2019 Spending Summary and Analysis

[ATX78701]

Single, 50, still in a j*b.

After expenses for income taxes and 401k (I see 401k as an expense in my spreadsheet as it reduces my salary and income), my total for 2019 was $60,788.08. The biggest contributors were property tax at 32.84%, medical costs at 20.20% and entertainment (vacations, streaming service, and baseball tickets) at 9.74%. Because of the impact of property taxes I'm selling the home in 2020 to reduce housing costs and have more for the savings bucket.

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.

I'm an accountant. I track everything - even the $1.08 coffee daily from 7-11. Yes, it can be excessive on the front end, but now that my spreadsheet is setup and has 7 years worth of accurate data it's really not much trouble for me to continue to use. I enjoy numbers and Excel, and like your Dad, it's more a habit.

I like the spreadsheet over other applications because I can use it offline, I can easily modify it to my configuration, and I can create the charts and graphs that I like, and it keeps my Excel skills up to date since I still am in the j*b.

As I approach FIRE (hopefully class of 2021), managing to the penny has been very useful to see where I've had money spent that was unnecessary. Basically I update after I return to the house, or at a minimum I place the daily receipts on the computer for input the next time I sit down. Takes only a couple of minutes. Been great to catch errors from restaurants. Anecdote: there was one restaurant I frequented often, yet every time I went they acted like they didn't know me. My ego was hurt. I decided to see how much I had spent at the restaurant over the past few years using my spreadsheet and my autoupdating pivot table in excel. Turns out, I didn't eat there as much as i though...months would go by actually. So to them, I wasn't a frequent diner. Ego checked.

I did try Mint years and years ago. I basically put everything on credit cards and pay off in full every month. Mint was ornery back in the day and I found it difficult to back it show the correct data after it downloaded everything from credit cards and banks.

Thanks everyone for sharing their numbers. It's an interesting thread!

 

[RobbieB]

Spending for 2019 all inclusive including taxes was $218,959.

 

[Teacher Terry]

Street, we set a budget for certain items like groceries (400/month) and don’t exceed it. We buy very few clothes so don’t bother to break it down. Other than shoes , socks and undies we can go years without buying anything.

 

[cathy63]

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 many years, the categorizing was just a byproduct of using Quicken to download transactions from our financial institutions, which is something I started doing when automatic bill payments became widely available. At the time, I wanted to make sure the amounts were correct, payments were happening in a timely fashion, and there were no unexpected charges. Quicken just automatically categorized everything based on the credit card merchant codes or business names. When it seemed like we might really want to retire early I started paying attention to all this existing data I had and pulling reports to see how much we'd spent in the past and figure out how much we'd probably need to live on in retirement.

Now I just look at current data occasionally to see if I was right and feel pleased that everything is going well. If I found that we were way out of whack on our overall spending, then I'd do some replanning and figure out if we needed to make a change to how much we spend on discretionary items like hobbies, travel or home remodeling.

 

[NW-Bound]

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.

I only started to look at expenses in 2011, when I seriously thought about quitting work. I learned about the 4% WR rule-of-thumb, and wanted to know if my essential expenses fit within that.

I use Quicken to download transactions, so it does not take much effort, and it is done at the same time Quicken downloads my investing activities. I still want the classification to be as accurate as possible. For example, I do classify fuel expenses as for travel or just for normal errand driving, because I am curious to know how much gas I spent on the long RV treks to Nova Scotia or to Alaska.

However, I do not go out of the way to split an expense item. For example, a receipt at Costco is usually put all on groceries. If I buy booze at Costco, it's still grocery. However, a receipt at Total Wine has to be alcohol, obviously. If I buy a large item such as a TV at Costco, I may split the receipt so that I later can look to see when I bought that TV. I could have put the whole receipt which has other items on the TV price, but then it may cause me to scratch my head later thinking I was dumb and overpaid for that TV instead of buying it at Best Buy.

Quicken of course keeps track down to the penny, but when I look at the numbers, I only care to the hundreds, or the thousands. Generally I can relate only to the first two significant figures, and that's all I look for when reviewing the results.

