My Expenses Compared with MMM

Some of you might have heard of Mr. Money Mustache (MMM), who retired at the age of 30 in the US and is quite popular in the F.I.R.E world. I have always wanted to compare my expenses with him and see if I can be as good as him with my expenses. I always believe that there are some similarities when I compare myself with him (like workouts, DIY, minimalism etc). My expenses should also be similar then? You know that I have this habit of looking back at my expenses in the past year and write a post on it in the beginning of the new year. This year, MMM also posted his expenses on his blog, so it was easy for me to compare my expenses with his. So am I better at managing my expenses compared to him? Lets find out. The results may surprise you!

First lets look at MMM’s expenses. I consolidated all his expenses into the following buckets.

Mr. Money MustacheIn USDIn INR
House expenses1,7351,21,450
Food and cash expenses5,7284,00,960
Utilities and services2,4801,73,600
Health and fitness00
Kid expenses00
Vehicle expenses96567,550
Travel expenses3,7022,59,140

Since his expenses are in USD, I converted them to INR by multiplying by 70 which was the average exchange rate for 2019. It seems like he spends around Rs. 15 lakhs a year. If I compare with my expenses which were Rs. 6 lakhs in 2019, I feel like I have done well. Wait, not so fast. I have to compensate for the cost of living difference shouldn’t I?

From my past experience, I arrived at a scaling factor of 20. It is just empirical and I don’t have a formula to compare expenses between Longmont, Colorado, USA with Bangalore, KA, India. What I saw was that if some one was earning about $100K, the equivalent pay they could receive would be about 20 x 100K = which is about Rs. 20 lakhs in India. Food that cost around $10 will be about Rs. 700 here. Rent of $1000 will be about Rs. 20K and so on. Of course this is a very crude way of calculating for cost of living differences. Some are quite expensive in India for the equivalent value, like petrol (or gas as they say in the US), electronics, fast food, electricity etc. Likewise some things in India are cheaper like services (electrician, maid etc). On average, I would like to think that a scaling factor of 20 works fine. After scaling the numbers, this is what I got for MMM.

Mr. Money MustacheIn USDCost of living
House expenses1,73534,700
Food and cash expenses5,7281,14,560
Utilities and services2,48049,600
Health and fitness00
Kid expenses00
Vehicle expenses96519,300
Travel expenses3,70274,040

Now you will see that MMM was somehow able to manage all his expenses in Rs. 4.29 lakhs in equivalent cost of living. He beat me! But how? To understand that I had to compare each bucket item with mine.

Mr. Money MustacheCost of livingMineDifference
House expenses34,70013,00021,700
Food and cash expenses1,14,5602,62,754-1,48,194
Utilities and services49,60074,831-25,231
Health and fitness013,205-13,205
Kid expenses032,634-32,634
Vehicle expenses19,30025,567-6,267
Travel expenses74,04080,422-6,382

One thing you will notice between my expenses and MMM’s is the fact that he did not mention what his kid expenses are because he is now divorced and the expenses are shared between him and his wife. Next thing is he did not have any health and fitness expenses. I know he works out at home like me, but may be he did not have expenses buying equipment (he already had weights and barbells). So if I exclude those expenses, the difference is still Rs. 1.3 lakhs.

The biggest difference seems to be in Food and cash expenses which is understandable since I am a family of 5 where as his family is 2. So spending twice as much seems reasonable. Otherwise we have pretty similar expenses. I was surprised how close I was in terms of expenses with him. Of course he is much better than me in every aspect, but I feel proud to be comparable with the legend! Here is one final change after accounting for number of people in our house and adding same expenses as mine for the things that he did not mention.

Mr. Money MustacheCost of livingMineDifference
House expenses34,70013,00034,700
Food and cash expenses2,29,1202,62,754-33,634
Utilities and services49,60074,831-25,231
Health and fitness013,205-13,205
Kid expenses32,63432,6340
Vehicle expenses19,30025,567-6,267
Travel expenses74,04080,422-6,382

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4 thoughts on “My Expenses Compared with MMM”

  1. Impressive!

    The main difference I see with MMM is that he doesn’t seem to have dependents who are fully reliant on him. Current expenses can be minimalist with self-control, but there could be future expenses beyond one’s control:
    – Have you taken into future health care expenses for parents / family? If there’s a chronic illness / support required like full time attender etc, these expenses are hard to control.
    – What if one’s kid wants to do her undergrad / postgrad in the US / foreign country?

    1. Yeah current expenses are based on minimalist living. Like I mentioned on some of my other posts, I don’t have a corpus just enough to meet the minimum expenses. There is a generous buffer but not too much. The problem with financial security and early retirement is that they are at odds. You cannot expect to cover all probable expenses you might incur (security) and also plan to retire early :). So I took the second option. I threw the security aspect out of the window and settled with early retirement.
      – Future expenses are unlimited just like greed. What would be a ideal expense per month you think one should keep for illness? Rs. 20k/month, how about 2 lakhs/month? There is no limit. An auto driver cannot expect to pay Rs. 20k/month for what ever chronic illness his family might have. He has to choose between letting go and going into debt. For me Rs. 20K/month of unexpected expense is fine. But a Rs. 2 lakh/month is too much even when I was working. What would I have done if I had to meet such a situation when I was working? Same as what I would do now. Also know that I am a risk taker (a requisite for early retirees 🙂
      – For kid’s future education, I would do what my parents did. They managed the undergrad education because it was cheap in India. I am sure my buffer will take care of it if my daughter needs it. For further education, my parents took an education loan on my name to send me to the US. They gave me just enough to meet one semester worth of expenses in the US which includes university fees, food and bare minimum rent. They never sent any more money, neither did I ask. I managed and eventually paid off the loan myself. I expect no less from my kid. A rich dad, does not entitle her for rich life. Sorry dear, tough luck 🙂
      – etc? I don’t know. There will always be more expenses and there will be even more ways to minimize. As I said, I can go back to work if nothing works.

  2. It’s fine to have expectations from your kid, but at some time the kid will also have expectations from you. Your parents did what they can for you. The question is are you doing what you can for the kid. It’s definitely one’s choice, and there’s no right or wrong.

    1. At post grad she will be 21 or more. Forget 21, if she is expecting her parents to pay after the age of 18, then I have certainly failed as a parent.

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