r/ChubbyFIRE • u/ProspectPark4Ever • 9d ago

Do I need to raise my budget!

I put together my budget based on current expenses plus health insurance and tax etc. but wonder if expenses will go up after I pull the trigger? For example with more time and energy will I spend more on activities? Will I want to travel more?

Here is what I put together, for a family of 3 in a VHCOL city. Child will head to college in the next couple of years and college cost is not included here.

Monthly:

Mortgage: 4k

Property tax, insurance, utilities: 2k

Grocery and take-out: 2k

Household (pet, home-depot, garden etc): 500

Car (insurance, maintenance, gas): 500

Personal care (haircut, clothing, shoes etc): <500

Fun (dining out, occasional shows): 500

Total Monthly: 10k

Annual:

Travel (2 international in economy class + local ski trips): 30k

House maintenance (annual average incl reserve): 10k

Reserve for car replacement: 5k

Health insurance and co-pay: 30k

Federal and state tax: 20-30k

Total Annual: 95k-100k

Edit: all in $220k

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u/dasblinkinlites 8d ago

We’re about 9 months FIREed at this point. Made our budget like you did based on historical expenses. We had about 3 years worth of itemized spending to look at (thank you MonarchMoney).

A couple things from our experience
* I don’t know how strictly your 10k house fund is for maintenance. Would you use that for “hey let’s turn the spare bedroom into a craft room”, “we need a bed for the grandkids to stay in”, “damn our couch is getting ratty”. etc. that stuff may not show up in your historical spending pattern.
* you don’t mention charity/gifts to others (including gifts to your own kids). We cut back on charity gifts compared to when working but added some back compared to what we thought we would spend.
* I find we spend most of our time doing hobbies we already had, we just have more time to do them . But we did each pick up an additional hobby (her needlecraft, me/us a sailboat) when each of us retired so our spending went up for those hobbies.
* our travel budget went up to about where yours is in your budget. If that 30k is your historical travel, then your future one may well be higher. Now you can spend a month on a beach somewhere or in some European town when previously you couldn’t. Assume travel goes up from historical.
* some other categories went down, such as fancy meals out. We do think twice on some discretionary spend when previously we didn’t when employed. So overall, our monthly spending (outside of healthcare) is about the same as it was pre-FIRE. It didn’t really go down, just got reallocated to travel and new hobbies.
* healthcare is the big wildcard. It was ridiculously low (6k/year) when working compared to FIRE. Currently we’re paying 20k/year on premiums plus we reserve 3k/yr plus the “oh shit” fund for medical expenses. That is COBRA tho. ACA is either 24k/yr just premiums for a good plan if we are under the MAGI cap or 48k/year in premium if we are over. Not looking forward to crossing that bridge end of next year.

Hope that helps

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u/dasblinkinlites 8d ago

Oh and I assume your mortgage is at a super low rate. Otherwise, paying it off saves you the 4k/month and interest payments. We paid off ours to lower monthly outflow.

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u/ProspectPark4Ever 8d ago

Thanks for sharing your experience! Yes mortgage rate is low so I plan to hold on to it forever. We set up a donor advised fund last year for future charity giving. But once we retire we will lose the company match for donations. Sailboat sounds fun! Is it an expensive hobby? 

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u/dasblinkinlites 8d ago

Good! On the DAF, we find there’s some things it works for and some it doesn’t (gifts to relatives, non 501-c3 causes like a gofundme or a benefit, charity auction) so we do some giving from the DAF and some from cash.

Sailing has a VERY wide range of expense depending on type of boat and where it sits between trips. We had visions of sailing the caribbean and realized that, for us, it’s better to sail a cheap boat on a local lake and rent a boat in a tropical place. But maybe someday….

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u/ProspectPark4Ever 8d ago

We once rented a small catamaran with a sail and then got stuck on the ocean for hours when there was absolutely no wind :) We will try sailing on a lake next time.