Eye popping spending and overwhelmed about how to cut down to a reasonable lifestyle

[Aerides]

I’m not picking on her, but I am curious. How many hours a week does your wife work, and what does she do on her days off? Do you have the nanny every day or only at times your wife is working?

Many of the services that you are paying for could be done by a non-employed partner. Heck, back when the kids were 2 and 4 years old, DH and I were each working full time and the only help we had was daycare (offsite, I did drop off and pick up) and a cleaning service every other week. I would think a spouse working part time could do the grocery shopping and make phone calls/answer emails.

I was thinking this too. OP said she works 1-2 days per week for about 20k per year, but she loves it - that's great.

But she has a full time nanny for the baby, the older is in pre-school, and she has a house cleaner (every 2 weeks), meals and groceries delivered, etc.

I bow to a Queen!

 

[pjigar]

I haven't seen anyone mention account aggregation in this thread. We had a similar issue (albeit on a half scale than yours) many years ago, my earning was rapidly going up but saving didn't go along.

I started using account aggregation service (many banks provide it for free and mint.com, etc.) from Bank of America. It pulled all transactions from all financial accounts and auto-categorized them. If something is categorized incorrectly then you can fix it and it learns. You can add/rename your own categories if you like.

This gave us 3 biggest metrics: Spending, Cashflow and Networth. I was able to clearly see where large chunks of expenses and small recurring expenses. How much money we are savings and how it is growing. We were able to rapidly trim down the expenses (5% annually) for several years in a row: Focused on waste and big ticket items first followed by smaller things that were not important to us. This also allowed us to plan for future "expense swapping" e.g. We traded big mortgage and property tax expenses to more travel, charitable and hobbies by moving to an acreage two year ago. Another intangible effect I observed personally: I "look at" category spending (monthly average FY) every month and it kind of pushes me to control the categories going out of control on-the-fly. Psychology of instant feedback is kind of hard to explain but it keeps me from doing frivolous spending.

I also download the categorized expenses and add them in an excel spreadsheet every month. I use pivot tables to create personalize YoY matrices. I have some business expenses on personal credit cards so the pivot tables also help me separate business vs personal expenses.

PS: I just checked my excel spreadsheet and realized we are still on the downward trajectory on expenses! Average 3% annual nominal reduction in expenses over last 7 years. If I account for inflation then I think we have been able to cut... cut... cut....

 

[target2019]

Yeah, definitely. And you know what's interesting, she initially got defensive and thought this was all punitive. It took some time to explain that I'm not trynig to act like a gatekeepr taking away her allowance but that we're partners in this and that we're the only 2 people spending money in this household so it's a WE issue for the future (even if the spending problem is a ME issue haha, the consequences are a WE issue). If we keep spending this way, I'll honestly never be able to retire and she definitely wants me aroudn more at the house and with the kids, so I think she's coming around.

My daily job involves smooth talking people and allaying fears all day, so it helps sometimes in my personal life too.

Now that I'm old and smarter, I would have approached it in this way. Cut off some subscription or expense that solely benefits me. Then start tracking, and start the conversation later.

I do read that you've put many things on hold, and that's a good idea.

As the children grow up, the march to more spending becomes rapid. So now is a good time to pause and make your joint goals. It's good that you've agreed to do just that.

 

[Gumby]

We have a very close friend who makes tons of money and also spends tons of money.

I can't tell you the number of times he's told us he's jealous of our life. I can't tell you the number of times I've tried to help him figure out how to spend less.

It's the same story over and over again.

Finally, he eventually mentioned how he grew up with minimal means, and being able to buy whatever he wants makes him feel like he's successful.

Until you dig deep you often can't understand WHY you spend more money than you think you really want to. And even if you understand it at some point, it often doesn't make any difference.

Perhaps this post will help you. However, perhaps it won't!

Our friend is still spending to oblivion. He's happy, though! I think. I hope! He's a great guy.

I was just reading back through the thread and came upon this very perceptive post. There's usually a reason our spending patterns are the way they are, and that reason is sometimes buried deep within us and is often a consequence of our early life experience. I can see very well your friend's attitude toward his spending.

