Can A Frugal Retirement Be Enjoyable? Mine is

My choosing a frugal retirement is an enjoyable personal success. When you can’t ever see earning a 6 figure salary or having a million dollar portfolio you have to create a unique retirement solution. I chose to strategically make smart balanced adjustments and decrease our lifestyle cost which means less is needed in the bank to retire. Getting our lifestyle cost aligned with our portfolio amount where the retirement calculator said the numbers work became the goal. I’ve seen some frugal retirement naysayers, mostly from people who have never tried it. Now as I’ve already cleared a decade of early retirement I can say that my flavor of a frugal retirement lifestyle has exceeded expectations. 

Can A Frugal Retirement Be Enjoyable? Mine is

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Choosing A Frugal Retirement, What’s Not To Enjoy?

Why I looked for a workable employment liberation answer –

Retirement is constrained by how much money we have. All the talk about being able to replace 80% of our pre-retirement salary for a comfortable retirement is a tall task and I think I’ve proven that notion wrong. For many households including ours, it’s really tough to save a million dollars or more for retirement. With all I had experienced in my tech career that required a relocation, endless cycles of layoffs, reorganizations, etc., my having to survive working into my 60s or later was something I couldn’t stomach as acceptable or even viable. In 1998 at age 40 I decided that I wanted to explore early retirement options and began my 10 year early retirement plan. 

We didn’t let the million dollar portfolio barrier deter us from early retirement. That’s when frugality became the solution. But it had to be done right or not at all. If it was a joyless existence of austerity it wouldn’t be worth it. While some choose extreme frugal practices, ours was uniquely measured to fit us. 

The Fun Stuff – 

I want to clear the air up front and get past notions of a frugal retirement as sitting in a small apartment or RV with a TV as the only entertainment. While some may call that heaven, that isn’t at all close to our retirement lifestyle. We stayed in our 2 story home close to our daughter’s families and have what we call a frugal budget. It not only covers all of our living expenses, but includes our hobbies, entertainment, and much more.

Travel- 

We travel as much as we want to. Other than a Hawaiian vacation bought through Costco Travel a couple of years ago, we usually prefer budget friendly road trips. We have our go-to destinations of the Black Hills SD and southern California where we hunt for and lock-in great lodging deals ahead of time. We also travel yearly to places where we enjoy visiting and staying with extended family. All on a yearly travel budget of $3,500. If we over do something and go over one season we adjust down the next, make other budgeted adjustments, or accept any slight overrun for the year.  

Holidays-

We enjoy making the holidays merry just like anyone else. With grandkids there’s always something going on from Halloween to New Years. We have a $1,500 holiday budget that covers family outings, celebrations, and gifts. 

Dining Out-

We dine out on occasion but we aren’t hooked on going out to eat a lot. In fact, by the time we return from a vacation we get pretty tired of restaurant dining. We do dine out for special occasions and typically try to use a promotional discount or coupon of some kind. I happily admit to useing our advancing age to our advantage and get senior discounts when available. Dining out comes out of my misc budget which also covers other random household, automotive, unplanned but expected non-fixed monthly spending. 

Activities-

When you look you find all kinds of free activities and events. The only cost is getting there and what you spend once you are there. Food trucks and beer vendors are always around. We go with a $40 cash budget in mind for events and it comes out of my misc budget. It’s always easy to stick to. We typically go to events to enjoy the venue, not load up on expensive food or drink. We have a habit of going with a beverage in hand to start things off and have already eaten a meal. I do love a good draft beer and that is always a budget challenger while attending events. 

Coffee Shop-

Every frugal person goes on about ditching the lattes. I do enjoy a good cup of drip coffee or an Americano and frequent an independent coffee shop in my town. It also serves as my daily social outlet. I have gotten to know many people in my town there and have been able to greatly expand my social circle beyond what had only included work peers before retirement. I have a $40 a week petty cash, aka pocket money allowance in the budget that covers this and everything else that’s a small random purchase during the week. 

Movies and TV Entertainment-

We cut the cord years ago and not sending that bill in every month still puts a grin on my face. I installed an attic type antena and used the existing coax cables running through the house to hook up our TVs on every floor that had cable before. Between over the air and online streaming with a Roku or Chromecast dongle we get all the programming we want. For movies we checkout free DVDs from our local library or use a standard $13 a month Netflix.  

