2020 Spending Summary and Analysis

[SecondCor521]

But, doesn't that actually encourage Roth conversions by folks like me, with a large tIRA and only one heir?

I understand your point, but I don't think the "tax bump" will reduce conversions. I think it encourages them for folks with a large tIRA.

It wasn't my point originally. Someone else made it (bingybear I think?), and I was just explaining it to someone else who asked. And the original poster's point was from the POV of the beneficiary, not the original owner.

Yes, if you have a large tIRA and only one heir, it certainly could make sense to do Roth conversions to reduce the impact of that tax hump on that heir for those 10 years. It depends on a lot of factors, though, including your other assets, age and tax bracket of the heir, your health situation, your estate plans, whether you're married, etc.

 

[Out-to-Lunch]

and I was just explaining it to someone else who asked.

No good deed goes unpunished!


But thanks again.

 

[kaudrey]

Well, we did something unexpected and moved in October. So our expenses are completely out of whack - bought house in the farther-out suburbs/sold townhouse in crowded area. New house needed some new furniture, a Peleton, and some renovations. Having said this, the money we spent this year would have been spent in 2022 or 2023 originally, so we just moved up the timeline.

Of course, we spent less on travel and entertainment/eating out, as well as pet-sitting (since we didn't go anywhere)....the other categories were about the same as 2019.

 

[Midpack]

Things look very different during Roth conversions - year 2 of 7 for us. But the right thing for us to do long term IMO. Fed & State taxes have been as low as 5-8% of annual spending some years since I retired...

 

[geeky_grrl]

My spending was way down for last year - from 54,000 in 2019 to 33,000 for 2020. I had actually been thinking of increasing my spending in 2020 from prior years - 4 years into retirement I felt like I was past some of the SORR - but the world had different plans.

I think my 2021 spend will probably be pretty low as well, so 2022 may be a "blow that dough" year for me.

 

[meleana]

Our spending budget is just under $45,000 per year and we are pretty frugal and live simple. House is paid. Only eat out once or twice per month. We live in the Northeast so maybe that’s why. I dread when I go on Medicare this year and my health insurance premiums skyrocket from when I had my ACA plan with full subsidies.

 

[Dtail]

Our spending budget is just under $45,000 per year and we are pretty frugal and live simple. House is paid. Only eat out once or twice per month. We live in the Northeast so maybe that’s why. I dread when I go on Medicare this year and my health insurance premiums skyrocket from when I had my ACA plan with full subsidies.

I still have 4 years on the ACA if it lasts and will also be enduring an increase in changing to Medicare.

 

[Splash]

Spending returned to "normal" 3% withdrawal rate in 2020.

Spending was $50k higher in 2019 due to property purchase.

Used funds from reduced travel and entertainment expenses in 2020 to replace washer, dryer, roof and furnace.

 

[audreyh1]

This may or may not be helpful, but you are able to download EVERY THING YOU HAVE EVER BOUGHT at Amazon. It used to be much easier, but there is a workaround for it and it's not instant like it once was. I will warn you...if you order from there often and don't keep track, the results may be...ahem...surprising.

https://www.komando.com/how-tos/download-your-amazon-order-history/752778/

Yeah, it’s really cool. A few years ago I went and looked at my very first Amazon order, and I had ordered the book “The Millionaire Next Door“. Hah!

 

[NW-Bound]

I just looked up on Amazon my first ever purchase on March 31, 1997.

It's a book: Interfacing to the IBM Personal Computer, Lewis C. Eggebrecht.

I don't know when Amazon started to sell other than books, but all my purchases were books until my first non-book order in 2005.

 

[Sunset]

I record every expense every day, except on vacation. Takes a grand total of 5 minutes daily.

Same here, except I use a phone app called spending tracker, it's really quite convenient and I've stuck with it for years. It's free too. Because it's on my phone it takes me just a minute or less when I buy something each day.

Each month, I transfer over the category totals (groceries, restaurant, etc) to my own spreadsheet. This transfer effort takes about 5 minutes or less.

 

[Dtail]

Same here, except I use a phone app called spending tracker, it's really quite convenient and I've stuck with it for years. It's free too. Because it's on my phone it takes me just a minute or less when I buy something each day.

Each month, I transfer over the category totals (groceries, restaurant, etc) to my own spreadsheet. This transfer effort takes about 5 minutes or less.

I still use just the old fashioned spreadsheet. Are you concerned with any safety issues, if your phone gets lost?

