Standard budget definitions not common
During this research phase for our next major adventure I have run across any number of ‘retire in paradise for $xxx per month’ or ‘Live like royalty for only $xxx per month in this Island Paradise’ type of posts. There are a number of countries that come up pretty regularly so I have some faith that you actually CAN live on the given budget in those countries. $1,500 is a common theme as the budget; every now and again you see someone saying $1,000 and there’s an occasional $2,500 but by and large, $1,500 seems to be the threshold.
I suspect two things are going on here. On the one hand, I see that the average Social Security benefit for retirees is $1,500 and on the other hand, it certainly appears to be cheap AF to live in a lot of places outside the US of A. Like, most of them.
What isn’t focused on so much is that the budget really needs to be plus or minus, based on your definition of comfortable (That’s a different subject; I see similar questions all the time that sound like ‘can I live on $xxx per month in <country>?’ and the answer is almost always going to be a qualified ‘Maybe?’) as well as being an accurate reflection of the total cost of living.
My real concern is that I have seen quite a few posts about the low cost of living in a particular place that seemed suspect to me. I hear digital nomads say things like “I live on around a thousand or so Euros each month” and think “Wow. That’s pretty amazing. I mean, if he can live on $1,150 a month just imagine how nice a lifestyle we would have on a $2,500/month budget”
Mostly it appears that maybe we aren’t all using the same definition of ‘cost-of-living’ but since hardly anyone shares an actual breakdown, it’s hard to say. There is sometimes a tangential piece of evidence – like comments about paying a certain amount for rent – If you tell me that you live on $1,150 per month but then later you mention that your rent is around $700 per month… Hmmmm, all of your expenses aside from rent only totals $450 per month? Seems unlikely to me. If you’re somewhere that rent is €350 per month and you live on €1,000, that’s much more believable.
This idea that we’re using different definitions came into sharp relief the other day when I saw a post where someone stated that their cost of living was 1,575 Euros ($1,725) for the month and then went on to say that their highest expenses were €1,030 ($1,1,28) for rent, €362 ($397) for food and €127 ($139) for gas. For the math-impaired I’ll save you the trouble – those three items add up to €1,519 (($1,664) which means that all other expenses total €56 ($61) per month. The math was also made suspect by the mention that costs ‘were up almost €300 over 2 years ago so obviously food costs had gone up considerably’. I feel like food costs couldn’t have been that big a contributor to the increase because of the relative scale. Overall it’s 20% more expensive so I think probably rental pricing was a big issue
If we presume that the figure given for gas means petrol (and I’m sure it was; it was from a warm climate so it wouldn’t be LPG for heating and cooking) then they have a car and, we hope, insurance for the car. The post was made on Twitter so odds are super high that they have a cellphone with a data plan. If they did anything other than sit around all day then there would be some additional expense to go to a museum or zoo or something at least once during the month. No health or life insurance of any sort?
Just, in order for their cost of living to be €1,575 then, based on what we know from the info provided, we need to believe they own their car outright, drive it uninsured, pay less than €50 for their cellphone/internet bill and had literally no expenses aside from rent, food and fuel. That’s an unfathomably boring existence. Or, more likely, they are providing us with a misleading cost of living assessment.
That’s an issue if you are actually trying to be an influencer, a blogger, a vlogger, something like that. People are using the information you provide to help them make decisions. Part of the challenge will always be human nature, of course; everyone wants to believe – or at least present to the world – that they are more skilled than others at some thing and living cheap is a popular theme these days.
We’ll be hitting the road this fall and I intend to share the totality of our budget and have as few things as possible categorized as ‘other expenses’. Our intent is to live on a set amount monthly and have a separate budget for travel between countries; that money is currently budgeted as a monthly expense but it will be used at relatively random intervals so I will track it as its own category.
Our budget is based on specific ideas we have about the project as well as what I’ve been able to glean about the actual cost of living in various places around the world. We’ll have overspend months and underspend months; we’ll have super touristy months where we get out and do a bunch of things and we’ll have ‘sit around and read’ months because the travel both is and isn’t the point of this particular project/adventure/whatever. We are retiring almost completely. In order to be able to afford to live on our savings and also being not be bored out of our frickin’ minds, we’re going nomadic but we’ll have to exercise SOME restraint in our spending.
Also, the reality of the situation is simply that the places in the US where we could have something like a reasonably comfortable lifestyle on a $2,500/month budget aren’t places that are attractive to us. When I see articles about ‘where to retire in the US for less than $2,000 per month’ I never think “Oh, that’s cool; I’ve always wanted to go to <whatever city>” More typically I think “Wow, I cannot even imagine living full-time in someplace so <hot/cold/wet/dry/MAGA>”
Don’t take that as some sort of judgment; I’m happy that there ARE people who want to live in those places; just like I can’t even imagine being happy as a firefighter but I’m very appreciative that there are people who WANT to do that.
Anyway, I guess this is mostly a shameless plea for folks to follow along on our travels once we hit the road this fall.
