A Long Boring Post About Money

Numbers Geek.

That's what it would say on my business card if I still had one.  Since I don't have a job, a business card seems kinda silly.   

If you've been reading this blog for a while, you probably know a bit about us:

• Saving money and retiring early has always been my Major Goal  
• As a radio announcer I made ($35k to $65k/year) over the course of 18 years - not a large salary, but I saved and invested a lot of that cash
• I also made great $$$ buying/reno-ing/selling houses during the real estate boom in Calgary - no major skill involved there, it was more 'right place, right time' 
• My Fella and I met in April 2004 ... after he pursued me shamelessly, I finally broke down and decided to spend my life with him (please note, his version of this story may vary a teeny bit  :) 
• From that point we began working towards the common goal of retiring super early and spending our summers in Canada and six winter months in the south (preferably Mexico)
• In 2007, I quit my full-time radio gig and we moved from Calgary to BC
• In late 2009, we sold our home and gave away most of our 'stuff' 
• In early 2010, we bought a Tiffin Allegro that we named JohnnyDisco and became full-time RV-ers
• Our RV holds everything we own, which is really everything we need  
• Last spring My Fella (the golfer) accepted a dream job at sweet resort golf course in Canada, working 7 months a year
• During the off season (mid October to April) we can follow the sun to warmer spots like Mexico
• Our stock investments are structured to pay out xxx amount of dividend income every year.  In other words, our investments cover our current living expenses, plus savings for future retirement so I don't have to work anymore.  But I really enjoy trading, researching companies and watching the markets, so that's how I spend about 5 hours every weekday 

And it all started with spending less than I earn.  Just like  the ING Direct  guy says:  "Save your money!"

Unfortunately, the above story takes far too long to explain to all the RV-ers we've run into who constantly ask "How can you guys do this at your age?"  We get that question at least once every couple days.  Maybe I'll just print off this blog post and have it laminated so we can carry it around and whip it out when necessary. 

I'm always interested to hear how other people live/spend their cash, especially people in our age range (33 to 40 years old). FYI:  I'm 40, My Fella is 33.  

A few days ago I was doing some research on how average folks spend their hard earned cash and I stumbled across this survey.   It's from the US Department of Labor - or Labour, since I'm Canadian, eh?  :)

you have to click on the picture to see the whole thing

The stats are from April 2009.

Even though it's an American survey, it was interesting to compare this to how My Fella and I budget/spend.  

One of the reasons we can winter in the south and still save so much money is that we only fork out 9.7% of our annual budget on housing. That's the beauty of full-timing in an RV.  There was the initial cost of a new motorhome, but that was paid for in cash, not financed.  And our pad rental and utilities are super cheap.  Most other folks spend at least one third of their annual family income on Housing - which (in the above survey) covers:  mortgage or rent, utilities, home cleaning supplies, household furnishings and equipment.

As I got deeper into the survey, I noticed there were a lot of missing expenditures.  For example, there is no specific category for internet, telephone or cable, but perhaps that's covered under the subcategory Household Operations, which is 2% of annual expenditures.  Not sure what else household operations could mean.  Security system, maybe? 

There is no category for charity/donations.  Yet I'm sure that many Americans are quite charitable.

And what about family vacations?  Or holiday spending (Christmas, Valentines Day, Halloween, birthdays, etc.)  There is no specific category for that.

The above US survey also neglects to mention pets, yet other studies show that 1/3 to 1/2 of all US households have a dog or cat. We budget $800/year for our pup, but that doesn't include major medical emergencies.  We have a big stash of emergency cash to cover The Unknowns like pet emergencies, major dental work, a new vehicle, or a stretching machine if I ever want to make myself taller.  I'm 5'7', but I'd like to be 5'9" without shoes.       

And there is no category for property taxes or debt repayment.  So the average American doesn't pay property taxes or credit card debt?  How about a line of credit or student loans?  Can't see those listed anywhere but I'm sure the majority of adults in the States have one or the other.  

Enough nitpicking - back to the survey...

There is a category in the above study called Cash Contributions.  I have no idea what this one covers.  Pocket money?

There is no visible category for house insurance, tenant insurance or vehicle insurance. There was a subcategory for personal life insurance - which was 0.6% of annual income.  But no auto or home insurance??? 

Another category where we personally save a ton of money is Transportation.  We own one fully paid for nine year old car.  Repairs have been minimal so far and our insurance in $650/year.  This accounts for 2.7% of our overall budget.  Yet the above survey suggest most folks spend closer to 17.6% per year on transportation.  Holy Moly.  And again, that doesn't include car insurance.  

