Host: Is your spending actually reasonable? Today we’re diving into data that compares spending in high cost of living and low cost of living areas. And we’ll answer one of the biggest questions on the path to financial independence. Should you spend more because you live in a high cost of living area or are you just making excuses?
Host: Hello, hello, hello and welcome to the BiggerPockets Money podcast. My name is Mindy Jensen and with me as always is my high quality co-host Scott Trench.
Co-host: Thanks Mindy. It’s great to be here. I’m looking forward to spending a great hour with you here talking about budget benchmarking and spending. A few months ago, we had a financial independence in New York City series where people are achieving fi or have achieved fi in a very high cost living area down downtown Manhattan. So we know it can be done. Today, however, we’re going to be using data to ground the discussion about how average people or median people in given geographies actually spend and how that should ground the assumptions we have around financial independence.
Host: Scott, what tool are we going to use to look at this?
Co-host: Oh boy, we’re going to use another BP money tool. These are all free, of course. You can check them out at biggerpocketsmoney.com/resources. This one’s specific URL, findable from the resource library, is biggerpocketsmoney.com/budget. This is a beast of a data set. I think it’s a beast of a data set that I’ve assembled with my AI companion and painstakingly checked although there’s going to be a, of course, deviation, there’s a lot of estimates and guesswork in here in the first place. But this basically takes people based on their household type and composition, what income quintile they’re in, top, you know, 20%, bottom 20%, middle 20%, that kind of stuff. And then their location and it takes government spending data, actual government spending data and modifies it for geography. This is not aspirational. I think a lot of fire and financial independence content talks about aspirational like what spending ought to be in a given situation. This is not trying to do that. This is just saying here’s what I believe spending actually is per Bureau of Labor statistics data, per HUD fair market rents in a given area, per regional pricing adjustments, right? It’s more expensive in Santa Cruz, California than it is in, you know, certain towns in West Virginia. And then I also did did a lot of work to get day care costs in there because that’s particularly relevant to my household and I’m sure it is to a lot of people who listen to the Bigger Pockets Money podcast. So combining those four data sets, adjusting for inflation, I had to make some some estimates and and adjustments there that, you know, because the data, some of the data is is a year or two old. But I think it’s a pretty powerful tool and we’ll give you a good starting point, especially as we go on finance Fridays with with guests on the show and they give us a budget and they’re spending, we can compare it to a household of four people making a middle 20th percentile income in Denver, right? And say your spending is actually right in line with what we estimate the averages to be here or you’re way above or below some of these categories. You may want to be more conservative in your spending assumptions in earlier retirement, or you may want to focus on bringing this spending down.
Host: I think this is great, Scott, including all of these different things. Now, if I wanted to go in and play with this budget calculator, could I go in and mark childcare at zero since my kids are no longer in childcare?
Co-host: Yeah. So I have childcare off by default, but if you do use childcare, it will default to having them in full time. You can also toggle it to be part-time here, child care and adjusted for your area. It’s much more expensive to get daycare, for example, in Denver than it is in many places in the Midwest. People are just shocked at the differences in costs around these things. And this is attempting to to fairly present that data.
Host: I think this is great, Scott. So let’s look at the, what did you say that was the most expensive?
Co-host: One other thing I want to caveat here before we get into most expensive, least expensive, is there’s this concept of affordability and this calculator is not talking about affordability. Affordability is a a relative metric, right? So if incomes are very high in Denver and expenses are higher than for example, counterparts in Memphis, I don’t know the answer right now. Denver may be more affordable than Memphis when you adjust for incomes, right? It’s certainly not the least affordable area in the country. It’s not less affordable than places that are lower cost. So that that’s a big nuance in this. This calculator is just talking about expenses in a raw sense based on the best available government data and the fairest adjustments I could make to bring it current to 2026. Some of these studies are two years old and they need to be adjusted for inflation, for example. So the most expensive market in the United States of America that I can find is actually Santa Cruz, Watsonville, California. And for a couple with kids that’s not using daycare, I’m estimating you’re going to spend about $12,600 per month at the median. That includes $5,300 a month in rent in fair market rents for a three bedroom apartment or house. That includes 1300 for food, which is probably pretty tight feeling for that that family. That’s includes 1600 for transportation. That’s the one that I think that the fire community bulks at the most and rightfully so. It’s very easy relatively speaking to avoid $1600 in transportation costs. But that is my best guess of what the spending level of a median household in Santa Cruz looks like for two vehicles.
