What the Hell Is Going On with Our Living Expenses?!

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What the Hell Is Going On with Our Living Expenses?!

Boy, this has been one helluva rollercoaster lately.  Our living expenses have been all over the map this year.

We’ve had a ton of abnormal spending (both more and less) throughout the year.  The biggest factors for this were:

For a guy with control issues, this is throwing me off a little.  The roller coaster ride we’ve been on this summer is just about wrapping up, but we’re still not running a normal budget right now.

It’s been so crazy with so many unknowns that I’m struggling to project what our living expenses are finally going to settle down and be for the foreseeable future.

We’re working on finding a more permanent place to live here in Panama.  The rental range is pretty broad in the area, so depending on what we decide, our future expenses could be higher or lower than I’m anticipating.

I’d like to think that our expenses will likely settle on around $2,500/month, but unfortunately, that’s still just a guess… and maybe some wishful thinking!

In the meantime, here’s why this year’s been such a struggle for us to keep up on financially…


Front-loading some costs

Although our living expenses were pretty normal at the beginning of this year, we had some additional costs we usually wouldn’t have had to worry about.

For example, I’m writing this from a place we’re staying at in Valle Escondido… a fancy-pants resort and gated community in Boquete.  We got the rental through HomeAway, which is kind of similar to Airbnb.

We wanted a place to stay for a couple of weeks in the area while we found a more permanent place.  Fortunately, when I went to book this, I tried extending the end date by a day and the price didn’t change.  I moved it out another day… no change in $$$ again.  I was able to get the rental for 30-days for the same cost it would have been for two weeks – that’s a frugal win!

The total cost was $1,698.00 plus a $500 refundable damage deposit.  That’s pricey compared to some of the low-cost places here, but we were familiar with the resort from our 2017 visit, so wanted to stick with what we knew to begin this trip.

What the Hell Is Going On with Our Living Expenses?! - Valle Escondido
I seriously can’t describe just how beautiful the views are in Boquete, Panama. This photo is of a small part of the community we’re currently staying in… unbelievable!

And, unlike most folks booking a beach vacation somewhere, this is our home.  We’re not obligated to continue paying on another mortgage or rent somewhere as well.  In other words, that $1,700 is like our mortgage payment for the month.

But, we had to pay for it in advance.  So we had an additional $2,198.00 in our expenses in March.  Not only does that throw things off a little, but then we’ll get the $500 deposit back (hopefully!) later this month.  That’ll mess up our numbers for August as well.

A few uncommon front-loaded costs like that have taken our monthly living expenses and knocked ’em out of whack.


July was an odd month for our living expenses…

Then, of course, the month of July was truly a unique month, I don’t even know where to start.  I won’t rehash our July adventure, but in a nutshell, we didn’t have a home to call our own.

Because of that, we floated around like vagabonds throughout the month.  We also took the money we’d normally spend on housing expenses and put it toward… well, fun.

In the end, our living expenses ended up being a little less than $1,000 more than normal, but man, that was a great time!

Regardless, it wasn’t spending in a normal fashion like we’re used to doing.


The Texas bull ride

Howdy, Texas… our time there really was like bull riding.  We had such a great time living with my brother and sister-in-law for the first few weeks of August.  But boy, oh boy, we spent a crapload of money.

In fact, we spent a little over $1,000 on dining and entertainment in that short amount of time.  That is so not us.  We tend to be very frugal and watch our pennies a little more judiciously.

On the other hand, this was another month where we didn’t have housing costs.  Because of that, we were able to spend plenty of time going out to dinner and doing all kinds of activities.

We had a blast, but I was just watching our money fly out the window left and right.  $150 for a dinner here and there, $50 for an occasional round of drinks, a rodeo, tubing on a river, movies, etc.  We also tried to pick up the tab as much as we could (though they picked up some checks, too) since they were letting us stay with them for three weeks.

Faith at the Rodeo
Faith had no problem fitting into the Texas lifestyle. Here she is at the rodeo…

Again, we had a great time, but it was a struggle to see our money burn up like that.  We’re not used to letting our money go that easily as we did during our stay.

But here’s why it doesn’t matter… well @#$%, of course, it matters.  However, its really not a big deal in the long term.  We didn’t have rent or a mortgage payment to make and that saves us $1,500-$2,000 right off the rip.  No utilities and other expenses either.

So a lot of that was probably a wash or we did better than normal… maybe.  Who knows?  Tracking our finances is a mess right now.  More on that in a little bit.


