What doesn’t get measured doesn’t get managed – which led to doing a horrible job of tracking expenses until the end of the year. Some of the extra spending couldn’t be helped – like dad dying – but we’ve got a bunch of self-inflicted wounds. I know I said I’d reveal my FI number as my next post – but I needed to lay out our 2018 spending and 2019 budget to give some context. All I’ve got to say is – Blarg.
We had a 40ish% savings rate last year, which is great, but when you look at the hard numbers, our spending was much closer to Dumpster fire than the DadBodFIRE I’m aiming for. We might as well have just set a pile of cash on fire.
So let’s look at this year’s spending and then break down our budget for next year. But I’ll give a teaser: We plan on spending at least $17,000 less than last year (20% less), and that’s with some extra travel. We still won’t be lean, though. And we’ll probably save even more money than we indicate. I hope.
But what about…
Our expenses are (almost) completely listed here. Except…
- We don’t include the checks we stroke to the IRS.
- We don’t include our charitable giving.
- My cell phone plan and my trip to FinCon. (They are paid by my LLC, along with website fees, etc.)
- Savings for children’s college funds. While we don’t include these here as expenses (you can find them as part of our savings rates), we include them as part of our calculations for Financial Freedom, because we will be contributing to our kids’ Florida Prepaid College accounts monthly until they are each 18.
And what you will see:
- We have three kids, one of which is a newborn. And with two of us working and no family living in town to offer child care, there is no Child-care hacking (but we do get lots of points on my Southwest card).
- We still have a mortgage and do not intend on paying off early.
- A bunch of detail. There is probably waaay too much detail here. This post is a voyeur’s dream.
A note about Travel Hacking
Some travel/vacation numbers are smaller than they might otherwise be, since we use credit cards to lower our travel expenses – The Southwest credit card lowers our airfare burden; SPG AMEX saved us many hundreds of dollars in hotel costs, and a combination of Barclay Arrival+ and Citi Premier have helped pay for non-covered hotel fees and for meals on trips. (These are NOT affiliate links, but we highly recommend them).
Managing and measuring
I love Personal Capital (affiliate link – you get a gift card and I get a gift card if you link an IRA, 401k, etc.) for keeping track of our investments, but their expense tracking leaves something to be desired, namely: if I start tracking in the middle of the year, I can’t go back and manually add older transactions. Also, I can’t split transactions – so if I buy a birthday present and groceries off of Amazon, I can only choose ONE category to use. Hey Personal Capital – let’s join the late twentieth century in functionality, shall we? But it is free!
I have been experimenting with YNAB over the past two years (make that: I was really good about keeping up with this in 2017 but not so good in 2018. ERGO the Dumpster Fire) because I love the idea of giving all the dollars a job. But some months are naturally more spendy than others (i.e. a big trip to SAM’s club – there is no Costco nearby), and I find myself just adding extra money to the budget instead of switching money around, which really seems to defeat the purpose of the YNAB system, and that just makes me anxious.
Soooo I will say this. I love YNAB in the abstract; I really love how well they’ve executed their product, and it has done so much good for so many people. So while I’m finding that the software isn’t necessarily for me, I can’t recommend it highly enough for someone looking for a budgeting program. Now, it’s not free, which is something to consider, but they do offer a 34 day trial, and if you use my link, then you’ll get an additional month free (affiliate link). I think I am going to end up reverting to an old standby for spending tracking…
Mint (NOT an affiliate link). I used this to track spending AND investments back in the day (in the 90s it was Quicken – ahh, the days of totally manual transactions). Their investment tracking has been horrible for me, and their interface has been tweaked (not in a good way), but their track spending feature is functional AND free. I seem to do much better simply tracking spending, checking on the spending at the end of the month, seeing if the spending aligns with our values, and then correcting course. Did I mention Mint is free? And it allows me to do the things that Personal Capital doesn’t (split transactions and enter missing transactions because I was distracted and forgot to add a new travel hacking credit card.)