Host: Okay, so we know that Santa Cruz is the most expensive city. What’s the least expensive city?
Co-host: Yes, so of the places that I compiled data for, Beckley, West Virginia, um which is in Southeastern West Virginia is the cheapest market in terms of raw dollar costs to live in the country for this type of household. So for a couple with kids, age 35 to 44, I estimate that the median spending is about $6500 for this household, a middle income household in that area. And that includes $1300 a month in rent, literally $4,000 cheaper than Santa Cruz. A little bit cheaper on transportation, much cheaper in basically every category here across the board. That’s a drastically different fire portfolio that you need to sustain this lifestyle for this family than it is in in in Santa Cruz. Now, whether it’s more affordable, I don’t know. I actually, I actually think that that’s an open question and I, I’m looking forward to combining this with the tax projection tool I’ve built and a future income percentile band calculator to kind of see where you sit inside the income spectrum. And I think that once you get those three data points together, we can actually tell which one is the most affordable between those two markets. But those are the two extremes, the most expensive and the least expensive market to live in in raw dollar costs that that my tool computes right now.
Host: OK, so for those listening who are like, why isn’t the cheapest also the most affordable? Can you define what most affordable means to you?
Co-host: Well, it depends on income, right? So at a raw sense, we have if one area has a median income of 60 grand and a cost 60 grand to live there, then you know, there’s it’s basically very challenging to save for the median household in there. If another area has $100,000 median income and the average cost is $85,000 to live there. That place is more expensive to live, but that that household has a better chance at saving money or accumulating wealth. And so that’s the challenge here, the economic opportunities have to be better in Santa Cruz than they are in Beckley, West Virginia for the median income earner, but whether that allows them to save more or less, I don’t know. My guess is, yes, you can probably save more in Beckley, West Virginia than Santa Cruz as a median income earner, but that changes when you get into the top 20 income quintile or the next one down in those two top two quintiles. I actually bet that that may change when we do that math. So that’s the fun part of this, right? The data is is going to be very interesting here. And then of course, you have to also compute that after taxes.
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Host: So Beckley, West Virginia is not a place that I’ve ever been before and I’m not familiar with this city. I just googled who is the main employer in Beckley, West Virginia. And it said something that really makes me excited. It says it does not have one single dominant employer as its economy is largely driven by healthcare, education, government, and regional services. So I like to see that in a city that I’m contemplating moving to because I lived near a city where the main employer shut down and the entire city shut down and housing prices were all of a sudden worth nothing. It was a very depressed place to be. It was not a happy place, like the whole just vibe of the city was awful. So when I think of, you know, places to retire, I’m thinking of places that I’m going to enjoy being at. And this this city that I used to live near was not a place that I enjoyed being at. I really like that they don’t have one single dominant employer and I would encourage people to consider that when they’re considering moving. Just Google, who’s the main employer in the area that you’re looking to move to?
Co-host: So I actually looked up just now because we were talking about it, but it looks like Beckley is actually a poster child for exactly what you’re discussing where it used to have very large employers in one dominant industry in the coal mining space and those employers have largely kind of left or or kind of receded to some degree, as I think is the right word, and they’re education and healthcare has replaced it. So I wonder if Beckley actually suffers from exactly what you described here and that’s one of the reasons why costs are so low in that area.
Host: That could be. I mean, the reason that an area is a low cost of living area is because there’s not a lot of demand to live there. It’s kind of like the coasts, like the parentheses of the the country is this is where everybody wants to live. So that’s where everything is really super expensive. And then the interior isn’t quite so expensive.
Host: Mindy, what do you think are some of the most common places in the fire community that people want to retire to?
Host: You mean besides Longmont?
