The California Coast is nice
Every year I write a summary of our life and expenses, with the exception of last year / 2021 (because apparently I forgot.)
2022 was our 10th full year of unconventional living – we traveled some (Hawaii, California coast, Yosemite, Tahoe Thanksgiving, Disneyland), Winnie grew a ton of food and flowers, I built some stuff out of wood, and we went snowboarding often throughout this epic/record snow season. I also experimented with income generation (didn’t like it), home maintenance (renting is still better), and public speaking.
Expenses were what they were… a bit more than planned, but that is how these things go sometimes.
2022 Cost of Living
Core cost of living wasn’t too far from what I had previously estimated in Our California Dreamin’ Budget, but we added bi-weekly housecleaning, half-day childcare expenses for our 2-year-old so we could get some adulting in, and food cost a bit more. This was offset somewhat by not visiting Taiwan this year and extensive travel hacking (because free travel is the best travel.) We also installed some windows and a new HVAC system (which is really cool (badumtss)) which cost some $$$ but reduced future expenses.
Here is spending in fancy table form.
Expenses | Monthly | Annual | $/day |
Housing* | ~$3,100 | $37,200 | $102 |
Transportation* | $350 | $4,200 | $12 |
Food | $1,800 | $21,600 | $59 |
Healthcare | $100 | $1,200 | $3 |
Entertainment | $500 | $6,000 | $16 |
Vacations | $700 | $8,400 | $23 |
Misc | $500 | $6,000 | $16 |
Childcare | $1,200 (start 9/2022) | $3,600 (only 3 months) | $10 |
Taxes | $100 | $1,200 | $3 |
Total (Core) | $8,350 | $89,400 ($100,200) | $245 |
Other | $19,000 | $52 | |
Total | $108,400 | $297 |
Sums don’t total because childcare payments were only for 3 months.
Other expenses include an e-bike ($3,000) and the previously mentioned HVAC system ($16,000 – but financed, total outlay was ~$1,000.)
* we have debt on our house (30-year fixed 2.75%) and car (7-year fixed 2.74%.)
Expenses reflect only the interest portion of the payments (~$560/month on mortgage, $100/month on car)
Thoughts on life
Life is fairly busy – Jr has year-round sports now (baseball, soccer, basketball, swim team, tae kwon do) plus snowboarding. Our little one is ready to do the same starting this next season. Overall cost for these activities is fairly reasonable.
When possible, we get in a bit of travel.
Although sometimes it is hard to want to go anywhere. Home is nice.
No fear
Hot tubin
Home is a source of good food – fresh bread, fresh vegetables, and juicy meats.
brisket
fresh from the oven
garden delights
With fun local activities
sledding buddies
fun day sun day
light winds
Thoughts on Money
By sheer coincidence 2022 (1st full year in the US) cost about the same as 2020 (last full year outside the US.)
I’m not completely sure what 2021 cost… but more ($200,000?)
The main difference is we are spending that amount from a smaller portfolio (because we sold stock to buy a house.)
In theory we could spend less, but it seems unlikely. 2023 spending will likely be similar.
In 2023 our monthly childcare expenses will go down as our soon-to-be 3-year-old will start formal pre-school at much lower cost, but those funds are likely to be redirected to sports. (Does that mean a 2nd car for the Mom-and-Dad taxi service? Higher food spending because the little guy already eats more than Mom?)
Home improvements have already resulted in lower spending on utilities, but it is mostly a rounding error that pays for itself.
Travel is expensive these days with fewer business travelers subsidizing things for the rest of us, so we spend a lot even with optimization. 2023 travel plans already include a return to Hawaii (Big Island this time) and Christmas in Taiwan. Some Tahoe camping is also in order.
The only thing I can say with any certainty is that our spending on taxes and health insurance will remain low.
Summary
Life is good. We live well, travel well, eat well. That costs us about $10k/month.
No real changes are planned so 2023 will likely look similar to 2022 in terms of life and expenses.
Thank you for reading. Please share your GCC love on Twitter, Facebook, and Instagram.
Hope everyone has a great 2023 and beyond.
Jeremy, Winnie, Julian, Jaiden
Go Curry Cracker!
Great to hear you’re doing well back it he US. We also noticed our first year back from Taiwan (in California) living cost about the same per month overall, with no mortgage here though vs paying rent in Taipei. Taiwan was slightly less overall due to the crazy food inflation here recently.
How has this been impacting yor portfolio? Based on expenses and the 4% rule, you’d need a portfolio of at least $2,710,000 to maintain the current lifestyle, and then probably more once as your children get older, right?
