Are we complete fools to think we can live on $30,000 a year indefinitely? End post. Just kidding. April Fools. But really, how much is enough?
It is hard to imagine a world with no mortgage, no utility bills, no saving for retirement and very little taxes. It is also hard for most people to imagine a world without a car payment (I, however, haven’t had a car payment since 2007 and Mr. PFL hasn’t since 2011). With our current incomes, we save for retirement and pay taxes (income and property on our current house) more than an average household’s yearly salary - I’m talking in the neighborhood of $75,000 a year. We spend just over $18,000 a year on principal and interest on our current mortgage. This is nearly $100,000 worth of money, every year, that we either don’t see or don’t use for discretionary purposes.
We would be fools to believe we can live on $30,000 a year if we needed to pay rent or a mortgage somewhere, unless we went to a very inexpensive foreign country. But if our housing was paid-for, $30,000 starts to seem like a lot of money. And pretty close to what we’ve actually been spending as “discretionary” income over the years. I think. Or am I a fool?