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Thriving on $35,000/Year

According the the government my household income last year was about $70,000.  Of that I spend on maintaining my lifestyle about half of that or $35,000/year for a family of four.  Which the majority of the spending was on my mortgage (principle and interest) and property taxes for about $15,800.  So that leaves me $400 per person per month to feed, cloth, keep warm, clean, entertain and gas to keep our car running.

Some people would assume this means I’m living a dreadful existence while I’m actually find I’m thriving.  So how did I do it?  Well that is a long answer and you can read this blog for more ideas, but here are some of the biggest things I’ve learned.

  1. Entertainment should be free or nearly free most of the time.  We love to read books and watch movies, both of which are free from our local library.  Actually I’ve worked it out that I haven’t rented a movie for over two years now from a store and I see a movie in on the big screen perhaps three times a year.  Other entertainments include playing with my boys or visiting family and friends.
  2. Stop eating your money.  I’m near constantly amazed on what people spend on food a month.  Eating out is an entertainment and should not be a weekly event (and this includes the daily buying of coffee).  Also start eating what is in season.  Last week was the first time I had bought a grape in over eight months.  Did it kill me to wait? No.  Did I love that grape? YES!  Also cut back on the meat and cheese and discover the wonderful world of beans and lentils.  Start a small garden and for a few bucks in seeds and little time weeding and watering you can get great food from a pot on your balcony or your backyard. Oh, and stop throwing out food and just eat your leftovers already!
  3. Cut back your stupid wasting of resources.  Did leaving a light on when you are not in a room give you joy?  Does running water while brushing your teeth give you inner peace?  Is your health so delicate you need the house at 22C in the middle of summer or the winter?  If your like me and answered NO to all of those questions then you need to stop leaving on lights, running water and a bit more of temperature extremes and save your money.
  4. Drive less.  You know I don’t typically even empty a 45 L tank of gas in a month.  Really most of the time we use about half a tank of month (23L) provided I don’t travel out of town for some special event.  Why?  I get rides with other people to work and we only take the car out when we are going to make more than two errands.   I also just walk more to things close buy.  My seven year old car only has 96,000 km on it and I typically spend less than $1000/year on gas including trips out of town.
  5. Invest in what you do love.  The reason I do all of the above is to save money for things I do love.  I like fixing up my house, so I buy paint, flooring (I just got a deal to get some oak hardwood for $2.50/sq foot), and patio stones. I also love spending time with my family (which is often free).  So spend your money where your passion lies.  If you love art, buy some.  If you love travel, take a great trip.  Make your money give you the most joy it can.

Living with the Fates

I think most people like the idea of early retirement (excluding those who love their jobs and don’t ever want to stop). Yet there is often a lot of hesitation about actually retiring. People often do the just one more year of work to make sure they have enough. Why? We are all too stuck up with our plans.

You see we plan our early retirements very well. We know how much we need each year and what we would like to do when we retire but we are terrified of the ‘what if”s. What if I get a horrible disease? What if inflation skyrockets? What if I spend more than I expect one year? What if I out live my money? What if the market crashes?

The truth of the matter is this. To early retire means giving up control of your income. You are no longer bringing in your income with a job and are now at the whim of the market and your plan. That is what really terrifies you.  We are so conditioned to control everything that we forget often most of our lives are beyond your control anyway.

Your job could be gone tomorrow in a downsizing. You could be competing for the same jobs as thousands of others (any one recall the Nortel downsizing?).  The control you believe you have is just an illusion.  A soothing balm of a lie that you tell yourself to forget the fact that complete strangers are deciding if you get an interview or not.  Then they decide to offer you a job or not (often for the oddest reasons).  You don’t have much for control in a job search about actually getting the job.  You can do your best and the rest is beyond your control.

So now that is out of the way and you realize you are already living with the fates.  Does retiring early really change anything?  No, it doesn’t.  Life is about change and the unexpected.  Yet the unexpected doesn’t always have to be bad.  Occasionally it brings good things as well.  So what if you get 20% returns during your first five years in retirement?  What if you get to follow your dream and send the rest of your days happy?  What if early retirement is the best thing you can do for yourself?

Break free of the lie of control.  We are living with the Fates.  Embrace life as it truly is and be happier for it.

The Hidden Costs of Breast Feeding

So with another baby my wife is back to breast feeding.  I find it rather amusing now again when people comment that breast feeding a baby has no cost.  When in actually it does have some related costs.  After all breast milk isn’t formed out of thin air you know.

So what costs are involved? Here is a brief list:

  1. Nursing bras. Good ones cost about $40 each and my wife has four.  She used some sales and gift cards to reduce our cost to $120 rather than the full $160.
  2. Nursing pads. To protect those bras from leaks.  Cost is about $0.40 a day.  You might be able to get this cheaper with coupons so keep an eye out.
  3. Food. Nursing woman need about an extra 500 calories a day to produce the breast milk.  Given the average female diet is around 2000 to 2500 calories per day that means an increase of 20 to 25% of their normal food intake.  You will notice this on your monthly food costs.  I would estimate this is going to be around $40/month for us.
  4. Water. Lots of water.  Depending on your costs you might actually notice this on your water bill.
  5. Optional items. Such as a nursing pillow for comfort (about $40), and perhaps a new chair if you don’t have a good one in the house.  Additionally some nursing shirts might be useful depending on what you have in the closet.  My wife highly recommends nursing sleep wear ($30) for comfort while getting what little sleep you can between those first few weeks of feeds in the middle of the night.

Despite all these cost breast feeding is still cheaper formula, but it isn’t free.  The exact cost is going to depend on how long you nurse the baby.  Many thanks to my wife who provided most of the information for this post.