Cost of Living 2018 in Goa

Lot of people have asked us questions about our lifestyle as well as our cost of living such as- How much it costs to live in Goa? Or How often do you eat out? etc..These are very valid questions. However till now we were shying away from sharing our detailed cost of living in Goa, India  publicly primarily for following reasons:

  • We are very private people.
  • We were concerned about people judging our lifestyle. (I guess no one enjoys criticism)

Why the change of heart?

But over the years we have grown confident in our choices. More-so sharing our life through this blog has made us little more open. Most importantly through this blog we came into contact with a lot of good people that we feel the question about our expenses is NOT judgemental but sincere.

On this blog we have published stories of Anil and Mahesh where they shared their lifestyles with all of us. And we found their interviews very useful.

So now at this point we feel comfortable enough to divulge our detailed cost of living on this blog. Hoping that somehow it helps fellow F.I.R.E enthusiast.

But before we move forward and divulge our cost of living. i will digress into the philosophy behind our family’s spending.

Philosophy Behind Our Cost of Living

Q What is Your Approach toward budget and spending

A: When we started our FIRE journey we created an excel sheet and budgeted every aspect of our spending. Over the course of 4 years we have looked at our spending habits and have diverted our money where we get maximum satisfaction or return on our spending such as comfortable home, good food cooked by a cook, house help to manage house etc.. eliminate or reduce what does not really matter to us that much at this point- International travel, Frequent gadget upgrade, luxury car,Lots of clothes, shoes, eating out more than once a week etc… So now it is a way of life rather than a depravation.

Q Do you have a motto to save more?

A Yes and it is:

  1. De-clutter your house, and mind.
  2. Only buy what you need and buy it of high-quality.
  3. Do not buy in a hope that you will use that item someday in future. We live in a highly connected digital world where if needed you can buy things from another continent. So, do not hoard things for a one off future occasion.
  4. Don’t mindlessly add new stuff in your house. You need less than you think you need.
  5. Look for satisfaction outside of shopping or collecting things.
  6. Enjoy what you have, take maximum comfort out of your belongings. Cherish them!

Q What are you trying to achieve by doing this?

A We are trying to balance personal freedom, work, time, happiness and money. So that we can minimise the regrets in life.

Q. Is this the only way to achieve all that you mentioned?

A No, there must be many ways. But this works for us.

Q. Will you always maintain this Cost of Living?

A No. In future depending on our income, and other life goals. We may reduce or increase our spending. We definitely want to do some travel in the future. So, that will take much more money than we are spending currently.

So here goes…

Our Annual Cost of Living, for a family of 3 in Goa, India

……….DRUMROLL……..Our 2018 cost of living in Goa

Below is the snapshot of our cost of living break-up from the budget and expense tracker app we use. It is free to use and we have written how to use it in our blog post Track Spending to find Savings.

Cost of Living- category-wise break-up

This is a cost of living in Goa for a family of 3. We have covered our biggest expense categories here:Cost of living 2018 Goa IndiaSome  other Important Categories which are not in the above infographic are:

  • Insurances-: 4.2%
  • Transport- 2.6% (Mainly fuel and car service)
  • Clothes, shoes & personal effects- 1.4% 
  • Gifts- 1.1%
  • Entertainment- 0.4%

Cost of Living- Category Details

Rent : 22.6%

Rent is the biggest chunk of our monthly expenses.  Rent from our own apartment offsets 55% our outgoing rent. You can read more about our lifestyle Photos of our current lifestyle

We live 10 minutes from beach, surrounded by beautiful cafe’s, art galleries, joggers park etc..It is a very convenient location as everything from movie theatre, shopping mall, restaurants, our doctors is within 3-5 kms radius.

view from our house

View from our terrace
View from our terrace

our neighbourhood river mandovi

Pregnancy & Delivery expenses: 12.4%

We had our baby this year! You can read the detailed break-up here Our Pregnancy Expenses in Goa, India. Do check it out we have covered detailed costs in it. We tracked everything we spent during 9 month pregnancy- including tests, medicine, doctors consultation as well as delivery costs. Overall we had very pleasant pregnancy.

Home improvements before baby 8.7%

We anticipated our parents’ extended stay to help us with the baby. So we made guest bedroom little more comfortable, added a T.V so our mothers’ won’t miss their daily soaps:). The T.V is rarely used with baby taking up everyone’s time. since there is not going to be much resale value, it will sit on the wall laughing at us. Plus whats wrong with the Cable Tv programmes these days? hardly anything worth watching.

