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| Acadia National Park, Maine |
My wife and I have been retired since August 2020, and have been living a mostly nomadic lifestyle, traveling 8 months out of the year to various destinations on the east coast of the United States. The first year of our retirement coincided with Covid-19, which probably helped lower our cost of living.
Two years ago, inflation hadn’t happened, and we were able to find relatively cheap month long rentals using AirBnB. The first year of our travel, we paid on average $1,020 for a month long stay. Admittedly, we settled for cheaper accommodations the first year, as we weren’t sure how our budget would work, the first year.
We didn’t want to do what typical retirees do, that is overspend the first couple of years, during the ‘go-go years’, when most retirees tend to travel more, buy more things, and splurge on themselves or on their kids. We were careful not to go over our budget, and finding cheaper housing certainly helped make that happen.
Two years ago, price of gasoline or groceries wasn’t a problem either, as we paid about the same amount in Pennsylvania (where we used to live), and in places like North Carolina, Maryland, and western New York. Southern states were even a tad cheaper compared to Pennsylvania, so we weren’t complaining the first year.
The second year was when inflation started to rear its ugly head! In this everything bubble, where everything kept going up (housing, stocks, gas, etc.), prices started going up and up. Just in early February in South Carolina, we were paying $2.20 for a gallon of gas. With the start of Russia-Ukraine War, price of gasoline has shot up to around $5 per gallon around June-July. Ouch…
So, how does an early retiree deal with the high cost of living and high inflation? In this post, I’d like to share my thoughts on this topic.
Housing and gas are certainly two major components of inflation, but these aren’t the only ones. As mentioned above, everything just about went up at the same time. Grocery prices is one of the most noticeable things that has hurt our budget, besides cost of housing.
Whereas in the first year of our retirement, we were fairly close to our monthly budget for food, at around $300, by the second year (Summer 2021 to now), it’s gone up to around $400. Like everyone else, we kept hearing about the labor shortage causing prices to spike up. With the price of fuel going up as of early 2022 thanks to the Russia-UkraineWar, this has gotten much worse.
Things that used to cost less are now too high. Examples include a bag of onions that used to cost $2 now costing $5 and a carton of seltzer that used to cost $3 now costing $5, and which now include 4 less cans than before.
I’ve been hearing about the cost of bacon and meats going up higher than most food items as well. I’m kind of glad we’re still not eating much meat these days, even if we’re no longer vegans. Our food budget would be so much higher…
Being early retirees mean we now have to live on fixed income. Unless you’re a billionaire with unlimited funds, most retirees have to spend something like 4% of their nest egg per year, if they want to see their nest egg last several decades.
Because of this fact, retirees are super sensitive to inflation. At least retirees who get Social Security will get a somewhat inflation adjusted cost of living each year to offset some of that inflation, but we FIRE (financial independence retire early) movement retirees have to rely strictly on our own money (and wits) to survive inflationary times.
These are some of the things we’re doing to survive this inflationary period:
- Being FIRE (financial independence retire early) movement adherent helps!
According to the Bureau of Labor Statistics, the average amount spent yearly by a household headed by someone 65 or older was about $48,000, between the years 2016 - 2020. FIRE movement retirees typically spend less than that (and sometimes much less), and this is the case for us.
We’ve figured out how to live on less, compared to most retirees. We don’t shop except for food, and we’re driving a Chevy SUV (and not a fancy luxury car). One other important thing is this: we’re living when we’re at a month long rental, and not behaving as if we’re on vacation.
What’s the difference? When we’re on our month long stay at AirBnB, we’re cooking our own meals, and staying indoors most days, when we’re not sightseeing. We do sightsee, but that’s usually two/three days out of a week, and not everyday. We don’t go out to eat at restaurants for every meal like when we’re on vacations.
FIRE movement has taught us how to reduce our expenses and to live on less. This has been put to good use, especially these days when everything costs more…
- Eating mostly fruits, vegetables, seafood helps…
Even though we are no longer vegans, we still see the healthful benefits of eating like vegans for most of our meals. We do eat seafood, and we’ll eat some meats/cheese at times, but when we’re grocery shopping, we don’t buy meats.
Since getting off the vegan diet, we’ve been buying shrimp, tuna, and fish fillets as our primary ‘meat’. We recently bought a cream cheese and an onion dip because we missed them. Both tasted so good as we haven’t had them since June of last year.
By not buying meats like beef, pork, and chicken, we’re saving money, especially these days. We’re glad our diet choice is still helping us in more ways than one.
