2024 Strong Money Household Spending

As I’ve been doing since the start of this blog, let’s peel back the curtain and look at our household spending for last year.

Some of you are bound to read through it and think “is that all!”

While others will definitely be able to see the areas where there’s a lot of, say, padding 🙂

In fact, the sub-heading for this article should be Lifestyle Inflation Continues.

The aim with these posts is to give you a transparent look at how we live and what we spend.

So, how do things look now, after living through a supposed ‘cost of living crisis’ and ‘spiraling inflation’ for the last few years?

A reminder of our life situation

Before we get into the numbers, some context…

— We’re a couple living a semi-retired lifestyle after becoming financially independent in 2017.  We currently have no dependents, other than a couple of chickens.

— In 2022, we purchased an old house in Perth to live in and have since renovated it (which is finished now, thankfully!)

— We enjoy our free time, lead a very comfortable yet relatively simple life. We like spending time on our hobbies, being in nature, and going out for the odd coffee or bite to eat.

— Mrs SMA works 2 days per week in government admin.  I pretty much just do this stuff from home – blogs, podcasts, my book, and some investing articles over at Pearler.

— We do and buy whatever we need and anything else that seems worthwhile, without following any kind of budget.  There are no ‘allowances’ – it’s just freestyle spending and I tally it up later.

Okay, with all that said, let’s get into the numbers.

In our previous spending report, I revealed that our total for 2023 was $54,516.  So, how did we go in 2024?

Strong Money Household Spending 2024 vs 2023

You know what’s funny?

These numbers are almost as surprising to me as they might be to you.  Because even though I’ve been filling in the expenses during the year, I don’t really look or even try and guess what the totals are gonna be.

So when you say a category and go, “Hmm, that ones much higher/lower then last year” I’m doing the same 😂

And I must confess, there’s actually more to throw on top…

We also finished renovating the house, spending another… $35,000.  This included solar panels, a patio, carport, and converting an oversized laundry into a second bathroom, irrigation, and a new back fence.

Plus, the above figure is simply interest on our mortgage.  If you count principal, that adds another $8,000 or so.

Mortgage note:  People debate whether to count principal as an expense or saving. In reality, it’s both. The money doesn’t disappear like an expense. But it also must be paid from cashflow. Those dollars simply morph from cash/savings to become home equity.  So you’ll have to choose your own method of measurement.  

Anyway, that puts the total outflows for the year at just over $100,000, which feels insane if I’m being honest.  It was, by far, our most expensive year.

And holy shit – I nearly finished this post before remembering we also spent like $60k on a new car!  As a result, we didn’t invest much in 2024, which is slightly annoying.

The difference, of course, is that you don’t do these things every year.  And we wouldn’t have renovated this house or bought the car if it would affect our financial independence.  But still, it should be noted for completeness.

With a couple of tweaks, this could easily be brought to around $50,000.  Lots of places could be trimmed, but the two most obvious are food/dining and travel.  We could also quite easily rent out a room in this house to generate another $15,000.

Comments and excuses

A few thoughts and, um, ‘reasoning’ behind our expenses.

Housing:  Our home loan has been fully debt recycled, so this interest is tax deductible against our investment income, making it cheaper ‘after-tax’.  But it’s left here in total for completeness.  We also got some tree works done which explains the extra cost this year.

Food & Dining:  I always get comments around “how are your groceries SO LOW.”  Our grocery bill doesn’t seem to get higher since we’ve been doing more eating out, so it’s a simple category hack 😉  But in general, we rarely eat meat so that would have an impact.

Another thing that nobody seems to think about: we aren’t big people, at something like 65kg and 55kg.  People who are 20% bigger are probably going to spend 20% more on groceries – add in a bunch of meat and few other treats and you’re probably looking at 50% extra cost.

Travel:  This included a 12 day trip to Darwin (and an extra trip for Mrs SMA), a 10 day trip within WA, and 16 days in Thailand.  As most readers will know, we did mostly local trips with our dog until he passed away in mid 2023 (which I wrote about here).  So this category will increase as we deliberately do more travel.  We just went to Malaysia, and our next trip may be Japan.

Transport:  Cheaper now thanks to no petrol since March 2023.  Insurance is more expensive (full comp vs third party), but maintenance is zero so far.  Also got a speeding fine lol.

Utilities:  This is still low due to electricity credits from the local and federal government (though not as much as last year when we got triple the allowance due to a stroke of fortunate timing).

Miscellaneous:  No more cancer treatment for our dog (unfortunately).  The ‘Other’ category includes two passport renewals, and a new wardrobe for the spare room.  We also spent more on clothes and gifts this year, but not much else to write about in these categories.

