Some people have asked for more specifics about how we were able to up and move to Puerto Rico and essentially retire before either of us turned 35. Well, let me first start this series with our budget. Your budget is sort of like your diet. It can be healthy or not, but it certainly does reflect what’s important to you. For us, living a bit more wild and free choosing how we wanted to spend our time was far more important than a lot of consumer items we could buy. Obviously not everyone wants to live like we do. But it certainly IS possible. And I would say having more freedom is worth every penny we don’t spend. If you are interested in the cost of living in general in Puerto Rico, check out this post: Cost of Living in PR.
We live on only about $1000 a month. This is probably a shockingly low amount for most people, but it’s really just fine for us and it is very close to the amount we spent in Colorado except that we had a mortgage there. Less really is more and we still have a lot of fun and this is a pretty loose budget. If we needed to live on less I could probably get this down to about $700/month or $8,000/year if needed. So how does that $1000/month break down for us?
$500 -Food/alcohol. Approximately $100-$130/week grocery bill equates to about $500/month. While we grow a good 50% of our food it still costs a lot to buy food and alcohol. I value good, nutritious food, so this might be more than someone who just buys cheap junk processed food. Still eating in is by far cheaper (and way healthier) than eating out. This breaks down to less than $3 per meal per person (3 meals a day). If you counted the snacks/beer/coffee that we don’t go out to buy it’s even less!
$100- Vehicle. Travel. Truck gas, marbete and maintenance like tires. We try not to drive too much and this is probably closer to $75/month but also gives some room for long distance travel or a random large mechanical problem.
$75- Going out for food. We don’t eat out much, but just a light lunch for two is about $20. Let alone a dinner. So we only go out to eat about 3 or 4 times a month.
$75 – Partying/hanging out. Hard to admit, but yah, going out once or twice a month to a bar or whatever is expensive when you start buying drinks/rounds! At least we get paid a little when we do it with the band!
$50- Clothing. We don’t buy this monthly but this would probably be an average of about $500-600/year.
$50 -Random household goods/repairs. Kitchen items, Kitty food, makeup, cleaning supplies, small tools, Rx. Stuff like that.
$50- Farm Expenses. Bird food, new plants, plant care, yard tools. Though some of this is capital improvements and/or comes back in the sale of eggs/produce or in that we don’t have to buy as much food at the store.
$50 -Utilities. Water, electricity and internet. Appx $15 each. We don’t have air conditioning or a clothes dryer and although we sometimes water our plants or mix concrete it still doesn’t seem to jump up much. Sharing is caring when it comes to internet and many other things.
$25- Medical. Doctor/Dentist -Rarely needed. Probably not even this much.
$25- Other miscellaneous expenses that inevitably pop up. Also gifts/donations.
A mortgage/rent. We have no mortgage on this property. Living expenses are generally the largest expense most people have. So to be free from this is incredibly important in being able to live simply/inexpensively.
Other debt. We have no other personal debt. No student loans. No credit card balance. No home equity lines. No car payments. We live simply and don’t like debt unless it earns us money directly above and beyond what it costs to service the debt and even then I don’t really like it.
Costs related to investments in CO. Those go back into the business so aren’t counted as part of living expenses.
Most insurances. We self insure, so I suppose in a way our savings pays for this but it’s not a monthly or yearly expense.
Taxes. We pay very little taxes except sales tax. One big benefit of making less money is not having to pay much in income taxes! Property tax is $40/year or less than $4/month. Counted in other misc.
Costs related to construction. This was saved for prior to the move.
Many utilities. We don’t pay for a cell phone. We don’t have cable or even a TV. We don’t pay heating (there is no need for heating). No one pays for garbage service in PR.
Hair cuts, landscaping, car and house maintenance and other stuff we can do ourselves.
Costs related to children or divorces (like child support/alimony). Keepin’ it simple!
Very many dumb purchases. Sorry to say but some things like cigarettes, lottery tickets or bottled water are just not smart for a variety of reasons including your health, the environment and of course your budget. Alcohol is our one dumb purchase and we limit it to about $50-100/month. If we needed to save more it would be the first thing to go.
Retirement payments. We are already living it!
Most Entertainment. Most of our screen audio/visual entertainment comes from the internet.
Savings. We still save each month, but this budget list is only for expenses that are not recouped.
Travel/Vacations. This is captured under vehicle somewhat, but we can also use savings. Though I haven’t left the island in over two years, so it’s not really an expense currently. Traveling is super expensive in general!
So that’s it! That’s what we spend our money on. We took a huge pay cut to move to Puerto Rico, but it didn’t really hurt because we lived on this basic budget in Colorado even when we were making a LOT more. Though a lot of focus is on salary or pay, it doesn’t really matter what you make. It matters much more what you spend. Again to compare a diet, just as you can’t outexercise a bad diet (if you are eating more than you burn), you can’t outearn a bad spending habit (if you are spending more than you earn). You may be making a million dollars a day, but if you are spending two million you’re doing much worse than someone like us who makes maybe $1200/month but only spends $1000.