Time to peel off that bandaid…
Here is our overall spending by category, plus this year’s budget, in all of its glory. Gah:
|2018 actual||2019 budget|
|Health, Fitness, Medical||$5,050.30||$5,008.00|
|Just for Fun||$1,594.19||$725.00|
This post took much too long to write. It’s painful to look at. Nonetheless, let’s break this down by category, and talk about what our budget is for 2019. Let’s go…
|Mortgage||$11,850.12||$11,850.12||Principal and interest|
|Utilities||$2,692.74||$2,700.00||Electric, gas (furnace only), water, sewer, trash, storm water fees|
|Tree service||$2,125.00||$0.00||We took down two trees, one of which was threatening our foundation and one of which was tearing up our neighbor’s driveway (they paid part of the expense). We also thinned some trees out before hurricane season. Removal also paves the way for possible solar installation (and we can claw back 30% of this if we install this year through solar tax credit)|
|Home Updates||$1,705.34||$500.00||2018 included a new-to-us refrigerator (Lowe’s swap at 70%+ off)|
|Maintenance||$1,463.05||$520.00||2018: A new lawn mower and unexpected A/C maintenance call (sparking fuse box. Yikes). Also includes routine HVAC maintenance and carpet cleaning (we’re going 100% not-carpet in the next house)|
|Internet||$809.16||$720.00||I negotiate Internet price yearly. If I paid full price it would be nearly $1000|
|Pest Control||$663.52||$300.00||IN 2018 we paid 3 years of termite protection. And we’re in Florida, so we make sure the roaches stay out.|
|HOA Dues||$605.62||$600.00||Essentially, we are paying for our community pool.|
|Household Supplies (non-medical)||$2,675.08||$1,000.00||This was a catch all last year, so it’s artificially inflated. Also probably spent too much here.|
|Property Taxes||$2,938.32||$2,938.32||Our house is worth about $285k at the moment. Relatively high taxes|
|Furniture, home goods||$92.30||$500.00||We probably won’t spend this much, but we would like to put some pictures on the wall that include more than just our first child.|
Over half this category is principal, interest, and property taxes. Home insurance is included in the “Insurance” category. There are some items here that we just can’t get down all that much: HOA dues are fixed, and I have worked on making our home more energy efficient. Our water consumption is low – about 4,000 gallons per month, and I don’t water the grass. We don’t plan on cutting down any trees this year, nor do we plan on buying a refrigerator or lawn mower – expenses which inflated our spending.
We also hope that our air conditioner won’t almost catch on fire this year (that’s the wrong sort of FIRE). You’ll notice some categories that are wildly different (misc, household supplies, furniture/home goods) – we did a poor job of categorizing last year, and some of these almost certainly involve groceries, kids school supplies, cat supplies, etc.
|Daycare||$7,696.60||$6,000.00||Baby FRA will be staying at home this year, and FRA#2 will start VPK, which is partially paid by the state|
|After School Care||$1,897.00||$1,900.00||FRA#1’s after school care|
|Gymnastics||$1,595.00||$1,596.00||Two kids in gymnastics|
|Music Lessons||$1,447.44||$1,440.00||Our eldest takes piano lessons|
|Camp||$963.58||$1,500.00||Summer and spring break camps – Mrs FRA works over the summer, and public school and college don’t harmonize spring breaks.|
|Music class||$490.00||$340.00||Music and movement (Music Together) for FRA#2.|
|Swimming||$275.00||$640.00||We live in Florida. You may have noticed there is some water close by. Infant Swim Rescue (ISR) for the youngest this summer.|
|Clothing||$182.10||$180.00||Mostly hand-me-downs. The budget is primarily for shoes.|
|Clubs||$150.00||$150.00||In addition to after school care for FRA#1|
|Haircuts||$92.25||$100.00||I tried cutting their hair a few times. Ergo the line item.|
|Babysitting||$50.00||$100.00||Hope to eliminate this line item with trading babysitting with neighbors|
|School supplies||$38.98||$100.00||We didn’t track this well last year, so $100 seems more realistic. We also buy shared supplies to contribute to 1st grade class|
|Diapers||$0.00||$300.00||We have lots of diapers from a surprise baby shower, and maybe this will be less since we have washable diapers from FRA#2.|
|allowance||$0.00||$338.00||We will be trying John Lanza’s Art of Allowance ideas. He’s got a book but his appearance on the Good Dad Project Podcast is good enough to get started.|
With two working parents and no relatives living in town who are able to donate their time to watch our three kids, it’s no surprise that child care expenses dominate this category. But paying these fees allow us to earn much more income than if one parent stayed at home. We love our kids, but we could never be stay at home parents. Mad respect for those that do, AND who home school to boot. We can’t afford the cost of trips to the looney bin.