Hobbies-

We do have hobbies in retirement. My biggest is an automotive hobby. Although that can be expensive if buying cars, my oldie has been with me since 1993. The hobby cost comes from the events I attend. Like other events, I set a cash budget. Any out of town events are aligned with planned vacations. Car maintenance comes out of my monthly misc budget. I did have a 21 year old Corvette that I gave up this year for a fun but rationally more practical all-season any weather or road condition convertible Wrangler. The difference between the two in the purchase amount was outside our 2020 budget and will be listed as a one time charge off. I had just survived a serious health scare and was ready for a change. It was also about a 45 year bucket list item I wanted to scratch off and it only happened because we had the extra funds to do it. Our frugal retirement allows for the occasional splurge.

Cell Service-

I see people spending way too much for their cell plans. I still use an old $100 a year pay as you go flip phone plan that I never use up all my prepaid account balance. One that brings a laugh from people around me every time I take a call. My wife uses an iPhone on a $10 low cost cell and data plan. We can live frugally and still stay connected to the world as much as we want to. 

Day to Day Lifestyle Cost and Spending-

What we did was push against our frugality threshold. When we went too far we backed off. The idea was to cut costs that didn’t have real happiness values and do so without feeling deprived. As opportunities to improve our frugality came we took them. There are many frugal living decisions we can make. There are just as many frugal living tips to put into practice. We embrace purposeful spending. Seldom is anything bought on whim without thinking first about whether we really need it, getting it will add something positive to our lifestyle, or if we decide to get it, getting it for a better price. We also won’t just settle for cheap. A needed quality product that may cost a little more but will last and do what it is supposed to do is what we target. 

Our 2020 Retirement Budget Numbers

We do not live in a low cost area of the US and live in the house we raised our 3 kids in. The last report I found of the median household income where I live is $121,000 and it’s most likely higher than that today. As almost everywhere else, based on the cars I see in the driveways and the cost of some of the housing around here, most people are living paycheck to paycheck. Here’s a peek at our retirement lifestyle budget figures for 2020. It’s based on the previous year and adjusted when necessary like once we see actual property tax assessments, insurance increases, etc. This should give an idea of what our definition of a frugal retirement that’s sustainable, enjoyable, and that works for us: 

  • Utilities: Water/Sewer/Power/Natural Gas/DSL/Cell/Netflix – $3,500
  • Insurance: HomeOwners/Umbrella/Autos – $4,400
  • Home Property Tax – $2,800
  • Healthcare Insurance: Medical/Dental –  $15,990
  • Out of Pocket Healthcare/Predeductible) – $4,000 max
  • Petty/Pocket Cash – $1,960
  • Misc: Repairs/Maintenance/Dining/Purchases/Gas/etc. – $9,000
  • Grocery/Toiletries/Cleaning Supplies/etc.- $10,400
  • Travel – $3,500
  • Holidays/Christmas – $1,500
  • Federal/State Income Taxes – $3,500

Total yearly budget $60,550

Will we be on budget for 2020? 

We will come in under budget this year. We are not traveling during the pandemic nor having family celebrations as normal. Events have all been a no go. Some things at the grocery store cost more but other expenses have all but disappeared. Just because we have a budget doesn’t mean we have to push against it. Hoping 2021 is a little closer to normal.

Are you thinking that our retirement budget isn’t very frugal?

There are plenty of frugal living stories of those living an enjoyable life spending less than we do. I love reading about what other people do and get great ideas but I don’t compete in frugality games. Here’s why I feel confident about considering our retirement lifestyle as frugal.

  • Our retirement lifestyle budget is just under 50% of our town’s median household income. We get to live here and enjoy all that it offers at a discounted price.
  • That 2020 budget figure comes in at 42% of our actual, not inflation adjusted 2009 household joint tax return AGI. That AGI was eleven years ago when I retired. Sure beats that 80% pre-retirement salary recommendation some experts throw around. 
  • Our yearly budget is the equivalent of us both earning $15 an hour at a full time job. An amount recommended as a dignified minimum wage.
  • When looking at the budget breakdown, our living expenses are fairly low at nearly $40K if it weren’t for ridiculously high healthcare costs. Health insurance and its associated out of pocket represents a full third of the total budget. In 3 years we will see a big part of that cost decrease when we are Medicare eligible. That along with my eventual Social Security that will also reduce our IRA withdrawals, lowering our taxable income for less income taxes.

