I’ve been posting our monthly spending since September, but have been tracking it much longer (since 2014). At the end of each month I download the transaction history from our credit cards and bank accounts – categorizing each expense in a giant excel spreadsheet. The practice takes a few hours, maybe a little longer now that I post monthly updates, but it’s incredibly insightful. It’s amazing how much spending is done without a second (or first) thought. By tracking every dollar I’m able to understand where our hard-earned money is going and ensure our spending aligns with our values. But enough yammering, let’s take a closer look at the results by category.
The biggest piece of the home category is Property Taxes. Everyone loves to celebrate rising home prices, but that’s only because they haven’t really thought about it. Rising home prices only benefit people down-sizing or moving to a less expensive area. I’ll spare you the rant now, but only because I’ve laid it out in this post.
Utilities break down as follows: Water $744, Electric $648, Natural Gas $488. We don’t try to moderate use in any way, we’re just fortunate to live in a small house that was built < 10 years ago making it pretty energy efficient. The water bill also includes a monthly trash charge from the city.
The biggest contributor to Maintenance is lawn care. I previously used a lawn service that cost $700/year, but reclaimed the chore in 2017. Part of that reclamation includes $300 for a new lawnmower and edger. Our HOA fees are the other major component of maintenance. The entire maintenance category makes me cranky – we’re spending so much money on a lawn and community pool, neither of which we use.
Home Insurance was quite a bit (20%) less expensive for us in 2017. One of the major benefits of tracking every dollar is that it makes you evaluate what you’re spending money on. When I revisited our home insurance policy I realized we were paying for a lot of features we would never need, so we cut them.
This is the last time you’ll see Mortgage Interest on a spending report of mine. We paid off our mortgage in May 2017 and it FEELS SO GOOD! We are truly debt free which has a psychological benefit that’s hard to quantify. Not so hard to quantify is the $3,000 less in mortgage interest we paid this year.
Merchandise was split between decor and some organizational products to help button down our wily closets.
Groceries is a bit misleading because it counts everything we spend at the grocery store not just food items. This would be all those random things you use all the time – medicine, shampoo, cleaning supplies, laundry detergent, etc. If I estimate that extra stuff at $1,000 then it means we’re spending $450 a month on grocery groceries. We’re certainly not uber efficient, but I think we do well with meal planning. Our goal here is to keep food costs reasonable without making grocery shopping stressful or time-consuming.
If you’re interested in major grocery savings without resorting to extreme couponing you should check out Root of Good’s advice. I follow his monthly expense reports and his grocery spending (or lack thereof) always impresses.
Dining Out is also misleading because it doesn’t include eating out while on vacation – that gets lumped into the Travel category. Most of our meals (including lunches) are prepared at home.
Our spending on Clothes never ceases to amaze me. It certainly doesn’t feel like we go shopping very often, but alas, $200 a month says otherwise. The vast majority of this spending is for work attire and garments for special events; we spend very little on clothes we “want” to wear, which is interesting…
Gifts are a bonkers category for us. I include charitable contributions here, but honestly most of the $1,700 consists of socially obligated junk. There are a few things every year that I’m excited to give as gifts, but mostly the whole thing just seems strange to me. Why do adults give other adults presents on their birthday? Christmas especially stresses me out. So much time is spent fretting over what trinkets to buy other people that we end up spending more time on Amazon than in each other’s company. Seems like we should all just agree to hang out or go to dinner in lieu of gift-hunting, but I haven’t been so bold as to actually suggest this plan to anyone (other than anonymously to you of course).
Personal Care includes make-up, haircuts, and any spending at pharmacies. Make-up really dominates this category though, it is soooooo expensive.
The $236 of Travel Related spending was for a new suitcase, new backpacks, and some outlet adapters. For consistency I probably should have dropped this into the larger “Travel” category, but I didn’t think of it until just now.
I have expensive Hobbies, but I don’t mind it too much. I really enjoy my leisure time and aspire to be an active person. My hobby spending is mostly on activities with friends that I get a lot of value from. I think you can start to see my goal isn’t necessarily to minimize spending; it’s to make sure our spending is focused on things we enjoy.