Mrs Fire Ready Aim will stay home all this year with our newborn, with some occasional help from my mother-in-law. In 2020 our youngest will start daycare, and our middle child will finish VPK and then start Kindergarten.
For the record, as of this writing (January 2019) – FRA#1 is 6.5, FRA#2 is 3.5, and Baby FRA is 7 weeks.
There are plenty of “wants” here, but we like that we are spending money on experiences. Our two eldest have gained confidence from gymnastics, and we think that music exposure and music lessons are important. Swim lessons (ISR for our infant) are non-negotiable here in Florida. Camp for our eldest last summer was a “must” since my wife taught over the summer (her choice) – the income far outweighed the additional cost. Camp this summer is not a must, but there is a sleep away camp that we feel will be an invaluable growing experience for our eldest.
|Eating out||$2,258.23||$1,540.00||Too much beer and too many forgotten lunches for me. Almost nothing for Mrs. FRA.|
|CSA||$900.00||$925.00||We are eating local, sustainable produce and eating with the seasons|
|School Lunch||$84.98||$50.00||Most lunches are packed at home. Lunch is (currently) free for all students in the district but we like homemade lunches better. We provide cash for an ice cream treat once per week|
Food purchased while on vacation is NOT included in these counts.
This will be the year of Aldi, Lucky’s, and our local green grocer who has amazing deals on bulk items. It’s way too easy to let this category slip. Eating out includes bar runs. I’ll be grabbing more six-packs for home-based hangouts this year. I’ll also be packing my lunch daily. The biggest savings though will be groceries. Last year we weren’t mindful and didn’t plan meals well.
This year we are planning better and also will be eating more legumes and vegetable-based proteins to save money, get more fiber, and tread lighter on the planet (shoutout to Blue Zones for inspiration). We get local, organic product 9 months per year from our CSA. We could probably do a little better just buying the produce from the store, but we guarantee that we eat with the seasons, and we support local, sustainable agriculture.
|Health Insurance||$2,160.00||$2,160.00||Covers a family of five. State of Florida has wonderful insurance for $180 per month (HMO or PPO – you choose)|
|Dental Insurance||$1,080.00||$1,080.00||Amazing – this is half the cost of health insurance with much lower benefits – but the cost of dental insurance is break even with out of pocket prophylaxis costs.|
|General Medical (copays, etc)||$538.45||$400.00||There’s a baby in 2018!|
|Drugs and Supplements||$481.45||$300.00||Prenatals, various medications, B12 and D-vitamin supplements, etc.|
|Dental expenses||$295.00||$200.00||Mrs FRA goes to an out of network dentist whom she trusts for some tricky dental issues.|
|Gym||$170.40||$300.00||Mrs FRA gets her Barre membership for free as an instructor; I pay to go the university gym|
|Vision Insurance||$168.00||$168.00||Covers myself and the kids – Mrs FRA still has perfect eyes|
|Massage||$118.00||$100.00||Carrying a baby is hell on the body|
|Eyecare||$39.00||$300.00||It’s time for new glasses this year|
We are amazingly fortunate with our health insurance. My wife is covered for free through her job, and for $180/month I cover the entire family with some of the best insurance you can find. That means my wife is double covered. How much did we pay to have a baby you might ask? $180 out of pocket. It’s hiding in the “General Medical” category. Also hiding there is a $95 trip to the ER when my face blew up in the middle of the night after an allergic reaction.