Living expenses in Panama

Between the 4% rule and our rental property, our financial planner feels we could get away with spending up to $55,000/year.  I don’t feel comfortable even acknowledging that number… at least for the time being.  Maybe if we see some decent income from this blog and other endeavors down the line that might be a different story.

Instead, I’d rather be over-conservative in our plans.  That being the case, my plan has been to keep our annual spending around $40,000.  In fact, while we’re here in Panama, I think we can stay way below that number.

As a reminder, we’re in the “pre-paid” period of our HomeAway house so no housing costs for this month’s living expenses.  In the meantime though, we’re currently in the middle of looking for a place to live for at least the next year.

A top of the line rental that we just checked out would run us $1,600/month for a 2-bedroom, 2-bathroom house.  That’s in the same resort and gated-community we’re in now with the golf course and security onsite.  It’s a beautiful place and a 20-minute walk to town as well.

That $1,600 would include use of the gym, racquetball court, tennis court, an indoor and outdoor pool, hot tub, sauna, etc.  It also includes high-speed Internet, water, electric, and garbage.  Oh, yeah, and a weekly gardener.

Not too shabby, right?

What the Hell Is Going On with Our Living Expenses?! - Valle Escondido
Another photo in Valle Escondido… stunning!

Even so, we’re contemplating not jumping on it.  Are we crazy?  Maybe… maybe not.

That price is definitely feasible for our “budget” and still gives us room for vacations and fun.  But, here’s the thing – if we find a place that costs us less per month, we could have even more fun.

We looked at another place that was $1,000/month.  We liked it a lot, but it had a few details we didn’t like such as no ceiling fans and no screens in the windows.  That’s a big deal because there’s generally no heat or A/C here.  I mean why would there be when the temp is 75° F every day and lower 60’s at night?  Just rubbing that in a little!

Regardless, even the $1,000/month place is really nice here and some people who live here might even say it’s pricey.  These places likely won’t include all the bells and whistles like the $1,600 rental, but they’re still really good places to live.

Now think about if we got a place that was $1,000/mo. versus $1,600/mo. – that’s an additional $600 we’d be saving.  That’s $600 that we could spend freely and not worry about it.  That could be used for dining out even more than we’re doing, more weekend trips to the beach or other getaways, or more cruises.

That’s a cool thought.  In a way, we’d almost be living as if we were FatFIRE.  Not bad considering a net worth of only around $1.2 million.

So how do you figure out your living expenses and do high-level budgeting when your housing cost can vary by over $600 a month?  Hint, it ain’t gonna happen in this household until we figure out the place we’re going to live.

We’re still debating and looking at other places so we’ll let you know what direction we go, but there are definitely pros and cons to both.  I will tell you though that we should be able to live very nicely on $35,000/year.  We’d almost be rich here.

We also still haven’t decided on if we’re getting a car or not.  The cost of taxis and bussing is cheap and easy and we’re now enjoying plenty of walking and being outside.  Imagine skipping the car along with driving in traffic, repairs, maintenance, insurance, finding a parking space, and all the rest of the fun that comes with it.  We’re not sure yet, but it’s some discussion on the table.


Dammit, I switched again!

One of the aspects of life in Panama that’s a little different (particularly in places like Boquete) is that the majority of the spending is cash only.  Most restaurants and a lot of stores don’t take credit cards.  And with the places that do take them (a couple of grocery stores, for instance), you still have to worry about foreign transactions fees with your bank.

That’s both good and bad.  It’s good in that you absolutely feel the pain of spending when you see the cash disappear out of your pocket.  This can truly be a valuable kick in the pants psychologically to keep you from overspending.

However, it’s a little inconvenient in that you have to always carry cash on you.  You also have to periodically hit ATM’s to restock your funds.

What the Hell Is Going On with Our Living Expenses?! - Panamanian Balboa Coin
A Panamanian Balboa coin worth $1 USD… not as light as a dollar bill and not as tasty as a Balboa beer, but it does the job just fine!

A plus is that the Panamanian Balboa trades evenly with the U.S. dollar so we can use that interchangeably here.  Additionally, I’ve mentioned before that using a Schwab Bank High Yield Investor Checking Account helps us dodge ATM fees and foreign transaction fees when we can use a card.

But for the most part, we’re using cash for almost all of our living expenses here – purchases, dining, and entertainment.  Heck, even the places we’ve looked at to rent are expecting cash each month or a PayPal transfer.

