Keeping Fixed Expenses in Check

I'm just an average Jane when it comes to deciding how to best invest our portfolio. I have a pretty solid understanding of how our diversification buckets need to be adjusted based on market conditions and our anticipated withdrawal timeframe, but that's really as much as I'd ever feel comfortable or competent sharing here. When it comes to managing our budget, however, I'm very confident, believing it to be the flip side of the same coin. We need to manage our money well to make sure it continues to work for us, and we need to allocate it wisely to make sure it delivers maximum value and allows for future adjustments should the financial arena take any ugly turns.

One of the areas I've become absolutely passionate about since my early retirement is the need to keep our fixed expenses low, low, low. Doing so frees up more money to be spent on fun discretionary items like travel, entertainment and hobbies, but more importantly, it leaves us free to slash our spending at a moments notice should something go horribly wrong in the economy.

You'll notice I've referred to a possible financial calamity twice in my first two paragraphs - that would be the result of how I've been left permanently altered, emotionally speaking at least, by the 2008/2009 economic crash. I doubt it will go away in my lifetime, but perhaps that's a good, rather than a bad, thing.

So back to the discussion on fixed expenses. Within our specific budget, these are the items marked as Fixed:
  -Auto Fuel
  -Auto Maintenance
  -Groceries
  -HOA Fees
  -Home Maintenance
  -Insurance (Auto, Home (including Earthquake), Medical, Travel Trailer)
  -Taxes (Federal, Property and State)
  -Utilities (Cell phone, Electricity, Gas, Internet, Water/Trash)
  = 40% of our total annual budget 

The rest of our budget is marked as Discretionary:
  -ATM (Our weekly mad money)
  -Charitable
  -Clothing
  -Electronics
  -Entertainment
  -Gardener
  -Gifts
  -Gym Dues
  -Haircuts
  -Hobbies
  -Home Decor
  -Housecleaner
  -Major Items Fund (Auto replacements, large home repairs, etc.)
  -Restaurants
  -Travel                                                                               
  = 60% of our total annual budget

As we go about living our lives, I keep the above 40/60 split in mind when making purchasing decisions. Recently, as an example, we've been discussing the feasibility of upgrading to Smart phones when our current Verizon Basic phone contracts come up for renewal. The sticking point for both Mike and I is we do not want to increase our fixed, combined $80 a month cell phone bill. Under any, any circumstance. So, what we recently landed on instead was  purchasing two new Kindle Fires at $199 each as this year's Christmas gifts to each other. The Kindle Fires will give us the ability to go online for free when we are away from home, eliminating the need to sign up for any type of expensive, ongoing (i.e, Fixed expense) data plan. We don't feel the need to be online 24/7, but know we'd enjoy taking advantage of the free WiFi available now at so many places, including our local university where we spend so much of our non-traveling time.

Aside from the obvious, which is that we don't carry any debt, some of the ways we've managed to drive our Fixed Expenses down to 40% is by paying attention to what we do each day, and making some simple adjustments to become more financially efficient. We've cut our Utility bills down by 25% simply by better utilizing our automatic thermostat and slowly acclimating to a cooler-in-the-winter and warmer-in-the-summer temperature range. For example, this summer we slowly increased our thermostat from 72 to 77, aclimating along the way as we did so, and saw our electric bill drop by $50 a month as a result. 

By raising our homeowners insurance deductibles to $2,000, we saved another $200 a year. Dropping cable and our land phone lines slashed another $1,250 off of the Fixed side of our budget. By making a weekly menu and shopping more efficiently, including planning meals around food items on sale, we were able to decrease our annual grocery budget painlessly by $1,000 a year. By biking more instead of driving to run errands, we calculate we're saving about two gallons of gas a week, roughly $400 a year. 

Our Fixed items are necessary, not necessarily fun. Our Discretionary items are not necessary, but definitely fun. The flexibility of having only 40% of our annual spend marked as Fixed affords us the freedom to enjoy the many wonderful aspects of early retirement, and also tremendous peace of mind that no matter what the financial markets may deliver going forward, we are positioned to adjust.

A Weekend RV'ing in Apple Country

We spent the weekend in Oak Glen, prime apple orchard country here in Southern California, and although it was a tad warm (our A/C stayed on the entire weekend), we had a great time. Our primary purpose for the trip was to visit some of the many apple orchards in Oak Glen, buy as many apple products as struck our fancy, and enjoy a picnic on the grounds of picturesque Los Rios apple orchard.

I can report that we came, we saw, and we ate. This trip was actually very low key as our trips normally go. We visited with friends, we enjoyed our very spacious campsite and it's mountain views, and we had a lovely day visiting the apple lovin' town of Oak Glen. 

