2016 Spending

[FUEGO]

I was aiming for $40,000 this year and came very close at $39,000.
2014 spending: $34,400
2015 spending: $23,800

I'm trying to spend more when we can find something valuable to spend on, just coming up short We're at a 2.6% withdrawal rate right now and I'm totally comfortable with 3.0-3.25%. And there's the side hustle income that covers most of our spending (haven't actually sold anything from my investment portfolio during retirement - just spending dividends and side hustle $ and still maxing a solo 401k and IRAs).

For our $39,000, we managed to go on three cruises and a 3.5 week road trip through the US and Canada, pay for 9 weeks of lodging in Europe for 2017, buy a new used minivan, buy 2 new laptops, and take care of several plumbing issues. And eat and be merry too of course.

 

[FireBug]

How was your year? Did you stay in budget?


My kid is getting married. Nuff Said?
(it's ALL good)

 

[bclover]

I don't have a budget per se. I have an idea of what I think is OK to spend, and what is not. And, I have non-rigid spending goals.

My spending was 2.22% of my portfolio, and also less than my 2016 dividends. Unless a meteor lands on my house in the next two days, I managed to meet my spending goals.

After buying a house in 2015, I was trying really hard to cut back on spending this year. I had a total for 2015 that didn't include the house buy/sell/move spending, and was about average for my spending. I was pleased to discover that my 2016 totals in every category below were smaller than in 2015.... except for that I had to replace my entire HVAC system. You can't win, right? So I cut back on everything else to try to make up for it, and I did so I am very happy about that.

Preliminary totals for every category except income tax and medical (which would make the total much, much larger!):

Category|Total for 2016|Comments
Groceries|$2,338.41|Includes toiletries, detergent, etc.
Restaurants|$3,206.87|lunch every day plus some dinners
Gasoline|$359.39|I live in an inner suburb, and everything is close by.
Car|$1,644.59|insurance, maintenance, registration
House|$13,197.57|insurance (homeowners', wind-and-hail, and flood), prop. tax, mowing, brand new entire HVAC system except the ductwork
Utilities|$3391.11|internet, nat. gas, electricity, water, trash, sewage, cell
Fitness|$632.85|gym fees, weightwatchers
Clothes|$127.92|casual "retiree wear"
Miscellaneous|$1849.05|Gifts, iPad, furniture, etc
Video Games, apps|$150.91|
Total|$26,898.64| plus income tax and medical

.
I think that my spending has finally stabilized after my house purchase, sale, and move. So now I can relax a little about that.

And finally, I should add that my HVAC system works like a dream so it was a good purchase. I knew it was 25 years old and needed to be replaced, but had just thought it might last another year before I had to replace it. Oh well, guess that was magical thinking (if I really, really WANT it to keep working, then maybe it will, and so on).


I will update this post after the end of the year.

OMG W2, lol I am so jealous of your grocery bill. I have young adult sons and I think that was my gatorade bill for the year.
Last summer my youngest who plays football went on this protein/trying to build lean muscle kick so he was eating 1/2 dozen eggs at a time grrrr told the boy to buy a hen. I'm determined to get it down to 6k this year.

 

[athena53]

A lot better than last year. Last year we'd downsized and weren't able to borrow what we wanted (the rest had to come out of investments), spent more than expected to fix up the old house and make changes to the new house and THEN the HVAC in the new house had to be replaced (it was 30 years old but we'd hoped to wait).

This year the only major surprise was the AC part of the HVAC (had replaced the heating system in late 2015). Travel well below budget because we'd paid for a trip to Iceland and when both DH and my mother were diagnosed with terminal cancer we cancelled it and got nearly all of the $$ back. I've already used the refunds to book a trip to Central America in April but we still didn't incur all the additional expenses beyond prepaid airfare and lodgings that we would have if we'd actually made the trip. Overall we spent $7K less on travel this year. We spent $300 in total on clothes!

Average annual withdrawal rate since my retirement is still under 4% since my retirement 2.5 years ago and I'm not collecting SS yet, so I'm in decent shape. I really hope I'm done with house repairs and that I don't have any giant medical or dental expenses in 2017.

 

[Surewhitey]

Surprisingly, we were perfectly on track when you take out one-time expenses at just over $3k / month.

Last year was just $300 less than this year overall, so we're pretty consistent.

