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I've been retired since January of this year and so far my actual spending has closely tracked to what I budgeted.

However, I've had a couple of "gotchas":

Dining out

I find that I spending more on eating out than I had anticipated, whether dining out with friends and family or going to a coffee house. Part of this is a desire to socialize since I'm no longer in the workforce.

To lower my dining costs, I've been doing the following:

- On occasion, I'll do a paid evaluation on a restaurant, which reimburses me for the cost of my meal and my guest
- I'm slowly shifting more of my socializing from expensive dining out to free or low-cost activities

I'll admit that even with after those efforts, I'm still spending more than I had anticipated.

Gasoline
Gasoline prices in my area rose to highest in the nation this summer and as a result I spent more than I had budgeted. I guess I got too used to cheap gas.

I'm trying to reduce the miles I drive by combining trips. In addition, I'm adding in the cost of gas when I make entertainment choses--ex: do I go to the dollar movie that is 15 miles away or do I take in a nearby maninee?


What are others doing to deal with budget "gotchas"?
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The biggest "gotcha" is health insurance. OUCH! And it seems to never end. If you can find a group or individual plan at all.

GOTCHA!
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Boy, I couldn't agree more with health insurance being the biggest "gotcha"! I medically retired at 39, will officially retire at 50 (yr and a half to go) while DH, who is 52, is still working due to health insurance costs. He currently pays $50 per month towards his ins. (which will probably go to $125 with the new contract) Once he retires (in 2 yrs) we have to pay the entire amt. which is over $900 per month as of two months ago. We've worked it into the "spending plan" but it still hurts!
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Once he retires (in 2 yrs) we have to pay the entire amt. which is over $900 per month as of two months ago. We've worked it into the "spending plan" but it still hurts!

Is there a large deductible as well?
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No large deductible. Co-pays for office visits and drugs. There was a 25% increase in premiums this yr. The good news is that the only times we visited the dr. this yr or last was for our annual physicals.
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I guess that's not so horrible then. This is in relative terms, of course- I was thinking that that's about the same cost as COBRA for my current plan.
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This was a major issue with us, as well. Due to a rotator cuff tear in 2002, I found that I was "uninsurable" in 2003...just as I was coming off COBRA.

When we began to investigate locales for retirement, I discovered that each state has different health insurance regulations. For example, in DE, each insurance company determines insurability and price independently.

In WA, the state mandates a standard health screening, where a rotator cuff injury counts fairly low on the scale of pre-existing conditions (it is actually completely healed now). This means that I was insurable in WA. Even for serious conditions, WA has a state health-insurance pool. Furthermore, WA mandates that insurance companies accept any person whose COBRA coverage has maxed out (18 months).

In DE, our health insurance would have been almost $1000 per month. In WA, it is about $500 per month (for both of us). Still a major expense, but the saving of $500 per month is significant.

I encourage you to investigate the health insurance rules of any state where you are considering retirement.

Wendy
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I encourage you to investigate the health insurance rules of any state where you are considering retirement.

That is a great point, Wendy. It's very difficult to compare and weigh all the various factors that go into deciding upon a retirement location. I'm sure most here are aware of some of the discussions that have taken place on the REHP board. But your point isn't brought up often enough.

For us, when we decided to move from WA (to CA), health insurance was one of our major reasons for picking CA. In Southwest WA (where we lived) the choices of health insurance provider were very limited, and the costs compared to the Californian providers we checked against were significantly higher. We knew that health insurance costs would likely grow to become our largest budget category. So we decided that in the long run, any economic disadvantages that we might have with picking CA would eventually be overshadowed by starting with a lower health insurance cost.

Plus, property taxes continued to increase without limit in WA. By the time we left, we were paying about 2.5x what we started out paying 13 years earlier. Here in CA, our property taxes are fixed to 2% increases each year, a figure we can live with.

Ken
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What are others doing to deal with budget "gotchas"?

My mother used to have a saying when she was alive. "When it's gone, it's gone." Another words, you spend what you got, and when it's gone you don't spend anymore! I'm such a frugal tightwad that I'm actually spending less in retirement, than I "budgeted". I'm actually saving money. I make a game out of it. I mostly eat chicken legs that I buy on sale and rice. I buy the rice in 50 lb bags at Sam's club. I think I paid about $8.50 for my last bag. That comes out to 17 cents/lb! I bake the chicken in the oven and smother it in Louisana hot sauce. I can live on next to nothing.

You don't have to be as cheap as me, but my point is that you can go as low as you have to go. For instance, most of the people in the world live on less than $2.00/day. They eat the equivalent of tortillas and beans. Do you know how cheap a bag of dry beans are? Pretty durn cheap. In the middle east it's mashed chick peas and "nan" or flatbread. In India it's chapatis (flat bread) and "Dal" which is lentils. In china it's rice and some vegetables with a tiny bit of meat. It's amazing how little meat we really need. The average adult male needs about 55 grams or 2 oz., and the average female 45 grams or 1 1/2 oz. of protein. So, my point is, spend what you want, but when it's gone, it's gone. Then you have to go back to living on tortillas and beans till your next distribution! - Art
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I bake the chicken in the oven and smother it in Louisana hot sauce.