Outside of the minor inconvenience in and of itself, there are two concerns that I have with paying for things in cash:

  1. The state of our credit score and credit cards
  2. Tracking our expenses

Not using our credit cards can be a problem.  First off, if your card becomes stale from inactive use, a lot of the issuers will close them.  When a card closes, your credit utilization goes up because you have less total available credit available.  Credit utilization makes up 30% of your FICO score so that’s an important factor.

Between my side businesses and our personal cards, we currently have ten credit cards.  A number of those were opened to take advantage of the sign-up bonuses for travel rewards.  All of the cards we have do charge foreign transaction fees so we don’t want to use them here if we can help it.

This isn’t the end of the world because we’ll just make sure to rotate through all our cards for U.S. transactions.  We still order from Amazon (more on that in a future post soon) and we’ll be booking flights back to the U.S. periodically.  Also, when we’re in the U.S., we’ll be spending on Uber/Lyft, dining, etc. so we’ll have plenty of opportunities to cycle through our cards and get some activity on them.

The second concern though on tracking expenses is a little bit of a pain in the butt.  If you’re a regular reader, you might know that I spent most of my life using Quicken to manage my finances.

However, after 20 years on Quicken, I finally decided to simplify a little bit and move to something a little more modern.  I moved to Empower (formerly Personal Capital) earlier this year because it focuses more on the investment side of things, which aligns more with my needs.

If you haven’t signed up yet for Empower (formerly Personal Capital), you really should try it.  It’s free and it an awesome piece of online software.  You link all your financial accounts and it does all the work for you.  It saved me over $65,000 on fees alone over a 10-year period.

I love it.  But, there is one issue that I have with it right now.  Empower (formerly Personal Capital) tracks everything – banking, credit cards, investment and retirement accounts, loans, assets, etc.  However, it doesn’t let you add manual transactions.

That works great in a plastic society.  Everything is logged and trackable.  But when you’re in a cash society like Panama, that’s a problem.

I don’t budget – never have – but if I want to effectively track my expenses, I need to know what I spent.  So if we take a taxi ride or eat out, that gets left out of the equation here.  Yes, it’s initially tracked at some point that I took money out of the bank, but where that cash went vanishes.

I want to be able to look at my living expenses and easily see that I’m spending too much money on entertainment or eating out.  Empower (formerly Personal Capital) can longer give me that because it’s not seeing the whole picture anymore.  So I had to make a change.

I’m continuing to use Empower (formerly Personal Capital) for my investments, but I’m now using Mint to handle tracking my expenses.  I can add cash transactions manually and their app lets me do it on the fly.

I’m in the process of updating the categorized transactions for August so I can see what the @#$% happened.  We could have had a good month or maybe not, but right now, I really don’t know.  This should give me back the control I need on knowing where our money’s going.

So there you go – it’s been a financial roller coaster ride this year (albeit a fun one!).  Having been on top of our expenses for so many years, this hasn’t been a good feeling for me.

As we get settled and work out our new normal on living expenses here in Panama though, I should be able to get back on track with this soon.  Change is good and being able to adapt is even better!


Have you ever gone through a period where you just don’t feel like you have a handle on what your living expenses have been?  How’d you deal with it?


Thanks for reading!!

— Jim

You know you wanna share this!!

26 thoughts on “What the Hell Is Going On with Our Living Expenses?!”

  1. Hi Jim! I’m so excited to hear you are settling in Panama now. We are going to visit in January or February!!!! We’re kinda in the same boat as you with finances. With building our house, living with family and friends for a month, and now buying things we need for the house we haven’t been keeping track of our spending like we normally do. We moved into our house last night, girls started school today, and there are a few things that our builder, etc need to finish before the house is completely done. We figure once we switch to a mortgage and know what that monthly expense is going to be, we’ll be able to plan out monthly expenses.

    1. It’s frustrating a little bit (if you’re a control freak like me), but it’s good to know that we should be just fine. Wow, you guys have been busy all around – that can definitely throw off your game. That’s exciting that you’re in your new house now. Hopefully, things will get back on track for you in the near future. And yes, I’m definitely looking forward to you guys coming down here to visit!

    2. We lived in Boquete for 3.5 years and rented and finally bought our house there, fully furnished and now rent it out for $1050 a month.
      Any other house you are looking at outside of Valle Escondido will not compare. The $1000 house you saw without window screens or fans is a deal. You can easily and cheaply put in screens and ceiling fans for less then the first months rent savings of $600. Heck the landlord would probably split it with you. But if a guard gated community is what makes you feel comfortable go for it. Just know after a year or two you will realize you are not truly experiencing the Panamanian culture or life style. Good luck!

