As Rita and I wave goodbye to the high-rises and vibrant streets of Panama City, we're brimming with tales to share from our month-long exploration. The city's blend of bustling markets and serene Malicon walks left us with a mix of admiration and longing for what's next. Our latest podcast episode takes you through the sensory delights and urban challenges we encountered, and why despite the allure, our quest for the ideal retirement haven is pulling us towards the sandy shores of Playa Coronado. But it's not just about the coastal views; we dig into the realities of climate impact and reflect on the local waste management practices—or lack thereof—that played a part in our decision to keep journeying.
Join us as we pull back the curtain on the nitty-gritty of budgeting for a life untethered by borders. We lay out the puzzle pieces of our finances, from Social Security to pensions, and tell you how we pieced together our $3,000 monthly budget. Whether you're a spreadsheeter like me or a pen-and-paper romantic, our episode offers actionable insights for anyone dreaming up their own globe-trotting budget. Plus, stay tuned for our upcoming conversation with Julie Tallman and Roy McGinnis for a ground-level glimpse at life in Costa Rica, as we continue to canvas the globe in search of places that resonate with our pioneering—or perhaps whimsical—spirits.
As Rita and I wave goodbye to the high-rises and vibrant streets of Panama City, we're brimming with tales to share from our month-long exploration. The city's blend of bustling markets and serene Malicon walks left us with a mix of admiration and longing for what's next. Our latest podcast episode takes you through the sensory delights and urban challenges we encountered, and why despite the allure, our quest for the ideal retirement haven is pulling us towards the sandy shores of Playa Coronado. But it's not just about the coastal views; we dig into the realities of climate impact and reflect on the local waste management practices—or lack thereof—that played a part in our decision to keep journeying.
Join us as we pull back the curtain on the nitty-gritty of budgeting for a life untethered by borders. We lay out the puzzle pieces of our finances, from Social Security to pensions, and tell you how we pieced together our $3,000 monthly budget. Whether you're a spreadsheeter like me or a pen-and-paper romantic, our episode offers actionable insights for anyone dreaming up their own globe-trotting budget. Plus, stay tuned for our upcoming conversation with Julie Tallman and Roy McGinnis for a ground-level glimpse at life in Costa Rica, as we continue to canvas the globe in search of places that resonate with our pioneering—or perhaps whimsical—spirits.
Welcome to Travels with Jim Enrita. I'm your host, jim Santos, and in this podcast series you can follow along as my wife Rita and I work out our crazy plan to outfox the real estate market in the US and actually increase our retirement nest egg by spending the next three years or so living abroad and exploring the world. Are we bold, forward thinking pioneers or just plain nuts? Let's find out together, shall we? Episode 3. Setting your Budget. Hello, and welcome once again to Travels with Jim Enrita. Before we get to our topic today, I want to give a shout out to Julie Tallman and thank her for supporting the show. We'll be speaking to Julie and her husband, roy McGinnis, in a future episode to get their impressions of Costa Rica, one of the many countries on our target list. Now today's a big day for us, as we're leaving our home of one month in Panama City to check out life at the beach, playa Coronado to be specific, about an hour and a half southwest of here. So a few impressions of Panama City before we go.
Speaker 1:
We really enjoyed our stay here. There's a lot to like about the city. We have the traditional markets like the Mercado de Mariscos and the Mercado San Felipe Neri, but you also have large, well stocked grocery stores. We visited two different malls, the Albrook Mall and Multi Plaza, both very modern, with an incredible mix of stores and services. The 4 kilometer long Malicon along the waterfront is a real treat and we've walked at least 3 miles on it just about every morning as the sun is coming up and have enjoyed walking around Casco Viejo, the historic district. We've done some touristy things, we've enjoyed some fine meals and we managed to make the most out of our limited kitchen in our condo.
Speaker 1:
However, there are a couple of negatives. There's a lot of litter on the streets and there are some places around town where there are piles of garbage, and I mean large piles, 5 or 6 feet high and 10 feet across. Even in Old Town you see piles of trash in some places around obviously too small cans. As you move into the business district it gets better, but there's still a lot of litter. For a country that likes to boast the strongest economy in South and Central America, you would think they could do a better job of trash collection in their capital city. On the same subject, a 15 acre trash fire at a dump on the other side of town blanketed the area in toxic smoke for a few days. Looking through the local papers, it seems most residents blamed the inefficiency of the government for not taking care of this particular waste site, despite years of problems. Some articles stated that there were 13 fires in this dump last year alone.