By the way, if there are any areas you’d like more info on, let me know in the comments.  Hopefully I can remember what the expenses were for!

Our spending in perspective

Here’s a visual of the spending broken down by categories, which really highlights where the money is going…

I’m guessing quite a few household are shaped this way, even if the numbers are different.  Your personal expenses are likely going to come down to 3 things:

— Where you live
— What you eat
— The places you go

Put another way, a large part of your spending is driven by housing, food, travel and transport.  All are controllable to a certain degree as well.

Plus, one more that’s not showing up here – how many people are in your household AKA if you have kids or not.

This seems to be the 80/20 rule in full effect.

And just for fun, I decided to chart our spending over the years since I started officially recording it for this blog back in 2018…

If you want to see and hear more about what we got up to during 2024, I shared all that in the following articles, including our travels:

Looking Back on 7 Years of Freedom

Our Trip to Thailand

Results from the First Tesla Roadtrip

Lifestyle inflation

I’d like to take a moment to share how I think about our finances right now.

Having reached FI, our wealth has continued to grow and is now more than we need to sustain ourselves.  We also have part-time income which covers our spending, but is essentially ‘bonus money’.

So if there’s an extra $50,000 flowing in, would it matter if we spent $20,000 of that?  Well, no.  We’d still end up with $30,000 of bonus money after a year.

And $20,000 would be A LOT of extra spending money, for a couple who’s used to spending around $50,000 per year.  That’s like a $100,000 couple giving themselves an extra $40,000 – a huge boost in spending capacity.

The reason I say all this is to point out a few important things:

1-  Our expenses are not increasing primarily due to ‘inflation’ and ‘the cost of living’.   These are by design, and part of a conscious shift in how we’re choosing to live.

2-  I continue to see all of these expenses as controllable and adjustable.  I don’t consider my current spending as a new ‘baseline’ or minimum level for living a happy life.  That’s a weak and pampered mindset to operate with.

3-  We are spending more now because of the surplus described.  If our finances take a big hit and things aren’t so cushy, this spending could EASILY be ratcheted down and optimised.  I mean, when I look at it, things look extremely sloppy compared to how it could be 😅

4-  I would not be content with this level of spending if I was still having to work all week to pay for it.  I’d spend less on everything.  But as your situation improves, even after reaching FI, there’s nothing wrong with relaxing a bit and spending more.  In fact, I think it’s a healthy way to reward yourself.

I’m always at pains to say a version of this, because  I don’t want anyone to get the wrong idea.  But hopefully that gives you some context on the situation and how I think about this stuff.

As I’ve said before, your mindset needs to evolve as much as your finances do.  Or you’ll end up with millions of dollars and drowning in dividends, while you waste your mental energy worrying about which brand of rice to buy.

Final thoughts

As you can see, we’re essentially now optimising more for enjoyment than cost and deliberately choosing to spend more in some areas.

So, our costs are going up by design and choice, rather than helplessness and compulsion.

Well, that’s how I justify it anyway 😁

I hope that gives you a good idea of how we’re living our lives behind the scenes and what ‘retired’ life is looking like these days.

As for 2025, here’s how I can see our spending shaping up this year…

— Possibly more spent on travel, as we do a bit more exploring.

— Mortgage interest might go down if rates keep falling and as the balance goes down.

— No works on the house, or other big purchases.  I’m very happy about this actually – I’d much rather invest than spend more on the house.

How do you expect your spending to change this year?  Did you have an expensive 2024 like us, or was it more frugal?  Let me know in the comments.

Thanks for reading! 

Here are some resources you may find useful on your wealth building journey:

My book: After 5 years and hundreds of articles and podcasts, I’ve now distilled everything down into an easy to follow book.  Designed as a complete roadmap to achieving financial independence and retiring early in Australia.  Available in paperback, ebook, and audio.

Mortgage broker: My personal broker of 10 years is More Than Mortgages.  If you’d like help refinancing or getting the right loan for your needs, get in touch with MTM. They have fantastic reviews for a reason. I’ve worked with them for 10 years and they’ve been excellent.

Sharesight: A great portfolio tracking tool for share investors, and free for up to 10 holdings.  It tracks all dividends, franking credits and capital gains, which is incredibly helpful at tax time.  Saves me a lot of time and headache!

Just so you know, if you choose to use these resources, this blog may receive a financial benefit at no extra cost to you.  Thanks in advance if you do.  And to be clear, I only ever recommend things I use myself and genuinely believe in.