The world doesn’t need another “10 ways to save money!” clickbait article, so good news: This isn’t that! It’s my belief anyway that most of the time when people tell you how to “save money,” they’re really telling you how to spend it.
And we are going to spent money in retirement. Sometimes lots of it. But we’ll also have a somewhat fixed budget cap (as opposed to a line item budget, which we won’t try to enforce, because we don’t jive with traditional budgets), and want to make sure we don’t exceed it but still live a kick-ass life.
Health Care Aside: You may have seen last week that Trump announced an end to the cost sharing reduction subsidies for exchange plans under the Affordable Care Act. Immediately, 18 states sued to halt the action, and as a result, this latest move may be overturned in court, or Congress may finally act to stabilize the markets in response, or the subsidies could, in fact, disappear. It’s too soon to know what the result will be, but I’ll share more about how this impacts early retirees once we see how this shakes out. Stay tuned.
The biggest luxury we’ll have in retirement is time. For the past many years, we’ve had more money than time, and have spent more money than we would have liked at times knowing that we could do that thing ourselves, but that the time trade-off wasn’t worth it at that point in time. However, very soon that equation will flip, and we’ll have the time to invest in figuring out how to stretch our dollars.
And stretching those dollars is really what we’re after: finding ways to live bigger and better than our budget cap suggests. Let’s dive into the rundown on how we’re planning to do that, and then let us know in the comments if you’ve got other strategies we missed. (I’m sure you do!)
A few reminders right off the bat for those just jumping into our story: 1.) We paid off the house last January, so our budget doesn’t have to cover housing, only property tax and utilities, 2.) We have a boatload of travel miles already (>3 million total points at this moment) that can stretch our travel dollars much farther, and 3.) Our budget cap is padded significantly to be recession-resistant, so we can cut back a fair amount and still enjoy our life.
Of course, even with those caveats, we’re still game to stretch our budget even farther. Because though we have a pretty sweet next life lined up, who wouldn’t want to be able to travel more or longer, or enjoy an occasional splurge here or there? Here’s how we’ll do that.
How We’ll Live Beyond Our Budget in Early Retirement
Because we don’t have kids, we’ve already been able to travel off-peak to some extent. Like I can’t remember the last time we took a big trip in July or August, when the whole world is cramming into those popular travel destinations. (We already experience enough of that at home!) But we’ve still been constrained by limited vacation time, which has encouraged us to do things like fly on the most expensive days (Fridays) instead of the cheapest days (Wednesdays and Saturdays), and to stay in the most convenient lodging to maximize our limited time in places. After we retire, we can make all arrangements solely on price, at times when the crowds aren’t there and the deals are better. For 2018, we’re eyeing big trips in January, May and November — all off-peak months when crowds will be smaller and prices lower.
The thing we are most excited about is that sitting in weekend ski traffic is now a thing of the past for us. From now on, we sleep in on weekends, and get after the pow on weekdays only. (Or we head into the backcountry on the weekends.) And skiing only midweek means not only reclaiming time and sanity that we would have spent in traffic (and in lift lines), but it’s also a lot cheaper than buying an unrestricted pass. And we can now take advantage of all kinds of deals like this, doing costly activities midweek or during shoulder season, instead of at peak tourist times.
We love doing things ourselves. When we have time, we make a huge percentage of our household consumables, we’ve renovated one place top to bottom ourselves and have done lots of projects at our house and the rental property. I mean, geez, I even DIYed the shirts for our contest giveaway. Problem is, we haven’t had time to do the things we’d prefer to do ourselves these last few years of work, so we’ve ended up outsourcing projects that we’d prefer to DIY, like restaining the house (for a cool $4,000 — never shelling that money out again) and sweeping the chimney so we can blaze up the wood stove and get the house up to a toasty 60 degrees. But soon we can not only resume the DIY habits we’ve undertaken in the past, we can also stretch our budget by learning some of the DIY skills we’ve aspired to acquire, like more car repair know-how.