I recently discovered some more serious errors in tracking. Quicken does not itemize the taxes withheld from IRA withdrawals as taxes or even expenses. They simply became "shrinkage" of the portfolio, just like a stock price drop. This has the effect of lowering my computed investment return, and I do not like that it shows lower than it already is.

 

[SumDay]

I recently discovered some more serious errors in tracking. Quicken does not itemize the taxes withheld from IRA withdrawals as taxes or even expenses. They simply became "shrinkage" of the portfolio, just like a stock price drop. This has the effect of lowering my computed investment return, and I do not like that it shows lower than it already is.

Ditto. I discovered this last year, and it drove me nuts. So, this year I decided to have ZERO withheld, just give it ALL to me, and I'll pay quarterly via EFTPS. It will make it easier for me to track via Quicken. And that's all that matters - keeping Quicken humming along and happy.

 

[24601NoMore]

How do people go about breakdown target, amazon, sam's club, costco spend, given that it's a hodgepodge of stuff?

Easy - Quicken's "Split" function. You enter the total amount and break it out across as many categories (Groceries, Household Goods, etc) as needed.

I do this since we buy a bunch of things at Kroger, Costco, etc that are not "groceries", and I prefer to know how much we actually spent on groceries vs groceries plus all the other stuff we buy at those stores. Ditto, Amazon and similar stores where the things we're buying on an order usually split across numerous spending categories.

This might be pretty 'fussy', but I also always break out Sales Tax, Shipping, etc also. That way, I know how much we are really spending on each category vs. the separate taxes and shipping costs that can also be added. It's really quite eye opening to see, for example, how much Sales Tax we pay in addition to all the other taxes..

 

[Jerry1]

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.

I don’t categorize every penny, but I have about twenty categories. That’s a little larger than necessary because I still have utilities broken out and not lumped into one category “utilities”. My main breakdown is between necessities and all other. That’s important because I feel it’s important to understand how little I could spend if things get crazy bad.

But to really answer your question, I use the exercise as a learning tool and I think it will lessen considerably over time. This early in my retirement, I’m still a little nervous as to whether I’ve considered all possible spending. Once I get about five years under my belt, I’ll probably just have a few categories. I also use the information to understand what’s changing. At year end, if something like healthcare is significantly different, I’ll want to take note of that and see if I need to adjust my budget. For example, when I go on Medicare, it my be significantly less than what I’m paying now. Comparing to my historical number, I’ll be able to see if it’s enough to cover the cost of a new Lexus or if I’ll have to stick with my Chevy’s.

It’s just information that helps me be more confident in my spending as I move into this phase of spend down versus accumulation.

 

[audreyh1]

I just have Quicken tell me. Quicken tracks and categorizes everything - I trained it years ago, and categories have barely changed over the past 10 years. We spend so little cash - most transactions are billpay or credit card charge, all downloaded into Quicken.

 

[cathy63]

I recently discovered some more serious errors in tracking. Quicken does not itemize the taxes withheld from IRA withdrawals as taxes or even expenses. They simply became "shrinkage" of the portfolio, just like a stock price drop. This has the effect of lowering my computed investment return, and I do not like that it shows lower than it already is.

That's interesting. I could see that your IRA custodian wouldn't be able to tell Quicken that part of the withdrawal was for taxes, but don't the transactions download something like this?

IRA account -$x
Checking account +$y

where $x-$y = taxes withheld

You can then just edit the IRA transaction to be a split where $x-$y is categorized as Tax:Fed and $y as a transfer to the checking account. If you customize your Spending report so that it includes your tax deferred accounts, then it will show the taxes as an expense. It won't show the $y amount on the report until you actually spend it, though if you wanted to you could go to the Advanced tab in the report customization dialog and select Transfers: Include all. I find including transfers just adds confusion in my case, but maybe it would do what you want.

 

[W2R]

I'm an accountant. I track everything - even the $1.08 coffee daily from 7-11. Yes, it can be excessive on the front end, but now that my spreadsheet is setup and has 7 years worth of accurate data it's really not much trouble for me to continue to use. I enjoy numbers and Excel, and like your Dad, it's more a habit.