The cost of the weekend was also very low, one of the more obvious and enjoyable advantages of taking trips in our RV:

• Yucaipa Regional Park water/electric/sewer site: $35 x 2 nights: $70
• Gas: $25
• Food:  No change from what we'd spend if at home 
• Oak Glen purchases: Whole apple pie, 5 pounds of Fuji U-pick apples, and two freshly made, hot, apple doughnuts: $20
• TOTAL FOR TRIP: $115

Our site was huge, with our closest neighbors a good 1/2 block away. We enjoyed lovely mountain views as well. 

Picking Fuji apples right off the tree. I know, old hat to many of you, but very exciting to a gal from the suburbs!

Pressing cider the old fashioned way.

How could we resist?

Just-pressed apple cider being poured into a jug . . . about as fresh as you can get.

A Week In The Life Of An Early Retiree

So what exactly does an early retiree do to fill the 40+ hours formerly taken up by her employer? Well, speaking just for myself, this what my memory and my Google calendar indicate I did this last week while we were here in town:

Monday

• Ran 6 miles
• Attended an Intermediate Spanish class at my local university's Osher Lifelong Learning Institute (OLLI)
• Met my Monday night bookclub group for Happy Hour at a local Japanese restaurant in order to discuss our three month summer read - Atlas Shrugged by Ayn Rand. (Don't jump to conclusions - this book has been on my Monday night group's reading list for over three years)  

Tuesday

• Weight lifting and yoga at our gym  
• Attended a lecture on Global Warming at OLLI   
• Attended Intermediate Photography at OLLI   
• Returned home to make dinner   
• Met my Tuesday night tennis partner for 90 minutes of singles tennis at my HOA courts   

Wednesday

• Ran 5 miles  
• Blew off all my planned activities and spent the entire day on the sofa reading The Language of Flowers by Vanessa Diffenbaugh, one of my book club reads

Thursday

• Ran 6 miles   
• Picked up new running and hiking shoes, plus my new contact lens prescription  (all replacement items, actually)
• Attended a two hour lecture at my local university on Israeli-Palastinian Tensions in the 20th and 21st Centuries   
• Returned home and read for a bit, this time The Thirteenth Tale by Diane Setterfield, another book club read (I belong to three book clubs) 
• Attended a monthly OLLI dinner club event which included a very entertaining presentation on some of the reportedly haunted houses in our town's historic district  

Friday

• Rode my bicycle over to our local university to play tennis with the OLLI tennis club   
• Attended beginning bridge at OLLI  
• Enjoyed lunch surrounded by 20-somethings in the university's student food court  
• Attended a classic film showing of the 1963 film Charade at OLLI   
• Rode my bicycle home   
• Made dinner and watched our favorite Friday night PBS news shows - The McLaughlin Group and Washington Week In Review. Opened our weekly bottle of wine and enjoyed some right along with the shows
• Soaked in our HOA hot tub before turning in for the night 

Saturday

• Met my running club for a 7 mile trail run   
• Organized my menu for the week and went grocery shopping   
• Read and took a short nap   
• Attended my neighbor's 70th birthday party   

Sunday

• Woke up at 4:45 AM in order to beat the heat, and get in a 40 mile bicycle ride   
• Returned home, showered and took a long nap  
• Cooked, baked, read and reviewed my Spanish book, plus a little needlepoint, while watching Sunday NFL games on TV  

Thanks to the abundance of offerings I've rooted out in the 18 months since retiring, I can share that for every activity I chose to do, there was another I left by the wayside. For example, I didn't make it to Watercolor, History of Jazz or Intermediate Recorder. I also didn't make any of the numerous Meet Up hikes available throughout the week, or a photography get together planned at a nearby garden, or a ladies lunch group that meets weekly.

Honsestly, lack of things to do is really not a problem in retirement. Lack of energy or time sometimes, yes, definitely, but lack of things to do? No, absolutely not. 

So why is it again that some of you think you'd be bored in retirement? 

Making Life in Early Retirement Memorable

I remember being in a training seminar my last year at work where the instructor asked an ice breaker question, "What was the most memorable time of your life?" As we went around the room answering, every single person went back to either the day they got married or the day they had their first child. (No single folk in this particular group.) As I sat listening, awaiting my turn, I thought had how sad it was that people had to reach so far back to come up with something. Had their lives never again achieved anything close to memorable?

When the instructor came to me I responded that my most memorable memory was generally whatever activity or trip I'd just returned from. In this case, a four day motorcycle trip my husband and I had recently taken through Phoenix, Prescott, Jerome and Sedona. It was wonderful, yes, it was memorable, yes, but it was only one in a long series of adventures still to come.