- Not buying beers/wines/wine coolers, and buying much less snacks
Since December of 2021, I haven’t bought beers and my wife hasn’t bought wines or wine coolers. I have decided that I will no longer buy beers, and instead will only drink them when I’m at casinos with my parents.
The ‘Battle of the Bulge’ (not the battle during the Second World War, but rather the ever expanding waistline) is making me rethink my alcohol intake these days. I’m trying my best to reduce the amount of food and drink intake. I will treat myself to an occasional beer or two on those days when I’m with our parents at a casino.
Needless to say, alcohol is not that cheap, especially my favorite beer, Samuel Adams. Same goes for wine coolers and wines. We figure we’re probably saving anywhere from $20 to $30 a month by not buying alcohol.
Also, after realizing that we’ve been eating way too much snacks after meals that are usually highly processed, we’ve stopped buying most of them since June. This has saved us around $20 or so per grocery shopping trip.
When price of gasoline hit $5 in June, we made a conscious effort to stay home most days, or combine trips as much as we can. By early July, we had already visited Acadia National Park, several waterfalls, Colby Art Museum, Castle in the Clouds, and ate out at 3 different restaurants in Maine, and once in New Hampshire.
I felt less inclined to go somewhere by July, so we took advantage of that by staying home for about 2 weeks. We probably saved at least $65 on gas, by not driving. Had we ventured out to more than one destination, it would even be higher than that. On top of that, we usually eat out near a destination, so the cost of a day trip would be more like $120 per trip.
We also combined two errands into one during our two months stay in Maine. We usually go to a transfer station and to a laundromat on the same day, so we don’t have to make a separate trip. Not a huge difference in terms of gasoline saved, but it’s something…
Our location in Maine, which is at the extreme north western part of the state, meant we needed to drive at least two hours to get to the coast. The nearest Walmart is about an hour away, and to go anywhere, we need to drive long distances.
By making less trips and combining some, we ended up saving money. We can only control what we can control, that is, our driving habit and routine.
I was always a big eater growing up. I equated eating with happiness, and I still do. As I’m getting older, I am realizing that I can’t lose weight. These days, I’m just hoping to lose enough weight so that my clothes, especially my pants, will fit better.
Needing to lose weight so my pants fit better was one of the motivators for why I turned vegan last year. After seeing my pants getting smaller (or is it my belly getting bigger?), I’ve started to control my meal portions starting in June.
Whereas I would eat to fill up, usually getting large initial portions or getting seconds, I’ve learned to be satisfied with smaller sized portions. We’ve substituted snacks like chips that are highly processed, to simple mixed nuts, toasted oats, and homemade desserts without using sugar.
Eating less inevitably makes our grocery costs lower. Even though we’re spending about a $100 more compared to just 6 months ago, at least we’re controlling ourselves so we don’t go overboard.
- Doing more things when we’re staying inside
Besides controlling our meal portions, we’ve also been exercising indoors since we got to Maine. We’ve been walking/running, and doing light body weight exercises on a regular basis. Combine that with lighter portions, we’re feeling great, and lost some weight. Pants fit better (yeah!), better yet, we feel good knowing we’re exercising almost daily.
In addition to exercising regularly, we’re still doing the usual like painting, writing, taking naps, listening to podcasts/music/audiobooks, and doing nothing at all, except to chat. We’ve become masters at staying indoors these days.
There were times not too long ago, when I would be pulling my hair out when staying indoors for more than 3 days. I was (and still is, to some degree) a wandering soul, but I can safely say that I’ve gotten much better at staying indoors.
With the high inflation these days, I’m managing my urge to wander fairly well. After all, we’re not spending money (except on foods we already shopped) when we’re staying home…
In conclusion:
High inflation has been detrimental to all, but especially to those who are reliant on fixed income, like us. Instead of complaining about things we can’t control, we’re doing things we can control to manage these inflationary times.
Yes, gas prices are incredibly high, and yes grocery prices/dining out prices are also very high. It doesn’t help anyone to blame others or things for why it is this way.
Instead, figure out what you and I can do, to manage these difficult times. There are always things each of us can do to help ourselves. Cut down on expensive foods, control food portions, do things that doesn’t cost much, enjoy staying indoors, are some of the things that have helped us.
We’re hoping high inflation is tamed going forth. But until then, we’ll do what we can to survive these times.
We thank you all for reading, and hang tough!
Jake
Wandering Money Pig
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