Now that our remodel and "new" car is out of the one time expenses category, we should have a really good year, this year, baring a new roof or the like. I'm planning on an increase of $2-300 / month as DW's insurance is being discontinued in TX and will need to find replacement coverage. So far it's going to be at least $200 more...ouch!

 

[Meadbh]

A lot better than last year. Last year we'd downsized and weren't able to borrow what we wanted (the rest had to come out of investments), spent more than expected to fix up the old house and make changes to the new house and THEN the HVAC in the new house had to be replaced (it was 30 years old but we'd hoped to wait).

This year the only major surprise was the AC part of the HVAC (had replaced the heating system in late 2015). Travel well below budget because we'd paid for a trip to Iceland and when both DH and my mother were diagnosed with terminal cancer we cancelled it and got nearly all of the $$ back. I've already used the refunds to book a trip to Central America in April but we still didn't incur all the additional expenses beyond prepaid airfare and lodgings that we would have if we'd actually made the trip. Overall we spent $7K less on travel this year. We spent $300 in total on clothes!

Average annual withdrawal rate since my retirement is still under 4% since my retirement 2.5 years ago and I'm not collecting SS yet, so I'm in decent shape. I really hope I'm done with house repairs and that I don't have any giant medical or dental expenses in 2017.

I know you had a funeral to pay for.
Hopefully 2017 will be a better year for you.

 

[NW-Bound]

How was your year? Did you stay in budget?


My kid is getting married. Nuff Said?
(it's ALL good)

My daughter's wedding was last year too. The expenses in 2015 were as high as in 2014, which saw high medical costs and also major home repairs. Still way below what FIRECalc said was a safe amount, but I don't want to see myself spending that much each year. I have no second daughter, and if my homes keep costing me like that I will move into an RV.

 

[Teacher Terry]

Fuego: I have no clue how you can travel that much and spend so little with a family.

 

[scrabbler1]

I don't have a detailed budget I compare my actual spending to. But a quick, back-of-the-envelope comparison of my overall spending to what I sorta guessed it would be has me at about 6% over, due to two small, unexpected medical issues, each costing me $750-$800. My SWR will go back below 2% after last yea's spike to 2.5% due to my 12-day hospital stay.

 

[W2R]

OMG W2, lol I am so jealous of your grocery bill. I have young adult sons and I think that was my gatorade bill for the year.
Last summer my youngest who plays football went on this protein/trying to build lean muscle kick so he was eating 1/2 dozen eggs at a time grrrr told the boy to buy a hen. I'm determined to get it down to 6k this year.

Well, there is only one of me! And I am 68 years old, sedentary, always trying to cut back on eating to lose weight, and intentionally spending less in most categories this year. Also, notice that I eat lunch at restaurants and so the expense for them is in that category. I don't go to less expensive places for my groceries. Instead, for convenience, I shop at a nearby popular local store which has average prices, probably about like Krogers (which we don't have).

Believe me, I remember what it is like to have young adult men in the house. I had two big brothers who also played football (in high school), and I remember how much food they could demolish at dinner. Then they'd want seconds and thirds. What one of them would eat at one meal, would probably feed someone like me for a week.

 

[CardsFan]

First year in ER. I don't have a detailed budget, but had a spending target based on history, which is 72% of 100% success in Firecalc. Final spending for the year was 23% below target.

I think we suffered a little from first year jitters, but we did take three vacations, including an Alaskan cruise. Still trying to get DW to comprehend that we really CAN spend more in retirement than we did while working. Maybe a few more trips next year.

 

[Major Tom]

I don't really have a budget. I've been withdrawing the same dollar amount from my portfolio for the last 5 years, and continue to get by on that with no increases so far.

I normally spend ~17K/year but due to ~5K of dental expenses in 2016, my spend in 2016 was ~22K. All figures are ± a few hundred, as I'm too disorganized to come up with an exact figure This big dental expense didn't result in extra withdrawals from the portfolio, as I had already built up a buffer in my checking. The buffer is a little depleted now, so we'll see how that goes in 2017........

When I began withdrawals in 2011, the WR was very approximately 2.4% of my total stash at the time. Although the dollar amount of my withdrawal has remained the same, it now represents ~2% of the current portfolio value. I imagine that at some point in the next few years, I will increase the WR a little. I do have SS coming online in 9 years if I take it early.