I'm a retired physical oceanographer, not an accountant, but both of my brothers are CPA's. All three of us like computer modeling and playing in numerical data. And what better numerical data to analyze, than my very own spending records? My dear Frank is a retired engineer who enjoys this sort of thing and tracks his spending to the penny too. When he told me about it back in 2011, I thought that was a great idea and decided I would enjoy doing the same instead of tracking to the dollar as I had been doing. I do everything in Excel; I tried Quicken but for me Excel is so much more fun.

 

[karen1972]

So 2019 was on the high side but planned for. We moved Feb 2015, not sure if we would stay, sold most of our belongings, moved into a tiny town home, and finally at the end of last year decided to set down roots and buy a right sized home so 2019 included sale of tiny town home and expenses of settling in to new construction.

Expect next year to go back to $65k spending as our new normal.

*Book - BF published print book this year, hopefully will be long term side income with future items planned
*Home Maintenance - includes updating old town home to get it ready for sale, security system for new home
*Health - no ACA subsidy for either of us this year
*Personal - used chunk of proceeds from sale of town home to buy lots of new electronics and furniture and decor for the new home to make it ours. it was nice to splurge and settle in finally now that I'm comfortable our plan is working, replacing a few items I've missed over the last 5 years.

	YTD Total	Notes
Book	$7,608.17	Side gig, published first book this year
Mortgage	$17,141.36	mortgage, property tax, insurance
Utilities	$4,655.72	cell, water/sewer, gas/electricty, tv/internet, security
Home Maintenance	$4,855.61	HOA, ready house for sale
Grocery	$11,224.14	grocery, liquor, dining out, toiletries
Health	$14,646.17	premiums, out of pocket, deductibles
Auto	$5,398.96	property tax, insurance, fuel, repair, tolls
Personal	$16,229.15	clothes, electronics, décor,furniture, discretionary
Total expenses	$81,759.28

 

[karen1972]

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 believe, he did it more from habit and for fun to see where money went.

I use it for all kinds of things
- Tracking of when I last did something to budget for upcoming year (when did I last replace car tires, battery, appliances, etc)
- Making sure we split discretionary from necessity as being not married we share necessity but discretionary needs to come out of personal accounts so when we shop at a BJs for groceries if someone decides to buy headphones, that needs to be classified out and money transferred.
- I monitor trends to see are the cars getting too expensive to repair so I should plan on upgrading sooner, are utility rates going up, is it time to look for a new cable provider, did the changing out to all LED save us anything?
- I use it to save money. Looking back when prices seem out of whack, so when i see I a filter for $60 for the refrigerator and think didn't I spend $45 last time if I can find it in quicken I can see where I bought it or if my memory was just fuzzy. Thats how/why I bought TurboTax this year, I knew what the deal price should be from last year and when it went on sale this year, snagged it for even cheaper. These types of items are $10-15 a pop savings, its easy for that to add up to thousands over a year.
- I also use it to figure out who I used for certain services, I like that I can pull up all the carpet cleaners I used, what they did and I can call the right one for what I need them for (for example).

By categorizing everything its really easy to find and doesn't take time and since I enjoy the entering part and reports its no biggie to do.

 

[PatrickA5]

I use Quicken. I keep receipts and input them manually every few days. Takes maybe 5 minutes tops. I have been doing it for years.

We spent $265K this year. Yuck! Biggest expense was selling a house our DD was renting from us to her at a discount of $40K. We took the remaining proceeds ($80K and gave cash to our other 2 kids ($40K each) to even things up. Take out this $120K gift and my DS's college cost of $20K and we're down to a more reasonable go forward number of around $125K per year (once he's off the payroll). Hopefully, we'll be able to reduce this down to under $100K once we're fully retired.

 

[NW-Bound]

Ditto. I discovered this last year, and it drove me nuts. So, this year I decided to have ZERO withheld, just give it ALL to me, and I'll pay quarterly via EFTPS. It will make it easier for me to track via Quicken. And that's all that matters - keeping Quicken humming along and happy.

Yes, that went on for a couple of years before I noticed it. Drove me insane looking for it. Where did my money go? Well, it went where it was supposed to go, but there was nothing in Quicken to tell me of it.

