We are blessed to be able to live a comfortable lifestyle in early retirement, by almost anyone’s standards. Our son thinks we are sometimes too frugal, but we’ve enjoyed many vacations, entertainment experiences, and everyday luxuries over the last 4 years.
In general, our spending is still in line or even slightly below what we planned for our FIRE escape. Still, like most people, we are more likely to think about what we spend too MUCH on, rather than too LITTLE.
Perhaps as Sam Walton, once the richest man in the world said, “even rich people like to save a buck.”
Which brings me to today’s question: “What are you wasting the most money on?” As background, here is a cool pie chart that shows what the average American household spends their money on:
The four big discretionary spending areas in our life are 1) our house; 2) our cars; 3) entertainment; and, 4) travel. I’m guessing if you look at our lifestyle, you could find $5K-$10K that could be cut pretty easily from our budget from any of those 4 areas.
HOUSE – We live in a house that’s much bigger than two people need, but our mortgage is paid off, and it is an appreciating asset over time. Other than taxes and repairs, we don’t spend a lot in this area, so I wouldn’t say this is the ‘worst’ thing we’ve spent money on.
Related: Building The Perfect Nest
CARS – We have nice everyday cars and a sports car for fun. I like cars more than the average person who might think of them only as ‘appliances’ for getting from A to B. We could switch from BMW & Mercedes to Honda & Toyota and save a lot per year, but so far we have been enjoying them as a ‘guilty pleasure’.
Related: Every Day This Man Takes A Vacation
TRAVEL – Being able to travel freely and see the world is one of the key benefits we sought in early retirement. While money is quickly spent on vacation, the dollars buy what I think are truly priceless experiences that shape your view of the world, of history, and stay with you forever.
ENTERTAINMENT – For us, entertainment includes our screens (cable, streaming, phones), dining out, concerts/shows/movies, and sports events. Like travel, most of these expenses are down dramatically in 2020. We had tickets to The Rolling Stones, Journey, and the Broadway Show ‘Frozen’ among many things that may not be rescheduled. Perhaps a lasting effect of the pandemic is that ticket prices will come down.
So what is worst? It is hard to decide. Of course, we spend money on all of these things today because we enjoy them. Still, my wife and I enjoy them to different degrees, so there is no one answer. My wife would cut back first on international travel, while I would cut back first on our cars.
We both would rank everyday entertainment as our #2 money wasting area, so that would actually likely be the area we would both initially agree to cut. Neither of us have a lot of energy for saying our house is our biggest money waste. We designed the house ourselves, love the space we have, and our neighborhood.
Again, thankfully we live a comfortable existence and enjoy the things we buy with our money. Four years into early retirement, we don’t have a need to cut back. Still, it’s hard not to ask what we get the least value from, is it?
Now I’ll ask you, “what do you waste the most money on?”
Image Credit: Pixabay