Is this comment directed at me or JeffG? (it is a reply to Jeff’s comment)
On 2nd read, obviously directed at me.
Our asset allocation is the same except for a larger real estate component :)
What are you thinking for higher expenses as kids get older?
Sorry about that, I hit the wrong comment button and now we’re off on a side trail on JeffG’s comment.
I’m expecting food and fuel costs to go up significantly once my kids hit high school. I know our vacation / travel cost has already gone up with my oldest aging out of the children’s prices for restaurant menus and venue tickets. Granted, it should hit a cliff when all 3 of mine are out of the house…theoretically. I originally had $90,000 targeted as our annual expenditure, but given inflation and higher costs, I am thinking that may not be enough anymore.
My thinking on this has been that the childcare costs just roll forward. Just instead of childcare we pay for sports/food/transportation, etc…
But because these are not forever expenses the 4% rule doesn’t exactly apply. We just pay an extra $x thousand dollars each year for 10 years +/- and then maybe an insane amount of money for 4-6 years for college.
Our biggest mental adjustment has been around food – both the cost and quality. Groceries and restaurants definitely cost MUCH more, and the quality of food / value in restaurants is mostly terrible.
And that’s in California, which has decently fresh veggies and fruit. The US is out of control for a country with such a big agricultural sector.
Where does Taiwan source most of its groceries?
I’m not really knowledgable about the Taiwan grocery supply chain – a lot of produce is locally grown. Australian beef and US pork are common.
Property tax, income tax, health insurance, auto insurance, home insurance all take up a large chunk of my fixed annual expenses. How and where do you account for these expenses?
Property tax and home insurance are including in Housing.
Income Tax is included in Taxes.
Health insurance is included in Healthcare (which somehow disappeared from the table. Fixed now.)
Auto insurance is included in Transportation.
edit: How they are accounted for is explained in the post, Our California Dreamin’ Budget
So you think your ongoing budget will be 120k a year, not 75k? Appreciate the update, BTW, super useful.
Seems like that’s more possible with kids in sports etc. Was most of the increase due to childcare/sports/food?
Boy am I jealous of your low healthcare costs, and wow have you done an amazing job with (income) tax minimization. Impressive.
Probably not – lazy accounting on my part.
I think we end up at the original $75k estimate + more expensive food + extra kid activities (including childcare/preschool.) We overspent on most categories but underspent on taxes.
This is all very hand-wavy as I am just looking at expenses in Mint/Empower a year after they happened.
An example of accounting laziness:
I don’t plan on replacing the HVAC every year, but I included the entire cost here as a one-time expense ($16k) to make future budgeting/accounting easier.
In actuality… I pay about $125 per month on a loan and our utilities expenses have been reduced by at least $100/month as a result.
I chose to get a loan (at 5.25% afair) because at the time the stock market was way down (about 15% lower than today.)
I could now pay that loan off at a ~10% profit (15% higher stock market – 5% interest for a year.) I will think about that later.
Love this seeing this roundup, our expenses are actually pretty similar. How do your food costs split up across eating out and groceries?
About 75/25
According to Mint/Empower, YTD spending on food is about $6,400. $1,700 on restaurants and the remainder on groceries
Greetings from Neihu District in Taipei! How does this move to the USA affect your residence status in Taiwan in the event you would want to move back here?
Dan V
I left Taiwan, I have no residence status. If I want future residence status, I would have to apply. Everything starts over.
How would you say this level of spending would have worked with your original nest egg at the time you retired? Just generally curious if the blog (and ancillary) income has allowed you to live more expansively than you originally intended. And zero judgement- buy the Tesla, whatever! You earned it and we’ve all benefited from your efforts to share. I’m just curious how different this level of living is to what you originally thought you were retiring into (and I recognize that you could have made different choices re: moving back to US, buying a home etc so no doubt you could have found a way to make it work without additional income, just curious how much higher on the hog- if at all- your current spending is than originally planned.) Thanks!
With the caveat that my memory is probably off… I originally started planning this 20 years ago… afair our original plan was to live our current lifestyle in Seattle (house, cars, kids) and we currently spend less than that estimate.
Thanks for responding- so it sounds like when you retired you actually anticipated spending even more than you do now which is extremely impressive given the nest egg you must have accumulated. Hats off!
Yes, that was the plan. Then we traveled where it costs little to travel (e.g. Guatemala, Thailand, etc.) living well below our means to allow the portfolio to continue to grow. At the same time, we did all the tax optimization maneuvers. Then when returning to the US, we were well positioned on all accounts.
Would love to hear more about your HVAC replacement experience (age of system replaced, what kind of system you went with and why, etc.) My HVAC system will hit 20 years old next year so I expect to be in the market in the next 5 years or so.
