Our Household Spending in 2022 (Full Breakdown)

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It’s the end of January already, and we’re now well and thoroughly into 2023.

About now is when most people give up on their new year’s resolution and go back to life as normal, forgetting they ever had the idea to eat better/make more money/start investing/etc 😅

But this post isn’t about the new year.  It’s about last year, and our personal spending.

As usual, I’ll unpack our household expenses for you all to see.

It’s not intended to be an example of what everyone should do.  Rather, I share these details because I know how many readers love to see what others in this space are doing their own money.

But before we begin, I’ll give a brief explainer of our situation to give some more context for what you’re about to see.

A reminder of our situation…

• We’re a semi-retired couple, with one dog, who left our full-time jobs after becoming financially independent back in 2017 (man, that sounds like a long time ago now!).
• Last year we purchased an old house in Perth to live in and have since renovated it (with some more works still to do).
• We enjoy our free time, living a very comfortable yet relatively simple life.  Travel is generally local WA trips, so we can take our dog with us!
• Mrs SMA works 2 days per week in government admin.  I do mostly writing type stuff from home, like this blog and investing articles over at Pearler.
• We’re not really into high-end fancy stuff.  We buy whatever we need and anything else that seems worthwhile, without following any kind of budget.

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

In our previous spending report, I revealed that our total for 2021 was $44,856.   So how did we go in 2022?

Strong Money Household Spending 2022 vs 2021

Whoa… this turned out to be a pretty expensive year!

Overall, it definitely felt like we were just doing whatever the hell we wanted the whole time.

It looks like a huge blowout at first.  But when you take away $10,000 of cancer treatment for our dog (including a small surgery), our spending was basically the same as last year.  Some categories went up, some went down.

And just so you know, we also spent around $10,000 renovating our 50 year old bathroom!  You can see the pics in this post.

But I don’t count renovation costs as part of our annual spending, because they were planned, expected and most importantly, built into our home-buying numbers and the decision around that.

Anything that’s not part of that will be included under the housing costs category, like any maintenance, repairs or minor improvements.

You might recall I also didn’t count the car purchase as an annual expense a few years back.  I find this to be a more accurate view of household spending.  Just as I wouldn’t say we made $10,000 of income if we sold it.

Now here’s a few more details and comments (excuses?) around certain categories so you get a better grasp on the numbers 😉

Comments

Rent/Mortgage:  Interest rates are way up from when we moved in, so I expect our interest bill to be bigger next year.  Luckily, this entire loan is tax-deductible as we bought the house with cash.  More details on that here.   I’ll still record the interest here as part of our household expenses, just because it would seem strange if I didn’t.

Housing costs:  This includes council rates, insurance, and things like various repairs, along with some plumbing and electrical work that needed doing.

Groceries/Cafes:  We take advantage of Flybuys Bonus points offers on a regular basis (eg. spend $50/week for 4 weeks, get 10,000 points, equal to $50).  These are gold!  We also get our groceries mostly delivered, saving time and cutting our driving and impulse buying (prices are generally the same).  We also get a bit of fresh produce from our own garden as well as the community garden near our house that Mrs SMA volunteers at.  Our café/restaurant spending continued its relentless rise upwards…  pretty sure it’s tripled since we retired! 😅

Car/Transport:  Mrs SMA drove to work more this year rather than getting public transport.  Mostly because it saves her time and is less hassle, but partly because she has to carry a bunch of stuff in with her sometimes.

Utilities:  We’ve now got a nice amount of electricity credit thanks to the WA government.  Funny story: we actually ended up with triple the credits, since we had 3 electricity accounts opened at the time it happened.  One for our rental, our newly purchase home we hadn’t moved into yet, and an investment property we were selling.  It was purely by coincidence and I was sure the credits wouldn’t transfer once we closed the other accounts, but they did!  Water went up because we’re no longer renting.  In case you weren’t aware, water usage is insanely cheap, but water rates are expensive.  The owner pays a hefty amount for the connection and maintenance of that water supply/infrastructure.

Other:  This includes all sorts like electronics, appliances, random spending, things for the house, etc.  This year we got a fancy new cordless stick vacuum which is surprisingly fun to use 😁  We also got a new washing machine, sofa bed, pullup bar, 2 sets of table/chairs, and a new phone (second hand) off Facebook marketplace.

Phone/Internet:  Both on Catch Connect for roughly $100/year, which I’ve found has been faster and more reliable than our old cheap provider Kogan.  Our internet is Aussie Broadband which we’ve been with for a couple of years, and our current $65/month plan is more than enough for us.