I only know one way to live life, and that is to tackle it. Life is about continuing to expand. When you stop expanding, you begin contracting instead, leaving room for the process of dying to begin.  

Each day I spend time plotting out what I'm going to do. I try to include one activity that makes me slightly uncomfortable, understanding that by pushing past my discomfort I'll be inviting in stimulation, achievement and satisfaction. If and when the thought "I'm bored" creeps into my consciousness, it's a sure sign I've slipped into a state of passivity, likely a result of zoning out in front of the TV, or doing too much mindless internet browsing. As soon as I stop either behavior and turn to something active, like reading, playing the piano or working in my garden, my sense of satisfaction comes zooming back.

It's amazingly simple, really.

We again bumped into the "I can't see retiring anytime soon, I'm afraid I'd get bored" mindset at a party we attended last night. Mike and I looked at each other over the individual's head and smiled, because we are rarely bored. At times we're excited, stimulated, stressed, spent, involved or relaxed, but we are rarely bored. Because we both firmly believe boredom is a choice. When you choose passivity over activity, you leave the door wide open for boredom to march right on through.

The challenge in early retirement is to fill those 40+ hours formerly given over to your employer. The reward in early retirement is that you get to fill those 40+ hours formerly given over to your employer. Spend them wisely, actively, and life is good, easy, memorable. Spend them foolishly, passively, and life becomes very, very difficult.

Our Swiss Alps Hiking Adventure

It was just about a year ago that we returned home from an amazing 102 mile trek through the alpine passes of Switzerland. I'd intended to post something about our trip here, but there seemed to be so much to write about, I just never got around to doing it. However, just recently I received an offer from TravelZoo to create an 8"x8" custom photo book at Shutterfly.com for just the $7.99 cost of shipping and handling, and I decided this might be the perfect solution. I'd create a photo book and let the photos do the talking.

It takes a moment to load, but for any who might be interested in seeing some of the photos from our trip, as well as what customizable photo books are all about, you can click on the link below, and then click on the View photo book button you'll see displayed underneath.

Swiss Alps Trip Photo Book

We went through a specialty company for this trip, Sherpa Expeditions, which made all the hotel and luggage transportation arrangements, as well as providing us with detailed hiking maps to follow. Although there are Guided options available, we went with the Unguided option since it was considerably less expensive, and afforded us the fun and challenge of navigating from point A to point B each day on our own. The company's attention to detail was impressive, and I would recommend them to anyone interested in doing something similar. They offer guided and unguided walking, hiking and biking tours all over Europe, as well as in Napal, Peru, Morocco and Tanzania. We're eyeing The West Highland Way walk in Scotland at the moment . . . after a 102 mile strenuous trip through the alps, this one, rated as just moderate, sounds awfully appealing.

Osher Lifelong Learning Institute

Yesterday was back to school day for Mike and I. We're now both enrolled in our local university's Osher Lifelong Learning Institute (OLLI), which is geared to adults age 50 and above. There are over 100 different courses being offered this semester, ranging from The Arts to Science & Technology, with offerings like The Boundaries of Outer Space, Exploring Classical Music, Beg/Int/Adv French, Spanish and German, to a variety of more relaxed, hands-on classes like Watercolor Painting, Ceramics and Beginning Bridge.

None of the classes involve roll call, taking tests or assigning grades. The goal is simply to bring adults together to enjoy learning for the sake of learning. Many of the teachers come from within the membership base, having been lecturers, teachers, professors or single subject experts in their prior working lives. A series of single topic lectures are also offered, generally given by visiting university faculty or political figures. 

The cost for this program varies by university, with ours currently running $230 for a full year's membership, parking included. For our $230 we can take as many OLLI courses as we wish, attend all campus sporting events at no additional cost, receive discounts on concerts and plays, and apply to audit any of the other classes being taught on campus that are not part of the OLLI program - the ones that do involve roll call, tests and grades!

This semester I'm signed up for Intermediate Spanish, History of Broadway, Intermediate Digital Photography, Intermediate Recorder, Study of Shakespeare, Middle Age European History, Tennis, Beginnig Bridge and a whole slate of one day lectures like Understanding Israeli-Palestinian Tensions, The November Elections, Artificial Intelligence, and Rover Reveals Planet Mars History.

Continuing education programs for older students abound, but for more information about OLLI specifically, visit www.osherfoundation.org. For a list of the 150+ universities currently part of the OLLI program, visit http://www.osherfoundation.org/index.php?olli_list. If your local university is listed, contact them directly for more information, as each university operates their OLLI program independently.