Well, I am a bit lazy to make quarterly estimated payments, and rather pay via withholding.

I found a work-around as follows.

That's interesting. I could see that your IRA custodian wouldn't be able to tell Quicken that part of the withdrawal was for taxes, but don't the transactions download something like this?

IRA account -$x
Checking account +$y

where $x-$y = taxes withheld

You can then just edit the IRA transaction to be a split where $x-$y is categorized as Tax:Fed and $y as a transfer to the checking account. If you customize your Spending report so that it includes your tax deferred accounts, then it will show the taxes as an expense. It won't show the $y amount on the report until you actually spend it, though if you wanted to you could go to the Advanced tab in the report customization dialog and select Transfers: Include all. I find including transfers just adds confusion in my case, but maybe it would do what you want.

When I make a withdrawal, what my brokerage reports to Quicken is this:

$x for transfer to banking account
$y for fed tax
$z for state tax

The $x shows up in my checking account of course, but the $y and $z are transfers made into the void, and not shown as expenses. If they showed up as expenses, I would classify them correctly and be done.

So, I fixed this by entering two fictitious transfers to have $y and $z deposited into my checking account. Then, I entered two expenses to pay $y and $z, classified correctly as fed and state taxes. Now, everything looks right.

 

[sanfanciscotreat]

After receiving SS benefits, had to use 1.3% of investable assets to make ends meet, though I will admit the rope between the two ends was pretty long. Figured up on December 31 that we could spend 2X current budget till wife is 105 and still have sufficient cushion. We will have to buy some more real estate. Also, with the market gains in 2019, my IRA RMD will increase about 15% over last year, so more taxes to pay.

 

[grasshopper]

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.

I use Quicken so it really is easy. Each dog(4), cat(2), tortoise(2) has their own accounting line. This is strictly for when Ms G asks me how much the last dog dental cost, it will pop right up.

 

[NW-Bound]

^^^ Yes, I also use Quicken to record many things. For example, when I need to know the last time I bought new tires for my car, I just look at Quicken, expand the "Auto & Tranport: Service & Parts" category, then scroll through to find it.

For this to work, I usually spend a bit of time to type in a description for each item that needs it. Having the payee automatically listed by Quicken as "Discount Tire" is not enough. I also enter in "6 Michelin tires for RV", for example.

I don't bother to add "1 bag of chicken wings, 2 cans of tomato" to a grocery receipt.

 

[audreyh1]

Spending for 2019 all inclusive including taxes was $218,959.

Glad to hear it Robbie! Good on you for blowing that dough on good and important stuff!

 

[aja8888]

Spending for 2019 all inclusive including taxes was $218,959.

Hey Robbie,I would have figured you for at least $400K in spending in 2019 the way you were dropping the Large!

 

[audreyh1]

Hey Robbie,I would have figured you for at least $400K in spending in 2019 the way you were dropping the Large!

Hey, he’s efficient and really grabs the value when blowing that dough. I bet his taxes are a big chunk of it too.

 

[RobbieB]

Hehe, the size of the number surprised me! But there was a new car for wifey and a lot of home improvements and 3 travel expeditions. Next year is going to be high also. College expenses for step daughter, and finish up the home improvements.

 

[street]

Thanks for your explanations why you keep such great records. That all makes sense to me but I have never really liked working with numbers. My dad spent hours doing book work and records of everything financially. I never could understand why!

Thanks

RobbieB >>> if I spent that much I would have to be eating cat food. LOL

 

[Samething]

Spending $43039 for 2019. Single, MCOL paid off house and auto. That included @ $4300 for gifts and donations. Had a big vet bill in there too. Seems like there’s always something that comes up every year.
I retired at the end of May this year. Average monthly spend January-May=$2626. Average monthly spend June-December=$4273. More golfing and working on my house plus $400 COBRA.

 

[sengsational]

I'm not doing my numbers until later...I'm waiting until all the credit card statements and banking statements come-in and things are reconciled.

But on the topic of "why bother", my "excuse" is that before I did it, I'd wonder "where it all went". That was when I first got a real job out of college.

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.