Yeah, I do the same thing with a jalapeno pepper sauce made here in the SW. It gives the chicken unbelievable flavor! People think that cooking with hot sauce makes the food "burn-your-tongue" hot, but it doesn't.
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Ken said,
For us, when we decided to move from WA (to CA), health insurance was one of our major reasons for picking CA.

Since health insurance can be the most unpredictable part of FIRE, I think you and your family were wise indeed to consider health insurance into the equation of which state to live in. The rules seem to vary so much from state to state.

Here's a situation I'm in: I used to live in CA and obtained health insurance while there. Because I obtained the policy while a CA resident, I've been able to keep policy for a number of years even after I moved to AZ. However now I have found a better policy so I'm dropping the CA policy. If in the future I ever decide to re-apply for CA policy I would have to once again re-establish residency in CA.

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I find that I spending more on eating out than I had anticipated, whether dining out with friends and family or going to a coffee house. Part of this is a desire to socialize since I'm no longer in the workforce.
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Funny you should mention the increased cost of dining out. So far that has been my experience as well. Part of the problem is picking up the tab for the table. I guess I'm so happy to be retired that I'm in a celebration mood. I'm sure that will pass.

One thing you may want to investigate is eating during the day. Typically lunch menus are cheaper than dinner menus.

Good luck in your retirement.

ImAGolfer
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Art, Can you share some of your recipies with chicken and rice?

Any thing different that you have come up with?
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In our case (not yet retired), the biggest gotchas are insurance, all different types:

Health - $2000+ out of paycheck (pre-tax, luckily my company pays 85% and we only pay 15% of the total bill) plus various copays, etc.
Life - $800+, and needs to be raised (since we have 2 more kids now).
Automobile - $2500+, for 2 1994 vehicles (no tickets, no claims, just live in South Florida and have to cover the 40%+ who carry no insurance at all).
Homeowners - $2800+, just went up over 50% this year.

That's a lot of insurance to be paying each year ! (maybe I even missed some others)
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My budget "gotcha" has always been car repairs. They're ALWAYS more than what I budgeted for. That's the price of driving used cars over 10 years old, I guess.

I'm tracking these expenses this year, as well as a few other "surprise, surprise" expenses (like the sewer clogged up a couple of times), and will plan to set aside a certain portion of my e-fund for this. I have paid off my credit card, which I was using for these things, and will just try to set the $$$ aside for this.

Hoping this will work...

As for the price of gas, that hasn't affected me too much, since I live about 2 blocks from the main bus line and take the bus to work. (The car repairs are from helping my family maintain the family cars, that I do use for errands and weekend socializing).
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Then you have to go back to living on tortillas and beans till your next distribution!

When my husband lost his job, and I was working a low-wage job, we ate lots of rice and beans! There are all kinds of recipes in vegetarian cookbooks, and some even taste like meat! We also ate vegetables we bought at the farmers' market, or gleaned from a neighbor's garden (at their invitation). My husband went fishing, and we had salmon and trout quite often! We baked our own whole wheat bread on Saturday morning. And, oatmeal and other whole grain cereals are real cheap, too. We never went hungry, even though we were living on very little income.
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"I bake the chicken in the oven and smother it in Louisana hot sauce." - Art

"Yeah, I do the same thing with a jalapeno pepper sauce made here in the SW. It gives the chicken unbelievable flavor! People think that cooking with hot sauce makes the food "burn-your-tongue" hot, but it doesn't." - workwayless


I'm pretty bad about smothering everything in Louisana Hot sauce. Potatoes, cole slaw, etc. It doesn't really matter to me. I just love it. I buy big bottles of it. Sometimes I even make my own. - Art
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Part of the problem is picking up the tab for the table. - Imagolfer

Whenever my wife and I go out with people we always get seperate checks, or seperate the bill at the end. Avoids bad feelings. - Art
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Art, Can you share some of your recipies with chicken and rice?

Any thing different that you have come up with? - Foolkath


I do a lot of stir fry. I have to cook the chicken seperate from the vegetables because my wife is a vegetarian. I sometimes make "General Tsao's chicken". First I skin and debone the thighs, then I stir fry the meat, then add some soy sauce and hot pepper sauce and some sugar and garlic. I make a kind of coarse hot sauce with ground up red peppers that works real well in General Tsao's chicken, but if you don't have that you can use "Thai Red Chili Sauce for chicken" It's about $2.89 bottle at our local Oriental Grocery Store. It's got kind of a garlicky sweet peppery flavor and is delicious. General Tsao's chicken is cheap and very easy to make.

