NO JOB, NO PAYCHECK! LIVE OFF OUR SAVINGS?!!

LEARNING TO BE FRUGAL

No More Doggie Spa Days? No Problemo!

More Money Than Time  
    I have to admit that I was pretty spoiled while I was working, earning a relatively good salary as a pharmacist. My philosophy was that while I was working full-time, I had more money than time, so I justified paying others to do the work that I didn't want to do. In my free time I wanted to do the things I enjoyed and I had the money to allow it. I had a cleaning service come every two weeks to clean our home. I had a window washer come every quarter to "do my windows". I pampered myself with a pedicure and a massage every month or two. I took my pharmacist smocks and slacks to be dry-cleaned. I took Bella, our miniature, long-hair dachshund, to the pet groomers to have her nails clipped and her hair bathed. You get the idea...I was spoiled and for many years I liked it that way. I refer to my own pampered life because I don’t like to point fingers at others. But, I believe that in the United States a large percentage of people of all classes pamper themselves, indulging in their own versions of daily indulgences. Ours is a country where if we want something, we buy it and worry about meeting our budget later.

      About a year ago, I started to realize that the paycheck, and my pampered lifestyle, wasn't enough to compensate me for the misery of my job as a pharmacist. (See blog post: #1 REASON FOR EARLY RETIREMENT: I'M BURNED OUT ON MY JOB AS A PHARMACIST ) I desperately wanted to get out of the rat race. I knew that if I retired before the age of 59, I would have no paycheck and no Social Security for another four years. I promised myself that I wouldn't touch my IRA Retirement Account until I absolutely had to, and not before age 59 1/2 when I wouldn't have to pay the I.R.S. the penalty required on early withdrawals. I became determined to change my lifestyle so I could quit my job and retire. Learning to be frugal was the key to simplifying my life and retiring before the age of 59.

Become Debt-Free
     How would I be able to live on my savings? It was not that much after I sold my condo, my car, and most of my superfluous stuff? The first thing was to become debt-free and stay that way. After paying off my home mortgage and the motorhome loan, it was an immediate financial relief to be payment-free and realize how much interest expense was eliminated. Over $1000 per month that had been going to financial institutions for interest alone was now staying in my bank account. I quit my job!

More Time Than Money
     Now that I was free from the grind of punching a clock and putting in my ten hours a day, I had more time than money. I was going to have to live a different lifestyle to stretch my limited funds. Mr. Money Mustache, a quirky blogger that I follow, figures that to retire early a family needs to have 25 times their annual spending set aside in investments to retire. His belief is that "you can count on your money making a 4 percent return per year over most of a lifetime. So if you don't spend more than 4 percent per year your money won't run out." By his calculations, "$600,000 in investments, plus a paid-off house.... is enough to generate $24,000 of spending money each year, which goes quite far if you have no rent or mortgage to pay."  To read Mr. Money Mustache's blog article about the 4 percent rule, click:  http://www.mrmoneymustache.com/2012/05/29/how-much-do-i-need-for-retirement/ 

     We have the motorhome, which is our current full-time home, paid off. We didn't quite manage to put aside his recommended $600,000 in investments, but then we are older than he and his family so our money doesn't have to last quite as many years as his does. We do like to go out to eat a lot more often than Mr. Money Mustache, though, so we'll have to cut costs in other areas. And, we would like to invest around $100,000 in a home without wheels on a piece of dirt all our own someday. So, let's say that after we buy our little "brick 'n' mortar" home in paradise, we still have about $500,000 invested in our mutual and index funds. Using Mr. Money Mustache's 4 percent rule of investment income, Jon and I need to live on $20,000 per year, which is $1666 per month. That's going to be tough to budget since our biggest monthly expense is health insurance, running about $625 per month and that is with Jon receiving Medicare benefits. Luckily, Jon is receiving $1332 in Social Security benefits, so this brings our total estimated monthly income to $3000 per month. After paying our health insurance, that leaves $2375 per month to live on, $375 more than the Mustachian family lives on. But we aren't willing to give up going out for dinner three to four times per week. And we enjoy traveling and going on adventures occasionally. A lifestyle change in other areas is definitely in order if we are going to meet that budget!