Speaker 1:
But the main issue that keeps us from doing a little house hunting while we're here is a matter of personal preference. It's just a little too hot and a little too humid for our tastes. Just about every day has been in the low 90s, with high humidity, and the coolest overnight was 75. We get out to walk as the sun is rising, because by 8am it's 80 degrees or warmer. Case in point, it's 10am as I do this intro and it's already 88, with a feels like of 94. And remember, technically this is winter. We're north of the equator. Still never say never. Like I said, there's a lot to like about Panama City, but we do hope it will be a bit cooler and a little cleaner when we get to the beach, so stay tuned for that.
Speaker 1:
Alright, now on to today's topic. We got a few emails from people asking how we went about deciding on our $3,000 a month budget and details about what it includes and doesn't include. And, by the way, keep those emails coming. You can reach me at Jim, at JimSantosBookscom, with questions, comments or if you havea story to tell Now. Naturally, everybody's financial situation is going to be different, but here's the info on how we went about it and some pointers for what to do as you work up your own budget.
Speaker 1:
First of all, take a look at your assets. Now, I'm a geek so I do everything on spreadsheets, but if you're a pen and paper person, just make a list. In our case, we each get a monthly Social Security check and I get a monthly pension check. We call these our fixed income because they are regular payments and amounts that only vary with each year's cost of living adjustments. You may also have variable income from other sources. In our case, we have a few other income streams, like royalties from our books and audiobooks, freelance writing, voiceover work and so on, although they do add to our wallets. Since the amounts cannot be planned on each month, we elected not to include them in our calculations. Similarly, we have savings accounts, iras, 401k, etc. But we don't want to rely on them for travel or indeed touch them at all. Also, with totaling our fixed income, we're using the amount that gets deposited each month the net figure, not the gross. So this is after deductions for Medicare, my health insurance and some tax withholding.
Speaker 1:
Now, once you have a reliable number for your regular income, it's time to look at your fixed expenses. Now. There will be a lot of variations here, of course, especially if you're electing to do slow travel or roaming, part time instead of selling your home, like we are considering. So here's some expenses that everyone should list. First of all, any health care costs not already deducted, things like dental and eye insurance, prescription plans, regular prescription drug costs if you're on regular medication. And, by the way, on this subject, I cannot in good conscience recommend that anyone give up their US based health insurance or Medicare to save money. I would see how much coverage I have overseas and adjust if prudent, but you never know what's going to happen and I personally feel that it is not a good idea to give up that particular safety net, even with all the problems with health care in the US. Also, if you or your spouse have special health needs or problems, discuss the wisdom of being out of the country for long periods of time with your doctors and follow their advice not mine or anyone else with a podcast, blog or a YouTube channel.
Speaker 1:
Moving on your US cell phone plan. We'll talk more about this topic in another show, but there's a big advantage to keeping your US cell plan active and making use of eSIMS and WhatsApp while abroad. You'll want to keep your streaming services or subscriptions to electronic news and magazines. You'll also need a VPN service for those streaming services so you can still get US shows while abroad. You may also need this to access some bank sites or health care services, and I promise there will be an entire episode on apps, it and communications related topics when you're abroad.
Speaker 1:
Now, if you're planning on maintaining your home, you'll also need to add in the following Mortgage payments or rent, if applicable. Your property taxes, home insurance, fire insurance, etc. Auto loans and auto insurance. Your HOA fees, lawn care and snow shoveling services, if not provided by your HOA. See, you can't have the house looking unoccupied or poorly tended while you're gone. You'll also need someone who can clear your door of any hangers or ads and get newspapers and advertising circulars off your driveway. Your water, electricity and gas bills have to be factored in because even if you're not there, the reduced bills will still be coming in Internet access. This is often overlooked, but you'll want it when you return and many home security devices like green cameras, internet accessible thermostats and so on will need it while you're away. You also may need a virtual mailbox or possibly paying someone to get your mail and notifying you of anything important.
Speaker 1:
So, as you can see, adding up the expenses involved in keeping the home fires burning on low while you are gone for at least the 9 months of the year that we are considering can be a big chunk of change. Even without a mortgage or a car loan, we figured we would need at least 1500 a month set aside just to maintain our home. Now here's the list to consider. If you are selling your home in automobiles and then setting off, you will need to include the first list of everybody expenses and then some or all of the following Storage for any records, furniture, household goods, etc. That you may want to keep. Some of you may be able to dump some stuff on a child or relative for safekeeping, but we will have to rent a climate controlled storage area, that virtual mailbox again, or a relative that will let you forward mail to their home. The main problem is you need a US address for Social Security, Medicare and so on, but the US Post Office will not hold mail for more than 30 days or allow it to accumulate in PO boxes. But that's about it. Healthcare, phone plan, streaming services, subscriptions, v-mail and storage if needed. For us, this drops our fixed expenses down to less than $700 a month, with the biggest variable being what we can negotiate for the storage. Now that you have your fixed income and your fixed expenses, subtract the expenses from the income and see what you have left to work with. Hopefully it's a positive number.