Growing up poor, I always resented the fact that money, or rather the lack thereof, controlled every aspect of our lives - where and how we lived, what we wore, what we could do (or, mostly, not do) and what we ate. I especially hated that we could not buy certain foods at the grocery store because it was too expensive. When I thought about my future, I never wanted to be "rich", I just wanted to have enough money so that I did not need to know or care how much something cost at the grocery. And that carries through to this day. I don't care about expensive and fancy houses, cars, clothes, jewelry, or other possessions. But as long as I have been an adult, I have bought anything I want at the grocery. Lucky for me, my aspirations were so small that I could be satisfied with a trip down the produce aisle.

So, for the OP, you might want to give some consideration to what, if any, inner needs all your spending is trying to meet (of course, there could be none, and all your spending could be a rational choice). As Simple Girl suggests, if you know why you spend, you can better determine how you should spend.

 

[captain3d]

Wifey has a ‘no need to look at price at the grocery’ store rule for similar reasons. That is how we got to try $55 Manuka Honey.

 

[PatrickA5]

I was thinking this too. OP said she works 1-2 days per week for about 20k per year, but she loves it - that's great.

But she has a full time nanny for the baby, the older is in pre-school, and she has a house cleaner (every 2 weeks), meals and groceries delivered, etc.

I bow to a Queen!

I can see (maybe) having the nanny, house cleaner, groceries delivered, etc IF the wife was working full time in a high-paid job, but this seems excessive. What does the wife do when she's at home while the nanny is taking care of the kids, doing light housekeeping, etc? While, I agree with the Happy Wife, Happy Life saying, it appears that a lot of money is going towards the Happy Wife part.

But, having said that, I doubt she would agree to do away with any of these expenses - so you'll probably have to curtail spending other places.

 

[brett]

Our annual spending was never near that amount.

We have always shopped on value, not price.

We are retired and very financially independent. Even today we typically focus on our high spend items, especially recurring. Things like insurances, utilities, international travel with a view to maximizing value. In our experience we tend to end up spending less when we review and getting more.

We do not bother with the small stuff. The other area of our focus is investments. I am not about to spend a few hours analyzing how many cans of peas I bought or where I can get gas 2cent cheaper. I find spending that time on investments pays much better return.

We always considered placing money in savings/investments/retirement as a priority spend. No different that other household items. It simply became part of our spend, no different that a mortgage payment when we had one. Same for our childrens edu fund.

 

[cathy63]

We got the Every dollar app on both our phones, and agreed to daily check ins of what we've spent that day and why, and whether it's adding to our lives. Quicken per recommendations above, I'm enjoying learning it and playing around with it. DEFINITELY lots of low hanging fruit to go after with our expenses, it'll be fun to see how this all progresses in teh next year or so.



My biggest worry is that the initial burst of motivatio and energy will dissipate and we fall back to our old ways.

To keep the motivation going, try not to obsess too much or go too extreme. In your first post you set a goal of cutting spending by 66%, but that's a really big number and it's likely to be pretty painful if you try to do it all at once. Maybe start with 25% this year and then cut another 25% of what's left next year, and so on.

You have enough to enjoy some luxuries in your life and you should. Maybe right now that's a full-time nanny and grocery delivery but not a really splashy trip to the Caribbean for the whole extended family.

 

[ivinsfan]

We got the Every dollar app on both our phones, and agreed to daily check ins of what we've spent that day and why, and whether it's adding to our lives. Quicken per recommendations above, I'm enjoying learning it and playing around with it. DEFINITELY lots of low hanging fruit to go after with our expenses, it'll be fun to see how this all progresses in teh next year or so.



My biggest worry is that the initial burst of motivatio and energy will dissipate and we fall back to our old ways.

Reading your previous posts I have zero confidence this will actually happen. You've both been spending like drunken sailors...(no slam on sailors) but good luck. I'm still wavering as to if you are trolling here. All the services and things you list are literally the stuff of million dollar income households...


And in your early posts you indicated you had no idea where your money was going..do you pay all these people working for you with your CC cards? If not where is the CC spend going?

 

[Gumby]

..... You've both been spending like drunken sailors...(no slam on sailors) but good luck. ....

A brief aside about sailors, drunken or otherwise:

Sailors have traditionally been viewed as incapable of managing their own affairs and therefore treated as "wards of the admiralty court."

