RT Cunningham


Living Expenses - You Have to Live Where You Can Afford to Live

living expenses I’m reminded of living expenses in various places by a memory. My younger brother, Joel, once told me “You’ve got to live where you’re at”. Grammatically incorrect as he always was, he made a good point. The reason most people suffer from a cost of living in one particular place is because they can’t afford to move to another.

The things that bind you to a specific place can include your job (or profession), family, specific medical care requirements and more than I can list here. The only way to get away from that specific place is to unbind yourself from those things. It’s way easier said than done.

Living Expenses Everywhere

One of the reasons I moved to Olongapo in 2006 is because I knew I could get American products here. The city is right next to the Subic Bay Freeport Zone. You have to understand, this was more than five years before two big malls opened up, one in the city and one at the freeport zone.

Another reason is obvious. My wife, Josie, was born here (in the Philippines) and her side of the family lived in Olongapo in 2006.

Some things are more expensive here than in the United States and some things are less expensive. It depends a lot on where you shop as well as what you’re buying. Some things at the public market are much less expensive than in the malls, but you take chances with quality and safety.

Take fresh whole chickens as an example. Unscrupulous vendors will inject them with water to make them weigh more. They charge by the kilo. That doesn’t happen in the mall grocery stores or the stores at the freeport zone.

There’s a point I want to make and it has little to do with the cost of groceries.

Living Expenses - Ownership versus Non-Ownership

You can survive on a social security pension alone if you own everything you use. If you’re making monthly rent or mortgage payments, you can’t. True ownership means you don’t have those living expenses to contend with.

The same goes for car payments. True ownership means you only have to contend with keeping your vehicle insured.

Home ownership is the largest purchase you’ll ever make. Buying a car is the second largest. Remove those two obstacles and you can live on far less than you might expect.

I’m living on less these days because I had to buy another car to replace the one I had to sell. The “had to” part of this equation depends on your perspective. We can get by without any vehicle at all but it’s extremely inconvenient to do so.

When 50 Percent isn’t 50 Percent

I retired with a military pension in 1998. A month later I received my first payment at 50 percent of my base pay. It wasn’t 50 percent of what I was receiving when I retired. The subsistence (food), housing and other allowances weren’t included.

Because of some congressional voodoo with numbers, that 50 percent started shrinking compared to active duty pay raises over the years. A couple of weeks ago, I looked at a pay chart from 1998 and another from 2016. I’m getting around $400 less than someone who retired with the same pay grade last year. When I start getting a social security pension (in several more years), I may get what a new military retiree gets by combining both pensions.

That 50 percent wasn’t even close to being enough to live on while I was paying my mortgage and making a car payment in Phoenix, Arizona. My wife, Josie, was working full-time and it wasn’t enough to fill the gap. Our living expenses didn’t suddenly change. I still had to find another job. I worked as a civilian for about seven and a half years before selling during the housing bubble, which saved me from 20 more years (give or take a year or two) of the rat race.

Living Expenses in the Philippines

Living expenses in the Philippines can vary widely depending on what part of the country you’re living in. The cost of living in Olongapo is higher than the cost of living away from the city but… you sacrifice convenience for cost. It’s only about five kilometers to the freeport zone from were I live. There isn’t any place I go to regularly that’s any further away.

The Royal Subic store is about eight if I take the route most people take. There’s a gate closer to where I live that makes it less than five (and it doesn’t even appear on Google Maps).

I could live in various places in the United States on my military pension alone, but only if I don’t have housing and transportation expenses to contend with as living expenses. The Philippines is my permanent residence because I have nothing to bind me to the United States.

I can visit my children in the United States but I will never live with either of them permanently. I would rather suffer with the living expenses I have now than to burden even one of them with more.

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By RT Cunningham
June 16, 2017
Personal Finance