Sometimes Early Retirement Feels Like A Never-Ending Honeymoon

 

You know how sometimes everything just goes exactly right? That's how this past week in San Diego went for Mike and I. From the absolutely beautiful view of Mission Bay we enjoyed from our RV site, to the view of the lit-up city skyline we enjoyed in the evenings, each day unfolded better than the one before.

But not without effort. Prior to our recent departure, I spent much time researching what type of off-the-beaten path activities might be available for this, our tenth or so visit to San Diego. We'd already done most of the popular tourist activities like Sea World, the San Diego Zoo, USS Midway and Balboa Park, and this time I wanted to spend as much time on the water as possible. We also committed to being active every morning before starting our day - our day goes 100% better when we do so. 

I found a ton of discounted offerings at Goldstar, Groupon and TravelZoo, and spent a total of $179 buying half price vouchers to go kayaking into the La Jolla Sea Caves, paddleboarding around Mission Bay, plus a harbor cruise around San Diego Bay, and a Coronado restaurant-hop excursion with Bite San Diego.

Our La Jolla Sea Caves kayaking excursion brought a surprise - there were dozens and dozens of pregnant Leopard Shark resting in the bay. Click on the link below to see a short news video filmed about a month before our visit from the perspective of a couple of unaware kayakers. We felt pretty much the same way when we spotted the first shark.

Kayaking with Leopard shark in La Jolla Cove 

Our first ever paddleboarding lesson lasted all of about five minutes, a big clue that it apparently wasn't really that hard. I was able to stand upright on on my very first attempt and Mike got up on his second.

Our voucher was good for a two hour rental. We lasted about an hour and 45 minutes before agreeing we were wiped and ready to go in. We will definitely do it again, however, it really was an absolute blast.

Immediately adjacent to the RV park we discovered miles and miles of biking/running/walking paths going off to both the north and the south around the bay. I ran on them each morning, enjoying views of boaters and jet skiers, while Mike pedaled over to the gym to do his workout. And in the evening Mike and I would pick a random direction and head off on our bikes to go exploring for an hour or so before returning to camp to start dinner.

The harbor cruise was much more interesting than we'd anticipated. We went by dozens of navy ships, aircraft carriers, destroyers and submarines, most of which I'd never seen and hadn't realized "lived" at the harbor. Sobering, humbling and very proud of our men and women in uniform, would pretty much sum up my feelings during the cruise.

One afternoon found us in Seaport Village dancing a Foxtrot in front of a few dozen folk listening to a Frank Sinatra imitator. We felt like Fred and Ginger as we "floated" around the pavilion where Mr. Faux-Sinatra was performing. And a few folk actually applauded, including Mr. Faux-Sinatra, who referred to us over his microphone as the Seaport Village Dancers. What a cheap thrill . . . we loved it! 

Each evening after dinner we spent time in one of the RV park's two hot pools, meeting and getting to know some of our fellow campers. When we'd had enough, we'd return to our trailer and sit outside for a bit looking at the lighted city skyline, and watching planes taking off from the distant San Diego airport, before turning in for the night. 

We discovered that baby powder works very well to combat ants, which were everywhere. Our site backed up to a Mission Bay wildlife preservation area, and the campground was prohibited by the state from doing any pest control spraying within it's vicinity. Baby powder, however, was apparently just fine to use, so we sprinkled it around every part of our trailer that touched the ground and remained ant free inside the trailer. Outside was another story, but we learned to look first, sweep and sit down second.

We spent a total of $779 for our five night/six day trip, including RV park fees, gas costs, excursions and misc. spend, and it was worth every penny. We've already booked a return visit for 2013 - a full week this time. We didn't quite get our fill of San Diego this go round.

San Diego, Here We Come

One of the very nice parts of retirement is the ability to bypass holiday weekends, and head out when everyone else is returning home to go back to work. So, today we're heading down to San Diego with our trailer in tow, for a six day post-holiday visit to Campland By The Bay.

This is a great, fun RV park that offers squeaky clean restrooms, a heated pool and spa, laundry, a cafe for casual dining and a general store. It also has a newly renovated fitness center, basketball and volleyball courts, a skate park, and a good chunk of Mission Bay beach front where water toys like sail boats, paddleboards, kayaks and jet skis can all be rented. All this fun comes at a bit of a price, but we timed our visit to coincide with the end of the Labor Day holiday, which is when the park changes over from summer to winter rates, resulting in a 33% rate decrease. 

We'll be bringing our bikes, which we'll use to ride each morning to a nearby branch of our gym, and into nearby Pacific Beach for a couple of evenings of light bar hopping. (Emphasis on light - a single beer or cocktail each will likely do us just fine.) 

