There were a lot of changes for us in 2016. Half way through the year, I quit my job, drastically cutting our income. At the time, we decided we were financially independent if we could spend less than $40k a year. But then we started to travel a lot more, spending over 2 months on the road exploring Colorado, New Mexico, Nova Scotia, Maine, and Costa Rica. I was also in a wedding and went to Montreal for a bachelor party while Mrs. CK enjoyed a weekend at the spa. We went sailing, fishing, hiking, biking, and ate and drank like kings. Overall, I think we have been living pretty damn well, but what did it cost us?
When it comes to early retirement, we don’t live in the best location. Connecticut has one of the highest costs of living. Our property taxes alone are over $5k, and we pay nearly $1500 a year just for liability insurance on two used cars. But we do enjoy living in New England, and for now, Mrs. CK enjoys teaching at our local community college. Her job allows plenty of free time to travel, and the pay more than covers our expenses. The health insurance we get through her job alone makes up for the additional taxes.
Living in a more expensive area doesn’t mean we need a six-figure salary to travel and enjoy life. We don’t budget, and didn’t keep the best records of our spending. But I was able to download all the transactions from our bank account and piece together our spending. The total spend is directly from our bank statements, and I did the best I could to break down where all that money went for the year. So for you voyeurs, here it is, the cost of living well for the Crazy Kicks in 2016:
|Taxes & Insurance||500||6,000|
|Renovations & Repairs||90||1,080|
|Water & Sewer||61||732|
|Costa Rica, March||1,900|
|Colorado & New Mexico||1,400|
|Nova Scotia & Maine||1,400|
|Montreal Bachelor Party||900|
|Hershey Spa Weekend||250|
|Costa Rica, November||1,230|
|Beer & Brewing||100||1,200|
|Gifts & Donations||$90||$1,080|
|Toiletries & Other||50||600|
|Total Spend 2016||$3,202||$38,427|
Coming in at just over $38k, we are safely within our target spend of $40k, and I think we can do even better in 2017. A big chunk – nearly $7k – of our spending was on travel. We did a pretty good job of travel hacking, and managed to get free tickets to Colorado and Costa Rica. But in 2017 we are planning a lot more travel hacking. We recently booked an all-inclusive vacation to Jamaica – including flights – using only travel rewards. I plan to share more on how in a coming post. We also used the travel vouchers we earned on our Colorado trip to book tickets to Barcelona for the summer – a trip we’re still piecing together.
Travel costs went up for us after quitting my job, but other costs went down. While working, I was eating out a lot more. I was also putting a lot more miles on my RSX commuting to work. So although our gas consumption will be a bit higher from road trips, my commuting and lunch expenses should go down. We also expect to burn less oil since we’re home to burn the free firewood I gathered over the summer. Mrs. CK and I also bought into lower plans at the gym, so our gym expenses should go down as well.
I didn’t list them, but we had both Netflix and Pandora subscriptions for a part of 2016. We cancelled them an signed up for Amazon Prime which has free streaming TV, movies, and music. We got a free month subscription to start, and so far it’s been convenient and saved us a bit of cash.
Optimizing our lifestyle to maximize our happiness per dollar has been an ongoing process. We used to spend over $80k a year, and were convinced that we would need at least $60k to live a decent life. Each year we are surprised by how low our spending keeps getting because we never feel like we are sacrificing. Just a few years ago we didn’t think we could live on $40k comfortably. But if you start cutting spending on things that return little happiness, you start to realize you don’t need much money to live a life of luxury.