The White Coat Investor Network[Editor's Note: Today's WCI Network post is a classic from the Physician on FIRE.  It is always fun to run posts like this because everyone wants to know how they compare to someone else on a subject that nobody ever talks about. However, I think that most of us who compare our budget to this one are going to be amazed. While this figure looks very high in the FIRE community, it will seem very low in the physician financial community. I know our family spends a lot more than the PoF family. Shoot, we give away more than $220 a day and spend $55 a day just on healthcare! But I hope this very specific example does two things. First, I hope it encourages you to actually calculate out your burn rate. I think that fun exercise helps put spending into perspective. Second, I hope it encourages you to maybe spend a little less and put a little more money toward your financial goals. Enjoy the post!]

Our budget for a family of four is two hundred and twenty dollars a day. That seems like a lot of money!

It’s pretty rare that I actually go out and spend $220. We couldn’t possibly be doing so day in and day out.

Or could we?

While I may not be handing over eleven $20 bills to someone every day, or charging $220 on our credit cards on a daily basis, expense tracking has shown us that, as a family of four, our burn rate is in the neighborhood of $220 a day.

The first 12 months I tracked it, we spent $74,000. Three months later, I had a 12-month calendar year tracked and the grand total was $62,000. The following year, we spent $61,000.

While these numbers may seem low, keep in mind our properties were paid off, our healthcare was employer-subsidized, and nearly all of our donations come from a separate Donor Advised Fund.

While our expenses were on the order of $170 to $200 a day, that didn’t include the portion of health insurance paid by my employer or a slush fund to replace our vehicles or perform home maintenance. The true budget for our family of four has been closer to $220 a day.

My Life Costs $220 a Day. A Realistic Budget for a Post-FI Family of Four.

I stopped tracking our spending toward the end of 2018. Personal Capital does a reasonable job, as does Mint, but they do require some fine-tuning. Three years of tracking told me all I needed to know — that our spending was consistent and would give us a very safe and low withdrawal rate if we were to cease earning money completely.

Consistency is key, but we have entered a period of relative uncertainty. I left my job in August of 2019, and we’ve begun to have something I’ve never experienced before: location independence.

Before the pandemic hit, we spent two months in Mexico and two months in Spain. We planned to experience this type of slow travel much of the year, returning home to visit family and friends every summer and presumably around the holidays most years, as well.

When the conditions allow, we hope to return to a semi-nomadic existence again. Budgeting for that sort of existence can be difficult. The costs will depend a lot on where we’re living. If we spent 2/3 of the year visiting Iceland, New Zealand, and Singapore, the budget might break into the six-figure range.

Swap those destinations with budget-friendly places like Central America, Southeast Asia, and Eastern Europe, and we might not spend half as much.

Given the uncertain nature of our future budget, I can only do the best I can with the data I have. In today’s post, I’ll review what life at $220 a day might look like for a globetrotting family of four.

Health & Fitness Costs: $55 a day

Not surprisingly, healthcare figures to be tied for the highest line item in our post-FI budget. I’m assuming that even if the ACA survives in its current state, we won’t qualify for subsidies.

We took a close look at the healthcare sharing ministries. We are fortunately quite healthy with no serious pre-existing conditions, making these a potentially viable option. However, the exclusion for coverage of expenses related to certain vices combined with the fact that we’ll soon have teenagers made these programs less appealing.

We also looked at catastrophic policies and traditional insurance via the exchange and the open market. We ended up choosing a Bronze HSA Plan via the health care exchange. The cost for the premium alone for our family of four is just under $1,000 a month, or about $11,000

We will also want some kind of travel insurance plan for emergency care and/or evacuation. For trips of up to 60 or 90 days, a premium credit card can cover this. For longer trips, we’ll consider adding travel medical insurance.

Planning to eventually spend up to 8 months away from home each year, I don’t anticipate belonging to a gym, which will save us $2 to $3 a day compared to our previous spending.

For this budget, I’m planning on about $20,000 a year for our health and fitness needs, a number that accounts for ample out-of-pocket costs and future premium increases.

Travel Costs: $55 a Day

This is a tricky one when you’re planning to spend the majority of the year traveling. What is travel, exactly? Is it the same as a vacation budget?

In our case, we’re not counting food and drink in this category. We’re going to eat and we’re going to drink no matter where we are in the world. Our slow travel plans will involve staying in places with kitchens; we’ll be able to prepare most of our meals in the places we call home.

It’s not entertainment, either. We’ll have a separate budget for that. When you’re in no rush to squeeze in a bunch of activities in one short week, the entertainment costs are more spread out.

The travel costs I’m thinking about are our transportation and lodging while away from home. We may spend up to 8 months vagabonding, and this budget gives us $2,500 a month. There will definitely be months where we spend more and others where we’ll spend less.

budget family of four

a recent visit to the grand canyon

We could spend a month traveling the states in an RV we own for half of that $2,500 allotment. The same goes for spending time in Latin America and other affordable locales. Time spent at home won’t result in any travel costs, obviously.