|Auto Maintenance Car Repair||$1,823.60||$1,800.00||Not bad for two cars, both at least 10 yers old|
|Gas||$1,697.00||$1,680.00||All of our immediate family is within two hours drive. And we see them often.|
|Tag||$330.11||$0.00||We paid for two years. Also includes re-titling vehicles into individual names for asset protection, per our estate lawyer|
|Work Parking pass||$192.00||$192.00||I have to drive often enough to justify a parking pass vs just paying for daily parking on the occasions I do drive (yes, I have to pay in order to hunt for parking at work. Some people pay > $1000 per year for a guaranteed spot)|
|Detailing||$140.00||$0.00||A once-every ten years expense|
|Sunpass Tolls||$105.00||$50.00||Driving in Orlando means you’re paying tolls (we don’t live in Orlando, but family does)|
We have a 2005 Rav4 and a 2009 Toyota Sienna, both owned outright. We have a trustworthy mechanic and we travel frequently to see our immediate families, all of whom are within a 2 hour radius. Most of my commuting (5 miles each way) is via bike. We don’t have any tag expenses this year because I paid for 2019 and 2020 renewals last fall. Detailing was a special treat for the wife. With two kids, its was a hot mess.
I bike 2000+ miles per year just to work, helping to stay in shape and save money on gas, repairs, and wear and tear. We spent $349.03 on bike tuneups, inner tubes, etc. last year, and plan on spending $75 this year.
My dad passed away this past year, as did my wife’s grandfather. We spent $3911.50 between these two events. We don’t plan on spending anything in this category this year.
These expenses include travel to my grandfather’s funeral, as well as two trips to see my dad – one a last minute flight in march to see him in the hospital, and the other a road trip when he was on his deathbed. This also includes various funeral expenses that were not covered by my dad’s funeral policy as well as shipping to get his papers and books back to Florida. Click here for my take on the funeral industry.
|Car Insurance||$1,505.00||$1,512.00||Seems high for 2005 and 2009 vehicles, but we can’t get it lower|
|Home Insurance||$1,162.00||$1,164.00||Includes $100k coverage in case of flooding.|
|Life Insurance||$515.00||$515.00||We carry a half million dollar policy on each of us|
|Umbrella Insurance||$325.00||$325.00||With our net worth approaching $1 million, umbrella|
|Computer & Camera insurance||$201.12||$204.00||I need to decide if this is really worth it – covers two Macbook Pros and a DSLR with a bunch of lenses.|
|Jewelry Insurance||$58.00||$60.00||Wedding ring|
Why did I include some insurance here and not other places? Man, I have no idea. The only insurances I’m on the fence about keeping are the jewelry insurance and computer and camera insurance. Car insurance is as cheap as we’re going to get it (I shop around every year), and I cut my home insurance costs in half a few years ago switching from State Farm to Progressive (AND I added some flood insurance).
I could get cheaper home insurance by going with a Florida-only company, but many Florida-only companies are undercapitalized in the face of a big storm (in my opinion), and I don’t want to wait for the state (which backs up Florida insurance companies) to find the money to stroke that check for repairs after a big storm. Also, my hurricane deductible is less than my regular deductible, which is unheard of among most insurance companies.
|travel – General||$2,408.29||$4,300.00|
Last year we took a 10 day road trip to GA and NC, and this year we will be traveling to SC for my brother in law’s wedding. I will have a gentlemen’s weekend (we crash on sofas and hit the local breweries) and my wife will take some time with her sister for a girl’s weekend. We are also planning on spending a week in the mountains with friends. Last year we went to Disney and Busch Gardens, and this year we have just Busch Gardens passes. We offset a bunch of travel spending last year with Citi Premier and Barclay Arrival + cards. We hope to offset some of our budgeted spending with SPG points and airline frequent flyer miles. I suspect that our actual spending will be less than what we estimate.
|computer||$1,552.99||$0.00||Our 2011 Macbook Pro wasn’t working well anymore|
|Wireless||$977.25||$420.00||We bought new cell phones this year after both of ours got old and died.|
We bought a new-to-us Macbook Pro last year, as well as a 4TB drive for Time Machine backups (ever lose your hard drive content due to total HD failure? Sucks, sucks, sucks). The 2011 Macbook Pro had just become too unreliable. It still runs…but it’s quirky. We upgraded my wife’s iPhone 5s to an iPhone 7 (used from Decluttr), and my 3 year old Moto X was upgraded to a Huawei Mate SE (meh).