As the U.S. District Court for the District of Maine, in the case of Harden v. Gordon, 11 F. Cas. 480, at 485 (1823), observed:

"Every court should watch with jealousy an encroachment upon the rights of seamen, because they are unprotected and need counsel; because they are thoughtless and require indulgence; because they are credulous and complying; and are easily overreached. But courts of maritime law have been in the constant habit of extending towards them a peculiar, protecting favor and guardianship. They are emphatically the wards of the admiralty; and though not technically incapable of entering into a valid contract, they are treated in the same manner, as courts of equity are accustomed to treat young heirs, dealing with their expectancies, wards with their guardians, and cestuis que trust with their trustees. They are considered as placed under the dominion and influence of men, who have naturally acquired a mastery over them; and as they have little of the foresight and caution belonging to persons trained in other pursuits of life, the most rigid scrutiny is instituted into the terms of every contract in which they engage."

 

[iloveyoga]

Our annual spending was never near that amount.

We have always shopped on value, not price.

We are retired and very financially independent. Even today we typically focus on our high spend items, especially recurring. Things like insurances, utilities, international travel with a view to maximizing value. In our experience we tend to end up spending less when we review and getting more.

We do not bother with the small stuff. The other area of our focus is investments. I am not about to spend a few hours analyzing how many cans of peas I bought or where I can get gas 2cent cheaper. I find spending that time on investments pays much better return.

We always considered placing money in savings/investments/retirement as a priority spend. No different that other household items. It simply became part of our spend, no different that a mortgage payment when we had one. Same for our childrens edu fund.

Well said! Especially about the small stuff and investments.

 

[RetiredHappy]

You remind me of how much we spent while we were working and how much we still spend. The big difference is that we both had very stressful jobs and our biggest expense while we were working was eating out. We ate out every meal except for breakfast. We made alot of money and were spending more than $300K per year, with no mortgage. We did spend about $30K a year on travel, which we continued to work remotely while we vacationed. We also did not have all the concierge-type services which you have because we made our own travel arrangements and handled our own email correspondence. I do agree with the observation that your wife is not working or making much and should be doing more of the stuff that you are paying others to do.

Now that we are retired, we spend about $210K a year, and about $60K of that on vacation and country club membership. We figure we have another 8 years or so of travel before we stay put as we get older and that cost will come down.

I believe you need to look at the problem in reverse. How much do you budget as your retirement expenses and when? The budget needs to be realistic. With the budget, you should figure out how much savings that you will need, and how long you need to keep working to get there, without changing your current lifestyle. If it won't get there soon enough, then how much paring down is needed on your current expenses.

 

[W2R]

A brief aside about sailors, drunken or otherwise:

Sailors have traditionally been viewed as incapable of managing their own affairs and therefore treated as "wards of the admiralty court."

As the U.S. District Court for the District of Maine, in the case of Harden v. Gordon, 11 F. Cas. 480, at 485 (1823), observed:

"Every court should watch with jealousy an encroachment upon the rights of seamen, because they are unprotected and need counsel; because they are thoughtless and require indulgence; because they are credulous and complying; and are easily overreached. But courts of maritime law have been in the constant habit of extending towards them a peculiar, protecting favor and guardianship. They are emphatically the wards of the admiralty; and though not technically incapable of entering into a valid contract, they are treated in the same manner, as courts of equity are accustomed to treat young heirs, dealing with their expectancies, wards with their guardians, and cestuis que trust with their trustees. They are considered as placed under the dominion and influence of men, who have naturally acquired a mastery over them; and as they have little of the foresight and caution belonging to persons trained in other pursuits of life, the most rigid scrutiny is instituted into the terms of every contract in which they engage."

Well, I don't know about sailors in general, but my late ex was a sailor and he sure fit that description to a T. I guess it's just another way of viewing life. He was a wonderful man in most ways other than handling money (and drinking too much) so I don't regret having spent 23 years married to him. I just couldn't handle 24.

 

[ivinsfan]

You know Gumby, my departed father was a sailor until he saw the light and switched to the Army. just saying

 

[Gumby]

You know Gumby, my departed father was a sailor until he saw the light and switched to the Army. just saying

I was a sailor, and the descendent of sailors, including my father. My brother and cousin were also sailors. The best that can be said of any of us is that we really know how to swear.

 

[SecondAttempt]

I'm encouraged that your first thought was to have a sit-down with your wife. If she's not on board, it won't happen. If she can see the advantages of saving more (spending less) then half the battle is done.

Not picking on you specifically Koolau, just using your post to launch from.