We have a 5-ton split zone heat pump – 1 external condenser with a 3-ton air handler in the crawlspace and a 2-ton in the attic. This replaces a similarly sized single zone natural gas system.
The previous owners did some really wonky stuff with ducting and the upstairs never got cool enough but now it is a perfect little oasis.
Heat pumps are insanely efficient.
In theory had I waited until 2023 we could have saved up to $8k in tax credits but then we would have been really hot last summer.
Thanks for the info. Heat pumps aren’t very popular in my area of the Midwest as we still need a natural gas furnace for when the temperature drops below 25 degrees (which unfortunately is often for 3-4 months). So most people just go with a conventional air conditioner paired with a gas furnace.
You just need a different refrigerant / cold optimized heat pump. Many work at -20F with high efficiency. And although they become less efficient below that, they are still more efficient than burning nat gas (because moving heat is more efficient than generating it.)
Indoor heat exchanger mounted high results in temperature stratification in heating mode. Warm at ceiling, cool at floor. More powerful indoor unit fan reduces degree of stratification but also draughts.
A box fan on slow speed elevated ~100mm from floor beneath and pointed up to indoor unit substantially reduces stratification temperature difference due to better mixing of cool and warm air.
Result is user likely to select lower temperature resulting in more comfort and better efficiency.
Sweden has tons of heat pumps. It’s cold there.
I’m putting one in, well, someone else is putting one in for me, and we get below 0 for several months a year.
And you will have no secondary heat source? I don’t know of anybody in my area that has an air-source heat pump without a gas-fired furnace as a secondary heat source. Even the local electric utility that pushes heat pumps recommends switching over to gas below 35-40 degrees.
This is a random link that came up with a quick search on google:
https://sealed.com/resources/winter-heat-pump/
Q: do heat pumps work well in freezing weather
A: Yes
“Not only did heat pumps effectively heat the test homes throughout the winter, but the data from the test showed that Minnesota residents could reduce their heating energy usage by 35% to 50% by installing heat pumps”
Thanks for the link. I’m intrigued. Sounds like heat pumps have improved a lot over the past 10-15 years. I wonder why I haven’t heard much about them in my area – perhaps the local HVAC companies are subject to some inertia based on past experience. I will definitely have to do some diligence when it’s time to upgrade.
We aren’t removing the old furnace, but don’t anticipate using it.
I guess time will tell! We intensely dislike the nasty HVAC air, so we hope to use the heat pump exclusively.
35-40? That’s weird. Heat pumps are definitely workable a good deal lower than that- we are getting a -15 one.
Interesting! I’m also in the Sacramento area and have been looking for quotes for a heat pump. Can you share what model you went with and who your installers were? They are pricey!
Perhaps a post on it would be useful for others. I’d love to see your feedback on the install process, how it’s been for a year, any design changes you had to make etc.
Send me an email and I can point you in the right direction.
We have a Daikin system (world’s largest mfgr of heat pumps.) They have a huge distribution center for systems and parts in South Sac.
We had to seek out an installer that worked with them though because all of the big companies that spend tons on advertising wanted to charge us 2-3x for a lower functioning system. Plus “maybe $6k more for new ducting.” I straight told 2 different sales people that they were nuts.
“reduce their heating energy usage by 35% to 50% by installing heat pumps”:
Energy use reduced but is $ use reduced?
My cost:
Gas:
$A / MJ 0.02948
Elect:
coefficient of performance 2.0+
MJ / kWh 3.6
$A / kWh 0.212784
= $A / MJ = 0.212784 / (2 * 3.6)
= $A / MJ 0.029553333
My cost of heat (MJ) is the same for natural gas at 100% efficiency vs heat pump at 200% efficiency.
As my outdoor temperature rarely less than -5 Celsius my heat pumps are always > ~250 % efficient.
“maybe $6k more for new ducting.”:
In preference, install ‘Back-to-back’ rather than ducted; individual rooms can be heated / cooled providing opportunity for greater efficiencies.
Acquisition and operation costs both important.
Our system has a COP of 4 (4kWH of heat for 1 kWH of input.) But that metric is measured at max output… with a variable speed system that never happens so actual efficiency is even higher. Amazing machines.
“Acquisition and operation costs both important.”:
For smaller or less used rooms a resistive heater can be more cost effective.
Example: Our 1 kWh elec / 3.5 kWh heat Reversible Cycle Air Conditioner (heat pump) in the kitchen / family room keeps the near by rooms cool enough in summer and resistive heaters + close doors keeps those rooms warm in winter without need of extra Back-To-Back RCACs.
