Our strict critera...

At the end of my last entry, I promised to explain the strict criteria we have established to ensure the financial goal of our world travel:  our total travel expenses would not exceed the expenses we would have incurred to live in a $1500 a month condo in Arizona or any tax-free state such as Florida or Nevada.  

Using an Excel spreadsheet we listed the normal expenses we would experience in our new retirement lifestyle, entitled "Basic Living Expenses"  
  1. Rent or mortgage payment:  include association dues, if applicable
  2. Taxes: federal, state and property, if applicable
  3. Groceries: to include specialty items for our restrictive organic, gluten free, low carbohydrate, sugar free, wheat and grain free way of eating.  All meals are homemade (no processed foods) utilizing grass fed meat with organic produce, dairy and eggs.
  4. Auto expenses:  payment for newer vehicle still under warranty, gas, maintenance, insurance
  5. Health:  insurance premiums, co-pays, prescriptions, dental, vision, health club dues, alternative therapies and supplements
  6. Other insurance
  7. Cable and Internet:  including a few premium channels (we love Dexter, Homeland, Boardwalk Empire and Shameless)
  8. Cell phones:  smart phone with unlimited data
  9. Utilities: gas, electric, water, trash 
  10. Entertainment and dining out (carefully limited)
  11. Clothing, personal effects, toiletries, and grooming (all items discounted and purchased at the best possible price)
  12. Gifts:  for family members/friends for birthdays/holidays, greeting cards, postage
  13. Publications: magazines, newspapers, online subscriptions
  14. Miscellaneous:  occasional purchase or replacement of household goods, donations, cash for incidentals
  15. Pet care:  food, treats, toys, groomer and vet (no pet now since we lost our WorldWideWillie last April) but we would have a new dog if we settled into a retirement lifestyle
  16. Banking fees;  interest on credit cards, if applicable; 
  17. Savings
Upon keeping our costs as low as possible, in an effort to live a relatively conservative retirement lifestyle we had a total.  Thus...

Criteria #1:  Do not have a permanent home!

With these numbers in mind, we created the next worksheet in our Excel workbook, entitled "Fixed Living Expenses" which were those we'd incur if we traveled but didn't have a permanent home. Although we are not accountants nor possess a degrees as such, we labeled the tabs that we felt best represented the analysis we chose to perform. These were expenses we'd have whether we were on a cruise, temporarily living in Spain or on a safari in Africa that didn't include travel expenses.
  1. Taxes: federal, state and property, if applicable
  2. Groceries: to include specialty items for our restrictive organic, gluten free, low carbohydrate, sugar free, wheat and grain free way of eating. All meals are homemade (no processed foods) utilizing grass fed meat and poultry with organic produce, dairy and eggs.
  3. Health:  insurance premiums, co-pays, prescriptions, dental, vision, supplements 
  4. Other insurance 
  5. Cell phone (one between us):
  6. Clothing, personal effects, toiletries, and grooming (all items discounted and purchased at the best possible price)
  7. Gifts:  for family members/friends for birthdays/holidays, postage
  8. Banking fees;  interest on credit cards, if applicable
  9. Savings
Criteria #2:   Do not own cars!  (And resulting payments, depreciation, storage, insurance, gas and maintenance)

We will sell both of our cars before we step foot out of this country, instead renting a car if necessary. While calculating our auto expense, considering the two payments, insurance, gas and maintenance, the total was $1523 per month which more than covers all of our of our upcoming flights, trains, ferries, taxis and rental cars (three of our credit cards provide free rental car insurance when the card is used for the rental car charges)!

Then we took the "Fixed Living Expenses" and created an "Average Daily Expense" which, no matter our travel expenses or living arrangements, would always be relevant numbers in our financial planning.

Criteria #3:   Do not stay in hotels other than short term! How is it possible to travel without staying in hotels?  Sleep in a tent?  Hardly!  Rent an RV?  Too expensive! Mooch off people you may know that live in exotic places? Never! Staying in a hotel requires the expense of meals in restaurants, tips, city, county, state and local taxes, outrageously priced cocktails and beverages and of course, the tempting "tourist trap" shops and services. 

Simple answer:  Only stay in houses, condos, townhouses, villas, apartments, and other such property owned, but not currently occupied, by private parties. Property owners are often anxious to rent their own homes and rental properties at reasonable rates knowing full well that the distraught economy and worldwide strife has tempered world travel.  We have found that we prefer to rent houses and villas as opposed to apartments, which are often noisy and offer less amenities.
Criteria #4:   Do not pay more than what which we were willing to pay for rent in our chosen retirement community!   The above described $1500 month was the magic number that fit into our predetermined budget.  How is this possible?  Only $1500 a month for a house?  Yes, the gorgeous 17th century, totally renovated villa in Tuscany, Italy is $1400 month!  Yes, the amazing little beach house in Placencia, Belize is $1250 a month!  Yes, the charming house in the Kruger National Park in South Africa, surrounded by the free roaming Big 5, is $1387 a month!  We will share more of these astounding rentals as we continue here.
There is so much more to share including the remaining Criteria, how to calculate total expenses, why we have booked five cruises thus far with two more waiting to be posted.  How and why we have booked ahead 571 days from this coming Halloween, Tom's retirement date.  How we will experience the the first 10 months of our adventure without ever stepping foot onto an airplane.  

Certainly, we have a "to do" list that is daunting. Certainly, there is a degree of risk.  Certainly, there is some blind faith that we are going to enjoy our new lives, free from all the familiar comforts that we have reveled in all these years. And most certainly, our love and devotion to one another, will see us through all the challenges we encounter along the way.  

We have mutually agreed that if, at any time, one of us is tired, bored or tired of being on the move, we will stop and find "home' wherever that we may be.

1 comments:

SMacSteve said...

Hi Jessica,

I talked to you today at the Super Target in Chaska and you shared with me your planning this exciting adventure. I came home and told my wife Mai about your plans and she too agreed what an awesome idea! We will follow your blog about your preparation and travels. Please stop by again and say hi when you're in the store. I really enjoyed getting to know you.

Steve

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