The Entertainment Category for this survey suggests that Americans spend 5.4% of their income on fun stuff.  My Fella and I must be super lame since entertainment is only 0.7% of our annual budget. That 0.7% includes a new tennis racket or pickleball paddle, whacking a bucket of balls at the driving range or $1.50 movie on cheap Tuesday at the theatre.  We would rather play crib or yahtzee at home, and have people over for snacks instead of going to a bar/expensive sporting event.  And we play a lot of free sports: basketball, tennis, hiking, gold-panning, etc.       

My Fella gets treat cigars occasionally, but we don't have an actual Tobacco Category in our household budget.  Although our Alcohol Budget is double what the above survey suggests ... And that's all me folks, cause My Fella doesn't drink.  On closer inspection, the above survey is misleading when it comes to alcohol since drinks are probably also included in both the Entertainment and Eating Out categories.

On the topic of eating out, I'm amazed that 5.4% of the average American's annual income is spent at restaurants - one of the quickest ways to suck cash out of your pocket.  Wasn't there a time when going out to eat was a big deal, almost a treat for the family?  Now it seems that folks eat out a few times a week, without blinking an eyeball.

My Fella and I spend only 0.2% of our annual budget on restaurant food.  We can eat much healthier and cheaper at home.  

And because of all those fruits/veggies, whole grains and low fat foods we eat at home, we don't need much in the way of medical care.  The survey above shows that most American families spend 5.7% (or $2853) of their household income on healthcare - that's for two adults and one child.  

I find this amount very puzzling, because we always hear how terribly expensive US healthcare is and how we have it so much better in Canada, but in our little family (2 adults) we easily spend a minimum of $2000 per year on very basic healthcare and prescriptions.  Neither of us are covered under a company plan and we pay extra for our dental.  

Why is healthcare considered so much more expensive in the USA? Can anyone answer this?

Or have you fallen asleep after this marathon post?  Sorry 'bout that.  But remember what I said at the beginning?  I am Numbers Geek.  

I Live for stuff like this  :) 

Comments

[Croft]

We know a couple of people is similar situations as you.

Rae of Travels With Miranda is a young Canadian woman who retired from an Ottawa job VERY young and went full timing in a 97 Class C. She summers in the Yukon and winters somewhere south. Last year she house sat for us in Campbell River but wants to go to Mexico. She writes books and is currently giving seminars at the Early Bird RV Show in Abbotsford on the legal/financial aspects of full timing in Canada. Her Blog is: http://travelswithmiranda.uskeba.ca/

PJ and Claudia are a Dutch couple who retired in their early 30's and travel the world in their truck and camper. Their income is from investments and rent from two houses in Rotterdam. They have a wildlife photography business and once waited on a beach in Argentina for a month waiting for a killer whale to beach itself! They are currently in Mexico (where we met them). Their Website is: http://www.dutchduowildlife.nl/index.htm

[Croft]

Just a comment on USA healthcare. We were having breakfast out the other day and talked to someone beside us who had been in a motorcycle accident. He has a skinned face, two black eyes and a split lip that needed stitches. Norma asked him if he had any other damage and he said he did not know, that he could not afford to see a doctor. I think that is how many Americans keep costs down.

[kelsi]

Both those websites look interesting, Croft - I really admire folks who carve their own path. Thanks for the links!
RE: healthcare in the USA. Here's what I don't understand: My Fella and I pay $1250/year for basic healthcare in BC. And another $750 for Rx (most of that is birth control as it's freakin expensive!) That may be too much info, but I had to put this in context :)
I'm sure we can go see the doc every time we have a sniffle, but we prefer to take care of our bodies and usually only go in for annual physicals.
We both eat very healthy, get lots of exercise, don't smoke or do drugs.
On the other hand, accidents DO happen.
And innocent folks ARE diagnosed with non-discriminating fatal diseases.
And small kids DO get sick.

But I know US residents who have health care plans (with $500 deductibles) who don't pay that much more than My Fella and I do for health care in Canada. And we still have to pay for vision, dental, prescriptions and a host of other things that basic BC healthcare does NOT cover.
The problem lies with personal responsibility, accountability and entitlement... in both Canada and the USA. Are most folks actually doing anything to take care of their health? If more people went to the gym a few times a week instead of McDonalds, the average citizen could solve their own healthcare problems. Yes, I'm being simplistic, but it's a start.
And as a result, the people who were traumatized by fatal diseases/accidents would have health care coverage since it wasn't being utilized/abused by folks with medical problems caused by fatty foods, smoking, drinking too much and lack of exercise.
I'll get off my soapbox now, but I gotta say, it's very telling to read that the average citizen spends 11% of their annual income on restaurants, entertainment, tobacco and alcohol but only half of that on caring for their bodies and their future health.