Groceries, Fruits & Veggies: 10.9%

The chart above does not including fruits/veggies and only shows 8% cost of groceries.We primarily cook north Indian south Indian and Chinese food at home and on occasion try the world cuisine. So we end up buying some expensive ingredients.

Maintenance, Repair, Replacement: 7.7%

The biggest spending here was a replacement Mac laptop for Sugandha & extended warranty for Naren’s Mac laptop.

Household help: 7.3%

We have a cook for all meals and she also does our laundry washing and ironing. Another maid for cleaning the house. A Japa maid to oil massage our baby for the first few months. A Car cleaner to clean our car daily as we do not have a covered car-park.

Yes! from doing everything ourselves in our previous house in a Goan village we’ve now decided (after serious considerations) to outsource all household work so we can focus instead on our business and giving the baby the parental attention he needs.

Kid’s expenses: 5.8%

This includes things we bought such as baby cot, cradle etc as well as vaccines, diapers all fall into this category. This expense category began since baby arrived in September, 4 months back. Biggest expense growth will happen here in the coming years!

Food & Drink a.k.a eating out: 4.7%

We managed to keep this moderate or so we would like to believe. It is a personal win for us. We wrote about our struggle with reducing eating out expenses in Developing Good Habits- My battles and learnings

Insurances-: 4.2%

It covers our life, health, home, car and accident insurance. We can not emphasis enough on the importance of taking appropriate insurances to protect your wealth.

Healthcare : 3.5%

This is the money we spent on Ayurvedic treatments/ supplement during Pregnancy. This was totally discretionary and something we believe would help us have a healthy pregnancy and baby. Besides this we did not have any other major health issues.

Transport- 2.6% (Mainly fuel and car service)

For the amount of driving we do this number appears big to us. How much do you spend on petrol?

Clothes, shoes & personal effects- 1.4% 

We both bought clothes and shoes. We are again proud of this low number. We are heading towards minimalism. We are focusing on buying good quality pieces that we can enjoy for long time to come. Suddenly I am realising how difficult it actually is to find good quality stuff that will last. But some brands that we enjoy and seems to last exceptionally well are: Cotton World, Arrow and Indian terrain.

Gifts- 1.1%

Gifts to family and friends on birthday, anniversary and visits. This usually also includes the donations we make to charities on our birthdays as a family tradition. But we did not make any in 2018, we realised this as we were writing this blogpost :-(. So this number should go up in future

Entertainment- 0.4%

We did not spend much on entertainment either. We saw two movies in the theatre and the rest is annual subscription for Tata sky (new connection) and Amazon prime. We did not have to try hard to keep this number low because where we live there is a lot of free high quality entertainment available.Beautiful musical concert free

Our Cost Of Living Implication for Early Retirement

Q: Your family’s expenses do not seem frugal at all!

A: Our first year expenses in a Goan village was almost 1/3rd of this. Expenses were low because we both did all the cooking, cleaning and gardening etc….We also made some bad choices to keep the expenses artificially low- we would delay car service, repairs to electronics etc to keep expenses low. We would cook Maggi noodles from home to the beach and bring our own beach umbrella instead of eating at a beach shack.

While it was fun to experiment in the early years of F.I.R.E we both decided not to artificially lower expenses just to keep our 25X target corpus low. In the end we’ll also have to live our post-retirement like pre-retirement for the corpus to work. So above lifestyle expenses are more realistic based on our comfort-level at this stage in our life.

On quora somebody rightly said one can live in even Rs 10,000/pm in India and for someone even 1 lac is not enough. A lot depend on your lifestyle and life events

This is a good lesson for anyone who has a plan of retiring to their native village or town to keep retirement expenses low in old age. Better to settle where you’ll have the appropriate support system needed for your life stage.

So, we recommend you to also find a sweet spot for yourself and have a reasonable goal for higher chances of success.

Q Is your target corpus 25X of the above annual expenses?

A: Yes and No. Not all of the above expenses will be incurred in Retirement especially Rent(or EMI) since we’ll be living in our own house by then. To know more about 25 X, read this and this.

Outlook for 2019:

  • Kid’s expenses will grow. We did not anticipate expensive monthly vaccines. Expecting more surprises 😉  Might need to hire a nanny once our mothers’ return home.
  • Our Chennai apartment’s maintenance will kick in after the association resolves pending issues with the builder. An extra 40K annually.

11 Recommended Budget Percentages by Category

This graph is by Well Kept Wallet. This chart is a % of earning. We have spent less then ideal in most category. Under food we are just about in the upper limit.