COP vs Part load & Temperature:
Figure 2: https://www.researchgate.net/profile/Robert-Bass-3/publication/273458507_A_new_two-degree-of-freedom_space_heating_model_for_demand_response/links/554292d90cf23ff716836096/A-new-two-degree-of-freedom-space-heating-model-for-demand-response.pdf
Glad to see you’re enjoying life, I just read your renting is better article for the first time. Now that Folsom Lake is fuller than it’s been hope it makes for some nice lake days for you guys.
Ironically, the lake level makes things worse – we typically do our boating on Lake Natoma. The dam releases due to high snow melt create unsafe conditions
Black Summer bushfires may have influenced the onset of rare triple-dip La Niña, study finds
https://www.abc.net.au/news/2023-05-11/black-summer-bushfires-la-nina-link-found/102196030
Glad to know you’ll be visiting the big island. We like it here and I think you’ll enjoy it, too. Do you know when-ish, yet?
Nice job on the blog income! That’s like having another million in the portfolio. And those fixed rate loans below 3% are looking real pretty these days.
We will be there just after Memorial Day
Those loans looked pretty good at the time also. Always nice when you can borrow money with negative real interest rates.
That’ll be coming off of shoulder season. Should be a nice time to visit. There’s a whole lot of variety of climates and activities on the big island, but I’d make double sure to spend a morning or afternoon at the beautiful Hapuna Beach.
Looking forward to a blog post about your visit.
Can you briefly share some details on miles/points used?
We have Venture X and Southwest miles but with car rental I’m still estimating $3k for a trip to the Big Island.
For our Oahu trip last year see: https://www.gocurrycracker.com/hawaiian-spring-break/
For this trip, we are using the amazing travel hack called “visit a friend who has a guest quarters.”
For the rest of the trip we are staying at a Marriott property with a 5th night free redemption.
For flights we used the Alaska $99 companion fare x2. About $900 for 4 tix.
Rental cars are expensive, but there are places that just rent simple used cars for a reasonable price. See https://www.hilorentalcars.com as an example
I am parking our car at a friend’s place near the San Jose airport for the price of one dinner
Hi Jeremy, any thoughts on your local NorCal real estate market? Thanks.
I have some, yeah.
My main thought is that we will be here until our youngest graduates from high school, another 14-15 years or so. What happens between now and then doesn’t matter too much.
My secondary thought is that California has had a long-standing shortage of homes. Over the past 2 years, a ton of legislation has been passed that should help to resolve this by making it easier to build, build, build. Hopefully that happens and we will sell our house in 2038 for less than we paid for it in 2021.
Curious on your ACA experience. I think you have Kaiser- how is it working out? Sticking with Kaiser next year?
We also have Kaiser this year, yes.
We have had limited experience – a couple annual exams, a couple PT visits, etc… Seems OK.
Sorry if this has been answered/discussed elsewhere, but how do you keep your healthcare/health insurance cost so low? I’ve got the same family size and have comparable income, but am still paying roughly $700 a month for health insurance through the ACA here in California… I know you linked to your post “Never pay taxes again” (love that post btw), however, I’m wondering if you can – or have already – outlined your healthcare costs in more detail? Thanks for all the inspiration and wisdom.
If we have the same income / family size, we should pay the same premiums. Those are the only 2 variables (unless you picked some uber-expensive cadillac plan)
Plug your numbers into our calc and see what it spits out:
My numbers:
Family size: 4
Income: 55k
https://www.gocurrycracker.com/aca-premium-calculator/
Just realized that the difference in cost is due to the fact that my family has been using Blue Shield CA.
I just updated our health care plans to Kaiser and indeed our monthly healthcare premiums have come down -$600/month, bringing us in line with your family’s $100 monthly premium.
After doing some online research, I could not find many worthwhile advantages of Blue Shield over Kaiser coverage – was there anything that gave you pause when choosing Kaiser?
There are probably pros on the Blue Shield side, but not worth $600/month…
I have zero qualms about Kaiser. I was standing in line for a flu shot recently next to a super old guy that said he is one of 5 original Kaiser customers that are still with them (the rest being deceased – he was born into their system.) He talked like Kaiser was the best thing ever.
The main “negative” I have heard from others is that if you have a super rare form of cancer, the world’s leading expert on that form of cancer is unlikely to work for Kaiser and would therefore be out of network and uncovered. But the way I figure it… the world’s leading expert on any subject is likely inaccessible no matter what (out of State, out of area, out of country, out of network, it’s all the same…)
Are you still using Traveling Mailbox to outsource the junk mail disposal, or are you just using the box at your house?
The latter. The junk mailers found me even though I never used our home address for anything.