Speaker 1:
We chose to set aside about 70% of that number as our monthly travel expense budget, leaving the rest for unexpected expenses and one other important item that we'll get to in a minute. So what does that $3,000 a month travel budget include? At a minimum, we wanted to cover our accommodations, groceries, public transit and ubers, any little excursions or tourist items. This has worked out well in Panama City, as we are on track to spend about $2,800 for a month here, which has included some expensive meals out, a day trip to Toboga Island, visits to the canal, trips to the mall and so on. It also includes our Uber fee from home to the hotel by the Noxio Airport and overnight in the airport Hilton, since we had a very early flight our meal at that hotel and our transport from the Panama Airport to our condo, and even the $100 to get us from Panama City to our new digs at the beach. If we look strictly at what we have spent since arriving in the condo and by the time we check out, it would be just $2,355.
Speaker 1:
Now I know you're probably saying to yourselves ah ha, your travel budget doesn't include travel. How much will you have to pay to get from place to place? Well, here's how we are counting for that piece. First of all, as I said, we actually are including all travel costs associated with this month, with the exception of the plane tickets to and from Panama themselves, and we're still under budget for the first month. I had to go back and look, since we bought the tickets five months ago, but our round trip airfare for two was $1,348.50.
Speaker 1:
Let me point out first of all, that our plans to spend 10 weeks in Panama was not originally part of our slow travel adventure. It was planned months before we came up with the crazy notion of selling our home and hitting the road for a few years. Its sole purpose was to get us out of the winter weather, so our original planning and budgeting was done much differently. That being said, if this were indeed part of our slow travel planning, it would have been two one-way tickets for Panama. A quick look on Google flights put that cost at around $658 or two, so much less. Ten weeks later we would be getting a one-way flight to someplace else, or possibly a bus to Costa Rica, so the overall transportation cost would be less and spread out over longer time periods.
Speaker 1:
But to answer the main question, the cost of big jumps, airfares, ferries, trains, buses, whatever will come out of that 30% cushion we left unaccounted for. Not to mention, we also have the extra income streams that we are not counting on to buttress that. Another consideration is the use of points on credit cards. For example, one of our flights from Mexico is only costing us $12 because of points cashed in. From what we have found through researching the web and looking at what other roamers are spending, we should be able to keep the cost of getting from point A to point B well within our cushion budget. Remember, we can also choose to live longer in each location to minimize that expense.
Speaker 1:
Now it's clear that the biggest expense we will face is whenever we return to the US for visits. That will be the real budget challenge. Our main goal, and hopefully yours, would be to be able to travel and enjoy ourselves without having to touch any of our savings. And that gets us to the main budgeting issue that makes this plan so attractive to me and Rita Savings. As you may know, interest rates for CDs and other savings accounts are at a high right now. We have an account with American Express currently earning 4.35%, and another with a bank earning 5.28%. Now, if we can get the house and car sold before rates start dropping again, we could potentially be earning more than we are spending on travel every month, increasing the size of our nest egg for our eventual return to the US. Now, as I've said before, I love our house, I love my kitchen, I love the area we're in and I like having all of my stuff. But when I consider the idea that we can spend a few years enjoying travel around the world and not only easily afford it but actually make money while doing it well, as Benji the Mouse said, and Hitchhiker's Guide to the Galaxy, if it comes to taking the money and running, then I for one could do with the exercise. That's all for now.
Speaker 1:
Thanks for listening to Travels with Jim and Rita. So what happens next? Well, honestly, we don't have a clue. Remember, in the immortal words of Spinal Tap, it's such a fine line between stupid and clever. Be sure to like and subscribe so you can find out along with us which side of the line we are on. You can find my books and audiobooks at JimSantosnet, or email me with any comments, questions or suggestions at Jim at JimSantosBookscom. If you're looking for more information about life overseas and travel in general, remember I also host the International Living Podcast, available through the International Living Podcast website and all major podcast platforms. Until next time, don't forget we travel not to escape life, but for life, not to escape us.