Co-host: Well, let’s do Longmont. My tool says that Longmont is going to move, we’re going to associated with the Boulder metro area, which is more expensive than Longmont. Significantly more expensive. So because Longmont’s a smaller town, I’m I’m mapping it to the nearest region, not crazy but also you’re going to have to make some reasonable adjustments there. The headline number is that a family of four in the middle 20% in Longmont, Colorado is likely to spend around $9,100 per month. And that’s going to include $2800 for housing. Note that you can toggle this. So there’s two different sources for that data. The 50th percentile is around 3000, the 40th percentile is around 2800 per rent for that family. They’re going to spend 550 bucks on utilities, 1300 on transportation, 1100 on food, 600 a month on healthcare, 300 a month on entertainment and recreation, 183 on apparel and services and 1200 bucks on other. This also includes an estimate for a a of about $922 which is typical for a median income household in that area. You can obviously toggle that off if you want to see your expenses in an early retirement, for example in that area. So does that sound about right?
Host: Well, let’s look at my specific situation. My house is probably worth 750, 800 and my taxes are $3,200 a year. My insurance is $2,000 a year, my utilities are about $150 a month, but I do have a full roof of solar panels, so that helps offset it.
Co-host: So you’re even lower than the $800 number that I have here, but I think without solar panels, you probably look at somewhere in the $800 a month ballpark if your house is paid off. And so that leaves you with, you know, the headline number is your peers in Longmont are probably spending 9600 bucks a month that are working full time that have a mortgage and have two cars and your household spending could look more like $6,300 a month if you took care of those big two, the transportation and housing budget and that still leaves you with median spend everywhere else. And that’s where I think this tool can be very helpful for folks that are planning on this stuff. Now, healthcare is an average and if you want to map health care costs specifically, we have a different health care tool, which I plan to merge all of these over time, but for now I’m building them as standalone components. The health care tool is available at biggerpocketsmoney.com/health care costs. You can check that out. I think that that that’s where this tool can be very helpful as you can see, hey, these these places can be very expensive, but a lot of it is driven by housing and transportation averages in your local area. And if you map those to more reasonable numbers, sometimes these places look a lot less scary. So if we go back to Santa Cruz, for example, Santa Cruz, Watsonville and you’re spending, I bet you you can you can live there if your house is paid off for somewhere closer to $1200 a month in housing, right? That’s just property taxes, insurance and utilities. maybe more, let’s call it 1500. I don’t know how much utilities are in that area. And I bet you can do transportation for closer to 300, 400 bucks. Now all of a sudden you’re really not, you’re only looking at like another 1000 to 1500 bucks over the costs of Longmont. So that can help you as well when you’re looking at these areas.
Host: Yes, and the median home value and listing price in the city of Santa Cruz is between 1.35 and 1.49.
Co-host: Yeah. So you just need an extra 1.35 to 1.49 million dollars to buy your house out, right? And then you’re good to go in Santa Cruz. The fire portfolio can be the same. Anyways. So yes, of course, that’s like that’s a drastically different challenge. But that’s the point, right? Is where’s the best place to retire to? You know, and it’s where you want to be and I think cost is also a factor, right? So if it’s going to take you an extra, you know, two million bucks or an extra 1.5 million bucks to retire and live the lifestyle of other people in a given area versus another, that may change your decision on how you want to think about this stuff. And I think that again, this tool is my best attempt to, to accurately reflect the reality of spending in various areas. And then of course, I think you should adjust your budget based on your values, right? If you want to drive a Corolla and everybody else is driving a Maserati, then you know, you can drop down your your transportation costs there.
Host: So Scott, do you think that a high cost of living or a low cost of living area is best for financial independence?
Co-host: Obviously, a low cost living area is going to reduce your fire number, a high cost living area is going to theoretically increase it and delay it. But I think in practice, you’re going to find that many people who pursue FI end their FI journeys with a very high income. This is a common complaint we get on Bigger Pockets money. Where’s the median income earner who became a millionaire at 35? Well, that’s pretty rare and we get a bunch of stories and they’re all real estate guys. Okay, I bought like 10, 10 properties and, and, uh, flipped them or, you know, or or built those businesses while earning a median income. Great, that’s that’s possible. You will find the median millionaire, um, who who never earns more than a median income and invested traditionally, but typically those folks are getting there in their late 40s or 50s or a little later than that. I think that the advantage of the high cost living area is that in many cases, there’s a higher income that goes along with it and folks move into that income bracket, especially in the last few years of their five journey whenever those hit. And that’s a massive compounding advantage. Without being an entrepreneur or a real estate investor, I think it may be fairly hard to hit financial independence very early in life in some of these these places that are not near to large metros with those elite job opportunities. I’m sure there’s plenty of exceptions, you know, in military and and and certain industries. But on average, I think that the higher cost of living areas will actually result in a faster timeline to fi. And I think that in the early years, if you can keep the housing and the transportation costs low, the differences between even the most expensive and the cheapest markets and the other categories is really not that large. It’s almost all driven by that housing cost. That’s the lion’s share of the the difference in in affordability.