One of our favorite things about living in a mountain town is the deeply ingrained work trade ethos. You do this thing I need, I’ll do this thing you need, and we’ll call it good. On our very first powder day after we moved up here, I met a contractor in the lodge who offered to do some work on our house for free after he heard I could do websites and marketing for him. That’s just how conversations go around here. We also know of some folks who work a booth at the farmers market or do deliveries of the local CSA boxes in exchange for free produce. That is definitely a gig we’d be interested in if the trade is fair! So we’ll be keeping our ears open for opportunities to trade time or skills for services or goods we need.
Gear Swaps and Buying Used
Our other favorite thing about living in a small ski town is that most people are focused on living a great life, and not on having the flashiest stuff. Which means there’s a vibrant used marketplace. From thrift stores that turn up surprising gems, to frequent ski gear swaps, to a buy nothing group and lots of listing on Craigslist, there are a ton of options for a town our size to avoid buying brand new. So though we own plenty of skis, we got crazy deals on nearly all of them by buying gently used. And we’re hopeful that Mr. ONL will be able to find the mountain bike he’s seeking through used channels. Especially in the future when our budget will be more constrained, knowing that we can find what we need on the secondhand market is a good feeling.
Changing Where We Buy Groceries
Telling people you’re saving to retire early and then sheepishly admitting that you shop at Whole Foods is a surefire way to get some weird sideways looks. Never mind that there actually is affordable food there which I have become an expert at locating. The truth is that we’ve mostly shopped there because our time has been in such short supply, and we know we’ll be able to find high-quality food there and to get in and out quickly. But soon we won’t always be in such a hurry, and we can shop in ways that feel less convenient but save us money, which might even include a return to Costco, a thought that fills Mr. ONL with terror. His past experiences there have been mildly traumatic, an amalgam of oversized shopping cart traffic jams, milelong checkout lines and fist fights over the last of the organic raspberries. (This is the version of events that lives in his memory.) But I’m positive we went on Saturday in the past, and now we can go at off times, when the gallivanting hoards of badly behaving shoppers are at work.
Occasional Travel Hacking
We’ve had the luxury of racking up tons of travel points through actual travel that we mostly weren’t paying for (that’s the nice way of saying we’ve spent months of our lives on planes for work travel), so haven’t gone very far down the travel hacking rabbit hole. I did sign up for the Chase Sapphire Reserve earlier this year when the bonus was high, though, and have come to appreciate the value of non-program specific points. I recently got the Ink Business Preferred to add more Ultimate Rewards points to my Chase account. We’ll consider maybe one or two cards a year if they give us big sign-up bonuses along with other benefits, as these two do. (But we also each have a United and Marriott Chase card, so we’re already maxed out on how many cards we feel like dealing with.) But just with these two cards, that’s 180,000 bonus points, which is several free flights. We’re not going to turn down another way to let us travel more for less money, we just have no desire to turn this into a major, time-sucking pursuit.
Pre-Loaded Donor Advised Fund
Charitable giving is an important part of our spending plan now, both monthly and in larger quantity at the end of the year, and we always want to continue that. Especially if there are times like now in the future, when there are so many causes that need our support — aid for the U.S. Virgin Islands, Puerto Rico, Las Vegas victims, Northern California fire victims, and the list goes on — we aren’t willing to stand idly by and do nothing. And even if there isn’t cash sitting around at that moment in retirement, we take great peace of mind knowing we’ll have our donor advised fund sitting there, ready to let us send money to where it’s most needed, thanks to preloaded money from our working years and occasional re-ups when we have excess cash.
How Will You Stretch Your Budget?
What else should be on this list that we are forgetting? How do you plan to stretch your dollars in the future — or how do you do it now? Folks who are already retired, what are the best tips you’d give those of us still working or about to retire to live beyond our budgets? Anyone want to put money on whether I end up resuming my old couponing ways in retirement? ;-) Let’s chat about it all in the comments!
P.S. The big reveal is only one week away! And even for those who got the early reveal in the email newsletter, there will be lots of new info and pics here. So excited to share everything with you guys… FINALLY!
Categories: gearing up