[Don]

Our system in a nutshell: A very busy night has the BC Nurses Union demanding immediate action to address continuing patient overcrowding at Vernon Jubilee Hospital.

The union says 192 patients were admitted Wednesday night at the 148 bed hospital.

It says the situation is "alarming nurses, patients and their families."

BCNU President Debra McPherson said in a news release, "The computer system wasn't able to register all the extra patients that were admitted, and vital supplies from commodes to access to medication were lacking. Interior Health has been ignoring this mess for too long."

[Croft]

We spoke to a Walmart worker (early 30's?) who has her medical paid by Walmart. She had a baby and wanted to add the child onto her coverage. The bill was going to be $300 EVERY PAY DAY to add the child. She said that was too large a part of her salary so the child is without insurance.

We talked to an elderly woman at the desk of an RV park in Yuma. She said she would like to retire but her husband is ill and she is the only income. She said most of her minimum wage income was going for medical insurance.

Maybe the chart shows such a low amount because it uses averages and so many people have no coverage at all.

I have never talked to an American who pays anything near as little as $1250 per YEAR for health insurance. I think any couple over 40 would be lucky to find insurance at that much per MONTH in the USA.

I don't want to sound argumentative but the feedback we are getting seems to be much different. Ask a couple of your neighbors you are friendly with how much they pay. They usually like to talk about it to Canadians because they have been told so many lies about our health system.

[kelsi]

Mexi-Croft,
I welcome argumentative. If we all agreed on everything, this world would be a dull place :)
The American couples I'm referring to are age 33 - 40. They have HSA's and high deductible health insurance plans and they pay $3000-ish per year for health insurance, as a couple.
Another example is Jacob from the Early Retirement Extreme blog. He's in his 30's and pays under $100/month for his health insurance, with a high deductible.
http://earlyretirementextreme.com/whoa-my-health-insurance-went-up.html
These links explain American HSA's and high deductible insurance:
http://earlyretirementextreme.com/how-to-save-money-on-health-care.html
http://earlyretirementextreme.com/15-things-you-should-know-about-hsas.html

RE: your particular examples... I can't comment since I don't know how accurate the numbers are or the exact circumstances.
But I think you may have missed my entire point, which was that according to the USA gov survey, folks are spending half the amount on health care that they spend for restaurants, entertainment, alcohol and smokes. Where are the priorities? Shouldn't personal health care be higher on the list?
If that sounds judgmental, I really don't mean to be ... I'm just trying to understand.

[kelsi]

Mr P - Canadian stats imply the health care situation in Canada is getting increasingly worse as the population ages.
It's not just Interior Health in BC... it's right across the country.

[Glenn]

You certainly know the answers to early retirement. AND you have a nice fella, and a good dog.

I lived in Mexico for a couple of years during my early thirties. I went back to the states for work, and eventually realized I wanted to live as a free spirit. So, I started a savings, and investment program. At 44, I walked away from work, and never looked back--it's been almost 22 years. BTW currently about 6% of my investment portfolio is in Canada.

I don't keep a formal budget...just check my investments occasionally, and think about what I'd like to do, where I'd like to go. Now, it seems like it might be a good time for Argentina, or maybe Ireland.

Healthcare? I eat nutritious food, and exercise daily. I'm enrolled in the US Veteran's Affairs healthcare system (courtesy of involuntary service during the Viet Nam era). Last year I spent $15 for a complete physical, and $9 for a 30-day supply of medication--a total of $24 for the year. The healthcare systems in Mexico, and Central America have met my needs outside of the US.

[Croft]

I put up a very simple poll on my Blog on health insurance costs in the USA. Nobody has done the poll yet but there are a couple of good comments so far. Please have a look if you are interested.

http://croftsmexico.blogspot.com/2011/02/poll.html

[Croft]

Correction, several people have done the poll. You have to click on the "Show Results" button. From the comments it seems I should have put in higher numbers.

