Cost of Living Breakdown

The Basic Needs

Everyone needs some basic essentials to live. In no particular order, those basics are food, water, and shelter. I think we need a little more than that, but let’s keep it simple for now. You can argue about how much of each is necessary, but I’m skeptical of anyone saying they don’t need to know where their food, water, or shelter is coming from.

The Basic Needs I’m Working to Maintain Today

Game of Life game piece of car and a familyOver the course of this blog, I’ll be scrutinizing my cost of living. And why wouldn’t I? The lower these costs are, the less money I need to save or generate income to offset. I certainly don’t want to spend the next 10 years of my life living so frugal that I don’t enjoy life. But, the primary motivation for me to start this journey was to start building security so I don’t work until I die. I want to enjoy life a little before I’m too old to capitalize on freedom from a job.

With that said, this process is going to start with a little backstory of my current situation. Some explanation of the pros and cons of assets and costs. As we’ll see over time, these will change. Hopefully, for the best.


A white house behind a picket fence with maple tree in front yardCurrently, I live in a small farmhouse on 6 acres. I purchased this house in 2012. The previous owners were going through a divorce. At the time, we felt the asking price was far below the potential of the land and outbuildings. The property has a hay barn and pole building. I don’t live very close to neighbors and the privacy is great. We have a huge garden which offsets our food budget as well as lots of room for activities. We feel there are opportunities to trial potential businesses out with all the space we have available here while enjoying the freedom it offers.

It’s not all great though. The house itself needs a lot of work.  Likely a remodel is going to be required if we stay here forever.  We know that downsizing in a couple of years will also have some initial cost to get the home sale ready. Another challenge is that high-speed internet isn’t available in our area. We utilize a 3G hotspot for our daily internet usage. Not to mention, it’s an 80-mile roundtrip drive to work and back each day.  Because of that, we recognize that transportation costs are likely going to higher than normal.

Food and water

The great thing about living in the country is direct access to healthy food.  We are exposed to both independent farmers and farmers markets.  Since we’re surrounded by all this healthy food it has become easier to support a healthy way of life. We’ve had the opportunity to buy beef in bulk via cattle farmers, grow vegetables that we eat regularly that support our diet, and can choose to buy the products that we struggle to grow from professional farmers.  This availability sometimes makes healthy food more affordable.

On the other hand, when I’m working in town I tend to eat out for lunch often. Usually, that’s because of my uncertain schedule and business meetings over lunch. And quite honestly, I’m a bit of a stress eater. Balancing the food budget is a vital part of my cost of living and something I’ll be attacking quickly.

The Details
Home Cost Review

I have a 30-year mortgage at a rate of 3.5%. I escrow $239.78 per month. That means that I apply $400 towards principal each month and pay around $355 in interest. At the current pace, this mortgage will be paid off December of 2036. We’ll come back to that payoff forecast later.

I don’t think the operational cost of this property is expensive. We heat the house primarily with a wood burning furnace. So far, it seems we use about 2 cords of wood in winter. We have forced air and central heating (propane), but utilities have been pretty stable up to this point. Yearly maintenance costs are also stable for the past few years. Time will tell if the costs of living, which seem so far from civilization, are worth the effort.

Food Cost Review

There are only 2 people to budget food costs around. I think its obvious that dining out is a tremendous area of improvement. That being said, I’m not going to eat peanut butter and jelly sandwichs for a month or load up on ramen noodles. Not that it’s not an option. Food costs are likely a very easily addressed area of low hanging fruit for improvement in spending. But, it shouldn’t come at the expense of quality healthy food. So long that the price is reasonable, of course.  However, if I’m going to make the argument for the cost of healthy food, I also can’t argue that eating out regularly is also meeting a “healthy” standard.  I think it’s time to get serious about this topic.

Take AwaysCheckbook and bills on a table

First, let’s take some action on reducing the food budget costs. I want to reduce the cost of “Dining Out” expenses by 50% or limited to $150 per month. This effort will start tracking in March 2019. To offset those costs, I’ll be bringing lunch with me to work more regularly. We’ll have to see how the grocery budget is affected by this change as well.

Secondly, we now have some basic cost of living numbers to wrap our heads around. To meet the basic costs of living at their current costs, I need to be able to pay for my current cost of housing ($17,000 per year) plus the current cost of food (rounding to $8,600 per year). As of this point, those costs add up to $25,600 per year, or an average monthly cost of $2, 133. I can guarantee that while I might be able to reach this amount in retirement, it’s going to be challenging to reach it before. If I didn’t have to pay the mortgage, those numbers would look much different.

What If?

Assuming nothing else changes but the mortgage was paid, my cost of housing would go from $17,000 a year to only $7,900! I’m well aware taxes are likely to go up over time, but that $10,000 per year difference is huge. I think it’s safe to say that having a mortgage paid off will be required for me to reach financial independence. And with these new discoveries, here is what I’m taking away from my first cost of living review:

  • Reduce Dining Out by a minimum of 50% or $150 per month
    • Recognize and record the change to grocery budgeting because of this change
  • Start working on a plan to have your home paid off to reach financial independence


Jump to the Income Breakdown



Author of Tracking my goal of achieving financial independence in 10 years.

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