Posted by Canadian Dream on July 22, 2010
I admit it: I have a problem of retirement envy. I just happen to know too many people of my parent’s generation who have retired recently. So when the conversations turn to it I think I freak people out slightly that I’m so knowledgeable about their retirement issues. I just can’t help myself I’m excited for these people to be achieving their dreams and envious as well that I won’t be there for a decade at least.
That feeling likely drove a lot of my desire to shift over to part time work. I couldn’t wait any more to try my hand at having more time off. So far I have to say it was the best decision I’ve made in a while. I’m so much more relaxed and on top of things than I was even a few weeks ago.
So as much as I do have these bursts of envy I’m start to relax into my new routine and accept that this is a fairly damn good life that I have right now. The danger of having retirement envy is people can forget to live for today and constantly live dreaming of future days. Taken far enough it can get out right sad to watch as people don’t do anything for themselves and push off everything for ‘later’.
I was recently watching a movie where in one scene a character asked “What’s the point of it all?” to which another character replied “There is none.” Which is actually strangely true, we assign meaning to what we want to in our lives. So you can choose to make tomorrow more important than today or not. You can also choose to want both as well. It’s ok to have dreams and work towards them. Is there a point? Not really, but as long as you really want go ahead and do something different today as you can never know how things turn out.
So even as I keep working towards early retirement I know things won’t turn out. I can’t predict the future and I don’t want to: I’m too busy enjoying today. It’s my method of coping with retirement envy. So how often do you get retirement envy? How do you deal with bursts of it?
Posted by Canadian Dream on July 21, 2010
Our $25 food challenge has come to a close. The final spending numbers are as follows:
- Margarine $4
- 8 L of Milk $8
- 1lb Coffee $1.98
- Fruit (5 nectarines, 4 plums, 3 apples, 5 peaches) $5.82
- Fresh Tomatoes (5) $1.27
- TOTAL $21.07 (84% of budget)
So you can see we actually didn’t even hit the total budget during our 18 day experiment. In total we spent $0.29 per day per person. What surprised me about this challenge was how easy it was to pull off with a bit of planning and focusing in on what we had in the house to eat. To be honest I think the fact we had two packages of veggies from my farmer which made this so easy (which included green onions x 2, radishes x 2, small bag fresh greens (spinach etc) x 4, parsley). If you included the retail value of that food that would bring us up to $0.71 per person per day. Our diet was actually fairly normal for the entire couple of weeks and we ate fruit and veggies fairly regularly.
Actually my wife like the idea of cleaning out the pantry and freezer so much that she wants use to do something similar at least twice a year going forward to prevent food clutter from building up. By the way, I define food clutter as that stuff you buy to try something new and then forget about for two months before you use it again (like rice paper wraps). So overall the challenge can’t have been that difficult if she wants to repeat it.
Yet the challenge was useful for me to realize a few new lessons on how we approach our food:
- Forget Name Brand - It’s all about what is on sale, not the name on the package (especially for generic items like pasta) . If you follow that rule you can cut back a fair amount on some grocery bill. When in doubt look for the cost per unit mass/volume on the shelf tag to find out what is the cheapest, when you hit a sale load up the pantry.
- Junk Food is a Budget killer – I don’t think I really understand how much a bag a chips is until you realize how many potatoes or apples you can get instead. Cutting back on this will make a huge difference to your grocery bill and likely improve your health.
- Eat around what you have, not what you feel like – Most people know that dangers of impulse shopping what is interesting is we don’t consider how often we do impulse cooking which requires picking up something from the store. I was guilty of doing this a fair amount, but now I realize if you plan your meals around what you have you will make less waste and throw out less leftovers. Also you can then shop by the sale to restock your pantry, rather than paying full price for things that keep for a long time (can soup, oil, flour, etc).
- Plan Your Meals Weekly – This is likely the key to eating on the cheap and ties into #3 as well. By planning what to eat in advance you can make themes for a week. For example, I had some ham in the freezer so we planned chickpea ham salad, chef salad and carbonara for one week. Also you can plan to eat your leftovers. This can be a huge amount of savings in money and time since you don’t have to think about what to eat. You can walk in the door get your defrosted meat from the fridge and start cooking.
- Get Creative – Perhaps one of the more interesting dishes I made involved me looking at our pantry and trying to figure out what to do with a can of pork and beans and some pasta. Thanks to Google I managed to dig out a recipe a template and then just adjusted it to what I had in the house. It was surprisingly good to eat despite my concerns of trying it.
In the end, eating on the very cheap is entirely possible, especially for short periods of time. The trick is to do an inventory of what you have and plan around that. Also with a bit of work I think most people could cut their food bill in half just by shopping sales and eating what you have. So would you try something similar? If you have, what did you learn?
This post is now part of the Carnival of Personal Finance.
Posted by Dave on July 20, 2010
Cashflow management is very important in early retirement, but is significantly more important when retirement is reached and large purchases need to be made, such as a car, a new roof on your home, furnaces etc. Most of these large purchases can be anticipated well in the future, for example my car will last approximately ten years (give or take a few years). To buy a large item, I’d prefer to pay cash rather than finance as I have a large aversion to paying other people interest.
The ten years between car purchases can be used as an example of a large purchase that our household will budget for. After retirement, it will be difficult to come up with the $10,000 to $20,000 needed to purchase a new car (this would be a large capital divestment from your portfolio). So to solve this issue our household has implemented a long-term savings plan for our next car. The same kind of system will likely be employed for other large items, but for us a car is the largest and most pressing purchase that will need to be made in the next year or two (but hopefully longer, as this would allow further savings to accrue).
If, for example, I retired at 45 that would mean purchasing 3 or 4 cars (anticipating our household’s ability to drive until approximately 85 years old). To pay for that I would rather save $150 per month as part of my budget for the next car rather than finance it. I personally don’t like financing because I don’t want any liabilities in retirement or alternatively taking the capital out of investments.
Planning like this when you are going into retirement, whatever your age, is very important. Too often it appears that people go into retirement with a huge pot of money and assume that everything will work itself out. If plans are made ahead of time that would mitigate foreseeable emergencies (loss of heat from a broken old furnace) retirement will go much smoother than going in with just a pot of money.
I will admit I may be an over-planner on purchases like this. Perhaps having a large pool of money sitting around would be easier. But I would rather know that I have a specific “necessary expense” covered so that if several of these things needed replaced in a short period, I would know that financially I would be okay.
So, that’s my plan to deal with large purchases in retirement– do you have something similar in your spending plan now or in your retirement? If not, how do you plan on making large purchases (I’m always open to ideas)?