Live in Our Motorhome Full-Time

Living in Our 32 Ft. Motorhome at Mar Rosa RV Park Mazatlán

    Our first decision was to save money by living full-time in our Class A Southwind motorhome. We eliminated property taxes, utility bills, home maintenance and landscape maintenance expenses. Some folks think living this way would be too confining. But, with two slides that expand the bedroom and living/dining area, it feels spacious during the short periods of time we spend indoors. Mostly, we follow the warm, pleasant climate and we live outdoors so our motorhome suits our needs fine. There are many article written on saving money while living in an RV. A couple of good ones to start with are:  RVing Full-Time While Living On Less by Stephanie Henkel and Frugal RVing Guide by Amanda Watson . 

Live In Mexico

     Our next conclusion was that we need to live in Mexico for nine to ten months each year to make that budget work. By most estimates I've read, and from our past experience, it costs about 50 percent less to live in Mexico than in the United States, depending on your lifestyle. Dru Pearson, in his book "Retire in Mexico - Live Better for Less Money", claims you can "Live the American Dream in Mexico for half the price." To view a free sample of his book, see "Retire in Mexico - Live Better for Less Money" on Amazon.com . 

     We plan to retire in Mexico, returning to Oregon for about two months each autumn to visit our family and friends. It’s a good thing we love Mexico! We can live the lifestyle we enjoy on half the money in Mexico! Read more about our experiences in Mexico on my blog: www.HealthyLivingandTravelinginMexico.blogspot.com. View a sample of my book on Amazon.com by clicking: "Healthy Living and Traveling in Mexico" ebook on Amazon.com .

"Healthy Living and Traveling in Mexico" eBook

Live a Frugal Lifestyle

     After I quit my job and retired, the next step was to learn to live a more frugal lifestyle. How would I be able to live on my meager savings? The income from my investments has not been so good with the way the stock market has been performing this year. I was just going to have to learn to be frugal (and clean my own toilets). Some people will laugh at how silly this sounds; others will shake their heads at how this should be obvious. But really, many of us live lives of luxury in so many ways that we take for granted and it's hard to give up our little indulgences. Lattes from Starbucks, high-end smart phones, a new fancy car, iPods, iPads, the hottest new shoe style, and more, seem like our due for working hard.  As purchasing and spending becomes a habit, we begin to feel those little daily treats and gadgets are necessities. But, are they really?
    We have already cut our cost of living by becoming full-time RVers. We eliminated the high expenses of property taxes, utility bills, upkeep and other costs of owning a home in the United States. Our 32 foot Class A motorhome with two slides has been a very comfortable and inexpensive home that also gives us the luxury of traveling in the United States and Mexico. But, that didn't cut out costs enough. We need to stretch our savings even more!
     I started to scrutinize my expenses to weed out any unnecessary luxuries. I have given up some things that others would scoff at, such as my cell phone and my car. But that is because going out to dinner three or four times a week is more important to me than talking or playing on a phone. Living in a small town where I can get daily exercise by walking and riding my bike is more important to me than owning a car. I realize that we all have different priorities, but these are the ways I have drastically cut my expenses and am able to live with no job and no paycheck.

Share One Meal When We Go Out for Dinner

Sharing One Meal Saves Money (& Calories!)

     Most evenings when we go out for dinner, we share one salad and one main course, saving ourselves a significant amount of money. In addition, this increases our vegetable intake and we cut the amount of carbohydrates and calories we ingest. Our pocketbooks and our bodies are healthier!