Host: Yeah, the higher incomes can be gamed a little bit. You know, you change your housing costs by having a bunch of roommates, you change your transportation costs by biking to work or even using public transportation in the case of our New York City, five people, I think one of them had a car and most of them just relied on the amazing public transportation system that New York City has. There’s a lot of ways to just in general live below your means and take advantage of that higher income. But with the low cost of living areas, like you said, it’s more of a that’s where you retire too, not where you grow your FI number. And I’m I’m, as soon as I say that, I can hear people yelling at their radios. I live in a low cost of living area and it’s fine and I’m pursuing FI. Yes, that’s great. You can pursue FI in any cost of living area. But I think the higher cost of living area, especially when you’re younger can just help accelerate your journey so much.
Co-host: Yeah. I mean, this is the challenge with the financial independence world is is there’s not good data, right? This is a fairly new concept. We don’t have like, you know, huge samples of data. We have a lot of anecdotes. We have a lot of very certain opinions that conflict um from various sources about how to invest and all that kind of stuff, which is fun. So what I’m trying to do is I’m just taking the averages of American households in here and then letting you map the differences in your situation to those averages. And so, you know, but you know, here’s an interesting one. If I’m 25 to 34 in Denver, the median expenses 5000 bucks. But if you’re house hacking and get that closer to zero and you’re biking to work and driving a Corolla, maybe 250 a month in car costs, all of a sudden your expenses can be as low as 3000 bucks a month and you’re not living anything any differently than the median in every other category, right? And that’s the fun part about this. It kind of helps you with that. The lion share of the budget is always the housing area here. One other note here is that Bureau of Labor statistics spending includes savings and pension contributions so you can exclude those from your actual spending targets because that’s not really a spending category as we think about it in five and you can mark that to zero in a lot of cases. In fact, I will ship a toggle following this now that I’ve said that to allow this to turn off if you’re computing your savings rate, for example.
Host: That is good, Scott, because I don’t consider your savings for retirement as part of your expenses. I don’t want anybody cutting that out unless they have a good reason. One practical application of this potentially is, you know, use your favorite AI and what I do is I I use Monarch money. By the way, if you’re um want to track your expenses and you want a good expense tracker, net worth tracker, check out monarch.com. If you’re going to use Monarch, we would be grateful if you supported bigger pockets money.com by using the code pockets, p o c k e t s at monarch.com and you’ll get 50% off your first year if you use that code, pockets.
Co-host: And you can download your transactions or your spending and upload it to your favorite AI. If you’re comfortable with with sharing the data with the AI. I I am. I understand that there’s a risk that comes with it but there’s also great advantages in the information I get and I figure when the AI becomes general AI and takes over, they’re going to be able to hack my data anyways. So the advantages of that is is is going to be really low. So but I you know, you can download that and then you can, you know, insert it, compare it to other households of your type by looking at the average spend by income quintile or whatever from this tool and say, where, you know, where do I differ? Where’s my spend higher or lower? Where are my spending more or less than people like me in my area and where are the opportunities to cut my budget? This is an exercise I I’ve done regularly and it’s made a huge difference on my annual spending without actually impacting my, my happiness.
Host: Oh, what did your AI tell you to cut out, Scott?
Co-host: Well, it just looks at the transactions. Here’s the recurring ones, do you really use that? Here’s the, you know, the areas for consideration are here, you know, you really got to pay attention to Amazon shopping, for example, that was a big one, um, uh, for us, you know, eating out, there’s probably should be some constraints here, here and here. Like it’s just very helpful with those things and you can look at it and say, ok, my food away from home is this much and that’s more than, you know, most people spend on both in that particular month. I gotta cut back here. That’s, that’s a little unreasonable. I’m going to be more more reasonable next month. So that that’s the kind of thing this can be helpful with. I think in terms of benchmarking you against other households of your type.
