2019 Spending Summary and Analysis

[Markola]

Happy New Year, E-R Forum Community! Our 2019 spending was tracked through You Need A Budget (YNAB) and was in-bounds at $121,000 plus taxes. Our written financial plan is for a semi-retirement for about 7 years before full FIRE. DW is already in semi-retirement and I will be too by 2021. We use Vanguard/Flagship Professional Advisor Services, and their software says our plan is “98% On Track,” which makes me very happy. Replicating our Vanguard plan in Personal Capital Retirement Planner also gives a high success rate. They both take into account separately all the big components: Our general spending, travel, mortgage and health care spending projections, some house renovation we want to do this year and a new car in 2023. I know this is more of a DIY crowd but this system is working well for us as a couple. Now I just have to make it through 2020 on the final year of this job, which will involve some challenging psychology pretending to care gravely about stuff in meetings I’m already just not caring about as much anymore. Cheers!

 

[RobbieB]

Next year I hit Medicare and the 15 grand a year for insurance gets cut in half - woohoo!

 

[NW-Bound]

When I first started to track expenses to see if I could ER, it was so that I could convince myself that I would be OK with 4% WR.

When I saw that I could live within 4% WR, and on top of that I saw what would happen when certain expenses went away such as children's college tuition and other non-recurrent expenses, I understood how retirees spend less and less with time. Yep, it all falls into place.

It is also interesting to spot some trends, even after I assured myself that I could ER. For example, our grocery bills have been steadily declining. Do we really eat that much less as we age? Will we die of malnutrition?

 

[audreyh1]

When I got the glimmer of ER, I sure was glad I had over a decade of detailed expenses data in Quicken. It really allowed me to model future expenses and feel fairly confident about baseline expenses.

 

[RobbieB]

Tracking my pre-retirement expenses would have served no purpose. My post retirement spending is triple. And then some.

 

[street]

I do see benefits, that is for sure. Like I have said, many times here, I sometimes have wondered how I got where I did financially in life. The only thing I knew what to do was save everything I could through the years. I spent a lot of money of stuff I should not have but could, so I did. I can't imagine what things would of looked like now, if I hadn't. LOL
I'd be spending money like RobbieB. LOL Blow that dough!

 

[Dtail]

I still track and categorize my spending mainly because I have done it for about 20 years. We don't really budget per se. We spend what we want. But it does keep me mindful of how we spend our money and suggests areas where we could be more efficient.

For example, I noted that in 2019 our cable TV bill exceeded both our natural gas and electric bills. So I asked the young wife what she watches on TV (I don't watch at all) and the vast majority of it is Netflix or Amazon Prime. I did a little research, just bought an OTA antenna and will stop cable once I'm sure we can get adequate reception. I'm waiting for a nice day to go up on the roof.

From the other side of the coin, I do track all our expenses.
The reason is that the budget based on a variation of % of remaining portfolio concept does drive our spending for the year, not the other way around.
Thus for our living situation whereas we do not have pensions/SS covering all our expenses and are thus somewhat dependent on our portfolios, the budget is important.
Additionally, by tracking expenses, when there is a down year, it is much easier to calculate where to cut expenses.
Lastly, I just like doing it. Costs me 5 minutes a day.

 

[badatmath]

Thanks to this thread I realized about what I spent keeping my cat alive (chronic health issue). Not to say he is not worth it but he has more medical bills than I do!

 

[Kelor]

My 2019 expenses don't provide much value as so much of my spending was business related, but I did happen to notice that the lovely Mrs. spent $460 on Kindle books even with the $10.70 monthly free book subscription. She likes to read.

 

[ER2B]

Close to 100K including taxes - Fed and state. That includes taxes for Roth conversion - fed and state taxes on 80K. Married family of two, paid off house, no loans. 2018 was also close to 100K but we only did 18K Roth conversion. So, our spending dropped in 2019.

 

[Calico]

Thanks to this thread I realized about what I spent keeping my cat alive (chronic health issue). Not to say he is not worth it but he has more medical bills than I do!

I hear you! Since my cat's overnight stay at the emergency pet hospital last week I have spent (so far) $2,316. She is also worth it, but boy does it add up.

Your cat is lucky to have you as their person.

 

[Dd852]

Medical - including insurance 23% of spend (wife had dental work!!)
Travel 14% (biggest hobby)
“Household” 12% (catchall for everything from tools, computer stuff, sometimes miscategorised book and music spending)
Dining out (major hobby) 11%
Groceries 10%
Grooming (hair, cosmetics) 4%
Entertainment 4%
Clothing 3%

Those are the true major categories....

Total spend 3.1% of liquid assets... but subtracting out net rental income 2.6%. So I feel good. Obviously in the list above there’s a lot of discretionary spend plus there’s room in the withdrawal rate for any downturn or emergencies to come

 

[Dd852]

If I may ask to the ones itemizing every penny and categorizing to a specific account, why?
Not a criticism to you or what your method is, but how do you use that info each year and do you change what you are doing when you see the results?
My dad did this type of bookkeeping and I beleive, he did it more from habit and for fun to see where money went.

For me it is the weekly discipline of entering the numbers that provides the wake up I sometimes need “I spent what on Amazon this week” “We really ate out so much”? It allows us to make gentle course corrections if we feel things are out of whack. My wife is more compulsive — she has given herself a daily budget and she trues up each night, using surpluses to buy herself treats. I’ve said a million times that it’s only the big numbers that matter and she should buy whatever whenever as long as it “fits”, but she feels more comfortable with the habit of saving/reward. It works; it’s unnecessary but it’s harmless.

