Dear readers of BelieveitOhrNot,
How can we continue to afford to live the lifestyle we live? Are we rich? Are we living off retirement savings? Do we have an endless supply of money? No, no and no! We’re definitely not rich. We are not living off retirement savings and we 100 percent do not have an endless supply of money at our disposal.
This blog post is about how we can continue to live a cool and perhaps even envious lifestyle. I’m gonna share what has worked for us the past 5+ years, and how you can do it, too!
For the past almost six years, we’ve both gotten our Ph.D.’s in the art of living very, very frugally. What does frugal living mean to us?
There are three basic points I’d like to share:
- In our day to day lives, we live EXTREMELY frugally. Really, really frugally.
- We have very few monthly expenses besides food and rent. I’ll outline some of our expenses to further illustrate this point.
- We both still work. Andy’s monthly salary as a copy editor for a San Francisco newspaper usually covers all of our basic living expense IF we are frugal. My salary can be saved for things like nice vacations. Some months his salary doesn’t cover our living expenses. When this happens, we siphon money from our vacation fund. But, Andy’s salary working 10-15 hours a week is usually sufficient. My salary can be saved for the fun stuff!
What does living frugally mean to us?
To make our lives work, we keep a good handle on our monthly expenses. We try to keep them as low as possible. Here’s how we do it.
- We eat 95 percent of our meals at home. We’re pretty careful with our grocery budget too. I estimate we spend somewhere between $80 to $100 a week on groceries, including fresh fruits and vegetables.
- We rarely eat out. Once every other week we probably eat breakfast out. We eat dinner out on average once a week, and when we do, we spend $30 tops — and that’s for a pretty nice restaurant. If we eat lunch out (once every 10 days or so) we spend about $15-$20.
- We buy almost nothing besides food. Really. Let me repeat. We buy very little. This is what we aim for every single month. I also think this is the key to our success.
Some examples of expenses
When you live out of a tiny backpack, you can’t buy anything. There’s just no room.Therefore, our budget for clothes is very, very low. I estimate we spend about $350 a year on new clothes for us both. While I do buy an occasional new shirt, or dress, our clothing purchases are sporadic. Andy mainly buys new clothes only when we visit the U.S. and even then, it’s only two to three shirts, a pair of pants and/or a new pair of shoes.
Every since we moved into our apartment at Hotel Casa Mexicana, we’ve spent very little money on personal care expenses. Soap, shampoo, conditioner, and toilet paper is provided every day. Therefore, we’ve saved a a bit of money over the last four months not having to buy these types of items. Do you know how long one deodorant lasts? I do. A long, long, long time! And, generally speaking, deodorant, Q-tips, toothpaste and the like are generally cheaper in Mexico by $1 or $2 over similar (or the exact same) products in the U.S.
General housing expenses
Our rents rarely exceed $800-$900 a month, and this is expensive for Mexico! Right now we are in a small apartment (kitchen, bedroom, living room and a stellar shower-bath bathroom) in a super convenient location in the town center for about $750 per month. Even when our rent is a bit higher, it usually includes internet, cable TV, the water bill and electricity. Sometimes (such as at Casa Mexicana) purified water is also provided, but not usually, in which case it costs us about 50-75 pesos ($2.50 to $3.50 USD) per week. In some places we stay, we might have to pay some of these expenses, but it’s pretty rare.
Our U.S. expenses
Since we sold our California house, we have drastically reduced our expenses. Here are some monthly expenses that we do have.
Car storage, $60
Storage unit for household goods, incl. insurance, $75
Insurance for our 2010 car, $50 (we keep our coverages very low, only bumping ’em up when we are about to return to the Bay Area to use our car. Geico allows this!)
Mailbox at a mail house, $18
U.S.-based Google cell phones, $120. Unlimited data plan.
Spotify, Netflix and MLB app, $300 a year (approximately)
Car registration, $225 annually
Health insurance. Since our annual income is quite low these days we qualify for Covered California and receive a monthly subsidy. This is a significant benefit.
I’m sure there are some things I’ve forgotten about, but not having a house any longer has greatly cut down on our monthly expenses. Plus, we no longer have to worry about paying property taxes, homeowners insurance, (a huge savings) or a property management company (as we did when we were renting out our house to create income), which is a huge deal. And, no mortgage, of course!
Splurges and more splurges!
Even with this tight budget, we have some splurges. I treat myself to a massage ($35) once a month. I also sometimes get manicures and pedicures, but not weekly.
Our travel budget is somewhat of a splurge. When we travel, we have chosen to not live as frugally as we live in our daily lives. For example, in early October we’re taking a Greek Islands cruise. But even then, we booked an inside cabin to minimize costs. We actually like inside cabins! But keep your fingers crossed because Norwegian (NCL) is entertaining bids for an upgrade to a balcony room. We bid the lowest amount possible, $150 apiece for the full one-week cruise. We felt like this was worth it, especially since we’ve never had a balcony. We haven’t heard yet if our offer has been accepted but we’re hopeful. A tiny splurge for sure.
Then there’s airfare. We will splurge to travel business class whenever it’s financially feasible, especially for short-haul flights in Europe and Mexico. Unlike in the U.S., the price difference is minimal (maybe $30-$35 to be in business class rather than the main cabin for a 90-minute flight) — and usually bags are included in the higher class, plus lounge access, which I absolutely love.
Regarding hotels, while we generally don’t book expensive hotels, we don’t book the cheapest ones, either. We like to stay in nice properties, but try to spend no more than $130 a night. We don’t usually order room service or sample treats from the mini-bar, but sometimes a room service breakfast can’t be beat!
Our frugal lifestyle feels just about right to us. We sacrifice O’plenty in our day-to-day lives, just enough to feel a tiny pinch, but not enough to feel resentful. These daily sacrifices allow us to live more extravagantly when we travel. To us, it’s completely worth it.
In the next few weeks, I’m sure I will have more to say about leaving Mexico and relocating temporarily to Europe. After three days in Athens and a one-week cruise to six Greek islands, we’ll be flying to Rome (2-hour flight, business class for $125 each!) and renting a car (about $850, yes, a big hit, but worth it for what a car, rather than trains, will allow us to see and do) for two weeks. Some friends have invited us to stay in a villa in Tuscany for a week, then we’ll tool around the Italian countryside, hit the Amalfi Coast and end up in Palermo, Sicily, where we hope to rent an Airbnb for a month.
More details to come. If you want more information about our day-to-day expenses, I’d be happy to share.