Frugality Is Personal, Make Sure You Can Enjoy Yourself

We have been more frugal in the past when we needed to be and we still make adjustments to stay in our frugal living sweet spot. Our frugality isn’t defined by anyone else’s definition of frugal living. It’s based on what makes sense to us while still meeting our financial sustainability goals. All of this became the model for our frugal retirement lifestyle. What’s not to enjoy about that? 

I won’t nor can tell anyone what they should cut to live a sustainable and enjoyable frugal lifestyle. That has to be figured out by each individual and their unique circumstances. Everyone’s frugality threshold is different. Living a life feeling deprived is not an enjoyable way to live if you can do something about it. 

I want to give a shout out and a thanks to Feedspot’s top 10 frugal retirement sites that rated Leisure Freak at number five for 2020. Check out their list if you want to find sites that can provide ideas for successfully living your own frugal retirement lifestyle. 

12 thoughts on “Can A Frugal Retirement Be Enjoyable? Mine is

  1. Well said Tommy. I approach things in many ways like you do. Being frugal is as much about the principal as the money. I really started taking a closer look at everything I spend on and why. Will I really use this item and enjoy it or will it just sit there collecting dust? Do I need to pay someone $100+ to put on this $5 part or can I learn how to do it myself? With a little extra effort you can figure out ways to save on items, restaurants, etc. I usually try to stack discounts if possible using online portals like Ebates, coupons or codes, and my credit cards. Some of my credit cards have 5% categories or other promotions. I still spend but have some discipline on what and when I buy it. You realize you dont really need as much as you think you do to enjoy yourself. And there are many free things to do that are enjoyable as well.

    1. Thanks for he comment Arrgo. You are right. There are so many ways to save money once you start the right mindset. Small savings from coupons or rebates all add up. For the past 20+ years I have always used a rewards credit card, paying it off each month, and never paying interest. Roughly $29K (48% of budget) is conveniently paid by rewards card only to get 1% or more back. Simple principled spending all adds up.
      Tommy

  2. Enjoyed the article, but would suggest not making an assumption that those with nice cars and homes are living paycheck to paycheck. Unless, perhaps, you have access to each of their financial situations? Otherwise it reads as ‘envy’ in the absence of actual knowledge.

    1. Thanks for the comment. Your a bit right, I shouldn’t make generalized observations. They can just as well be the ones earning the big bucks that drives up the median household income for my town since almost everyone I know makes less or barely at median. I made the generalized statement based on a small sample of people I know complaining about their finances when they have big car payments. For all I know people do the same about me when they see my cars.
      Tommy

  3. To ensure you don’t outlive your money, it’s critical to have a full-blown financial plan in place that’s been tested against market downturns, healthy risks and other unexpected factors,” said Tony Zabiegala, chief operations officer at Strategic Wealth Partners, a financial firm.

  4. I didn’t know about the Tello service. Great find. I live in CO too and was wondering if you got a good deal on your internet service. CenturyLink is pricey. All in all, I think your $60K budget for 2 is very reasonable. Mine is $40K for just me and I live like a queen.

    1. Thanks for the comment Angie. Parts of CO are high priced but does offer a lot of low cost opportunities to enjoy a life of royalty. I happen to have CLink DSL. I signed up for 1.5 meg on a $19.99 a month for life deal back when it was USWest/Qwest when that was considered high speed internet 15-20 years ago. Even though I could get higher speed on a one year promotional price for slightly more I don’t want to deal with renegotiated prices or changing providers once the promotion is over. That and it’s fast enough speed for all our needs, even Netflix.
      Tommy

      1. Tommy,
        I knew you got a great deal! I don’t know about Netflix since I don’t have it. But I know my WebEx and ZOOM meetings freeze sometimes and my internet speed is at its max. Century Link $49/month Price For Life at 100Mbps is pricey but I haven’t been able to get similar value at reduced price. Side note… Just heard on the Denver news that your city is about to open the “Incline” similar to Co Springs. That’s like a stair masters without having to pay gym fees and be safe outdoors. 🙂

        1. Hey Angie, I just drove by the incline here in Castle Rock at Miller Park and it was packed with people. Announcing its opening on the news explains why. No cost but I suppose only moderately safer than a gym with that many people going up and down. Folks are just eager for anything positive these days. That also explains why folks were willing to wait in the 12 hour line for Colorado’s first In & Out Burger this weekend.
          Tommy

          1. Tommy,
            So true. I think I will skip the crowded incline until the popularity dies down. Reminds me of the opening of our first Krispy Kreme donut shop. Insanity!

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