I also make chicken soup with rice or noodles. I boil chicken legs then strain the water to make sure there are no little pieces of bone, then add celery, onions, carrot, cooked rice, or noodles, and debone some of the chicken. My wife won't eat this because of the chicken broth. I buy Ramen Noodles and always have leftover flavor packets and I use them instead of chicken boullion. I usually only buy chicken or beef flavor ramen noodles.

Spanish Rice. Cook a big pot of rice. Set aside or overnight. Then fry up a bell pepper and onion in a wok. Use generous amount of olive oil. Use about a big tablespoon of chili powder and some salsa or old tomatoes if you have them, stir fry all together. Add some salt. About a teaspoon. Then add the rice. Also delicious with english peas and cooked carrots (cut square) in it. Stir it all together. If you like Cilantro (like parsley but a little more pungent) chop up some of that and add it to it. It's delicious. Because I don's add meat to this my wife will eat it.

I also like to bake chicken with barbecue sauce and serve over cooked rice. It's delicious. - Art
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When my husband lost his job, and I was working a low-wage job, we ate lots of rice and beans! There are all kinds of recipes in vegetarian cookbooks, and some even taste like meat! We also ate vegetables we bought at the farmers' market, or gleaned from a neighbor's garden (at their invitation). My husband went fishing, and we had salmon and trout quite often! We baked our own whole wheat bread on Saturday morning. And, oatmeal and other whole grain cereals are real cheap, too. We never went hungry, even though we were living on very little income.

Actually that sounds pretty delicious. My wife would love it, other than the salmon and trout1 She's a vegetarian and that sounds pretty much like her typical diet. - Art
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Actually that sounds pretty delicious. My wife would love it, other than the salmon and trout1 She's a vegetarian and that sounds pretty much like her typical diet. - Art

Many of the recipes we used came from "Laurel's Kitchen", a vegetarian cookbook from the '70s. I don't know if it's still in print. It has a lot of good recipes, as well as great nutrition information for a vegetarian diet. We weren't 100% vegetarian, maybe only 80%.
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<lots of rice and beans! There are all kinds of recipes in vegetarian cookbooks, and some even taste like meat! We also ate vegetables we bought at the farmers' market, or gleaned from a neighbor's garden (at their invitation). My husband went fishing, and we had salmon and trout quite often! We baked our own whole wheat bread on Saturday morning. And, oatmeal and other whole grain cereals are real cheap, too. >

This sounds like an ideally healthy diet...whole foods, veggies, fish.
Wendy
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To lower my dining costs, I've been doing the following:

- On occasion, I'll do a paid evaluation on a restaurant, which reimburses me for the cost of my meal and my guest



How do you get work like that, if you don't mind my asking?

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One thing you may want to investigate is eating during the day. Typically lunch menus are cheaper than dinner menus.


So true! I eat a meal out most every day of the week, since I don't cook at all, and my main meal of the day is usually around 2 or 3 pm so I can take advantage of "lunch specials". I live in a part of Chicago that has a glut of very decent restaurants, usually priced competitively (probably because there are so many). I'm amazed at the quality and quantity of food I can get at lunchtime for only around $5 or so -- particularly at ethnic restaurants.

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On occasion, I'll do a paid evaluation on a restaurant, which reimburses me for the cost of my meal and my guest



andrew asks,

How do you get work like that, if you don't mind my asking?


I found it in a local newspaper ad. Another way is to check on the Internet. Google phrases like "Mystery shopping" and "Secret shopper".



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Have you considered purchasing one of those fund-raising "Entertainment" books? As a lot of your dining out is social, all those "buy one get one free" deals might work better for you than they do for me.

I splurged on one this year for $30, and am sorry to say I did not get as much use out of it as I'd hoped. (But at least I saved enough to pay for the book!)
http://www.entertainment.com

If you know anybody with kids in school, chances are at least one of them is selling these things as a fund-raiser. Or you could buy one online.

ILC
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Boy, I couldn't agree more with health insurance being the biggest "gotcha"! I medically retired at 39, will officially retire at 50 (yr and a half to go) while DH, who is 52, is still working due to health insurance costs. He currently pays $50 per month towards his ins. (which will probably go to $125 with the new contract) Once he retires (in 2 yrs) we have to pay the entire amt. which is over $900 per month as of two months ago. We've worked it into the "spending plan" but it still hurts!

This is a "gotcha" that may work in reverse for me. Currently, I am in the IT field and working as an independent contractor. My youngest son has some medical conditions that exclude him from coverage on individual health plans. Therefore, we had to enroll in a group plan but we are responsible for the entire premium.

The good news is the healthcare provider recently changed and our premiums went down from over $800 to just under $700 per month. If the time comes where my son no longer has his current medical problems or he is of age and no longer covered on our insurance, I imagine we will be able to save on our healthcare costs.

If not, at least we will be used to paying high healthcare costs.

dt
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