Host: I love that. You know, I want to remind our listeners and I probably don’t even need to remind them because who hasn’t read the shockingly simple math behind the early retirement post from Pete. But, uh, he says in that post, your expenses are the number one predictor of how long your timeline is going to be. Pete’s got a chart in the middle of this article that says, if your savings rate is 5%, it will take you 66 working years to get to retirement. If your savings rate is 80%, it will take you five and a half years to get to retirement. There’s every number in there between five and 100. If your savings rate is 100%, you have zero years to retirement, but you can see how this affects your timeline to retirement. And this is it’s pretty exponential, 5% savings rate, 66 years, 10% savings rate, 51 years. You’ve shaved 15 years off of your retirement just by saving 5% more.
Co-host: Yeah, and it’s free. Like, it’s amazing how people will work 40 to 50 hours to earn the next dollar and then they won’t put in the 4 to 5 hours of work a month needed to save many, many, many, many times their hourly rate in costs in that month alone. And I think that this exercise hopefully will be a good starting point of, hey, what is a household like mine spend, what’s my actual spending? Let’s beat it up. And by the way, if the AI bulks at the data set and doesn’t understand it, there’s a methodology section here you can copy and paste right into the AI to get it comfortable with it or get yourself comfortable with all that. So but I I think this is powerful. It’s meant to be used with the AI and I’ve used it personally. And so like this last month after several months of other exercises in, in cutting spend in various other areas, I focused on my electricity bill. And so I made certain changes to like the biggest single change was how I set my thermostat over the course of the year, which is still play and whatever. But, you know, I, I was cooling it to a lower temperature in the summer than I was heating it to in the winter, for example. Like very silly, just basic thermostat uh setting there, fix that and I should probably save like 30 bucks this month and that compounds each month over the course of the year. So that’s a big deal when you can make those those types of changes and they take it just a few minutes.
Host: And do you feel uncomfortable now that you have cranked up your thermostat?
Co-host: Well, I didn’t crank the thermostat. I just had it set to like a preposterous, I probably was frustrated one day with how it was working at some point a year or two ago and jacked up my system settings and my my defaults and so I just put it to the right numbers. That’s all it was. But it, you know, that AI kind of checks it and it’s like, hey, for your household, you’re kind of a little over in spending for electricity in these in these areas. Does that seem right? Well, I have an electric car. OK, well, you know, let’s adjust for that, you know, we can fix this and this, this. And so that’s that’s the power of I think having these tools and data sets and comparing them against your own personal data. Everyone’s spending is different but benchmarking I think is is valuable.
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Host: You know, if you are finding yourself paying a little bit more for electricity than you should, like Scott was, bump it up two degrees, bump it up four degrees, see if that’s uncomfortable. Four degrees might actually be uncomfortable depending on how low you were, you were setting it before. But every degree that you can go up is just more money that you’re not giving to the electric company that you can put into your bank account, into your investment accounts. And Karl and I did this over the course of several winters where I would love it if the furnace was at 75 and he’s like, no way it’s too hot. Let’s put it at 65. I’m like, there’s no way we’re doing it at 65. And we have gotten it down to, I think about 68 in the winter time, we will warm the house. And then if we’re still cold, you just throw on a sweater. The summertime it’s a little bit different. Karl can’t sleep unless he is really, really cool. So I’m almost embarrassed. We cool our house to 73.
Co-host: Why are you embarrassed to cool your house to 73?
Host: I thought that was a little low.
Co-host: No, I I have to sleep in the 67 to 70 range. So we keep the upstairs where we sleep down in that range year round for sleeping.
Host: OK.
Co-host: No but but anyways, so we’ve spent too much time on the thermostat here, but it’s it’s one of those categories that I think, you know, after you go through and knock out the other ones, you can get to in the right order and the AI and these data sets will help you find where those big leverage leverage points are in your budget and categorize them in a way other people do. So I think that’s the power of the tool here. And then one one risk factor I’ll call out here that I think it’s fairly acute in the FI community is let’s say that you are comparing your spend to the middle quintile of income earners in your city. That’s great, but if you’ve spent your entire career earning in the top 20% or the, you know, the fourth 20%, you may find that you want or that you your spending in some categories regresses towards the spending of your peers, the people that you’ve you’ve worked with, maybe your friends depending on how how that looks. And so you may want to play around with those and think about, hmm, I’m currently spending, you know, for my household of four, a thousand bucks a month on food, but in my early retirement in 5, 7 years, I may want to be prepared that I that spend may want to jump to 1400 bucks a month if I have that option. And that that can just change some of the ways you think about these things. I think you should be open to that possibility over time as your wealth grows, you know, depending on on your peer sets there. So risk that’s just there and again, you can play with the data and figure out if that’s something that you think is is realistic for you.
