So I thought it’s only fair that you get to see me in my financial underwear and find out where our money really goes.
Admittedly, I never had a specific measure of how much we spent each year, only rough estimates. But in the last year I’ve started tracking it to the dollar.
So now, it’s judgement day! You get to see the juicy details, and decide for yourself whether we’re walking the talk.
Most of you will have an idea already because you know what our early retirement lifestyle looks like. But before we start, let me backpeddle a little…
In the last post I summed up how our year was.
In short, there was part time work involved, which meant some commuting. A full year of renting in a new location. And a few local and interstate trips.
So, let me be honest… our spending was a little bit higher than I thought!
Now, for those who are more frugal than we are, you get to point out where we’re bleeding cash. And for those who haven’t quite got their spending sorted yet, hopefully by reading this, you can nail down some areas to improve on in running your household.
We’ve mentioned before why small amounts matter, big time!
Obviously it’s not a competition. But sometimes it’s useful to see how others are doing things, as it can spark ideas of where we can improve.
Some readers will think this spending is plenty, and some will feel like it’s bare bones living. Well, I can tell you, it sure doesn’t feel like the second one!
But in all honesty, Mrs SMA and I do see it differently. She sees our current spending as being about right or towards on the low end. Whereas I feel it’s quite spendy with lots of fat that could be trimmed.
That’s a good point to remember! These things are always a balancing act to keep each party happy. And maybe, as usual, the best answer is somewhere in the middle.
Remember, it’s all about living a great life, and remembering how good we already have it, without being wasteful.
Anyway, let’s get into it…
Strong Money Household Spending for 2018
|Rent||$20,800||First full year renting.|
|Groceries||$4,263||Mostly an optimised vegetarian/vegan diet. Related post: Frugality & Food post.|
|Travel – Interstate family visits x 3 (flights + spending)||$2,923||An extra trip due to a wedding.|
|Travel – Country WA Trips||$2,648||We splashed out and went on two trips this year instead of one!|
|Car (Rego, Maintenance, Repairs, Fines)||$1,716||The old beast is still running – turns 19 this year. Rego is now over $800 per year! And sadly this includes 1 parking ticket and 1 speeding fine – dammit! Related post: Frugal Car Ownership.|
|Pet Insurance||$1500||A big expense, but we’re still ahead with this policy over 5 years. Another surgery this year due to swallowing part of his toy (not the first time!). No other insurance. See why here.|
|Dental, Physio, Doctor, Glasses||$1,455||Mrs SMA needed some dental work this year and a couple of physio appointments for a nagging hip issue.|
|Electricity||$1,306||Seems high, partially due to this property running on 100% electricity (including hot water). We are semi-careful with our power usage.|
|Garden||$1,154||I’m told this is an investment, not a cost, but I’m not so sure lol. Mrs SMA spends almost all of her free time in the garden and this year saw the creation of many garden beds. So on a cost-per-hour basis, this is a cheap and healthy hobby!|
|Vet bills, bulk dog food, heartworm etc.||$1,133||Had to pay some excess on insurance claim, plus vaccinations this year.|
|Café/Restaurants||$895||Feels like we let loose in this area in 2018, maybe something to keep an eye on for a healthier 2019!|
|Gifts – Relatives and others||$868||Is this high or low? I have no idea!|
|Public Transport/Uber/Ola||$810||Mrs SMA takes public transport to her part time job, so this is obviously offset by her income but wanted to include it anyway.|
|Petrol||$729||We fill up once a month. Seems like a lot for early retirees who spend a lot of time at home! Probably higher due to the old Commodore being a gas guzzler and driving visitors around.|
|Gifts – Our household||$689||We try and keep it simple these days with gifts, I mean, what do we really need?|
|Other (household items, bike repair, passport renewal, cash-out etc.)||$589||Random stuff that doesn’t fit in a category!|
|Vitamins, Protein Powders||$462||Regular fruits smoothies, along with some extra protein in our muesli. Maybe this should be in Groceries?|
|Charity Donations||$423||My goal is to increase this over time, hopefully every year for the rest of my life (while knowing it’s fully optional should we need to reduce costs for some reason).|
|Phone Credit||$404||Got an awesome 2-for-1 pre-paid deal with Kogan this year. No ridiculous smartphone plans!|
|Clothes & Accessories||$367||Donated some older/unused clothes to upgrade, and some work clothes for Mrs SMA, many from the op-shop.|
|Personal/Beauty Products||$335||I have no idea what this is, but I’m sure it’s important 🙂|
|Internet Credit||$300||2 Telstra recharges at $150 each. Mostly tax-deductible nowadays, but included here anyway.|
|Alcohol||$272||We don’t drink that much. Usually a couple drinks each per week – usually cider or beer.|
|Water Usage||$141||Hopefully keep the plants alive through the dry Perth weather!|
Total Spending: $46,182
For those who like pictures instead…
Since rent is such a large chunk of our spending, it may skew the picture a bit and make everything else seem small.
So here’s how it looks for everything excluding rent. You can click each image to enlarge.
I could probably condense a few of those categories to be fair. But at least we can see exactly where it goes. Maybe next year I’ll do that!
Now that we’ve let it all hang out, here’s what is obvious to me.
Firstly, since moving in 2017, rent accounts for almost half of our spending. Now imagine if we had a paid-off house!
Well, for retirees who don’t go very far, we sure spent quite a bit on travel related stuff. Well over $5,000 in fact!
And the car costs us quite a bit, even though we’re not driving to jobs anymore. Not to mention that our dog cost us almost $3,000 this year! But that’s okay, he’s worth it 🙂
Overall, we live a good life and although it may seem frugal to some, our spending even feels a bit bloated. Because honestly, so much of this spending is entirely optional.
For any reason, if we decided to, or needed to spend less, that’s definitely possible.
For example, we could travel less often. Or we could try going car-free. And we could easily spend less on eating out, random things, charity, or moving to a cheaper rental house.
And some costs are a result of some part time work, like public transport and some additional social eating, which obviously aren’t needed in a regular FI lifestyle.
As it turns out, I do expect spending this year to come in lower. But we’ll have to wait and see how it pans out. Sometimes life surprises you and things don’t go according to plan!
Either way, we’ve designed a pretty damn enjoyable life for under 50 grand a year.
As each year passes, I’ll post our annual spending for you to see.
Hopefully you found this interesting. And if nothing else, you now know more about the Strong Money household than you did before!
If you’re living like much of the population, there’s an almost unlimited amount of ways to improve your household spending. Just start looking and you’ll find little increments everywhere!
Even looking at ours, there’s some cushion in there, but it’s still relatively frugal.
Sure, we could find ways to spend lots more. But I just don’t see the point in jacking up consumption to chase new short-term highs. Because we’ll just end up where we started in terms of life satisfaction.
We already live a happy and simple life. So dialling up the luxury would not bring us greater happiness. There’s far more important things in life than striving for the new, the nicer, the better.
Don’t get infected with The Disease of More.
As I’ve said before, we used to spend a lot more when we met, almost double. But we’re actually happier now than we were back then!
So don’t believe the scaremongers. One of the most important and unexpected lessons I’ve learned over the last 10 years is, if you’re doing it right, your happiness does not decline with your spending!
How was your spending for 2018? Did you run a tight ship or were you letting loose!? Let me know in the comments.
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