Based on this already “old” post by Early Retirement Extreme (ERE), Jacob was able to live off $5.000-7.000 per year, as late as 2011. For argument sake, let’s assume that this $7.000 annual spending in 2011 is now $7.714 in today’s money (2018). This would be about €6.250/year (current exchange rate ~$1.233/€), can you survive on this amount in the Netherlands? How low can you go? In the Netherlands at least!
How low can you go?
We have done earlier assessments about how much money we would need in various scenarios for FIRE. I’ve plans to revisit this post and apply the 2018 taxes. But it also got me thinking, how low can you go? Let’s have a look!
How Low Can You Go?
Some boundary conditions to consider:
- No insurances other than mandatory ones (e.g. health insurance);
- Bare bones living, no fluff/holidays, but some leisure is included;
- No government benefits included;
- You still need to be able to stay healthy (e.g. eat/sleep well);
- Let’s assume you are FIRE and have no need for a job (i.e. no commute, limited clothing costs, etc.); and,
- It has to be legal!
The idea is to live a cheaply as possible, so we will look at extremes here.
How Low Can You Go?
Living in a Garage?
Options that I found/could think of are:
- Camping out in the “wild” (read public lands or forests) = Free, but very much illegal in the Netherlands. You would still need a tent too!
- Live in your office = Free, but probably illegal and not applicable as we assume you are FIRE.
- You could also live in a box truck = Free and illegal. However, buying the APK approved truck (i.e. road legal) would be rather expensive around here, probably not really an option.
- Garage box (€35/month). You probably need some funds (or do dumpster diving) to make it “habitable” and a gym membership to be able to shower (€25/month). Total costs about €60/month. Also illegal!
- Room for rent (€50/month). The lowest I could find was really cheap, but you had to help with choirs around the house. Let’s go with this one (not discounting that you might be able to live somewhere for free if you work on say a farm).
Since we are law abiding and we want to do as little as possible (i.e. limited work), the yearly expenses for living are about €600 (including utilities!).
A more reasonable/realistic number, if you want to have your own “private” room is about €250/month including utilities (€3.000/year). But again, this is not really barebones, eh?
Food and Groceries
Based on our own grocery expenses (with 3 people, about €350/month), you should be able to easily live off €116 per month. Let’s assume you are good at cooking and very efficient. You also don’t want to die from malnutrition, so let’s assume you can live off about €3/day (€90/month). This include toiletries as well.
Total costs per year: €1.080
How Low Can You Go? Groceries
Side note: according to the NIBUD (a budgeting site from the Netherlands) I’m grossly underestimating. They recon you need €5-6/day as a minimum per adult person. However, despite the NIBUD stating our expense are “not possible”, we managed to do this already for a few years in a row. I’ll take their numbers with a grain of salt.
In the Netherlands you are required to insure yourself, its mandatory by law. The lowest rates I could find, based on an adult, was €75/month (no dental/highest deductible/basic coverage). Assuming nothing bad happens and you are healthy and brush you teeth, the total yearly expense are €900.
We are in the Netherlands, so you will have a bike! Depending on how much you use it, let’s include €50/year in costs related to wear and tear. There might be things you need to do that are not within cycling distance. For this let’s assume €250 in transport related costs for public transport or occasional car rental for a day.
Total yearly expenses: €300
How Low Can You Go?
We said bare bones with no fluff/holidays at the beginning. In short, most leisure activities are things like reading books, going for a hike or cycle ride, volunteering & visiting free activities around town. However, it’s not about becoming a hermit, so let’s include some minor expenses for the occasional leisure event.
Total yearly expenses: €200
Considering life has become increasingly digital at the moment, you will need access to internet (for banking, health insurance, taxes, etc.). Some access can be free at the library, but let’s assume you cannot always time things. Let’s also include mobile phone (sim only, no data) and banking fees with this. Total costs per year €125.
You also need cloths, thrift stores are great for this obviously, but they may not always have what you need. Since you have time on your hands, you already repair some of your own cloths. Total expense for the year €150 (I’m generous here).
I’ve probably forgot a few items, so let’s include another €225 for unforeseen expenses.
Total other costs sum up to a total of €500 per year
The grand total of the expense noted above is €3.580. That is really low! It’s also very much barebones, not easy and you are really just “surviving” with the occasional exceptions. If something happens the expenses will quickly rise. For example, if you are taken to hospital, your deductible of up to €885 will be added to your expenses. If your bike breaks, that’s likely another €50-100 (for a used cheap bike). Perhaps you need glasses? You see where I’m going with this. The number above does not include for any buffer! Nor does it include replacement costs. Perhaps a value in the order of €5.000 is more reasonable (add in the “private” room and you are at €7.400).
For reference purposes; what’s poverty level in the Netherlands? It’s about €1.030/month for a single adult (2016 numbers). This is a total of €12.360 per year. Welfare support at the moment, for a single adults over 21 year of age, is €992,12/month (€11.905,44 per year). There are all after taxes.
The point I’m trying to make is that it is possible to survive in the Netherlands with very little money. How much you will enjoy life, and how comfortable it is, is a different thing. It seems that the numbers by Jacob are achievable, even in the Netherlands, but not easy to manage. Then again, we are talking Early Retirement Extreme here!