The 2019 budget is for MRS FRA’s Cricket Wireless bill ($35/mo), but we will try Mint Mobile for three months, and if we like it, then the $35/month plan will go to $22/month. Mint Mobile (affiliate link) is my provider, which is paid by business. I am happy with it, and am paying by the year to get the lowest cost. I should have purchased the phone through the biz, but put it here instead. Sigh. (Mint Mobile – when you sign up through the link you get $15 off at your first renewal, and I get $15 off at my next renewal)
|Kid’s Gifts and Party expenses||$580.88||$600.00|
Holy cow, we spend so much money on Teacher gifts! And we won’t have it another way. As a former teacher (with the terrible salary that attended), I know how far a gift card to the grocery store can go, and it’s even more so for our wonderful but woefully underpaid preschool teachers. We give all the kids’ teachers gift cards at Christmas and end of the year, and we buy lunch for the preschool teachers before Christmas. I feel like our spending for kid’s gifts and parties is pretty reasonable; the “gifts” category includes gifts to each other (rare), wedding gifts, and gifts to our nieces, nephews, and kids’ friends. Oh, and photo books for the grandparents.
Just for Fun
|Anniversary||$588.09||$100.00||We splurged for the ten year anniversary in 2018|
|AP Grading Food, drink, etc.||$569.22||$300.00||We grade AP exams. Great side hustle, but the cafeteria food is not great. Mrs FRA will stay home this year.|
|Parks pass||$61.83||$125.00||Florida Parks Pass for hiking|
We saw Paul Simon in concert and ate a fancy dinner for our 10th anniversary. We’ll stick to dinner this year. As an interesting side-hustle, MRS FIRE Ready Aim and I grade AP exams every year. We set aside money to pay for drinks and dinner…three square meals are provided daily, but we usually eat out for dinner.
|Mrs Haircut||$542.15||$540.00||Mrs FRA won’t let me try cutting or coloring her hair – almost certainly a sage decision|
|Clothing||$510.76||$200.00||We shop mostly at secondhand stores. This is for the adults’ clothing.|
|Name Change||$436.00||$200.00||This is one is weird…I paid court fees last year, and will pay additional filing fees this year, and pay to update my Passport|
|Mr Haircut||$18.00||$18.00||Mrs FRA cuts my hair – and does a fabulous job, even if she doesn’t think so|
The biggest expense here is Mrs FRA’s haircut. I offered to cut it and color it, but after watching me with the girls’ hair…we made the right decision. Also, we both hate shopping for clothes. The weirdest line item here is name change. I’m legally changing my legal name to…the same name that I’ve always used, except now it’ll be legal. Maybe that ought to be a separate blog post. I get my hair cut professionally about once per year now.
Last year was just plain out expensive. We had a diabetic cat who required insulin shots twice per day, and thus when we went out of town (e.g. for AP grading) we had to bring someone in to help. We did have to put the old girl down in the summer. We’re sad she left us at the ripe old age of 14, but now we have no more needles, no more insulin, no more monthly visits, and much less litter usage (did I mention she had kidney stones, bladder stones, and chronic kidney disease?) Our thirteen year old cat looks like she’ll live forever.
|Credit Card Yearly Fee||$472.00||$475.00||Mostly hotel and airline cards whose yearly fee is far less than the value we get from the FF miles, free baggage, or free nights in the hotel|
|Amazon Prime Membership||$49.91||$50.00||We save money (and time) by purchasing gifts and OTC drugs from Amazon|
We’ve been playing the credit card game for awhile, and we do let some cards carry fees from year to year, but we do get much more than the fees in value. As mentioned above, We may or may not keep YNAB.
OK, that was waaaay too much detail. But I hope this gives some insight how we spend our money. It’s been a great exercise for us, because even as I write this up and explain our thought processes, I have constantly been thinking “hmm, we could actually spend less here here and there…” Don’t be surprised if our spending comes in BELOW expectations. More money for IRAs!
How about you? How does your budget look? Fluffy like ours? Extra low like Mr Money Mustache? Tell us about it!