 

[rodi]

OMG W2, lol I am so jealous of your grocery bill. I have young adult sons and I think that was my gatorade bill for the year.
Last summer my youngest who plays football went on this protein/trying to build lean muscle kick so he was eating 1/2 dozen eggs at a time grrrr told the boy to buy a hen. I'm determined to get it down to 6k this year.

With a 14 year old and 16 year old in the house our grocery bill (which includes pretty much everything purchased at costco - including booze, toilet paper, pet food, some clothes) was over $12k.

But we cook at home and only eat out 1-2 meals a month.

I noticed a big uptick in grocery bills when the boys started playing water polo....

We do eggs a lot - but they're relatively cheap.

 

[athena53]

I know you had a funeral to pay for.

Hopefully 2017 will be a better year for you.

Thanks, but that was/will be pretty modest. DH was cremated and the funeral will be in a couple of weeks- wanted to give DS and DDIL some time after the birth of their new baby to make the 3-hour trip (she was born 11/29) and not have it over Christmas.

I'm splurging on soloists because music was important to us but the food afterwards, in true LBYM fashion, will be finger foods from Costco.

The worst was the local paper's charge for the obituary. It came to $450 for about 250 words!

 

[Bryan Barnfellow]

My wife and I create a very detailed (47 line items) budget for the entire year and have four quarterly finance meetings annually where we reconcile budgeted with actual spending and make mid-course adjustments as needed.

In our Q4 meeting this week, we found that we came within 300 Swiss Francs of our budgeted expenses. So, a small surplus. I complimented the finance director (her) and she praised the investment manager (me) over celebratory gin & tonics!

Yesterday we used some of our surplus to take the train to Milan for lunch and a visit to the Brera Art Museum. Just over the border from us--our closest "big city" option.

-BB

 

[Walt34]

We don't have much of an annual budget either, but we do use a monthly spreadsheet to track income/expenses. Spending is up this year because I started SS last spring so we opened the spigot a bit. DW's hobby is spoiling the grandnieces and grandnephews (well, maybe me a little too). We're still spending less than income because there will be expenses that we know are coming but don't know when, like a roof, furnace, car replacement, stuff like that.

 

[dm]

Last year was the first year I stopped keeping track of spending. I've been retired now for close to 10 years and I'm just watching the net worth now.

I'm guessing we spent about the same as usual as we didn't have any supprizes. And we generally don't do without.

 

[Tom52]

Here are our numbers with one day still to go in 2016:

Essential Expenses 2016
groceries $4,581.45
gasoline $1,170.97
gas/electric $1,720.23
water/sewer $574.60
cell phones $434.48
3 vehicle insurance $1,070.40
license plates/auto repairs $2,528.79
homeowner insurance $890.16
medical/dental/prescriptions $1,898.45
property tax $2,802.00
house maintenance $1,441.07
miscellaneous $3,550.00
income taxes paid $1,592.00
Total Essential Expenses 2016 $24,254.60

Discretionary Expenses 2016
entertainment $985.84
hair dresser $516.
cable TV $1,423.71
clothing $1,255.94
Christmas/birthdays $1,386.75
vacations/travel $7,735.57
yard maintenance* $13,071.64
Total Discretionary Expenses 2016 $26,375.50

Total Expenses 2016 $50,630.10

*yard maintenance is very high because it included a new John Deere garden tractor including snow blade, etc., which is approx. $10,600 of total. But we will probably spend this additional amount next year on longer snowbird vacation to Florida.

This is for two people living in Iowa and retired almost 3 years. We are both in fairly good health, with no mortgage or any loans. So far no pension, no social security, so living entirely off of invested assets. We do have ACA subsidies that kept HC costs very low. This spending represents about 1.7% of retirement investments. I just looked and our retirement investments at the end of 2016 are about $120,000 higher than at 2015 year end even after spending listed above.

We have a budget but it is very padded so we are not spending near the budgeted amount. This can and will change in the future with the need to replace vehicles and unexpected major health care expenses. For now, life is good so long as we keep our health. Happy New Year to you all!

 

[Just_Steve]

I don't have a budget but track spending vs income using finance works through my credit union. Seems I saved 13% of my pension income from the past year. Wow retired and still in accumulation mode. Very nice

 

[FUEGO]

We do eggs a lot - but they're relatively cheap.