Cancel My Cell Phone Service and Use Skype
      When we started living full-time in our motorhome, we both cancelled our cell phone service plans. We use Skype internet phone service on our computers and tablets, Jon's iPad and my Samsung Galaxy. This works well in most places in the United States and wherever we have Wi-Fi in Mexico. For $2.99 US dollars per month, I can make unlimited phone calls within the United States and Mexico. Many people are amazed that we no longer have cell phones. We met a very nice Mexican woman in Mazatlán and began exchanging email addresses so we could connect each other again later. When she asked for our cell phone number and we told her we don't have a cell phone, she said, "You don’t have a phone?! I've never known anyone like you." Jon and I explained to her that our jobs entailed years of constantly listening to phones ringing, answering the phone, and talking on the phone so that now we are both allergic to the phone. These days, just the sound of a ringing phone causes us to have a moment of anxiety. The truth is, we do keep an inexpensive GSM phone that takes sim cards in the U.S. and in Mexico, but only for emergency use.

Do I Really Need a New Bathing Suit?

That Suit from 2012 Can Last Till 2016!

     Before I purchase any new item of clothing, I ask myself, "Do I really need that, or am I just having a moment of wanting it?" To save money, I rarely purchase new clothing items and when I do, it has to be something that will last for years. For instance, when I bought my new bathing suit in 2012, I purchased a good quality one that would last me four year if I took good care of it. Yes, it was $80 U.S. Dollars, but with hand-washing, it will last me well into 2016 or longer. That's only $20 per year of wear. (In addition, there is incentive to avoid gaining weight which would require me to purchase a new one in a larger size!)

No More "Dry Clean Only" Clothing
     Every piece of clothing in my closet that had a "Dry Clean Only" label was donated it to Goodwill after I retired. No need for my pharmacist smocks or slacks any longer, so no need for Dry Cleaning. That saved me $40 to $50 U.S. Dollars per month.  I no longer purchase clothing that requires Dry Cleaning, and who needs that fancy stuff while living in a beach town in Mexico, anyway!

How Many Pairs of Shoes Do I Really Need?

I Splurge on My Zumba Shoes!

     Our shoe expenditures really dropped when we retired, especially when we live in Mexico more than half the year. All we need now is a couple of pairs of flip-flops, a pair of tennis shoes for hiking and playing golf, and of course,  Zumba shoes! I admit that I splurged on two good pairs of Zumba shoes at about $75 US dollars per pair. I justify that expense because proper shoes are a basic for my exercise program of Zumba two to three days a week. Gotta have fun and stay healthy!

No More Brazilian Blow-Outs!
     I've learned to live with my beach-frizzy hair and save about $500 yearly, the amount I spent on the Brazilian hair smoothing treatment. Hair color cost in a salon in Mexico is much less expensive, varying from 200 pesos (about $12.50 US dollars) to 350 pesos (about $22 US dollars), depending on the town we are in, saving me at least $40 US dollars per month from the prices I pay in Oregon. Periodically, I splurge on a haircut while in Mexico for about 200 pesos (about $12.50 US dollars).

Bella's Dog Grooming at Home--No More Doggie Spa!

Bella Enjoys Her Home Grooming Sessions

Quality Health Care in Mexico Saves!
     We had an excellent first experience with dental cleaning in Mazatlán, Mexico this past year. We saved more that 50 percent and received a better cleaning than in the United States. Paty Ascencio D.D.S., trained at the University of Guadalajara, did our cleaning personally, a very thorough job. She spoke English and was very personable, putting us at ease immediately. The cost was 700 pesos (about $43 US dollars) as compared to the $91 US dollars I paid in the United States six months previously. We are ready to find a physician for our family doctor when we return to Mexico next year.