 

[FANOFJESUS]

I still have 4 years on the ACA if it lasts and will also be enduring an increase in changing to Medicare.

Mine will also increase to Medicare but at $144 a month that is not bad. At least market sells will not make it go up under 87k. A much bigger cap for me.

 

[rjsob58]

I retired in 2017, but have tracking back over 20 years. There are some anomalies in my numbers since we:
a) bought a used car in 2019 and paid it off in 2020.
b) bought a second house in 2020 using equity in what was our primary house
c) Wife went back to work in 2019, so no more ACA plus dental and vision is mostly covered under her policy.
d) none of the utilities or taxes for 2nd house are included cause wife covers those from her income.
e) College is only housing & expenses (for 2). Tuition is pulled from 529s.

12	2017	2018	2019	2020
Monthly Average	$7,779	$9,278	$8,001	$8,824
EXPENSES	$93,346	$111,333	$96,013	$105,884
Auto	$296	$201	$8,788	$16,224
Auto:Fuel	$1,199	$2,005	$2,071	$1,398
Auto:Insurance	$2,396	$3,909	$2,762	$3,477
Auto:Service	$2,032	$2,387	$1,143	$1,826
Bank Charge	$95	$13	$0
Charity			$0	$40
Cigarettes	$2,522	$2,818	$2,980	$3,692
Clothing	$566	$714	$514	$53
College Costs	$300	$5,196	$6,188	$9,142
Dentist	$4,155	$3,932	$2,846	$0
Dining	$8,421	$6,198	$4,622	$2,900
Entertainment	$368	$2,160	$1,990	$1,193
Gifts Given	$931	$1,790	$612	$2,388
Groceries	$9,080	$6,480	$4,157	$3,141
Health & Fitness		$1,391	$0	$79
Home Repair	$253	$670	$1,277	$3,599
Household	$10,132	$9,616	$7,750	$7,578
Household:Furniture	$85	$55	$332	$1,425
HouseholdC HW/SW	$114	$508	$588	$114
Housing	$21,245	$21,336	$21,829	$30,841
Long Term Care		$248	$248	$248
Medical ACA		$5,217	$4,640
Medicaloctor	$4,489	$3,593	$496	$1,026
Medical:Eyewear	$656		$286
Medical:Medicine	$1,717	$243	$487	$162
Misc	$740	$563	$0
Pet	$2,582	$4,191	$4,347	$3,391
Recreation	$3,434	$216	$0
School	$3,234	$2,378	$0
Shopping	$30		$697	$125
Tax	$496	$10,950	$2,210	$3,030
Telephone	37.73	$97	$0
Telephone:Cell Phone	$1,554	$1,008	$1,186	$1,004
Utilities:Cable TV	$2,061	$2,231	$1,978	$1,857
Utilities:Gas & Electric	$2,265	$2,895	$2,534	$2,298
Utilities:Water	$491	$763	$642	$899
Vacation	$5,370	$5,359	$5,812	$1,549

 

[Out-to-Lunch]

I just looked up on Amazon my first ever purchase on March 31, 1997.

It's a book: Interfacing to the IBM Personal Computer, Lewis C. Eggebrecht.

I don't know when Amazon started to sell other than books, but all my purchases were books until my first non-book order in 2005.

Just looked my history over. It was all books (& and few albums) from 1999 to 2009, when I started buying goods.

What struck me forcefully was that, in the beginning, all of my books were FOR work. Then, in 2007, I started buying finance and investment books that would eventually lead to my LEAVING work!

 

[sengsational]

Woo-Hoo, Blow That Dough! But since half of that was landscaping and sheds, not too bad at all.

My calculations are overly complicated because I wouldn't call spending on home improvements 'real' spending...it's an investment in your real estate allocation But really, spending, in my methodology, is out-the-door, gone-gone, and even if I'm not going to "make" money on a home improvement (usually they only fetch 75% or so), I don't consider that "properly" blowing dough.

 

[RobbieB]

I agree. We're pretty much homebodies and this was an investment in making the yard look nice and be usable. The central valley has nice weather and we like outdoor cookery. Not to mention the yard was pretty much a dirt patch when we started.

I tried to grow grass a couple of times and didn't work so well, lotta shade here. So can be considered deferred upkeep. No more dirt yard!

 

[NW-Bound]

Ah, youse guys make it too complicated. I then would have to include the value of my homes in the Quicken data set, and then estimate how much my nice Trex deck adds to the value of my home, and the high-efficiency ACs and all that.