I've seen a trend in this thread to blame the wife. I see no reason to make that assumption. I mentioned golf. If OP is a weekly golfer that could explain the credit card totals. I think having a sit down is great but lets not make assumptions about how it will come out. She may be a down to earth girl that does not need luxury travel.

I speak from experience. I do not spend wildly and never have. But I like to travel and like nice hotels. It's really my only indulgence. But my partners have never really cared about niceties so if there were such a discussion about outrageous spending, I would be the one needing to make sacrifices.

 

[NameTaken2]

Amazed that this thread is still rolling 10 days and 191 posts later.
OP's spending issues are obvious, ex: $2K guided tour of a zoo, services, etc etc.
Fixes are easy and obvious for this high income couple.

 

[aja8888]

Amazed that this thread is still rolling 10 days and 191 posts later.
OP's spending issues are obvious, ex: $2K guided tour of a zoo, services, etc etc.
Fixes are easy and obvious for this high income couple.

I didn't even know that zoos offered a $2 K guided tour service. That got my attention. Well, there must be a demand for that expensive service or the zoo wouldn't offer it. I must live in a different world!

 

[Ronstar]

I’d give up a lot of things listed if I was OP, but I’d keep the car detailing service.

 

[target2019]

At this point, the thread has a life of it's own. Glad to hear that OP and Spouse are sailing for more temperate shores.

 

[Markola]

Not picking on you specifically Koolau, just using your post to launch from.

I've seen a trend in this thread to blame the wife. I see no reason to make that assumption. I mentioned golf. If OP is a weekly golfer that could explain the credit card totals. I think having a sit down is great but lets not make assumptions about how it will come out. She may be a down to earth girl that does not need luxury travel.

I speak from experience. I do not spend wildly and never have. But I like to travel and like nice hotels. It's really my only indulgence. But my partners have never really cared about niceties so if there were such a discussion about outrageous spending, I would be the one needing to make sacrifices.

Having sit downs about money or expenses with my DW rarely works. Joint failure, equally shared. Over 35 years, the only strategy that’s gotten us on track is to have a financial planner, in our case at Vanguard, gather our joint assets, shared spending, shared and differing wants and needs, and then show us with numbers and charts and with professional neutrality, what is possible, not possible and what the future looks like given action or lack thereof at present. DW and I are now on the same page with our assigned CFP, “trusting the numbers,” as he says, and we actually both get most of what we want, without the damaging, unproductive couple power plays and dynamics inherent in money management. I thought I knew money but I learn as much as she does through the planning process and regular tuneups. We enjoy a LOT more financial peace than in the former DIY approach and this way is simply better for us. YMMV.

 

[Calico]

Not picking on you specifically Koolau, just using your post to launch from.

I've seen a trend in this thread to blame the wife. I see no reason to make that assumption. I mentioned golf. If OP is a weekly golfer that could explain the credit card totals. I think having a sit down is great but lets not make assumptions about how it will come out. She may be a down to earth girl that does not need luxury travel.

I speak from experience. I do not spend wildly and never have. But I like to travel and like nice hotels. It's really my only indulgence. But my partners have never really cared about niceties so if there were such a discussion about outrageous spending, I would be the one needing to make sacrifices.

I've seen it in this thread too, and it was annoying.

The OP (male) actually stated in one of his posts above that he is prone to impulse shopping, but the default in many of the replies still seems to be to assume the wife is the one with the spending problem. Some things never change.

 

[SunGuy]

Was just reading a new paper released on SSRN about this. Prices are crazy. At least it will help people eat healthier, buying less junk food and smaller portions.

 

[Unpaintedhuffhines]

Except 2 and 6 year olds are not expensive to feed. They don’t eat very much. And $500/month eating out on top of that, so the total food budget is $1700/month.

I don't see how you feed a family for LESS than $1,200/month, unless you are eating ramen 3x/week. We spend that for just the two of us, but admittedly that includes the wine we buy at the store.

 

[street]

Yeah, BFF was explaining to me one day how he juggled his bills. This one could slide a month. That one had a penalty, so had to be paid on time. Another one could be put on a CC which gave another month before he had to worry about paying the minimum, etc., etc. It made me dizzy thinking about it. I told him "I couldn't live like that." He just chuckled and said "I've been living like that most of my life."

I could not live that way either. I bet there are a lot that do.