Prescription Medication
     Speaking as a pharmacist and as a patient, the biggest cost savings when purchasing prescription medication comes from buying generic medication, whether in the United States or Mexico. Whenever possible, we ask our physician to switch our brand name medication to one that does the same job and has a generic equivalent. The second major cost-saving step, if the medication is relatively inexpensive, is to bypass the insurance and pay cash for a one year supply while we are in the United States. For more expensive medication, we buy the maximum allowed by our insurance (30 or 90 days) while in the U.S. and then pay cash for the balance needed for the year or buy our medication for the rest of the year at pharmacies in Mexico. Each prescription medication requires price checking between pharmacies and comparisons of price versus quantity filled to stretch our dollars (or pesos).

Stay Healthy to Avoid Medical Bills
    We live a healthy lifestyle so we can stay as healthy as possible, minimizing the expense of Health Care services. We have an annual preventative check-up with our physicians in Oregon which is covered by our health insurance. Two expenditures that pay off--vitamins and vaccinations to improve our health. Another expense we budget for is exercise classes such as yoga, Zumba, and Pilates two to three times per week. Regular exercise is an investment that pays off in improved health and few medical bills.

Give Up My Monthly Massage?!!!
     When I quit my stressful job, I found that the knots in my neck and shoulders disappeared and I didn't need that monthly massage. I still enjoy an occasional relaxation massage and may treat myself to one as my birthday gift for the "Big 59". A 50 minute massage in Sayulita, Mexico is only 400 pesos (about $25 US dollars) as compared to the $75 US dollars that it costs me in Oregon. Ahhh, pure pleasure on occasion is still in my budget.

Do It Myself Home Pedicure

Home Pedicures Save Me $80 U.S. Dollars!

     I've learned to do my own pedicures at home, a rather amateurish version that looks perfectly fine when viewed from five or six feet above. This saves me $80 US dollars per month over prices I paid in Oregon and about 300 to 400 pesos in Mexico, depending on the city (about $18 to $25 USD). Pedicures are a relaxing ritual, even when I do them myself. And I save enough money to go out to dinner that evening!

Boondocking at American Indian Casinos and Prime Rib
     When we are traveling in the United States in our motorhome and find ourselves in the mood for dining out on a fine prime rib or salmon dish, we look for an American Indian Casino. They allow free overnight parking which saves us $30 to $50 on RV Park fees. The campsites are quiet, though nothing special, but the restaurants are generally excellent. We save enough by boondocking to treat ourselves to a delicious prime rib dinner at the casino steakhouse. To find an Indian Casino near you, click this link: http://www.indiancasinos.com/ . Another app we use to find free camping spots is Allstays Camp and RV . The campgrounds marked as "OP" on this app are free overnight parking places which are especially useful when we find ourselves traveling late in the evening and just need an overnight safety rest stop.

Boondocking at Casino del Sol in Tucson, AZ

Eliminate International ATM Fees
    Using a bank such as Charles Schwab Bank which reimburses all ATM fees, including those charged at international ATMs. Since we pay for everything with cash now, ATM fees can add up.

I Don't Need All Those Cosmetic Products
     I'm retired with no one to impress. Jon likes me without make-up; that's all I need to know. Cleanser, moisturizer, and sunscreen are all I need now and the savings are over $200 per year.

My Old Computer Can Last One More Year (Or Two)
      The "B" key on my computer quit working and the estimate for the "B" key repair was over $300--no way am I paying that! Jon figured out how to reprogram my "5" key into a "b" key. It was amazing to me how quickly my brain reprogrammed itself to always type a "b" by pressing the "5" key. The mouse pad hasn't worked for years, but I never used it anyway. This old Toshiba laptop still works fine as long as I don't need speed. Since I've slowed the pace of my life down, I can wait a few seconds longer for uploads and do large downloads during the night. It's all part of my goal to simplify my life.

Don't Buy More Stuff
     We still window shop occasionally, but we don't buy home decor, sports equipment, electronics, music CDs, DVD movies, or toys. We find ways to use what we already own, borrow movies, and listen to YouTube music for free. If we can't resist purchasing a new item, it has to be to replace one that is broken, or we have to sell an item we already own first. One exception: if a new item allows us to live in a more eco-friendly manner, we may purchase it. A perfect example is the new Euro Cuisine Automatic Yogurt Maker we ordered from Amazon.com. That eliminated one or two 32 ounce plastic containers per week coming into our household. We justified this new toy because it helps minimize the use of plastic, thereby helping our environment.