Too much work! I don't even enter RE values into Quicken. Homes are money pits to me, and money spent on them are expenses, not investments.

 

[RobbieB]

I'm not complicated at all. I looked up the spending from the B of A record and that's what I spent.

I don't track anything. I ain't got no spreadsheets, no quicken, no nothing.

I blew 200 grand last year. A high point so far. I'm happy it didn't come to more -

 

[tb001]

My calculations are overly complicated because I wouldn't call spending on home improvements 'real' spending...it's an investment in your real estate allocation But really, spending, in my methodology, is out-the-door, gone-gone, and even if I'm not going to "make" money on a home improvement (usually they only fetch 75% or so), I don't consider that "properly" blowing dough.

I don’t really consider home improvements real spending. I have an annual budget that includes an amount for home repair and improvements, but we’ve done a lot in the last year that I consider more ‘one time expenditures.’

I look at these big home improvement projects as purely optional and funded with ‘extra’ money. So when I calculate our success rate, I remove a chunk of savings that is dedicated to these projects. We still have some income coming in from DH, which isn’t necessary for our plan, so some of this gets allocated to projects.

But these are discretionary things, not need to dos. We probably spent about 4x our annual home improvement budget this year, and if we have another decent year of income, will do a few more projects that are ‘wants’ on a newish to us home. After we do those, anything else for the foreseeable future will be along the lines of the fridge going out or a small annual project and should be well within our normal budget.

Obviously this thinking only works as an exception, not a yearly occurrence!

 

[sengsational]

Ah, youse guys make it too complicated. I then would have to include the value of my homes in the Quicken data set, and then estimate how much my nice Trex deck adds to the value of my home, and the high-efficiency ACs and all that.

Too much work! I don't even enter RE values into Quicken. Homes are money pits to me, and money spent on them are expenses, not investments.

You're right that to "do it accurately" it would be too much work. For me, it's a conceptual thing. One of the things that's also too much work is to split mortgage payments (I have none now, but before). The interest portion is gone-gone, but the principle was just a transfer from an asset account to a liability account. On the "cash flow" it made a difference, but on the spending, the principle portion "didn't count". It's just a hobby, because there's no need to put such a fine point on it. My short stint as a financial analyst doomed me to think of these kinds of things

 

[FatBob]

My wife and I, 2020 spending was:

Home - $23,560.59
Food & Dining - $13,244.15
Shopping - $5,481.37
Auto & Transport - $4,938.37
Bills & Utilities - $3,213.47
Gifts & Donations - $2,084.60
Travel - $1,987.16
Health & Fitness - $1,022.80
Financial - $857.95
Taxes - $568.13
Fees & Charges - $430.03
Entertainment - $389.75
Business Services - $294.58
Personal Care - $70.75
Total - $58,143.70

I had budgeted around $50,000 for the year but overshot due to having daughter/boyfriend staying with us for 6 months due to COVID. Man, they can eat!!

 

[FANOFJESUS]

My wife and I, 2020 spending was:

Home - $23,560.59
Food & Dining - $13,244.15
Shopping - $5,481.37
Auto & Transport - $4,938.37
Bills & Utilities - $3,213.47
Gifts & Donations - $2,084.60
Travel - $1,987.16
Health & Fitness - $1,022.80
Financial - $857.95
Taxes - $568.13
Fees & Charges - $430.03
Entertainment - $389.75
Business Services - $294.58
Personal Care - $70.75
Total - $58,143.70

I had budgeted around $50,000 for the year but overshot due to having daughter/boyfriend staying with us for 6 months due to COVID. Man, they can eat!!

Just curious what is Financial?

 

[Sunset]

I still use just the old fashioned spreadsheet. Are you concerned with any safety issues, if your phone gets lost?

I would be concerned if my phone was lost, but mostly because it's used for the 2 factor authorization to accessing bank accounts and stock accounts.

My phone is password protected which stops the casual finder.

I am not worried if someone saw my spending, I already show it to people I know. I only track my spending not income. It does not automatically download anything, I enter each purchase myself. So no big secrets.

As I said I transfer the spending to a spreadsheet summary at the end of each month. About 30 possible categories, so possibly 30 numbers to enter. This allows me to add in my DW spending, and a few things I don't track in the app as they are already in the spreadsheet.

I do find the phone app super convenient. I really recommend it, it's free. I don't get a penny for recommending it either.

 

[FatBob]

Just curious what is Financial?

My accountant for financial services.