      1. Thanks, John – that’s fantastic that you have a rental here – it’s such a beautiful city! I agree that we could have probably put screens and ceiling fans in the one house. However, it had a number of other things that would have bugged us, like the metal roof in the rain and the far walk to town. We liked the apartment because it’s so close to town and we’ve already been spending a lot of time talking to people there – both expats and Panamanians. Although we’re staying in Escondido for now, having a place we’re familiar with will be good while we check out other areas. Then if we decide to stay, we’ll know the surrounding areas better and can decide where our next place to live will be.

        1. You bet. A lot of the homes in Panama and Latin American countries have metal roofs. The better-built ones have foam installation under the roof to decrease the noise from the rain and heat protection. Our house had the installation as well as many others. A Panamanian style house in most cases will not and also have suicide showers and no screens. That is typical.
          Don’t totally rule out metal roofs unless of course, they do not have the installation. ( which is easy to add ) Our house even with torrential rains we can hear our TV just fine.
          Your smart to scout out other areas from where you are based.


  2. Awesome, detailed post, Jim! I love living vicariously through this Panama adventure. That’s a really tough decision about whether or not to leave Valle Escondido — a $600 a month difference is significant! Maybe this thought can help you decide: do the other places you’re considering have a gym, a pool, and other athletic facilities available or nearby? I know that part of your retirement ambitions involves getting in and staying in really great shape, and having a gym right there available to you will really help — especially during the rainy season.
    Obviously, $600 a month is a steep price to pay just for gym/pool proximity, but for me it would be a major and possibly deciding factor. Health is your greatest wealth, after all!

    1. Great point on the fitness aspect, Adam. The other places don’t have any of those other amenities and they’re not anywhere nearby. Although I’ve been doing a little bit with resistance bands and could do that anywhere, I’m not a big fan. I do like the gym here – it’s actually a pretty nice facility and makes the workouts go much smoother. We actually may have decided on a place that just crept up on us yesterday. I won’t give it away though – I’ll save that for next week! 😉

  3. I don’t think you have to stress out too much. Life is changing and your monthly expense won’t be stable. As long as your annual expense comes under $40,000, you’ll be just fine. You guys had a lot of fun recently too. Once you settle down, the expense should be a lot smoother.

    Can you post more pictures of the houses? I’d be tempted to go with the $1,000/m home. It sounds pretty good, except for no screens. That’s necessary if there are mosquitoes around.
    I’m really enjoying these Panama posts. Keep them coming!

    1. Would it be crazy to say that we’ve had too much fun lately?

      I think we stumbled on a place last night that we’re likely moving into. I’ll save that for next week and I’ll post some pictures of what we’re seeing as well. The no screens factor is a big deal since there are a lot of bugs here. Somehow they seem to find there way into places with screens so I could only imagine not having them!

  4. No screens or ceiling fans? For $600 a month – you might be able to buy both yourself. Maybe the landlord would even offer a better price if you do those installs.

    1. I considered that as well but we realized it’s got other issues, too that we can’t really help. For instance, it’s got a metal roof and when it rains (and it rains a lot here), it’s loud… really loud. After we weighed everything, we decided to pass on this one. We found a new place last night that we’re probably moving into. I’ll give the scoop on that next week.

  5. Hi Jim,
    I am very interested in how the upcoming weeks go for you and your family. I can imagine myself living part time in Panama in the not too distant future. I would prefer to be there in summer to avoid Florida heat. I have read or seen on Youtube, people walking, taking taxis or buses in Bouquete, or driving their own cars. I haven’t heard or seen anyone mentioning bicycling. Can you tell me if the area is conducive to bicycling? Biking and swimming would be my preferred forms of exercise, and hopefully a bicycle would be sufficient for picking up groceries.

    I’m also interested in hearing if your daughter picks up Spanish quicker than you and your wife.

    1. That’s a good time to be here, Mike. There are a lot of snowbirds that actually come down here in the U.S. winters and leave in the spring so you’d be missing the busy time of year.

      Our initial plan was to do a lot of bicycling to town. Getting a kid trailer to use for groceries and just enjoying life. However, the roads and sidewalks (when there are sidewalks) are not good… like really not good. You don’t see many people on bikes here because it’s pretty dangerous. But, outside of town, you’ll see a lot more cycling. We’ll probably still be getting bikes to use around our neighborhood with our daughter. We haven’t done any trails yet, but I’m guessing that would be an option as well.

      I’m the furthest ahead with the Spanish because I practice on 3 apps every single day (haven’t missed one in 173 days). Plus, I took a few years of it back in high school. Now that we started homeschooling though, we made Spanish part of the curriculum. I imagine Faith will catch up pretty quickly and probably be a lot more fluent than me within the year.