My email is croft.randle (at) gmail.com

[kelsi]

Gypsy Glen - good food and regular exercise will prevent a ton of health care issues. Now that My Fella and I have discovered this awesome lifestyle we'd like to RV right into our 80's... so we better stay healthy :)

By the way, your Dec. 13/08 blog entry made me laugh out loud:

"I know the answer! The answer lies within the heart of all mankind! The answer is twelve? I think I'm in the wrong building."
-Charles M. Schulz (Peanuts)

Funny stuff! Why'd you stop blogging? Did you get bored?

[kelsi]

Mexi-Croft... a poll is a great idea. Gonna head over to your site and check it out now!

[Croft]

You are right Kelsi, we are talking about two different age groups. I an familiar with the costs of my peer group but not costs for those much younger.

I think we can agree that the lifetime cost for health insurance are much higher in the USA compared to Canada.

[kelsi]

Yes, you're right that when it comes to the older demographic, American seniors are paying more than Canucks, therefore lifetime health care costs are higher.
But I still maintain that personal responsibility and accountability play a large role in our healthcare, especially if we start taking care of our health from a young age.
Great discussion, Mexi-Croft. Thanks! I'm going to check the results of your poll daily to see how many of your readers want to whack me in the noggin because of my comments :)

[Bill]

Okay Kelsi.. you are a numbers person. Go to this free health insurance website: https://www.ehealthinsurance.com

It is a general website that gives you an approximate monthly cost for health insurance of various types (conventional, HSA, different deductibles, etc) based on what age you designate. You will have to put in a U.S. zip code.

You will find that each time you redo the entry the monthly premiums increase the higher the age you plug in. One also needs to keep in mind that this general "quote" site does not take into account pre-existing conditions.

The bottom line is that unless you have unrealistically high deductibles and are a star athlete or young, you will pay high monthly premiums. It is easy to talk about "personal responsibility" and "healthful living", however that neglects the unforeseen health problems that come about from other influences, ailments or age - which is exactly what health insurance should be for. It also neglects the fact that some of the working poor simply cannot afford even basic health insurance. Even worse are those who are excluded from health insurance because of pre-existing conditions. Sure health insurance can be "affordable", so long as the company can include exclusionary riders and so long as you can afford a high deductible.

Bill in Nebraska

[kelsi]

Hi there Nebraska Bill - that's a great link.
I plugged in our personal numbers this morning and found a plan with United Health One. Based on our ages and medical history going back one year we would pay $134.74/month or $1616.88 per year for both of us.
Deductible is $2500.
20% co-pay.
I'm assuming it would be cheaper if they took into account our entire medical histories going back further than one year.
No family doctors or specialist visits are covered, but the plan gives you a discount on prescriptions. I didn't download the brochure yet so didn't see what this plan covers for Vision/Dental Care or Travel Discounts.

Yes, you (and Mexi-Croft) are right - the older you are, the more your health care costs. And again, pre-existing conditions change the ball game and there definitely should be affordable insurance for those folks. Are you lobbying the government to make that happen? Are you involved with a group that's trying to change that?

To quote you: "It is easy to talk about "personal responsibility" and "healthful living", however that neglects the unforeseen health problems that come about from other influences, ailments or age - which is exactly what health insurance should be for."
That is the WHOLE POINT. My Fella and I have been to the tennis and basketball courts on a daily basis since we got to this area. The court is always free and the park is more often than not, empty. We go for regular hikes and I go for a 3 - 5k walk every day. Rarely do I see anyone out exercising - walking, running, biking. But when we drive past the fast food places, the drive thru is jam packed. And since this discussion started, I've taken a special interest in what folks have in their carts at the grocery store. No one has been overloaded with fruits, veggies and lean meats.
My Fella and I aren't perfect but have decided to take personal responsibility for our health. Long lives with infrequent doc visits are our priority.
You're right, Bill - It IS easy to talk about "personal responsibility" and "healthful living". But talk is cheap and actions speak louder than words. We need to start taking care of ourselves. And I'm talking about all of North America, not just the States.
And this personal responsibility includes prioritizing where we spend our money. According to the above pie chart in this post, 2009 US gov stats suggest that average citizen spends twice as much on restaurants, alcohol, cigarettes and entertainment than they do on their healthcare. The chart is somewhat flawed, but for all the talk about the cost of healthcare, why isn't it a spending priority?
Thanks again for your comment, Nebraska Bill. It's great to get other viewpoints!

