What should be our budget?

[idaho04]

So we will start building next year and it won't be long we will retire to our place in No Idaho. We are wondering how much should we budget for two healthy people. 55, no loans, fairly big house, shop, barn, couple of horses, dogs, cats, goats, and whatever. Here are our thoughts:
$300 med insurance
$300 electricity, phone, internet, propane/oil
$600 food
$200 gas/diesel
$100 vehicle ins, fees
$300 animals
$100 house & general maintenance
$200 clothing, entertainment, etc

What do you think, what did I forget?

[AndyF]

A real good way to start planning a budget is to use a program like Quicken or MS Money and get religious about entering all expenses - enter all credit card expenses and track your cash also. If you do this for a year, you will have a good set of data to work from in figuring out how much money you need for day to day expenses, how much to plan on spending for the "surprises" which seem to occur on a regular basis and how many expenses will disappear when you're not working anymore.

A few things that you might want to add to your list:
- mortgage ?? or is the house free and clear?
- savings for big planned purchases - new cars, tractor, furniture, etc...
- property taxes
- medical expenses beyond insurance cost
- dental expenses
- toys (tractor stuff, tools, other fun stuff)

If you start to track your expenses you may find that your estimates for home maintenance and utilities are low and that food may be high (unless you eat out a lot).

[idaho04]

I take any advice. I do use Quicken for our finances but I figured that the current living has little to do with living in the country: now we are fully employed, enjoy empl benefits, living in So Cal, cannot grow or farm anything, pay stables for our horses, apartment, utilities. I understand that I am looking only for basic expenses.

[DUMBDOG]

Do not know what kind of medical insurance you have, but that sure seems kind of a light amount for insurance.

The other thing that I have found after retirement is that when it seems like you have everything that you need, there is always that other thing that you would like to buy or build that you just discovered a need for.

House insurance, vehicle repairs?

[EJB]

I have gone thru a very similar process of budgeting our finances now that I am retired, and I update and monitor it very often.

Yours and mine won't match for obvious reasons, but her is what jumps out at me.

$300 for health insurance seems light...I pay over $700 per month and that iis expected to grow at 10%+ per year.

Property taxes: I budgeted $600 per month ( [img]/forums/images/icons/shocked.gif[/img] ), one of my biggest expenses, but I hope to reduce that by changing my land into farmland category.


$600 for food seems pretty high for 2 people, I budgeted $600 per month for 5 people. That all depends on what you like to eat I guess.

Your gas seems high, but car insurance seems low, but added together they match what I have for both in total.

I pay $300 per month just for electric. I hope to reduce that too if I can get everyone to turn off the lights when they leave the room [img]/forums/images/icons/tongue.gif[/img]

It was amazing to me to find out how little one actually needs to live on once you get rid of things like student loans, credit card debt, car debt and mortgages.

Little by little I have jettisoned all those little expenses that add up quite a bit to your overhead, but really aren't all that necessary. i.e. $40 per month for a cell phone...gone.

I have retired very early so that in order to stay retired I need to watch how we spend our money. Now whenever something comes along that previously I may have just bought without thinking about, I say to myself "do I really want this enough to have to go back to work?...and the answer is usually a resounding NO. [img]/forums/images/icons/smile.gif[/img]

[TimSullivan]

Being from New York State how about taxes. Also my health insurance for two is $495 per month.There are cheaper policies available to us but none less than $400.

I can't speak to the livestock but our two dogs cost over a $100 a month. That is food, treats, vet and trimming. We are going to start trimming them ourselves to cut that cost out.

You have a good start but just remember to have a big MISC. line in your budget until you have been in the house and area for a while. Mine never seemed big enough.

Tim

[Carl]

As mentioned medical is light - probably will be at least $500, then another $50-70 for dental. The company you retire from may offer Cobra as an option but these plans are usually high cost. As you stated you are in good health so get a plan that has a high deductible $2500 for normal or scheduled operations/care, but with the "emergency rider or waiver" meaning if you are injured in an accident you're covered by the policy w/o paying the deductible, but still will pay the 80/20 split on the total..

You might also consider starting a business that makes widgets of some sort, or garden plot that you sell the vegetables, etc.. I would limit this to enterprises that don't require high liabibilty insurance or high exposure, e.g. playground equipment and the like. This would enable you to write off some things like internet fees, office, some phone and travel expenses etc. Also if garden related, even your tractor and related implements [img]/forums/images/icons/smile.gif[/img]

The other thing moving into a new house there are always lots of misc expenses, like landscaping, materials, curtains, finish details on a new house, that add up real fast. A good rule of thumb is to estimate at least 10-15% over the total anticipated cost which will put you in the ballpark.

Carl

[Gary_in_Indiana]

I see nothing listed for maintenance or repairs to anything in your budget. I'd plan on $150-$200/mo. for those things. Of course, most months you'll not spend a dime on those things. Something like a set of tires or a transmission for a vehicle can really set you back when you need them. though. Just a thought... [img]/forums/images/icons/smile.gif[/img]

[wingnut]

You're planning on eating good ... I like that! My wife and I spend about $200 a month on food excluding restaurants.
The only one that jumped out at me, not knowing living expenses in Idaho (only drove thru fast a couple of times [img]/forums/images/icons/grin.gif[/img] ) is the house and maintenance. $1200 a year ain't a whole lot ... even if the house is new. Unless, of course, you also have an emergency fund to cover relacing furnaces, water heaters, roofs, windows, etc. In that case, $1200/yr would sound reasonable.
Good Luck!

[R_cannon]

</font><blockquote><font class="small">In reply to:</font><hr />
Property taxes: I budgeted $600 per month ( ), one of my biggest expenses, but I hope to reduce that by changing my land into farmland category.


[/ QUOTE ]

WOW! I pay little over $2000 ANNUALLY for 10 acres!