We’ve also gotten pretty good at earning and redeeming miles and points for free flights and hotel stays. I anticipate saving thousands of dollars annually by continuing to take advantage of these opportunities.

Additional cost savings could come from home swapping and/or home sitting. Both are attractive options for people with the flexibility we’ll have and without the nightly cost of a hotel or Airbnb property.

Depending on the choices we make, this $20,000 allotment could be a generous or inadequate annual budget. Time will tell!

Grocery, Restaurant, and Drink Costs: $40 a Day

In recent years, our costs in this category, which includes meals cooked at home, eating out at restaurants, and both alcoholic and non-alcoholic beverages, has been in the range of $30 to $35 a day.

I’m upping the budget to $40 a day for a couple of reasons. One, we plan to be exploring new places, and that means eating out more. That doesn’t necessarily mean spending more; restaurant meals in Guanajuato, for example, were wonderfully inexpensive.

The second reason is that we’ve got growing boys. In a few years, we’ll have a teenager, and two years later, we’ll have two teenagers. I might have to double the food budget by then, but $40 a day seems realistic right now.

Automobiles: $25 a Day

As I mentioned, our prior spending reports did not include a sinking fund for the eventual replacement of aging vehicles. In the last ten years, we’ve picked up two late-model used vehicles for $20,000 and $28,000 apiece.

If we continue to own two vehicles, I anticipate replacing one about every five years (keeping each vehicle ten years) and spending maybe an average of $25,000 apiece. A big chunk of this budget is setting aside $5,000 a year (or about $13.70 a day) to cover that vehicle turnover.

The remaining $11.30 a day will cover gasoline, oil changes, tires, repairs, and insurance. We won’t have to budget in depreciation since I’ve already budgeted for replacement; in fact, any money gained from selling a used vehicle will supplement this portion of the budget.

There may be occasions where we need a rental car, but I envision many of our slow travel experiences to occur in places where we can rely on our feet and public transportation to get around.

The budget may seem low, but we’ll likely have our car(s) idle for most of the year, and we could suspend insurance coverage at those times.

Also, notice I used parentheses when describing cars in the plural form. Right now, we have a “beater” ’06 Chevy HHR that gets pretty good gas mileage, and a ’17 Nissan Armada that gets pretty terrible gas mileage, but can haul a good-sized travel trailer.

We may decide at some point that it makes no sense to have two automobiles, and could be down to one. Eventually, we’ll be adding a third and fourth driver and we can expect both our auto and umbrella (currently ~$170 a year) insurance rates to rise dramatically.

Still, I think $25 a day for a family that won’t be using an automobile at all most of the year is a reasonable projection for the next several years.

Shopping, Gifts, and Miscellaneous: $16 a Day

This is a bit of a catch-all, and I’m basing this on past years with a moderate increase for unknown and unforeseen expenses while away from home.

Kids’ toys, Christmas and birthday gifts, gadgets, and random stuff like the aforementioned umbrella insurance, household goods, and tax preparation fall under this category.

We’ve got nearly $6,000 a year in this poorly defined section, which should help cover some “one time” odd expenses.

Like the others, I can envision being over budget in this category of randomness some years, and well under in others.

Primary Home: $12 a Day

Hold on. Twelve dollars a day for a home?

It could be true. We’re selling our current home and the tentative plan is to keep our second home as a landing base for several years. We’re also considering buying a larger but affordable place so we would have less stuff to store and more space to stretch out when we are home.

If the cabin is our only home, it costs us about $4,000 a year. That covers association fees, property taxes, home insurance, and utility bills. We own it outright, so the only additional costs would be the occasional repair. There’s only so much that can go wrong with a 700 square foot space, so those costs have been minimal.

For $12 a day, the lawn is mowed in the summer, driveways are plowed in the winter, and we have a beautiful shared sandy beach and playground. The dock is put in, as is our boat lift, and we’ve got a laundry facility on site just below our place. We’ve even got a place to store our boat in the winter, and it’s all paid for with our modest association dues.

If we end up with a different, larger place, I would expect our costs to go up between 50% to 100% in this category, but $12 a day will work for now.

Entertainment: $12 a Day

Like the catch-all category above, I’m basing these expenses on recent years with a modest increase. Most days, our entertainment budget is next to nothing, but other days, we go to places like Disneyland Paris or Disney World, and The Mouse is not a cheap date.

Depending on how we travel and where we go, I could see where we could spend more than we’ve budgeted here.

Are you detecting a pattern? I am.

Education: $5 a Day

Last, and least only in the monetary cost of it, is education.

Between piano, guitar, and ukelele lessons along with various activities, we’ve spent about an average of $4 a day in recent years.

We’re not going to abandon the instruments, but our kids will be using them less, and there may be a way to get some free musical education via a public school with an outreach program.

Something new for us will be homeschooling, or in our case, roadschooling or worldschooling, and I expect to have some costs associated with that. There are plenty of free resources like Khan Academy and online options via public schools, but there are also curriculums and workbooks for sale.