[Croft]

You probably know this but dental and eyeglasses are much cheaper in Mexico than in Canada or the USA. I have mostly gold caps so my teeth are fairly bullet proof. I get annual checks and cleanings every year in Mexico (I have a great English speaking dentist in Mazatlan). We have been buying all our glasses in Algedones (across from Yuma) since 2000. The last pair I bought in Canada in 1999 (we had two plans) would have cost $750 CAN. In 2000 I bought the same glasses (probably better quality) in Algodones for $160 CAN.

You would not approve of our restaurant habits. I Mexico we usually dine out one meal a day and in the USA a little less, maybe once every two days. For some reason I always come home in the spring weighing less than when I left. Go figure.

[kelsi]

Mexi-Croft,
Brenda in Guaymas hooked us up with her dentist and we're going to get a cleaning and check up on our next visit south. Do you have a ballpark figure on the cost of your cleaning?

And I'm definitely not anti-restaurant, as long as there's some balance, like walking to the restaurant instead of driving. We actually eat out in Mex more too but we try make healthy choices, and then eat lowfat at home for the rest of the day. I find it easy to eat healthy and exercise because it's a habit for me.
My BIG vice is my love of beer. Tecate lite, MGD 64, Bud lite... you put it in front of me, I'll drink it. But that just adds one more kilometre to my daily walk.
We usually come home from Mex a few pounds lighter too, but I think it has a lot to do with the active RV lifestyle.

And I checked your poll this morning - you're getting tons of replies!

[G Glenn]

Radio Kelsi, Most of my blogging occurred during a long, frustrating period concerning the closing of an estate. I really was in the wrong building. Now, I prefer to do other things; perhaps eventually I'll get back to the blog.

[Croft]

I convert my expenses to Canadian dollars before I enter them in Quicken so these figures are not accurate in todays conversions.

In 2009 I went to the Mazatlan dentist with a gum infection caused by a piece of taco chip jammed between my tooth and gum. He insisted on doing x-rays to make sure there was nothing else going on and then cleaned everything out He gave me a full ultrasonic cleaning and inspection. I was in the chair for well over 1/2 hour. He charged me the equivalent of $50 CAN (probably 550 - 600 pesos).

In 2010 The same dentist charged me $45 CAN for an ultrasonic cleaning and check. He only has one chair going at a time and spends all of his time with you. His equipment is at least as modern as my old dentist back home and all tools are sterilized and sealed.

[kelsi]

Gypsy G - Got it. It's time for a break when blogging starts to feel like a job.
Thanks again for reading mine... Hasta la vista!

[kelsi]

Mexi-Croft - thanks for sharing that info. We'll be back in Mex by October and hope to book a couple appointments.
And one for Shelbert - our dog. We figure if we have to go to the dentist to get our teeth cleaned, then she'll be at the vet for a cleaning too - it's only fair...

My Fella and I have been checking your blog for poll results TWICE a day. We're hooked on that poll :)

[Don]

According to Wikipedia, Canadian health cost per capita in 2009 was $5450.00. So each man, woman and child is paying thru their taxes, medical premiums, etc about $500.00 per month for every month of their lives.

[kelsi]

Mr P - now isn't THAT interesting? Anytime the health care debate comes up between Canada and the USA, I want to bring up the fact that we pay more for everything else because of our tax system.
But I never do open that can of worms...

Glad YOU did :)

[Jacq @ Single Mom Rich Mom]

My dad is 90 (91 in a few weeks), on no prescriptions, takes a few pills a day (vitamins) and the only time he would go to the doctor was when he had to in order to get his license renewed. Mind you, he also just retired from farming a couple of years ago so has been active his whole life. It's only been since he quit that he's been feeling a little worse. But I'm sure once spring comes and he can get out gardening again he'll be fine. He eats "cleaner" than anyone I know. I hope I've got the same luck of the genetic draw since I don't have quite that level of self-discipline, but am 90% of the way there.
If nothing else, I bring the averages down on the doctor visits since except for having to go a couple of times with the anemia thing last year, it had been 9 years (last time being having a baby) since I'd had to go to a doctor. Oh, except for a slamogram. So many people that I know seem to be going all the time for every little thing. I've learned more about what to do nowadays off the interwebz, I don't know why people don't try fixing the underlying problems more often.

Re. transportation - mine's high now because the cost of parking or commuting to/in Calgary is horrendous. Not as high as the average, but high enough that it's annoying to me. :-)

In the US, they call donations etc. "cash contributions" on their taxes, so that's what that is.

I saw a similar graphic that said that cost of hotels etc. went into housing and flights for travel went to transportation. That must be the case since I'm sure most people spend at least a couple grand on traveling a year.