in early December. Next semester I’ll only have class on Monday afternoons. That is the only place I’ll really need to go. I’ll be relying on public transportation to get there and anywhere else I want to go. Since I’m living with my GF I should be able to combine any trip I need to make with our other trips. I’ve been reluctant to give up my car because I haven’t wanted to get up early twice a week to take the bus to school. Now that I will only have to take the bus once a week and not have to get up early to catch it I don’t have much excuse for not getting rid of my car.
I’m not sure whether I’ll sell my car or donate it. My plan is to try to sell it for a low price and if it doesn’t sell then I’ll go ahead and donate it. Since I won’t make enough money to itemize I won’t get any benefit from donating the car but I’d still like to see it go to a good cause.
Getting rid of the car won’t save me a lot of money because it has been paid off for a long time and I don’t drive much anyway. I’ll save $20 a month on car insurance and and another $40 or so in gas and some more from not having to make repairs or pay taxes and registration. I will have to pay for bus fare and I might have to pay something to be added as a driver to my GF’s insurance although I will rarely be driving her car. My net savings should be somewhere around $60 a month.
Even if I get nothing for this car my cost per mile based on my purchase price alone is less than two cents per mile. I bought this car cheap and put over 90,000 miles on it. I didn’t keep complete records of my repair, maintenance, gasoline and other costs so I can’t figure my total cost per mile. I am sure that it was much lower than average though. Someone buying an average priced new car would still have a higher cost per mile than me even if they put a million miles on their car. I definitely received good value out of the purchase of this car.
A Somewhat Frugal Bed Purchase
We acquired a new bed over the weekend. We had been needing one for some time. Barbara Mandrell may have complained about sleeping single in a double bed but sleeping double in a double bed isn’t all that great either. There just isn’t enough room for us to both sleep comfortably in a double bed so we upgraded to a queen size bed.
We got the mattress for free from one of my GF’s coworkers. Her coworker didn’t like it because it was too firm. It is definitely firm but I can sleep fine on it and the price was right. My days of hiking and sleeping on a wooden floor with just a thin sleeping pad under me have changed my perception of how soft a sleeping surface needs to be.
Although we got the mattress for free we still needed a new frame and foundation. We were hoping that the frame we were using for the double bed might be adjustable but no such luck. We went and bought a frame fairly cheap at Sam’s Club and then bought the foundation at Big Lots. We still needed bedding since the double size sheets wouldn’t fit the queen bed. While shopping for those we found a bed frame that also doubled as a foundation. Since it was cheaper than the foundation alone we bought it and now have to return the frame and foundation we had already purchased. Kind of a hassle but worth it for the savings.
Setting up the new bed was pretty easy and didn’t take as long as I thought it might. I’ve now had two nights sleep in the new bed and I think it was worth the investment. We haven’t turned on our heat yet and being able to curl up in a warm, cozy bed is nice.