I’ve posted in the past how we went to a financial analyst near the end of 2019 to review our financial status and determine if/when we could retire early. Mrs. 39 Months didn’t completely trust my numbers and assumptions, and wanted a second opinion. While I didn’t agree with many of the assumptions of the analysis (investment returns, etc.) I still think the analysis was valuable overall, and it helped me adjust my plans. Part of the analysis was detailed income and expense information for each year, from 2020 – 2028.
Fast forward a year later, and I’ve taken the opportunity to compare our planned spend vs. our actual spending of the retirement budget. I’d encourage everyone to try their retirement budget out 1-2 years before actual retirement. So what did I find out:
Major overspending vs. budget
- Home Maintenance was 176% higher. Some of this was due to purchases (lawnmower, pressure washer) and some of it was services that I could conceivable do if retired (vs. hiring a landscaper). Still. Something to consider
- Electricity/Gas: 93% higher. Could have been us staying home for Covid, but we dramatcically underpriced this.
- Groceries: 23% higher – probably because of eating more at home (see my allowance below)
- Floor Insurance: 509% higher. Though only $430, it still is a large % change.
- Charity: Our retirement budget is only $240, and if we have extra at end, we’d give. We gave away $6,000 last year. Felt good, especially when folks needed help for Covid
Major underspending vs budget
- Auto Fuel: 56% lower. No commuting during Covid, but we also won’t be doing this when we retire
- Mr. 39 Months allowance: 41% lower. A lot of this is used for food at work, so we’ll see
- Dining Out: 54% lower – due to Covid
- Hobbies: 49% lower – may be able to save some money here
Final result was that we spent about $11K less in 2020 than expected. In the end, I think the Covid close-down was an excellent chance for us to look at our retirement budget and do some deep analysis on it. We’ll be making changes on it going forward.
Mr. 39 Months