Travel:  No country trips this year as we got a little bit too busy with regular life.  First, moving into our new house and getting settled.  Mrs SMA then spent a lot of time planning out her gardens.  Then I didn’t want to be away during turtle hatching (and later, laying) season.  And of course, the book took up a decent chunk of time.  But we both did family trips, and we’re currently planning a trip at the moment somewhere in south-west WA.  We’ll do our normal thing and rent a pet-friendly house 🙂

Gifts:  We splashed out a bit more than we normally do on gifts this year for each other, and then we had some relatives stay with us for Christmas which meant more presents and spending in general.  By the way, I have no magic formular for dealing with birthdays and special occasions.  I just try to shift the focus away from buying each other shit we don’t need, and more towards spending time together or doing something nice.

Our spending in charts

Given housing is typically everyone’s biggest expense, removing it for a minute can give you a much better glimpse of where the rest of your money is going.

Even here, the Pet category is throwing things out a bit.  Aside from housing and food, our money is essentially spent in bits and pieces in lots of different places.  Few thousand here, few thousand there.

I should point out something: we could easily reduce most of these categories if the need arose.

In fact, if we were still working full-time and trying to reach FI, there’s no way in hell I’d be satisfied such sloppy spending.  I would be optimising the shit out of it!

I don’t use the term ‘sloppy’ to suggest it’s a high level of spending.  What I mean is how little thought and effort goes into our personal spending these days 😂

Maybe in a future post I’ll flesh out how I’d approach our income and expenses in a ‘start from scratch’ scenario.  Let me know if you’d find that interesting and I’ll bump it up the ideas list!

By the way, I don’t use any fancy software to track my spending.  Just a very simple spreadsheet with categories on one side and months across the other.  One day each week I take 5 minutes to check bank transactions and add them to the tally for whatever category they fit in.

I have recently been playing around with a spending tracker that Pearler is building.  It’s actually coming along quite well and I can see myself using that instead of my spreadsheet sooner or later.

Looking forward

Gazing into my crystal ball, it’s unlikely our spending is this high in 2023.

Our dog won’t be going through another round of chemo.  He’s actually had a small lump on his foot regrow, so he’s on some special tablets now.  But we opted against more surgery or chemo.

He’s very happy, and there’s no guarantee more surgery or chemo will do much.  And then he’d end up on these tablets anyway.  So we chose not to put him through that.  These tablets do seem to be working though, with the lump steadily disappearing in the first two weeks, so that’s a good sign.

Our housing costs will go up with increasing interest rates.  We’ll also do at least one country trip this year, maybe two if we are organised enough!

We’ll probably spend a bit more money on the house too.  Solar panels are on the cards (after our electricity credits run out), and we might get some work done on the exterior of the house.  Hmm, maybe it’ll be a more expensive year than I thought!

By the way, if you’re reading this and hungry for savings ideas, check out my content on the following categories:  Holidays.  Cars.  Food.  Phones.  Fitness.  Fun.  And of course, Housing (this article, and this podcast).

Final thoughts

Our spending may look high, low, or ‘about right’, depending on who you are and your own personal situation and tastes.

But therein lies an important point: there’s no set amount of spending which magically creates a happy life.  A good life is made not bought.

This also means there’s no set amount for what you need to retire.  It’s all personal choice.

It depends what you focus on, how you want to spend your time, and how you measure your existence.   You can have a happy (or miserable) high spending retirement, or a happy (or miserable) low spending retirement.  And there’s no rule that says you can’t switch from one to another at any time you like.

I know I’ve said all that before, but it’s worth repeating.  For some reason – probably clever advertising, lack of examples, and strongly held beliefs often created by advertising itself – we find that hard to believe.

Anyway, this is how we’re choosing to spend OUR retirement.  And that may change in any given year.  Which is the fantastic part of all this – being able to change anything at any time because your priorities change.

How was your spending in 2022 compared to the year before?  Did inflation have much effect, or did you manage to keep things steady?  Let me know in the comments.

Mortgages:  Interest rates have moved up a lot since this time last year.  So it’s worth looking around to see if you’re still getting a decent deal.

Negotiate with your bank to see what they’ll do for you.  Alternatively, check out my personal mortgage broker – More Than Mortgages – if you want someone to shop around for you or to help with anything home loan related.

So you know, if you end up getting a loan with MTM, this blog may receive a referral fee. I only recommend things I use myself and genuinely believe in.