Host: Yeah, Scott, I think a lot of people don’t take into consideration how much they’re going to actually be spending in retirement. They’re like, oh, this is what I’m spending now, therefore that’s what I will be spending in retirement as well. I think this budget calculator is a fun way to compare yourself to what other people in your area are doing and look at other areas available to you and see if there’s any place you might want to move during your FI journey or after your FI journey is over. I know someone who moved from a very high cost of living area on the East Coast to middle of Kansas, loves their town. It’s a very small town, very low cost of living. I want to say they paid less than $100,000 for their house and they’re completely fine with this. They do a lot of traveling but they do come back to their house. They love their little house. It’s just it’s a nice small town to live in.
Co-host: Well, where did they move from and to?
Host: They moved from one of the Carolinas to a town in Kansas you’ve never heard. There’s like 19 people that live there. It’s a really, really tiny town.
Co-host: Okay. So we’re going to compare Charlotte, North Carolina. Do they have kids?
Host: No kids.
Co-host: No kids. So, couple with no kids, there are 35 to 44?
Host: I would say they are my age. They’re probably 50.
Co-host: Ok, 45 to 54. So, Charlotte, North Carolina, we’re looking at like 9000 bucks in spending if they’re renting and driving, you know, the two cars with leases or whatever in there. And if they move to Manhattan, Kansas, the Little Apple. I know that place well because that’s where my brother and law live. There’s a big army base there, the spending would drop to about $8,000 a month, mostly dropping off the housing set up there. From 9000 to 8000?
Host: I think 8000 is grossly over budgeting.
Co-host: Sorry, I mean the fourth income quintile. Let me redo this. So Charlotte, North Carolina, we got 6700 bucks for the middle quintile. And for Manhattan, Kansas, for that same middle quintile, we’ve got $5900. So what is that? 59 versus 67. Mostly driven by housing and a slight drop in transportation costs. But I think you’ll find that like the groceries are not necessarily that big of a change. The health care costs may not be that big of a change. Your entertainment budget may not be that big of a change on average in in some of these places. Clothing is not that big of a difference. Utilities may not be It’s going to be housing, transportation and some of the miscellaneous categories that are going to, that are going to be different in many of these these areas, right? So, you know, like even when we adjust groceries for like Beckley, West Virginia, you know, we, for this this couple with no kids, we got $784 for groceries. Santa Cruz, we’ve got $1100 a month for groceries. Right? $400 more. That’s a real difference. That’s like a 40% increase in food costs. But it doesn’t seem like that much relative to the enormous jump, several almost 2000 bucks jump in housing costs for this couple. So we’re, we’re a lot of that is that is located.
Host: I think their expenses are a lot less than 5000 a month.
Co-host: I bet if you go buy a house for 100 grand in Manhattan, Kansas and you compare that to the cost of buying a house for 600 grand in Charlotte, North Carolina. I don’t know what it is, but let’s let’s call it 600 grand for the same type of house. That’s the ball game right there for that, for that couple.
Host: Yeah, that is.
Co-host: The housing costs here all use rent, which is housing is just a crapshoot, right? Because if I, what am I going to put in there? If I put in rent, then I have this problem where people who have paid off housing are going to have vastly different numbers. But how can I possibly know when you got your mortgage, what your cost basis was in your own purchase for all that. So that’s why I, I swapped the BLS data with the HUD data for rents.
Host: I think that’s fair because, yeah, like you said, my mortgage is $1600 a month and the new mortgage on the new house is going to be something like $4,000 a month.
Co-host: A couple with kids renting a three bedroom house in Longmont is going to pay somewhere in the ballpark of $2800 bucks.
Host: That’s valid.
Co-host: In the middle quintile. And if you’re in the next one up, you’re going to pay 3200 bucks or 3300 bucks. And if you’re in the top income bracket, you’re going to pay somewhere in the $5,000 mark for a really nice fancy house for rent.
Host: I would say all of those numbers track.