  6. $1000 a month sounds pretty good to me Jim. We spend almost 3x that here in pricey Seattle!

    I think it’ll be a little while until your expenses settle down… there’s always startup costs when moving to a new place as well and inefficiencies that need to be “worked out”. That all takes time, so don’t stress too much.

    Also more pictures please! You really should have been posting photos of those two places you looked at. Pictures are worth 1000x words, right? Maybe even more in today’s society.

    Most people (myself included) have never been to Panama, so pictures of your new lifestyle will be super interesting!

    1. I like that, Mr. Tako – “startup costs” – that’s a great way to put it and pretty accurate at that! We think we found a pace as of yesterday evening so I’ll look at making a post for next week to talk about the different places and include a bunch of photos. I just figured if I didn’t include the photos you’d feel you needed more detail and would just come down here to visit and check it out! 😉

  7. We travel for a couple months every summer and basically gave up tracking spending in detail as we go along. Just get a couple hundred bucks from the ATM and spend it while you got it, then rinse and repeat 🙂

    Afterward I go through Personal Capital and piece it all together (if I’m doing a trip report with a section on expenses). I get pretty close as I can estimate some of the stuff. Although on our most recent trip a lot of the spending was done with no-fee credit cards (grocery stores, 7-11, a few restaurants, all the Grab rides (basically Uber in SE Asia)).

    But I’m six years into it and my withdrawal rate is sub-2% so spending really doesn’t matter that much other than showing others what it is on the blog. If I were you, I’d probably be okay with tracking the spending at a higher level, although I can see the benefit in knowing details. Like $300/month on taxis would be good to know since you might be able to buy and maintain a car for less than that (and boost quality of life too!).

    1. That’s really helpful, Justin! You’re right that I probably don’t need to be too detailed in this, but it’d still be good to know some generalities on some categories. I’m not a budgeter, but it’s nice to be able to look back and see our spending. Tomorrow we have to drop a couple thousand dollars in cash for our new place (first month’s rent and a deposit). I’ll definitely want to be able to see things like that to know how we’re doing.

      I’ll try the Mint thing for a little bit, but if it just becomes a pain in the @#$, I’ll probably just stop doing it at least for the smaller items. I’d imagine after a few months we’ll know what our normal spending is and I won’t need to look at it very closely anyway.

  8. Hey Jim,

    Glad to see you’re settling into your new Panamanian lifestyle. I’ve also been wondered about the monthly variable expenses and how best to manage those when your lifestyle becomes more flexible with FIRE. Have you considered using a rolling 12 month averaging approach? I have a lot of lumpy IT costs that I manage through work and turning those into a monthly run-rate based on last 12 months seems to smooth it out. It will take a couple of months to build some history but you can grow the averaging period until you hit 12 months. Let us know how you finalize your approach.

    1. That would make a lot of sense, but I still want to account for all the cash purchases. I think Mint will serve its purpose to help me tag these transactions. If it becomes too much of a pain, I’ll skip entering the small things like $3 taxi rides and just focus on larger transactions. I’ll keep you posted with how it goes as I iron out the details.

  9. LOVE hearing about your experiences & was wondering how you’re finding out about these rental properties? Are you working with a realtor or reading a newspaper/online ads/Jackie? Did you have to buy a new computer when you got there or was your old one okay to use in Panama? Can’t wait to hear about your new place & what’s included/not included & to see some pics! Thanx for sharing!

    1. Great questions, Debbie – I’m actually in the middle of working on a post about our mission of finding a rental and what we ended up picking, so stayed tuned! 😀

      And we brought our Chromebooks here (your computer is fine here), but I’m waiting for a desktop PC I ordered. I have plans to talk about the why and how on this one soon, too. There was a specific reason why we’re getting another and I’ll discuss that in a post as well once I get it setup. I want to make sure it does what I want it to first.

  10. Yes, living in a cash society can make tracking your expenses something of a black box. When we lived in Bolivia, I ended up having to dip into savings more than I would have liked. I found it stressful not to be able to go back and look at where *exactly* my money was going. But it sounds like you have much more of a margin for error than I did back 10 years ago!

    1. It’s actually kind of fun figuring things out as we go, especially because of how nice most people are here. I’ve got a post coming out Tuesday to talk about the rentals with a bunch of pictures and another post Lisa wrote on homeschooling coming out later in the week… it’s like you’re reading my mind, Michael! 😉

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