January 11, 2020
It’s that time again. Time to peel back the curtain as I share the juicy details of our household spending.
Believe it or not, last year was the first full year we’ve actually tracked our spending, and I only did it because of this blog! Before that I used to just estimate our annual spending, but there was no ‘proof’ as such.
You can check out last year’s numbers and thoughts here. But don’t worry, I’ll compare the numbers and provide commentary to put it all into context 🙂
Now, when you see the numbers and compare them to last year, you may be a little shocked. I know I was! This year didn’t feel much different at all, but the numbers tell another story.
During the year, we didn’t really bother looking for things to optimise. And even though last year already seemed high, we actually went out for food/coffee even more often. But despite this sloppy behaviour, our spending actually fell. A lot!
Although to be fair, by now it’s possible that some spending improvements are subconscious, meaning I’m making more efficient choices without thinking about it.
The name for this type of person is an OG Optimiser: someone who has become a veteran of the frugality game. Never heard of it? Well, that’s because I just made it up!
To re-cap our situation for new readers:
So you know, I’ve condensed categories to make things simpler than last year. The table looks different to last time, but don’t worry – everything was included! Okay, let’s get into the nitty gritty.
Here’s the summary of our household spending for the year…
|Groceries (incl. alcohol, vitamins)||$4,997||$3,718|
|Rego, maintenance, other||$1,716||$552|
|Medical / Health||$1,455||$1,390|
|Doctor, Physio, Dental, Glasses||$1,455||$1,050|
|Pet (Insurance, Vet, Bulk Food)||$2,633||$1,038|
|Gifts (Us and others)||$1,557||$764|
|Phone & Internet||$704||$569|
|Clothes & Accessories||$367||$180|
For those who prefer things in a visual form, here is our total spending in charts. One for everything, and one for non-housing expenses.
Clearly, there were differences vs last year. So here’s some commentary to go along with the table…
Food: Went to Aldi a little more. Took full advantage of Coles offers to stock-up big and then use Bonus Points for free groceries. Related post: Our Grocery Strategy.
Cafe/Restaurants: See what I mean? Shameful, sloppy behaviour 😉
Car/Transport: Traded in our car just before Rego was due (win!). One speeding fine this year (oops!). Public transport is for Mrs SMA’s part time job, so in normal retirement this would be zero. Related post: Frugal Car Ownership.
Electricity: 100% electric-powered house. And sadly, no competition here in WA.
Medical/Health/Prescription: Some dental work and a number of physio sessions. Plus prescription for some nagging nerve/pain issues for Mrs SMA (maybe I’m the pain that gets on her nerves?)
Travel: As mentioned in our Year in Review, we got slack and didn’t organise any road-trips in 2019. Also a more-normal one family trip each.
Pet: Cancelled pet insurance half-way through the year – costs have increased 20% per annum for 5 years straight and is no longer worth it. Happy to pay out-of-pocket (yes, even many thousands worth). Luckily, no swallowing of toys this year – good boy!
Phone/Internet: Phone is 2x Kogan pre-paid at roughly $200 each. Internet is $150 Telstra 365-day charge for the laptop (tax-deductible for the blog, but included here anyway). Related post: When Frugality Meets Smartphones.
Water/Garden: Less veggie patches this year and more water as landlord wanted grass restored.
The groups from last year vs this year may not be perfect, but the totals are accurate, which is what counts! If anything doesn’t make sense, just ask and I’ll clarify.
Regular readers will know we also bought a car. Would you include that here? I don’t as it’s not a regular item. It’s like the cost of moving house (buying/selling) or getting solar panels – something you might do every decade or so.
You might be reading this and thinking, “What the hell is going on? I just don’t get how they manage to spend so little and not be rocking back-and-forth in the fetal position.”
It’s probably fair that our spending this year was lower than average. We cancelled pet insurance as the cost is no longer worth it. And this year, we’ll definitely be going on a country WA road-trip or two.
Even so, our ‘average’ spending will probably come in at around $40k, including rent. Yes, you could add in multiple thousands for each of the following: insurances, more exotic trips, gadget upgrades, new clothing, home ownership, less home-cooking, more driving around and spending on entertainment.
Doing this would bring us up to a more ‘normal’ level of spending. But then I wouldn’t be sitting here typing a blog during the week about how to waste less money, build your investments and retire stupidly early, would I?!
Because we’d be just another couple in the rat race, stuck in an office/factory/site all day, wishing we were doing something else and wondering why we can’t get ahead.
Back to the point. Outside of rent, our personal spending came in at only about $16k. To be honest, I’m quite pleased with that. Especially when you consider many households spend that on restaurants or holidays alone!
So, even without conscious effort, our spending dropped by about 20%. Almost to the level I used for an emergency situation in my FI Backup Plans post. At the time, I’m sure some people read the post and thought, “Yeah right, he wouldn’t cut spending that far – it would affect their quality of life too much.”
Well, here we are. Around that number, without pain or sacrifice (or effort!). What this shows is, I was probably being conservative in that Backup Plans post. We could certainly up the frugality game if need be.
By the way, this isn’t to show off. It’s to show that life in Australia isn’t anywhere near as expensive as many suggest. And that you don’t lose happiness by simplifying your life and focusing on what matters.
This even includes what I like to call ‘Millionaire Snacks’ like avocados and walnuts, as well as a near-embarrassing amount of cafe/restaurant spending 😉
To be clear, if we were still in full-time work and hadn’t yet bought our freedom, I would still look to trim a few categories.
Even in what appears to be a lean lifestyle, there are always incremental improvements to be had! But life is good and we’re both earning some part-time income, so it’s okay to let a few things slide.
The truth is, this is possible because we just don’t need very much to be happy. Once we hop off the Consumption = Happiness Treadmill, the ‘cost of living’ tends to magically melt away. And as I detailed in Our Year in Review, plenty of good times can still be had without bleeding the bank dry!
Hopefully you found this behind-the-scenes look into our finances interesting. Maybe it showed you some areas where you could improve. Or maybe it highlighted some areas where you’re already killing it, and maybe ol’ Mr Strong Money needs to lift his game! Either way, both are good news.
So, how was your saving in 2019? Can you make your finances stronger in 2020? Any frugality wins you’d like to share? Let me know in the comments…