Events are concerts, admission to local attractions and the like. Anything spent on entertainment while on vacation goes into the “Travel” category. Event spending is way up this year because I put our Thanksgiving hosting expenses here.
Media spending consists of Amazon Prime, Spotify, movies and books – a pretty tiny sum considering how much we enjoy these things.
This is the category that gives me nightmares. We spent $2,318 on Cable/Internet! For anyone < 40 this is patently ridiculous. The good news is we recently (finally) cut the cord and should see a healthy drop in our cable spending in 2018. While we still have access to many of the same channels (via DirectTV NOW), one of our loosely defined “goals” is to watch less television. We’ll see how it goes.
Cell Phone spending is a bit inflated for 2017. My trusty iPhone 4 finally became unusable and I made the switch to Android. I actually ended up buying 2 new phones on account of immediately destroying the first one. Oops. $371 went toward my new (to me) phones and accessories. Our actual cell phone bill is right at $100/mo.
We live in the suburbs and commute to work in our small cars that were purchased used. Cars are the destroyer of personal finances, gas-guzzling money pits that do little more than transport you to the workplace so you can afford to pay for the transportation. One of our beautiful used cars bit the dust early this month (January) and we opted to buy a newer (still used) small car to replace it. I’ll try to cover that in a future post.
Our Gas is pretty reasonable at $100/mo; we both commute to work plus where we live requires climbing in the car to get anywhere.
Insurance is the second biggest outlay in the vehicles category. Because our economical, nearly decade-old, cars aren’t “worth” a lot we only carry liability insurance on them. I do eventually plan to post some thoughts on what insurance coverage I think is appropriate, but suffice it to say we’re covered if I slam into a semi truck carrying Porsches; we’d only be out the $2,000 fair-market value of my totaled car. Also included in insurance is our AAA membership, an expense that pays for itself in peace-of-mind.
Maintenance spending is dominated by new tires and supplies for me to do my own oil changes.
Fees/Tolls is just as it sounds. It’s mostly our registration and inspection fees with a small amount going to actual toll roads and parking.
Now it’s time for the big kahuna, the mother of all budget busters – TRAVEL. This is obviously where we prioritize our spending, we LOVE to travel! In 2017 we took 21 separate trips ranging from a short weekend by car to a 10 day romp through Paris and London. Interestingly our Travel expenses were also 35% of our total spending in 2016.
Our Food and Drinks spending will tell you right off the bat we throw frugality out the window on vacation – basically we travel to stuff our faces.
After recklessly gorging the local fare we like to sit back and be Entertained. Our spending here is probably higher than most frequent travelers because we like going on urban vacations. Hikes around natural wonders are fantastic, but Disneyland is fantastical!
Hotel/Airbnb and Airfare are pretty self-explanatory. We live in the Midwest and most of our vacations are via airplane. This leads naturally into Car/Transportation which is our spending on rental cars, ubers, trains, and anything else that moves us. Car/Transportation also includes parking at our home airport, maybe this should be lumped in airfare?
What’s left is probably the most interesting piece in this entire budget – Points & Miles Game. This is spending on credit card annual fees and other schemes to amass major airline and hotel points to redeem for “free” travel. If you are thinking – spending money to save money is stupid – let me first say you’re right. I am under no illusion this saves us money. Au contraire (learned that in France on my flight paid for with miles), we definitely spend more on travel because we use points and miles – we go on more trips with our free flights and hotels and thus spend more on dining out and entertainment. But guess what? We don’t care; we freakin’ love it!
In 2017 we redeemed hotel points and airline miles for $9,973 worth of FREE rooms and flights. So really our TRAVEL spending is more accurately represented as $29,000 a year. Signing up for credit cards is a great way to reduce this cost and go some amazing places you probably wouldn’t otherwise consider. You can read my post on Why Its Ok to Signup for Credit Cards just to get the Bonus.
So there you have it, an itemization of this couples $54,593 of expenses. Do you know where your money is going?