I've also been keeping an eye on my favorite discount entertainment sites for several months, and have picked up half price vouchers to go paddleboarding, kayaking, do a restaurant hop, and take a harbor cruise.

I planned a delicious menu for the week, much of which I've made ahead due to the limited cooking space in our trailer. Among the goodies already prepared and ready to go is a drop-dead-delicious double tomato brushetta dip (recipe displayed below). Trust me on this - just make it and thank me later.

As trips go, this one probably won't qualify as budget, but it's being book-ended by two less expensive RV trips, the one we just took to Newport Beach, and an upcoming trip to Yucaipa, located in the heart of apple picking country. If we average out the cost of all three trips, we're well under $100 a day, which is squarely in line with our overall spending goal when RV'ing.

As with everything in life, having a goal of traveling half the year in retirement requires trade offs elsewhere. In our case, we've made a lot of lifestyle and spending changes, some of which I detailed in a post titled Budgeting Matters #2, to ensure our travel funds remain robust. Are we still happy with the tradeoffs a year later? Yes, indeed we are.

________________________________________________________________________

    Double Tomato Bruschetta
    8.5 oz jar of sun dried tomatoes in oil
    4 oz. fresh basil leaves
    4-5 cloves of garlic
    1 & 1/2 cups of freshly grated Parmesan cheese
    1/2 cup extra virgin olive oil
    2 lbs fresh Roma tomatoes, diced
    1/2 cup good quality balsamic vinegar
    2 tsp kosher salt
    1 tsp fresh ground pepper

    Place sun dried tomatoes (including oil in jar) and garlic in a food processor and pulsate until all ingredients are chopped fine. Add basil leaves and process again until chopped fine. Add parmesan cheese and process again until chopped fine and mixture looks smooth. With food processor running, slowly drizzle in olive oil until the mixture reaches a soft, spreading consistency.

    In a very large separate bowl, add diced Roma tomatoes, then add salt and pepper. Mix gently, add balsamic vinegar and gently mix again. Add sun dried tomato mixture and gently mix again.

    Enjoy on crackers, bread, or on grilled chicken or fish. (Place on already grilled meat as a topper - don't cook this mixture as it's best eaten fresh)

Trading Spaces - Home vs. RV

It never fails that I re-fall in love with our trailer each time we head out on a trip after being home for a period of time. It also never fails that I re-appreciate my home all over again after we've spent time on the road in our trailer. I seem to need regular doses of both to stay balanced, which I find quite interesting.

So, just for fun I thought I'd do a comparison of the spaces in each to show why I so enjoy spending time in both. Plus, it's a sneaky way to get photos of our home and trailer out into cyberspace should we ever have need to provide proof of contents or upgrades to our insurance carriers.

Our Home Sweet Home

Our very-spacious-for-two 2400 square foot home. No plans to downsize as of yet -
Having room to host company and spread out has been very nice in early retirement.

Living Room - Where we read, practice piano and enjoy our morning coffee.

Dining Room - Where we enjoy our fancy meals.

Kitchen - Where we cook and enjoy our casual meals.

Family Room - Where we play cards, games and watch TV/DVD's. 

Master Bedroom - Where we sleep.

Our Backyard - Where we enjoy afternoon wine and the sound of our two fountains.

 Our Home Away From Home

Our 168 square foot trailer. Sold as being able to sleep six, but we beg to differ.
It's positively perfect for two, three at the most. 

Our combined Living Room, Dining Room, Family Room and Master Bedroom.
The sleeping area in the rear is King size and surprising comfortable for sleeping,
particularly with the three way windows ventilation. (Plus we have A/C as backup.)
We carry games and cards with us, as well as our laptops on longer trips. There is also
 an outlet for cable, though we have no plans to lug a TV along with us anytime soon.

Our cozy kitchen. Although compact, it does have running water, a sink, a cutting board (the sink lid !), a refrigerator, two burner stove, and when we have electical hookups - a toaster oven and coffee maker. We use stacking, sliding
drawers (rear left) as stand ins for our at-home pantry. 

Our ever changing backyard. We enjoying sitting down with some good wine and a book after an invigorating day of
touring or hiking. The best part of RV'ing actually.

So there you have it - our two wonderful spaces. We've talked quite a bit about whether we might want to to become full time RV'ers at some point, but right now we don't see doing so. We continue to enjoy our lovely home and the comforts it provides, and we thoroughly enjoy our trailer and the wonderful adventures it delivers.

Fortunately, very fortunately, we don't have to choose just yet.