expenses

London

From Scotland we drove back to Central England to return the rental car. We spent a night at a unique AirBnB, on a small boat in Midlands. We chose this spot in part for its uniqueness, but also because it was very close to Midlands airport, out of which we would be flying early in the morning on our way to London to wind down our tour of Europe.

London was fascinating, with a lot to see. It’s a large city, but reasonably easy to navigate via the subway (the “tube”), buses and on foot. With a week to explore on our own, we felt that we got to see all the highlights we wanted to.

The London Eye


It was mid-October when we were in London. Although the number of tourists typically starts to dwindle in September after the summer high season, we still found many places crowded. I like to tell people the photo below was our only view of the Changing of the Guard. That’s not entirely true, but it does illustrate the crowds we encountered.

The Changing of the Guard


We enjoyed visiting museums in London, especially since many offer free admission. Of course they are also nice because as well-known museums in a large city, they are able to acquire some of the most sought-after works of art. Van Gogh is consistently one of my favorite artists, and I enjoyed seeing a number of his works.

Van Gogh – Sunflowers


In an unscientific survey of costs during our travels, we would say that Copenhagen and Zurich were the most expensive cities we visited in Europe. Prague was the least expensive. Berlin was somewhere in between. London was not as expensive as Copenhagen and Zurich, but is was certainly not inexpensive. One thing that seemed expensive in London was transportation. In order to visit my cousin on the outskirts of London, we took a public bus plus a train for a portion of the trip, and the total cost was the equivalent of about $72 US for two of us to make the round trip. Many people make this commute daily to work in the city, so this must be quite expensive on an annual basis.

A note about traveling in London – if you ever find yourself flying to or from the Stansted area, I highly recommend the Hampton by Hilton London Stansted Airport for its convenience. You could almost say it is located inside the airport. Actually it is across the street, but it is within easy walking distance, mostly via a covered walkway that protects you from the weather. We had an early morning flight, and staying at the Hampton Stansted ensured that we would be on time. I would also give a shout out to the hotel staff, who were some of the best we’ve encountered at Hampton Inn. They made it a truly great experience for our brief stay.

Our Budget

We retired in July 2017 and have been traveling ever since. One of our reasons for retiring early was that we felt there were ways we could live significantly cheaper than we had been while employed.

Initially, this meant moving to Mexico. We have a house available to us in Mexico where we can live rent-free*. It’s not a completely free living arrangement, since there are the other usual expenses associated with living anywhere, primarily utilities, but these expenses are lower in Mexico than they are in the US. The house is not in a tourist area, so food costs and other living expenses are not inflated. Aside from the cost of traveling to Mexico, the actual cost of living there is very reasonable – at least it is for someone who has savings and pension income in dollars; it’s not as easy for locals who earn pesos.

After almost five months in Mexico we discovered another living arrangement that would allow us to continue to live at very low cost and NOT limit us to living in Mexico, and that is house sitting. Our experience house sitting is described in more detail in other posts.

Now that we have nearly a year of experience, we have some expense data that we can share. We have been tracking every expense for eight months; we did not track our first two months, as we were traveling across the US and then in transition mode and we didn’t feel that period would be representative of ongoing expenses.

Our expense tracking begins with our first full month in Mexico, September 2017, and continues through April 2018. Our average monthly living cost, with just a few exceptions**, is $1,880/month. This includes four months in Mexico and four months in the US, and it includes everyday living expenses as well as travel costs.

I won’t deny that we are cautious about our expenses, e.g., we are not traveling first class, but at the same time we honestly do not feel deprived. The $1,880 monthly average includes a three-week driving trip from Mexico to California to Kentucky, a week-long side trip with family members who visited us in Kentucky, and another three-week trip from Kentucky to New York City to Massachusetts. It includes lodging, eating out, gasoline, tourist activities. We don’t dine at expensive restaurants, but we do eat out on the road, as well as frequenting coffee shops. Then when we are in whatever location we currently call home, we mostly cook at home, enjoying whatever we desire made with good quality ingredients.

One thing missing from this analysis is what we spent when we were both working before we retired. Unfortunately, we did not track our expenses back then. However, I know we were spending everything we were earning, and not putting any more funds into savings than we are now.

The bottom line is, we are living very contentedly, seeing more places than we would have imagined, and spending less money than we expected!

*A note for those who don’t have a rent-free house available to them: in the town where we live, a small, bare bones, older apartment could be rented for as little as $20 per month. A more realistic living arrangement, but still below what most Americans are accustomed to, can be had for $150-$200 per month. Prices go up from there, and if you want to live in American-style comfort in a location frequented by tourists, it will cost significantly more, approaching American prices.

**While I consider the $1,880 monthly expense number to include “all” of our spending, there are a couple of things left out of this number:
• The mortgage on our house (primary residence) along with other expenses associated with homeownership. The reasoning for this is the house is rented out and the rent covers these costs. That’s a separate budget as I see it.
• Some of the remodel costs for the house in Mexico. I considered these as optional, one-time expenses, not ongoing living expenses.
• Tuition and living expenses for our kids in college. I consider these as temporary, and also not representative of our regular living expenses.
• We set aside some money into savings each month for large future expenses, such as when the car needs to be replaced. The amount set aside varies, and instead of including the amount of the savings in our budget, we would reflect the actual cost of any such expenses when they occur.