Living with LessWhen I retired early I thought I would be able to live on a much lower income. There were the obvious savings: no commuting costs, one car instead of two, fewer expenses for clothing and lunches.
In addition I decided to enter what I call my "post-materialist" phase. This means buying fewer things like books and CD's. So it's now been seven years - how have I done?
Well the first expense was the need to pay for my own health care. This has averaged about $400 per month. When my wife retired we had to pay hers as well. We are allowed to participate in her former employers plan, so that we get the group rate, but we must pay the total premium. Even with Medicare this now amounts to about $700 per month. Then there are the medical expenses not covered by insurance. This includes dental, eyeglasses and hearing aids.
Another expense has been the rise in real estate taxes. Our county restructured their system to be based upon market price rather than original construction cost. The rise in home prices, especially in the area where we live, has meant that taxes have risen about 6% each year for the past five years. (Six percent is the capped amount of yearly increase.) In addition some of the tax rates, especially the school tax, have gone up as well.
Then there is the problem of maintenance. There has been a continual stream of things like clogged drains and roof leaks. Many items around the home also have broken down. I've had to replace my audio receiver and TV since the cost of repair is nearly the same as the cost of anew one. We still live in a society focused on discarding items. They are not made to be fixed.
I've trained my family to cut down on gifts. Most people look around in desperation when having to give gifts to people who "have everything". I established a rule that I only want simple things, that don't last like food as gifts. I do give my (adult) children gifts, but they are of nominal value. Instead I've been giving them money to help them get their households established. Most people in the middle class won't be able to transfer wealth forward as their net worth has been stagnating or dropping for the past 30 years. This means that the young are going to have to start off poorer and stay that way longer then their parent's generation.
We have taken a few trips as our one major indulgence and the cost of travel has been increasing. I estimate that staying in modest accommodations and eating in mid-level restaurants still ends up costing $100-200 per day for two. With the decline in the dollar overseas travel is going to be much more than this. We have only taken one foreign trip over the period.
The rise in fuel hasn't affected us as yet. We heat with natural gas and the price hasn't gone up as much as heating oil. We also keep the house cool in winter and warm in summer. I imagine we will see this cost rise in the future, however.
So, overall my post-materialist lifestyle has only been partially successful. The areas where I have control over expenses are fewer than the ones where I don't. Fortunately for us we have been able to tap into only a portion of our retirement funds, so that we still have a reserve for the future. Those who are really on a totally fixed income are in a much tighter situation. Even so we have just increased our monthly withdrawal slightly to compensate for the inflation which the government says doesn't exist.
Living a modest middle class lifestyle in the US, is difficult even when one wants to. The society is just set up to promote spending. With all the talk about climate change and wealth imbalance I don't see any major changes in people's attitudes toward the accumulation of "stuff". Whatever declines there are have been the result of the rising gap between income and desires. Until recently much of this has been covered by increased borrowing. This may be (temporarily) coming to an end with the unacknowledged recession. When that ends will people revert to their old habits?
I keep discussing the need for the developed countries to do with less. Not do more with less (improved efficiency), just do with less. Don't have a TV for each family member. Don't buy the newest video game system to replace the two-year-old one. Don't buy dozens of toys for infants. Don't replace last year's fashions. Don't lease an SUV, buy a smaller car and keep it longer. In fact cut down on the number of cars and how far you drive altogether. Substitute activities that don't require spending a lot of money such as visiting friends or engaging in group activities.
Do with less is a threat to the entire capitalist/consumerist economic system we live in. Firms require continual growth to satisfy the demands of investors. Politicians require the support of these firms to pay for campaigns. No one is willing to consider the possibility that real sacrifice will be required. It is my contention that most people in the US (and perhaps the rest of the developed world) know that they are consuming at an unsustainable and unfair rate, they just suppress this unpleasant thought. What we get instead is talk of rising tides lifting the economies of the less developed countries. When it is pointed out that the world doesn't have enough resources to support a western standard of living for all 6.5 billion people, then we fall back on a belief that technology will find a way. Those who say otherwise are neo-Malthusians and will be proven wrong just as Malthus was. If one has doubts about that as well, well then we just support the world's biggest military machine. "Defending US national interest" is code for taking what we want, by force or intimidation if necessary.
Why should people develop a different sensibility when their are told not to worry by economists and politicians. Even suggesting putting on a sweater was enough of a "sacrifice" to sink Jimmy Carter's reelection bid.
My conclusion is similar to Dick Cheney's statement that personal virtue won't be enough to change excessive consumption. We differ in that he wants to keep us living our present lifestyle, maintaining it by force when necessary and I want us to learn to live within our means. So far the public (implicitly) agrees with him.
Moral: As Pogo said: "We have met the enemy and he is