Cut Out Cable TV, Netflix, and Pandora
     We would rather read than watch television, anyway--much more peaceful!

Thank Goodness Jon can Fix Anything (Almost)!
     Jon saves us an incalculable amount of money by fixing things before they become big problems. I give him a hard time about the spare parts and tools he carries, but I am truly thankful that he is able to keep things working well in our motorhome, saving the cost of repairs at an RV service center. Jon has repaired or replaced cabinet hinges, cabinet and drawer latches, the water pump, latches on the outside storage compartments, screen door latch, screen door screen, sewer shut-off blade-valve, slide awning, window shade stringing, and more. I’m lucky to have such a great handyman.

Breakfast & Coffee at Home
     We regularly have a simple, healthy breakfast at home to save money and calories. There are endless, tasty ways to prepare yogurt, fruit, and nuts, so why pay someone to make me a smoothie or bowl of granola? We did splurge with our Keurig coffee machine, but I have calculated that we actually waste less coffee by making one single-serve cup at a time. We spend about 35 cents per cup when we use the 95 percent Bio-Degradeable OneCups (environmentally friendly) from the Rogers Family Company. We no longer grind the beans for a pot of coffee, drink half, and then throw the other half away when it starts to taste burnt. Eliminating those $2.50 lattes at the coffee shop saves hundreds of dollars each year!

Lunch at Home or At an Inexpensive Taco Stand

Use Refillable 5-Gallon Bottles Water Bottles
     We use two five gallon water bottles that we refill with purified drinking water at the grocery stores in the United States for $1.00 to $2.00 per five gallons. In Mexico a water service company truck comes to our motorhome and replaces our empty bottle with a full bottle of water for 20 pesos (about $1.20 US dollars). This eliminates purchasing single serving plastic water bottles, saving money and the environment.

Limit Alcoholic Beverages
     Our goal is to have only one glass of wine or one margarita per day. Some days that one glass is larger than others...

Cut the Junk Food Out!
     Don't even purchase it! If it's not in the house, we won't eat it on impulse. No potato chips, rarely soda, occasionally cookies or ice cream or we share a dessert when we dine out. We do keep a bag of dark chocolate kisses and dove chocolates and have one or two a day to satisfy the chocolate craving.

Ditch the Car

Riding Bikes to the Grocery Store in Parker, AZ

     When I sold my two-year old Prius Plug-In Hybrid, it physically hurt me to see the new owner drive it away. But that added a large chunk of change to my savings account and eliminated my biggest expense, auto insurance. It also eliminated the costs of gasoline, electricity to charge the battery, and maintenance. Learning to live without a car was easier than I expected. We walk and ride our bikes more, which has the additional health benefit. We ride the bus in most cities and take a taxi when necessary. This was a huge step in our goals of living a frugal lifestyle and minimizing our impact on our environment.

Reduce Accountant's Fees by Simplifying Life
     No job, no paycheck, no W-2s or 1099s..... simple tax return.

Now I Understand the Phrase: "I have a Limited (or Fixed) Income"
     During my days as a pharmacist, I frequently heard the senior citizens exclaiming about the high prices of prescription medication and informing me in a distressed voice, "I have a limited income!" or "I live on a fixed income!" At that time, I often thought, "Yeah, don't we all". But, now I understand that it is scary when you retire and there is no regular paycheck coming in. I often find myself thinking, "What else can I cut out so we can live on our limited income?" Lately, with the stock market plummeting,  I've modified the question to "What can we cut out to live on our diminishing income?" The best answer we've come up with is "Move to Mexico where our dollar is worth much more and life is more relaxing".

Bella Digging, Jon Relaxing at Sunset in Mazatlan