 

[swakyaby]

Year 2 of FIRE for 2 of us. Spent about $107K. The largest categories were:

Health insurance: $25,000
travel $22,000
Property tax $9,600
Groceries: $5,000
Dining out: $4,000
Utilities: $3,300

The total was a little more than I expected, and the health insurance kinda stung.

 

[gcgang]

Not sure what I spent, but I’ve got more $ than a year ago and one less year it has to last.

Think I should look for a way to blow the buildup before the market takes it away.

 

[socca]

For 2019, I had $13k budgeted to reserves for:

• A/C replacement
• roof replacement
• misc house repair/replacement
• car replacement
• car repair
• computer replacement
• dental - major
• medical deductible

I actually don't have a separate bucket of money labelled 'reserves', but conceptually it's important to account for non-periodic 'big-ticket' items.

BTW: I spent $4.4k in 2019 on food (both dining-in and dining-out). I don't deny myself anything food-wise, but don't have extravagant tastes.

 

[dm]

I don’t have detailed records, but looking over the credit card bills and our checkbook it looks like we spent around $150000. I’m 62 and the wife is 59. We both retired at 50, so 12 years in for me and 9 for the wife.

That’s a little more than a 4% withdrawal rate for us, but of coarse it was a good year and we splurged a bit.

I should work on keeping better track, i use to track everything like many here do. But after several years of ER I just got lazy and track my net worth instead.

 

[athena53]

As to the question about whether the results are "actionable", I'd say, largely "no". Useful, yes, for the documentation (when/what I paid for "X", so I can make a good judgement or know when it's time to pay again). But the fact that groceries went from 17% to 19% is more "gee wiz" than actionable.

I agree- I just look for major changes in category spending from year to year and drill down if necessary. Travel expenses doubled from 2018 to 2019, for example, but if I break my travel spending down to YEAR of travel, I can see that travel in 2019 is up 25% over travel in 2018. What happened this year is that I've already paid for an expensive trip I'm taking next year and put up a $750 deposit with my favorite cruise line which will probably be used in 2021.

I'm guessing that the rest of my travel in 2020 won't add up to what I spent for travel in 2019, or at least won't be up 25%. As long as I can keep my withdrawal rate at my target of 3.5% it doesn't matter.

 

[corn18]

I did a deeper dive into our 2019 spending and it isn't as terrible as it first appeared. 2020 will be all about living within our retirement budget so I can retire in 2022.

 

[teetee]

I don't have detailed spending breakdown (single, in early 40s, work full-time and remotely, renting cheaply, only did bugeting 3 out of 12 months in 2019).

Total annual spending for 2019 was $9000. Pre-tax saving rate is above 92%.

What surprised me is this my 2019 net worth growth equals 1.5x of my income. I know it is likely overvalued but my investment (mostly in total/sp500 index) had a very good year.

Then I took my car for inspection yesterday and it requires $2k of repair which means I am looking at $11k total spending in 2020 if everything in the next 363 days goes similarly to that in 2019.

 

[kgtest]

Taxes - 18.1%

Mortgage - 12.9%
Childcare - 11.8%

Insurance - 4.8%
Utilities - 1.9%
Fees - 1.8% OUCH (CC fee, interest chrg, appraisal fee etc)

With the other 49% of the budget we eat and save for the future...still accumulating

Getting rid of employment related taxes, Mortgage and ChildCare when we ER freeing up almost 1/3 of our current budget will allow room for Health Care premiums and college tuition for the kids.

FIRECalc says I can retire in 2031 with 100% success at 105-150k spending depending on which models I select.

Then, throughout the course of our lives our other legs of the stool kick-in providing 7 different "raises" throughout our ER journey, One at 65 with the Pension, one at 70 for my SS, one at 70 for DW SS, my RMD at 71, DW RMD at 71, My inheritance and DW inheritance.

Ahh, yes the plan is coming together nicely...esp after the 15yr Refi I snagged at 2.75% last summer. Whoop!

 

[GravitySucks]

I really don't see the point in tracking every nickel, even after reading the responses. No offense to those that do detailed budget tracking, just not my way.
I do a snap shot budget every couple years or if considering a change. I do watch overall cash flows but estimate most of the rest based on the snap shots and general reasoning.
Just doubt I'd make changes by noting something like my incidentals expenses are increasing higher than my overall inflation, better buy cheaper toilet paper. Easier to stay as frugal as reasonable all the time.

 

[teetee]

I really don't see the point in tracking every nickel, even after reading the responses. No offense to those that do detailed budget tracking, just not my way.

I think knowing where the money goes is a good practice to know which spending you can cut back.

If you are already frugal and mindful of every transaction, it is still a good practice to keep a record and know your spending habits.

My 2019 total spending was 9k and I still have room to cut back and I will need the monthly budget sheet to remind me which category of which month I need to work on.. it is like using the historic record to prioritize my to-do list in the future..

 

[Kelor]

Any thoughts on Full View what you would classify an allowance under? My wife and I give each other monthly allowances (basically transfers from the main account to our separate accounts), and would like to categorize them as allowances somewhere.

 

[mrfeh]

Any thoughts on Full View what you would classify an allowance under? My wife and I give each other monthly allowances (basically transfers from the main account to our separate accounts), and would like to categorize them as allowances somewhere.

Those are just transfers. Categorize what the money is actually spent on.