January 9, 2021
Let’s kick off 2021 by taking a look at how much the Strong Money household spent last year.
We’ll take a look at what categories went up, what went down, and how it all compares to last year.
This is now the third year of tracking our spending properly. It might sound odd, but before that, I just used to estimate. Running this blog has encouraged me to make sure I was walking the talk when it comes to frugality and knowing where your money goes.
If you’re new here and unaware, here’s some context around the numbers you’re about to see.
2020 was a pretty strange year to say the least. But our spending was roughly what I had expected it would be. After a few years of keeping track, our yearly spending seems to be hovering around $40,000 to $45,000.
For comparison, in 2018 we spent around $46,000. And in 2019, we somehow spent only $37,000. Check out the links for a full breakdown. Okay, here’s the full picture of spending this year compared to last.
|Food & Dining||$6,125||$4,947|
|Groceries (incl. alcohol, vitamins)||$4,701||$3,718|
|Rego, repairs, insurance||$1,204||$552|
|Medical / Health||$1,138||$1,390|
|Doctor, Physio, Dental, Massage||$679||$1,050|
|Pet (Insurance, Vet, Bulk Food)||$233||$1,038|
|Phone & Internet||$884||$569|
|Clothes & Accessories||$305||$180|
Some people love the numbers, while others’ eyes glaze over.
Here’s the same breakdown in pie-chart form. All expenses in the first chart, and the second chart is everything except rent (since it makes up such a huge portion).
As you can see, our spending went up by around $5,000. Having said that, 2019 was unusually low.
Overall, it was a blend of lifestyle inflation, a more average year and some random fluctuations. But here are my thoughts on our spending this year.
Groceries. Our food spend went up by about $20 per week! I drank more alcohol in 2020 (anyone else?), but not that much. I did notice prices went up for most of our groceries by about 10%, which accounts for some of it. That’s the first year of noticeable grocery inflation in the last 10 years.
Travel. As I wrote about a few months ago, we got our act together in 2020 and did a lovely little trip within WA with our dog. This is usually a yearly thing, so we’ll start planning the next one soon.
Electricity. Sadly, still only one provider here in WA. But on the plus side, the WA government gave each household a $600 energy credit, which saved us $200 in 2020 and $400 for this year. Thanks Mark McGowan!
Car. Our fuel costs are noticeably lower now after switching to a smaller, more efficient vehicle. Hoping to drive less in 2021. We also had to pay rego this year (last year we didn’t as we sold our old car just before it was due).
We also got third-party insurance, which turned out to be incredibly cheap. I hadn’t looked at this in many, many years. It turns out I was probably way overestimating the cost.
Pet. First full year with no pet insurance after cancelling last year. Premiums became nothing short of insane. Happy to take the risk and pay out of pocket.
Gifts. Somehow we spent double on gifts this year. I don’t think it was on ourselves, so I guess Mrs SMA was feeling more generous this year. I say that because she’s the gift person as I’m pretty much in the camp of ‘adults buying each other stuff on a pre-determined day is silly’.
It’s not about the money. I think buying people things should be random in nature. That’s true generosity and thoughtfulness. Not a planned event which is 100% expected and feels forced. But I digress…
Phone & Internet. We now have NBN internet with Aussie Broadband at $60 per month, which I needed for podcasting. Our old and slow pre-paid internet wasn’t gonna cut it! This also enabled us to downgrade our Kogan pre-paid to a cheaper plan. We’re very happy with both services.
If you’re considering switching to Aussie Broadband, you can get $50 credit when you mention my refer-a-friend code – 3103355 – while signing up. And full disclosure, I’ll also get $50 credit.
Other stuff. We also bought a bunch of exciting new objects this year. The first was a washing machine, since our old one died. The second is a new battery-powered lawnmower. And Mrs SMA also got a second-hand massage chair, as well as fancy pillows for her neck.
Our spending has now been around this level – under $50,000 – for the last 6-8 years. Before teaming up and getting serious about our finances, we spent way more. Probably more like $70,000+.
That was over a decade ago, which would be even more in today’s dollars. Funnily enough, we’re actually happier now, even though we’re spending much less. In fact, our lives are more enjoyable and meaningful because we have our freedom.
With a large portion of our happiness built on good health, relationships, and spending time doing things that feel worthwhile, there isn’t a whole lot of things you can go out and buy to ‘enhance’ your life.
Actually, I’d argue that if you’re thinking about quality of life in terms of yearly spending, you’ve already lost.
Yes, money can help with certain things. But ‘dollars spent’ is a terrible gauge for how fulfilling a life is. More often than not, the highest spenders are the least fulfilled people.
And that makes sense when you think about it. They feel something is missing, something could be better. So they chase consumer highs and experiences.
In contrast, if you feel satisfied with your life, you feel nothing is lacking. And without that feeling, the urge to spend money melts away. There are no emotional gaps to fill.
… Somehow these blogs (and my podcasts) always turn into a philosophical ramble!
We could spend a ton more in every category, but that would achieve little. We’re happy with our lives the way they are.
While typing this out, it becomes clear there is even plenty of fat to cut if we wanted to. The list of spending feels pretty bloated while typing it all out and thinking about what we actually need.
Being the person I am, I can’t help but want to optimise where I see potential for improvement. We could probably spend more in certain areas, less in others and still come out ahead with lower spending and more enjoyment if we made the effort.
The new year is a great time to re-focus and consider making tweaks in how we do things – whether it’s health, work, finances, you name it.
That’s enough from me. How was your spending in 2020?
Did COVID and lockdowns affect your spending? I’d love to hear about it. Let me know in the comments below…