Co-host: That’s for the renting piece. If you’re going to buy, then all bets are off the window because it’s however much you put down, what your mortgage cost is, all that kind of stuff. Anyways, I had fun with this. You can tell I thought about a lot about the data. Hopefully it’s helpful to people that are trying to just get a gauge of, is my spending reasonable in these categories. I think the best thing you can do is track your spending, make those decisions yourself, pay attention to every transaction and do the slog of work needed to to actually know where your money is going. I think you should also plug it into an AI if you’re comfortable with that. I was informed by a listener recently, you can actually set up a connection between Claude and your Monarch account so I can have a real time feed into your transactions. I have not done that yet. That’s a great suggestion. I probably will set up some kind of agent or project to help me, help me with that and manage my spend. And then of course, hopefully this data set is a useful companion to that to compare your spending as it, as it comes out to what other people in your area are actually spending with households like yours.
Host: Yeah, Scott, I’m glad you had fun creating this. You said you spent a lot of time thinking about it. Is that what we’re calling obsessing now?
Co-host: I’m having fun, you think like all of these are components, you know, that again, I need an income one, I need a tax one, I need a Monte Carlo sim. That’s going to be the real beast of a project is can I go all this up to income, expenses, accumulation and deaccumulation engine in one, one nice thing. That’s going to take me at least a year. But for now the components are hopefully useful block by block as we, as we release them here at biggerpocketsmoney.com. So, again, you can find all of that at biggerpocketsmoney.com/resources and you can find this specific tool at biggerpocketsmoney.com/budget. All the tools are free. There’s no email required. I’m not storing any data. This is actually a single HTML file so it just runs in your browser. I don’t collect anything. There’s no login or whatever it doesn’t persist. So save it or screen shot it if you want to store it because we’re not storing it for you uh over here at BP money.
Host: OK. Well, Scott, thank you to you for creating this and all the other fun calculators on our website. And a note to our listeners, this episode is ending but that doesn’t mean that you have to stop learning. You can hop on over to biggerpocketsmoney.com and find more of these resources in the resources tab. We have a blog, we have a newsletter, we have a ton of calculators and templates. All of this is designed to help you accelerate your financial independence journey. And what was that cost again, Scott?
Co-host: Free. We’d give you a money back guarantee, but there’s currently no way for you to pay us um here over at bigger pockets money. Um so there’s no opportunity to refund you any money. So but I will say, you know, these are data sets, these are complicated. I, I’m checking them a lot and I’m going through these situations like here with Mindy, but I just got great feedback the other day on my tax projection tool that, you know, hey, you’re not really stating the potential burden for self-employment taxes unless you add in a new component here, a new field for each earner, right? Because each earner can get taxed on fica, like social security and Medicaid and I, I didn’t, I didn’t build that into the tool and someone asked me to build that that’s an easy thing for me to fix these days. So I think I actually responded within an hour to this person and got that, got that live. But that’s the kind of feedback that really helps these tools get a little better. So please email me, scott@biggerpocketsmoney.com if you have any suggestions like that that can increase the accuracy or or usefulness of the tools here as we’re building them out.
Host: Yeah, please email scott@biggerpocketsmoney.com and let him know if you find any mistakes, any suggestions you have, what could make it better. That would be fantastic. Scott has nothing to do all day except listen to your emails, right? Is that how you characterize your day, Scott?
Co-host: A lot of my day is making changes to these apps and as I code them, right? So I’m using the AI and then I’m going through many rounds of checks along with that to try to make sure that it’s actually presenting the way I want. And in between those, I have plenty of time to respond to emails. Yes.
Co-host: So following the discussion with Mindy, I made one update to the calculator that I wanted to highlight here, which is one of the interesting use cases for this tool might be to compare geographies and see how you’re spending in Denver, Colorado might compare to if you have moved, picked up and moved to Santa Cruz or Beckley, West Virginia. And so this comparison tool shows the differences estimated on average from the data sets that we’ve compiled in those areas and allows you to toggle that, maybe your situation will result in lower expenses in one area versus another because you have family nearby or what have you. So go ahead and and play with that. Maybe it’ll help you at least get an idea of some of the costs of areas that you might be considering living in at a directional view.
Host: All right, that wraps up this episode of the Bigger Pockets Money podcast. We will see you again on Tuesday. He is Scott Trench, I am Mindy Jensen saying, bye for now, brown cow.
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