That was my thought too. We go through phases and eat a lot of eggs from time to time but they're pretty cheap protein (.69-.99 per dozen large at Aldi or one sale at the grocery store or $1.00 for 18 medium size eggs at dollar tree).

 

[bradaz2488]

My actual WR was 1.95% for 2016. Plan was 2.35%. Did not do as many house projects this years. Vacations was the highest spend category, which may explain why house projects came in low this year ...

 

[NW-Bound]

Last year was the first year I stopped keeping track of spending. I've been retired now for close to 10 years and I'm just watching the net worth now...

Using Quicken, I cannot track my investments without also seeing the expenses.

Everything is downloaded from every account (except a few such as Treasury I-bonds), so it takes no work to see my expenses.

And I need to see the balance of my checking account, in order to replenish it every few weeks. My wife needs to see the credit card accounts to pay them off at the end of the month. And I want to see every activity in every account in order to spot fraudulent charges or transactions.

 

[FUEGO]

Fuego: I have no clue how you can travel that much and spend so little with a family.

Road trips are dirt cheap. Couple hundred in gas gets you a couple thousand miles in our minivan. Airbnbs are cheap (under $100/nt in our experience). Hotel reward points ($1500 worth of hotel rooms in Niagara Falls for 12000 Starwood preferred Guest points which equals half the pts you get with one Amex Starwood credit card bonus offer - also stayed free in Washington DC and Detroit for a few nights).

Groceries for 50-75% of the meals, budget dining for the rest (fast food if we're doing a driving day, Asian/Mexican/middle eastern if we're at a sit down restaurant - think we spent $30-40 for most meals - strong USD helped in Canada).

We found a lot of free/cheap museum and entertainment options (US Air force museum, Smithsonian Air n Space, Art Gallery of Ontario free night on Wednesdays IIRC, strolling and dining in Chinatown, swimming for the kids, hiking, exploring downtown area, exploring universities). I don't think we spent much on any admission fees. A few bucks on the "pay what you want" night at the Shoe Museum in Toronto (which was worth about what we paid for it).

Other than buying the minivan, it was pretty cheap (minivan goes under transportation, not travel expenses though it's 75%+ for travel/vacations at least in 2016).

For cruises, we're always trolling the prices for the dirt cheap deals and usually pay in the $25-40/nt range plus tax. Sometimes kids sail free. Mostly off season from September to February. We drive down to the ports, so we can snag last minute deals without worrying about airfare. And hotels if necessary are free using points (stayed in an unbelievable 2 BR suite with free breakfast for 6 in Jacksonville FL for 3,333 Starwood points / 10,000 Marriott Pts).

We also spend virtually nothing extra while on board (other than gratuities). Roll our own excursions, drink the free stuff and attend the loyalty welcome back cocktails for a stronger beverage or six. Dine at regular on board restaurants instead of premium places.

For our upcoming Europe trip I bought $5750 worth of airbnb gift cards for $4600 while they were on sale at 20% off. So not only will we be staying most places in Europe for around $80-120/nt on average, it'll actually be 20% less than that. And we'll have full kitchens so we can at least do simple meals at the apartment (think cereal/fruit/yogurt/bread for breakfast; occasional meat+veg or pasta for dinner; some take out meals instead of sit down dining (easier w/ kids!)).

Our Europe trip won't be cheap though. Much more expensive than our past trips to Canada and Mexico. I figure we can cover the remainder of the costs such as food and local transportation plus go on a cruise back here in the states within our $10,000 travel budget (unless I bump it up for 2017! ).

 

[RunningBum]

One of the few financial related things I hate doing is tracking a budget. I spent a lot of time coming up with a retirement budget to make sure I knew what I'd need/want and could safely retire, but I don't like specific tracking. I might buy something other than groceries at a grocery store, and I might buy groceries at a non-grocery store, for example. So I just total up what comes out of my checking account and credit cards and compare the total to my goal budget. If I'm under, no worries. So far I've only been a little over a couple years where I had large irregular expenses. I haven't entered December's numbers yet, but I think I'll be about 5% under this year.

 

[Dd852]

Our spending was 9% up on last year - some unplanned travel we had to do for family reasons plus unplanned house expenses blah blah blah. That's the bad news. The good news is that spending rate represents 2.97% of liquid assets so well within my safety limits! Maybe I won't be such a bear about bringing spending back down again... happy new year all