I have written previously about how my wife and I need routine in our lives. While it is great to live in new countries, constant travel is very time-consuming and stressful. We have been consider setting up roots again and having a more stable lifestyle.
The big problem with settling down is that it costs a lot of money. It actually costs a huge amount of money to have a normal western lifestyle.
Here is a rough breakdown of monthly expenses that we would expect to incur if we permanently relocated to my home city of Calgary.
- Mortgage on an average starter home: $1800
- Property taxes: $200
- Utilities: $350
- Telephone, Internet: $150
- Cell Phones: $200
- Car Payments: $300
- Car Insurance: $100
- Car Maintenance and Gas: $200
- Furniture and Household Items: $500
- Clothing: $200
- Food: $500
- Entertainment: $500
The North American Idea of a Normal Lifestyle
We don’t have to spend that much money of course, but it is hard not to when all of your peer group does. Expenses of $5,000 per month are normal for a professional couple in Calgary. It doesn’t matter how independently minded you think you are, we are all influenced by society, peers and family. When your friends all have the latest iPad, LED TV or trendy automobile, you start finding pressure to buy too.
My wife and I could cut back on those expenditures if we rented an apartment downtown, reducing the need for a car and lowering our accommodation fees. We could also cut down on food and entertainment if we really scrimped, so cutting these costs down wouldn’t be impossible.
On the other hand, that mortgage payment is contingent on low interest rates. Payments will easily increase a few hundred dollars per month once interest rates start to rise. Also, in a sprawling city like Calgary it is common to have at least two vehicles per family, particularly if both parents work outside of the home. That could also add another $500 or $600 in expenses.
I have also left out health and life insurance which can get quite pricey, but it won’t change much regardless of where we live.
Despite all those caveats, I don’t think that $5000 per month is too out of line for a middle aged couple like my wife and I. In Canada, assuming a 40% tax rate, $5000 per month after taxes would require a salary of $100,000 per year. (60% of 100,000 = $60,000 or $5,000 per month.)
Factoring in commuting time, lunch hours and overtime, it is very likely the total hours dedicated to work would be 50 plus hours per week each. We would do all this with the reward of about 10 statutory holidays and a couple of weeks of vacation time per year.
What if You Only Had to Work 6 Months a Year?
There is a clear trade off between time and money. You can work 60 hour weeks and make a lot of money, but if you don’t have time to enjoy your life, what is the point? If you could cut your consumption in half, you could easily free up 6 months per year of time. What could you do with half a year of free time?
From living in Japan, and traveling across Europe and Asia, we know that we can have a pretty comfortable standard of living outside of Canada for about $2,000 per month. $3,000 per month would offer a great lifestyle with money to do almost anything we want. Even as visitors in Calgary, we only spend about $1,000 per month. (This is largely due to low accommodation costs because of an empty condo my mother owns.)
Not having a permanent residence eliminates so many costs. The fact that we are location independent means we can’t buy a car, furniture, household goods, clothes, tools, etc. We have no need for them and we have no place to keep them anyway.
There are benefits from being stationary like getting higher paid work, time spent time with family and friends, the opportunity to work with other people in person, more networking opportunities, etc. I don’t want to over simplify the choice, however after living a consumerist lifestyle in the past, my wife and I are not interested in setting up that life again. Less is much, much more.
Are you willing to control your spending in order to do the things you want in life?