How much did you spend in 2010?

[Nords]

I'm sitting here listening to the final night of New Year's Eve fireworks before Oahu's new law bans most of them... on 2 Jan. It hasn't been as bad as I've feared, and we've had a couple rain squalls knock down most of the smoke, but I won't miss this a bit. Of course it'll probably be another 3-4 years before the local inspectors manage to throttle most of the smuggling, and before everyone uses up their stash (or until it burns their house down when it decomposes in storage), and before there are actually few enough lawbreakers for the police to keep up with the civil disobedience. And people will still be able to buy some firecrackers with a $25 permit. But I'm hoping it's a lot quieter around here from now on.

Anyway there's not going to be any sleep tonight before 1 AM, so I thought I'd start the 2010 edition of the "How much did you spend?" thread. Here's a retrospective:
http://www.early-retirement.org/forums/f28/how-much-did-you-spend-in-2005-a-19096.html
http://www.early-retirement.org/forums/f28/how-much-did-you-spend-in-2006-a-24833.html
http://www.early-retirement.org/forums/f28/how-much-did-you-spend-in-2007-a-32212.html
(No 2008. I guess we didn't want to relive our 2008 spending numbers?)
http://www.early-retirement.org/forums/f28/total-spending-in-2009-a-48408.html

Here's another thread on 2010 spending vs budget:
http://www.early-retirement.org/for...o-on-your-expense-budget-in-2010-a-53960.html

... and here's my table updated for 2010. Although not every single expense is listed here, and I consolidated a few subcategories, this covers at least 90% of our recurring expenses.

Category/Year	2005	2006	2007	2008	2009	2010
Kid's allowance	500	825	956	1265	1485	795
Kid's school	2750	1500	2055	2735	1140	393
Kid's sports	1150	1925	1338	1730	2062	75
Adult clothing	200	225	514	302	257	640
Computer (incl DSL)	1000	875	2570	1274	1871	2027
Dining	1500	2000	2113	2019	2026	1466
Entertainment	525	425	1387	762	727	389
Nords taekwondo	2000	3200	1445	1808	1778	1161
Gifts given	200	500	1109	327	544	1038
Groceries	6000	5800	6016	6685	7381	6889
Furniture	1100	0	2073	1613	995	332
Pets	170	250	315	194	159	127
Tchotchkes	100	275	121	42	114	180
Home repair/imp	7800	2200	3236	5177	1945	849
Car insurance	775	750	744	851	727	744
Home insurance	900	900	354	817	946	1960
Liability insurance	600	650	706	669	844	907
Investment expenses	250	250	211	61	271	258
IRAs	8000	3872	2605	3364	2000	7000
Medical & dental	750	1200	1020	1939	1359	1104
Mortgage interest	18800	18300	18052	18093	15594	15493
Mortgage principal	4300	4800	5130	5413	4396	5868
Federal taxes	6000	6200	1063	2670	1852	1335
Property taxes	3800	4425	4598	4562	4551	4460
Gas	1100	1400	1262	1215	847	1086
Car repairs & service	650	2600	2826	1694	1435	1901
Electricity	750	425	304	404	353	302
HOA dues	300	350	360	378	384	402
Phone	325	350	507	335	427	404
CATV	425	525	565	595	624	658
Water & sewer	800	850	944	997	1058	1112
Vacations	5600	5800	13813	3114	9448	12,454
Total	$79,120	$73,647	$80,312	$73,104	$69,600	$73,809

The first $39,372 of this was paid out of my military pension. We're staying below a 4% SWR with the rest, although we could hypothetically ramp that up in anticipation of spouse's pension starting in 2022.

The biggest spending change this year was getting our college-bound teen off the payroll. We're still paying $12K/year room/board (NROTC pays the tuition), but that's coming out of the college fund and isn't reflected in this table.

And yes, we just refinanced the mortgage. Again. Next year's interest should drop by a couple thousand bucks and the principal should rise almost as much.

IRA contributions skyrocketed this year because spouse's volunteer gig turned into 10 hours/week paid employment. She's donating the salary back to the charity but I'm taking advantage of the opportunity to shift taxable funds to tax-sheltered accounts.

We also thoroughly enjoyed ourselves on vacations this year. Most of the expense was the airfare to Houston (Rice University) but we managed to squeeze in some quality grownup's time too.

I don't see much reason to change our spending over the next few years, although our vacation spending may go down as our stays become longer and we find travel bargains.

I'm going to have to figure out whether airfare between Honolulu & Houston is a tax-deductible educational expense...

 

[FIREd]

Happy New Year Nords. We are vacationing in Europe (and ushered the New Year about 11 hours ago), so I don't have the complete breakdown of our expenses with me, but the total stood at $84,687 before we left. It was our most expensive year yet but, considering we bought 2 new cars, it wasn't outrageous.

 

[martyb]

Haven't tried tracking yet, but since my retirement (not spouse's) is getting closer, it's time. And since this is the 1st day of the year, what better time to start?