Also like any FIRE aspirant our saving rate is higher than ideal recommendation.

Ideal spending % category wiseSource

Tell Us in comments which category do you spend way more than ideal?

Also feel free to ask us if you have any questions and share your ideas in comments on how you maximise your lifestyle while pursuing F.I.R.E?

Please refrain from posting nasty comments. We are not perfect, well no one is- you put one foot in front of the other and hope it is in right direction!

6 COMMENTS

  1. Would you be able to put some absolute numbers on what is your target corpus?
    The numbers published in all online resources seem to indicate more than 40 x times the requirement as retirement corpus. For. e.g. the times wealth of this week had an article where the persons retirement corpus in 20 years was approximately 4.8 crores and his montly outgo was not even a lakh. (calculated with inflation of 6%)
    How do you justify just 25x the total outgo per year as your corpus requirement?

    • Hi Mahesh!

      We do not promote 25X to retire early. How did you get an impression that we do?

      In our blog post How much money I need to Retire Early In India we have clearly stated:

      We recommend and use 25X corpus to shift life gears into doing things you always wanted- business, new job with less salary, travel the world while still supplement it with passive/part-time-seasonal income.

      here I have picked few lines directly from that blog post:

      Age 30-45: Target 25X within 10-15 years to become financially independent first. This is very much achievable with a savings rate of 50%. Start early in your 20s if you can.
      Age 45-50: With 25X of expenses as the safety net, you can afford to quit your job and figure out how to make money from your real interests in life. A new venture can take 3-4 years of focus before it starts covering your living expenses.
      Age 50-65: Once your new venture succeeds, invest any surplus to grow the 25X to give yourself a really secure old-age retirement. You have another 15 years to grow the 25X into say 40-50X.

      Neither of us is in jobs we don’t like, because we shifteD our life gear with 7X our annual expenses. But we did feel pressure because of low savings- we were bit young and we thought we could swing it! we eventually did! But we do not recommend it to others. We recommend 25X instead of 7X to take a pause in your life to align your work and life to your belief system. NOT TO RETIRE FULLY.

      We recommend 40-50X annual expenses for full retirement, depending on what age you are planning to retire.

      We have not read the article you mentioned, perhaps you can share a soft copy with us.

      Hope this clarifies your doubt?

  2. This is the kind of discussion I love.

    I can’t post a table here as it’s only text but I’ve just finished my analysis for 2018. My budget was 20L but disappointingly, I’m over budget by 2.3L. Consolation is that this was an international travel year (we do alternate years for international travel) so as long as our domestic holiday is reasonably priced next year, we should recover somewhat.

    Rent 16%
    School & Daycare 9%
    Utilities & Bills 5%
    Provisions 5%
    Domestic Help 6%
    Dining & Entertainment 8%
    Car & Petrol 4%
    Clothes 3%
    Fitness & beauty 2%
    Domestic travel 2%
    Charity 2%
    Gifts 2%
    Insurance 1%
    Medical 1%
    Miscellaneous 3%
    Holiday Travel 22%
    Capex (Car, furniture etc.)9%

    Setting aside the travel thing, I’ve realised I’m mainly overbudget on Dining/Entertainment and Clothes. Either need to relook at my budget or start reining some of that in. I guess the longer term issue is that my FI calculations are based on a 20L current spend. I may have to look at them again to build in some buffer.

    Savings stayed solid this year mainly helped by it being our first full year of dual income after a 3 year break for my wife as well as some nice bonuses at my work.

    Overall still just about on track for FI at 45 but it would really help to have an underbudget year next year to reassure myself.

      • Yep. Big milestone this year – dropped my life insurance! Even after calculating very conservatively, I figured that if I popped off tomorrow, my wife and daughter would have to make zero adjustment to their lifestyle if she stopped working and chose to live off the savings stash.

        Part of my FI at 45 plan. I’m at 75%+ of my target stash and my dropping off the expenses would take it well above 100%.

        So the only insurance left is a medical insurance that I bought 4 years or so ago and is on top of both my and my spouse’s work insurances. I add Car insurance to the car costs.

  3. Rent : 24%
    Electricity and flat maintenance :8%
    Child school /daycare/uniform/school incidentals :22%
    Insurance (all):8%
    Petrol and car mainentance : 6%
    Domestic help:5%
    Medical:5%
    Digital:3%
    Groceries:10%
    Eating out/entertainment/shopping/personal :11%

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