I think $5 a day, or nearly $2,000 a year, is a fairly generous budget for our kids’ education in the coming years.

Everything Else: $0 a Day

WCI Continuing Financial Education 2020

It may seem foolish to call “everything else” $0 a day when I’ve already got a grab basket “miscellaneous” category to capture the random expenses that don’t fit tidily into one category. However, there are some notable missing categories that ought to be addressed.

Donations: $0 a Day

Will we be selfish with our money when I leave my high-paying job? Of course not. A reason that I’ve worked one more year several times over and continue to work hard on this site is to have the ability to give generously despite retiring early.

We’ve built up our donor advised fund (DAF) to allow for five-figure donations annually with a sustainable 4% withdrawal rate.

In fact, the income from Physician on FIRE will continue to increase the flow to and from our DAF, and I anticipate donating six-figures annually for the foreseeable future in accordance with our charitable mission to donate half of my profits.

The reason I say $0 a day is the fact that nearly all of our donations will come from a DAF rather than our retirement funds. There will be the random $20 raffle ticket or $1 lollipop here and there, but we can categorize those in the miscellaneous category above.

Financial Advisor: $0 a Day

If we were working with a financial advisor charging a typical flat 1% to 1.5% AUM fee, our initial costs would be in the range of $40,000 to $60,000 a year.

In other words, by managing my own investments, I’m avoiding a cost of around $110 to $160 a day, or mor than half of the outlined budget.

If we actually stick to this budget (and never earn another penny), we’ll have a withdrawal rate of about 2%, and I anticipate our assets to grow, meaning the cost of a financial advisor charging a percentage of assets under management would only increase over time, as well.

This financial planning fee would clearly be the most expensive line item in the budget, and it’s not hard to imagine a scenario where the cost could eclipse all other retirement expenses combined. Of course, this would only happen if the withdrawal rate becomes lower than the AUM fee as a percentage, but it’s not out of the realm of possibility.

I think it’s a great idea to learn enough to do your own financial planning and investment management, and it’s my goal to give you the tools to do so. The White Coat Investor’s signature course is a great way to jump-start that process.

For those not interested in going it alone, you can find flat-fee and hourly advisors who commonly work with physicians on my short list of recommended financial advisors.

Beer: $0 a Day

No, not really! Beer’s a part of the Grocery, Restaurant, and Drink budget.

Higher Education: $0 a Day

Our kids have well-funded 529 Plans. As long as I’m earning some online income, I’ll continue contributing to them, but I don’t feel that we need to, and it doesn’t need to be a part of this budget.

If the state of Michigan wants to give me an instant 4.25% boost on money invested in their 529 plan, I’ll continue building up those balances.

Income Tax: $0 a Day

I’ll have some earned income, so we will have to pay some income tax, but if we were fully retired instead of retired not retired, our federal income tax bill on this kind of budget could easily be zero. See The Taxman Leaveth for details.

When my online income is my only income, I expect to pay something less than ten percent. I recently projected the distribution of a hypothetical million dollar revenue year. The breakdown looked something like this:

  • 1/3 to expenses and profit sharing
  • 1/3 to charity
  • 1/3 to me and the tax man, with a better than 4:1 ratio for me, or about 26% of the total pocketed, with 7% going to pay FICA and income taxes.

Is This Truly a Realistic Budget?

I’d like to think we can live a good life, doing the things we want to do, with a budget of $220 a day, or $80,300 a year ($80,520 in 2020, a leap year). I’m familiar with a physician family larger than mine doing extraordinary things all over the world on a smaller budget. Their adventures chronicled in Big Family Small World are inspiring.

To summarize, here’s the proposed budget in table format.


Category Daily Cost
Health & Fitness $55
Travel $55
Grocery, Restaurants, and Drink $40
Automobiles $25
Shopping, Gifts, & Miscellaneous $16
Primary Home $12
Entertainment $12
Education $5
Total $220


What does this look like on an annual basis?


Category Annual Cost
Health & Fitness $20,075
Travel $20,075
Grocery, Restaurants, and Drink $14,600
Automobiles $9,125
Shopping, Gifts, & Miscellaneous $5,840
Primary Home $4,380
Entertainment $4,380
Education $1,825
Total $80,300


A family abiding by the 4% Rule could do this with just a hair over $2 Million. $2.5 Million would give you a very safe 3.2% withdrawal rate with this budget.

It may be that we feel a need or desire to spend more. If that’s the case, that’s what we’ll do. I say we’re further on the spectrum towards fatFIRE as opposed to leanFIRE, and if the budget stretches to closer to $300 a day or $100,000 a year, we’ll still be in good shape with a withdrawal rate well below 3%.

That’s assuming all income-generating opportunities are abandoned for life. Readers of my newsletter know that this site generates a decent income for me, my shareholders, and our charitable mission.

What do you think? Have you calculated your own burn rate? Do you think a $220 a day budget for a family of four is high or low? Comment below or continue the discussion on Facebook with other White Coat Investors!