 

[LOL!]

Of course Nords could just move to Houston which would cut out lots of his expenses: Travel, that huge housing cost, kid could live at home. But electricity would go up slightly.

 

[martyb]

There's not much surfing in Houston...

 

[rescueme]

There's not much surfing in Houston...

Of course there is

Google

 

[chinaco]

Nords... I notice you have a vacation budget.


Ya live in Hawaii man?? Where you live is my vacation!

 

[Danmar]

Very consistent over the years Nord. It always surprises me to learn that many people still have mortgages in retirement. Especially Americans. I guess it's the tax deductibility? Portfolio must be up nicely?

 

[Texas Proud]

The negatives of Houston....

My property taxes are close to Nords... and his house has to be worth a LOT more than mine... for one thing, he pays almost $1,000 more per month on the mortgage...

Our car insurance is over $2K for 2 cars...

Gas is more... but I do not break this out from 'all other'...

Electricity is a lot more... but we don't have the solar panels...

 

[HFWR]

Don't track it as closely as some, but the basics were around $23k. The rest I spent on beer and wine...

 

[freebird5825]

I spent less than my net income from pension and fixed annuity. I haven't done an exact reckoning yet.

I was able to have a new front picture window installed without blinking financially. I have a comfortable amount of residual cash flow in my savings account. I may plunk some of that into my muni bond fund to get some extra TE dividends for 6 months, or just leave it in the bank. Undecided...

I'm skipping my FL vacations this year. Why get out of town at greater expense when I have such great company during the days now and MA (the ocean ) is just a 5 hour drive away? Next road trip is in February.

 

[ScottFromUtah]

I prefer not to reveal my expenditures , but this is the bottom line:

1. After 2.5 years of retirement, DW and I haven't had to go into our 401(k) yet (and won't need to until Uncle Sam makes us withdraw some).

2. We own two homes outright, so we didn't have to pay mortgages.

3. We spent TONS more on travel than we had budgeted. (We had to pay in advance for our South America/Antarctica Cruise trip that begins on Tuesday.) But I ain't complainin'.

4. We didn't spend any more than we took in. (That's the real bottom line.)

 

[aaronc879]

2010 was the first year I tracked all spending for the full year. I spent $11,974. I know i've had some years that were less and don't think i've ever topped $15,000.

 

[calmloki]

.... the total stood at $84,687 before we left. It was our most expensive year yet but, considering we bought 2 new cars, it wasn't outrageous.

Uhoh. Do i have to figure in the house we bought in the budget? Pretty sure that means we went negative for the year. Only following the lead of our government...

 

[Sue J]

3. We spent TONS more on travel than we had budgeted. (We had to pay in advance for our South America/Antarctica Cruise trip that begins on Tuesday.) But I ain't complainin'.

Your cruise sounds wonderful! Have a safe trip.

 

[Tom52]

I just totalled everything up this morning. To preface this, these figures are all after payroll deductions for 401K, taxes, and employee contribution toward medical, dental, etc. Also you do not see a clothing expense as this comes from our "Spending money" which is split $300 per month for wife and myself. Also, some of the Spending money, at least mine, does not get spent and I have actually saved some of it in a CD.

$3340 Vacations
$7200 Spending money split 50/50 wife and me
$571 Entertainment
$471 Wife hair solon
$1900 Gifts/donations
$1443 Car repairs
$4033 Groceries
$1660 Gasoline
$2220 Land phone, internet, cable, cell phone
$1711 House and yard maintenance/repairs
$871 Natural gas
$1448 Electric
$260 Garbage pick up
$2240 House, auto, life insurance
$4941 Property taxes
$198 Auto license plates
$4348 Medical, dental, perscription, vision, out of pocket
$993 Uncatagorized
------
$39,848 Total for 2010

This is about 8.3% or $3,040 higher than what was spent in 2009 but $2,968 of the extra cost in 2010 was due to higher medical costs. This was due primarily to the lesser insurance coverage we now get from my employer.

 

[bbbamI]

2 adults...no debt....retired.

$39,942.00....84% essential...16% discretionary/sin

Under budget by about $2,000. Hmmm...I only take 3% of the portfolio...I have quite the cushion for sin.

 

[Nords]

I like Danmar's thread format better-- comparing expenses to budget-- but one reason I publish my numbers is to make sure that I keep tracking them. For example, the cost that annoys me all out of proportion to its impact is our water & sewer bill, and I really only notice it at times like this when I run the numbers. It's already gone up nearly 40% in just five years, and the city cheerfully proclaims that it's going up at least another 50% in the next five years. Meanwhile we use less water (and create less sewage) than anyone in the neighborhood. It's a green/emotional reaction to getting stuck with the tab for nearly a century of rotting infrastructure. However the reality is that our costs have dropped significantly over the years, and even more so with our daughter out of the nest. That drops straight to the [-]vacation[/-] bottom line.

