We save 48% of our take home pay, so spend 52%. We live the extreme early retire lifestyle, not for everyone. Some extreme early retire people would laugh at our savings rate (only 48%!).
The breakdown of the 52% spend is
- 27% goes to housing (mortgage, property taxes, house insurance)
- 5% goes to fixed costs (car insurance, life insurance, internet, cell phones, utilities, Skype phone, Netflix, VPN service, etc.)
- 20% goes to variable costs (groceries, gasoline, supplies like toilet paper, light bulbs, entertainment like restaurants, bars, movies, sport league fees, etc.).
I know variable costs are big, but we only loosely keep track of this. We control it by only allowing ourselves so much spend cash per month for these variable things and we stick to it, if we get low, we don’t do it or we have a serious discussion. We’ve tried to lower it more, but this seems the right level for our lifestyle.
I know I know, we own a house in Vancouver. Hey, we bought fixer upper years ago and got lucky with the market. I don’t count house equity in our extreme retirement plan, as far as I am concerned, it will be icing on top of the cake. Our only debt is mortgage (student loans paid off, 1 car that we paid cash for).