I also do this because people just can't believe that over 1.2 million of us can afford to live here. (Well, except maybe for Henk Rogers and the Omidyars.) When the inevitable incredulity & skepticism rear their ugly heads, especially from the military readers, I can point them to this series of threads. For example we buy gasoline at about $3.25/gallon, and we had a teen driver doing most of it. Yet our annual fuel costs are under $1200/year. No heating or air-conditioning expenses, and not much of a clothing budget either.

Of course Nords could just move to Houston which would cut out lots of his expenses: Travel, that huge housing cost, kid could live at home. But electricity would go up slightly.

Nords... I notice you have a vacation budget.
Ya live in Hawaii man?? Where you live is my vacation!

Yeah, yeah, we get that a lot. Our real estate dollars would go four times farther in Houston, although we pay a lot less in property taxes here. But the problem is that we'd be living in Houston-- and even worse, our daughter would be living with us at home!

You guys can take heart-- I'm sure the Hawaii Visitors & Conventions Bureau has a really tasty "E komo mai!" advertising campaign all teed up for the next couple months while you finish freezing out the Dark Ages.

Oh, I see the issue. I gave the impression that I actually took all those vacations. The harsh reality is that nearly 60% of that airfare was spent by our daughter (graduation trip to exchange Hawaii/Italy visits with a classmate, and a language-immersion camp in Minnesota, and commuting between college & home) while spouse spent a month in Bangkok with a shipmate. We parents also went to Rice's Families Weekend, and I suspect that the event was underwritten by Continental Airlines to be able to fully exploit the out-of-state attendees.

But we had a very nice adult vacation in Kapalua/Napili Bay, and it looks like we'll be going back to Haleakala again this year.

Very consistent over the years Nord. It always surprises me to learn that many people still have mortgages in retirement. Especially Americans. I guess it's the tax deductibility? Portfolio must be up nicely?

The tax deductibility was a lot more compelling when interest rates were 8.5%, but not so much any more. Beating the standard deduction (is it $10K now?) is a huge hurdle, especially in the back half of the payback, unless you're paying an equally huge mortgage.

In 2011 it's the compelling math of borrowing money for 30 years at 3.625% fixed while collecting a COLA'd govt pension, and having the reasonable expectation that interest rates over the next 30 years will be higher than 3.625%. We're gonna inflate away our debt just as fast as the Treasury while investing the money in the stock market.

I've been tracking the mortgage arbitrage for six years in this thread. It's a niche tactic and unsuitable for most ERs. However the risk is mitigated with the combination of a COLA'd pension, a high-equity portfolio without bonds, the lowest interest rates in six decades, and no intention of moving from this place. It also turns out that FIRECalc likes the math better because the portfolio is larger and able to survive higher swings of volatility, even though spending is also higher.

I like Htown Harry's tactic of serial refinancings until our monthly payments go to zero. Only about 20 refis to go...

Our ER portfolio's definitely back in the "green zone". In 2008-2009 our it was down over 50% from peak to trough, but it started from a pretty ridiculously high peak. We're back to where we used to be in early 2007 before the silliness started. This year we also got a nice income boost from selling covered calls on Berkshire Hathaway and a small-cap value ETF (IJS). There was a lot of dumb money in the Berkshire options market when they joined the S&P500, and I'm not sure that'll be repeated in 2011. Traders also seem to think that IJS is going to rise another 5% in the next six months... I'm skeptical. If volatility picks up in the next few months then we'll sell some more options-- and perhaps take a few percent more cash off the table for whatever buying opportunities may come our way.

 

[Midpack]

$50,003, over budget, but a small fraction of income so we still qualify for LBYM status.

And I just sold our boat (our highest expense - more than home, car, entertainment, utilities, etc.), so 2011 will be much lower...

Whatever you do, don't buy a boat.

 

[ScottFromUtah]

2 adults...no debt....retired.

$39,942.00....84% essential...16% discretionary/sin

Under budget by about $2,000. Hmmm...I only take 3% of the portfolio...I have quite the cushion for sin.

I deeply admire you and the others on this forum who can live on that amount. You are my heroes.

 

[REWahoo]

I deeply admire you and the others on this forum who can live on that amount. You are my heroes.

I think everyone should remember this isn't golf - the lowest number doesn't win.

 

[73ss454]

I think everyone should remember this isn't golf - the lowest number doesn't win.

DW will be relieved to hear that.

 

[Alan]

Target excl. taxes was $73,200, actual was $80,979.

I haven't tracked it by category.

 

[aaronc879]

I think everyone should remember this isn't golf - the lowest number doesn't win.

Darn, I thought I might actually win something

 

[Aiming_4_55]

Wow - I'm in MN, I don't believe I can get by on 3x your spend. Good job!

2010 was the first year I tracked all spending for the full year. I spent $11,974. I know i've had some years that were less and don't think i've ever topped $15,000.