“Wow, that’s more than I thought.”
After tallying up our discretionary spending for 2025, I’m now in danger of losing my frugality blackbelt.
Now, it’s not that crazy. But for someone who was a long-time optimiser, it certainly feels like lots of unnecessary money-spraying going on.
In this post, you’ll see where our spending has gone up, and I’ll show you how it’s changed over the years.
I’ll also share a few lessons on how I’m thinking about money and spending lately as our situation evolves.
To give you some companion articles to go with this one, check out a few of the previous spending reports below. You can also use the search bar of this website to find more going back to 2018.
And before we get into the numbers, here’s the context if you’re new here…
— We’re a couple living a semi-retired lifestyle after reaching financial independence in 2017. There are no dependents except for 2 chickens 🙂
— In 2022, we purchased an old house in Perth to live in (about 30 minutes from the CBD) and have since renovated it (which is finished now, thankfully!)
— We enjoy a comfortable yet relatively simple life. We like nature walks and going out for coffee or a bite to eat.
— Mrs SMA works 2 days per week in government admin. I do writing and content stuff from home – blogs, podcasts, and books.
— There is no budget or buckets. We buy whatever we need and do anything that seems worthwhile. It’s basically just freestyle spending.
In our previous spending report, the grand total for 2024 came to $60,845. Now let’s look at 2025…
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What’s surprising to me is just how similar the categories were from last year. Especially since no thought or budgeting is going on.
In fact, if you zoom out and squint a bit, the only real change was in the food/dining out category. And since it’s such an obvious experience and conscious expense, that’s probably why it felt like such an extravagant year – despite the total figure not being that much higher.
Now for some more info explaining the above…
Housing: Interest rates were lower during 2025 and we had a bit of money in offset for a while. Our home insurance is with Budget Direct in case you’re wondering, and it’s roughly $800 per year (I always choose the biggest excess).
We’re paying interest-only on our mortgage, so there are no principal repayments to speak of. I have no, um, interest, in paying off this debt. There were also no additional home works in 2025, so it’s also good to have that done and dusted!
Travel: This includes the Malaysia trip, and some of the cost of Vietnam as we booked it late last year. Also includes 3 interstate family visits to Darwin.
Food: Mrs SMA has been experimenting with the keto diet, so meat has been added to the grocery list, which probably accounts for part of the jump. I always get asked why it’s so low though – check my old article for the principles I follow.
Cafe/Restaurants: OK it’s getting a little out of hand now! We’ve been going out multiple times per week for food, coffee, and sometimes drinks and dinner 🙂 If you go back to our early spending reviews – like this one – you’ll see how dramatically different it is (used to be under $1k!)
Transport: Rego went up, insurance went up. Our car is insured with RAC. Rego is now just over a thousand bucks! Fuel bill is non existent, thankfully.
Utilities: Most of this is actually gas charges rather than electricity. From memory, there were still electricity credits on our account from WA + Federal handouts. We also got solar which led to some very low bills. I’ll have to go back and look at actual power usage + estimated car charging to figure out our ROI from solar, but it looks decent so far.
Miscellaneous: The biggest sub-category ‘Other’ includes things like online shopping, stuff for the house, electronics, nail/hair appointments (beauty products come under Pharmacy), cash out, and other things I either couldn’t remember what it was for or couldn’t be bothered categorising, haha! A few purchases blew out this category in 2025 – a new vacuum, lawnmower, and a new phone (all were pretty pricey).
Gifts: Much bigger this year due to a Christmas trip to Darwin for Mrs SMA’s family.
On the plus side, the true cost of all this is probably a bit lower. Reason being, our mortgage interest is now fully tax deductible thanks to debt recycling. The charity deductions and a large percentage of the phone/internet expenses are also deductible.
I’ve always tracked spending manually in a spreadsheet, but as our spending went up so did the number of transactions. Each time I went to do it, the list got longer and longer – to the point where it was becoming a painful process.
A reader recommended Pocketsmith and I’ve been using it for the last 18 months. What was becoming 20 minutes a week is now 5 minutes a fortnight. This is not an ad by the way, and I’m not an affiliate. Though I probably should’ve sorted that out before writing this 😅
The platform itself is honestly a bit too powerful for my needs. But it would be heaven if you’re a data nerd or want to run all kinds of different reports and cashflow projections.
Anyway, I’ll keep producing my simple comparison charts here for continuity. Feel free to share any spending trackers you use in the comments. I’m not interested enough to test a whole bunch, so I’d love to hear what you’ve found to be the best/easiest to use.
Here’s a visual of the spending broken down by categories, which really highlights where the money is going…
I said this last time, but it’s worth repeating. This points out the 80/20 rule and how most of your spending will be dictated by just a few things…
— Where you live
— What and how you eat
— The places you go
People think of these things as almost fixed. I don’t. I consider everything optional, and every cost modifiable. We have fixed needs, but not fixed costs.
If you’re looking for potential savings, these areas are worth heavily scrutinising and brainstorming as many alternatives as possible. After that, you still have thousands and thousands of dollars of potential improvements elsewhere.
Here’s how our spending looks since the inception of this blog…
Clearly only heading in one direction!
If we were still working towards FI, I wouldn’t be happy with such a big increase. And under a normal FI scenario with zero part-time income, it could also be a bit risky. But there’s something hidden behind this chart that’s worth discussing…
A single spending figure by itself is meaningless. Only by putting it in context can we decide whether it’s reckless or reasonable.
As an example, if we had no wealth, and were both only working part-time, spending nearly $70k with all those optional extras could be considered reckless. But in the context of our situation, it’s perfectly fine.
In fact, if we assume $45k as a starting baseline, our spending has gone up about 50% since reaching FI in 2017. Our wealth, on the other hand, has increased over 100%.
Which means we’re actually spending far less than before, as a proportion of our wealth compared to day one of FI. And that’s the dynamic I find most interesting.
There’s a few lessons here worth noting…
— As your wealth grows beyond your FI needs, you can – and probably should – spend more on the things that interest you.
— Your investments eventually take on a life of their own that’s hard to imagine in the first 5-10 years.
— If you’re a younger early retiree, under 50 let’s say, you’ll probably end up earning some income, which becomes ‘bonus money’ that lazily fuels the above.
You might think this last factor is driving everything in our case. But the amazing part is, our combined part-time income has never come close to our average portfolio return.
In dollar terms, we’ve probably made 3-4x more from investments than part-time work. Which also highlights that you really need to find things you enjoy doing for reasons other than money. Because money will naturally lose its appeal as a motivator.
A couple more things…
Spending more doesn’t make you happy, but it does lead to a more care-free life. Since you simply don’t care if something is a bit expensive, or you don’t really ‘need’ it.
You buy the item you want, not what’s the cheapest. You take the flight you want rather than the red-eye to save a few bucks leaving you tired and grumpy for the next 2 days.
While people in the broader community get stuck in spending mode, people in the FI community can get stuck in saving mode. At some point your brain starts to realise there will always be enough, and that money worries are not only unhelpful, but increasingly unrealistic.
When that happens, your brain begins to slowly shift into abundance mode. This doesn’t mean you start acting like you have unlimited money. Instead, you operate from a peaceful state of mind, knowing your situation is solid, and that if you continue managing money well – while enjoying its perks and benefits – you will never run out.
From the position of abundance, you can take a highly personalised approach to spending – whether it’s helping family, getting a fitness coach, donating to charity, luxury travel, or more likely, a combination of several things.
I unpack these mental and practical shifts in more detail in my new book if you’re interested.
Sometimes it feels like we spend too little, others times too much.
It’s probably going to be a continuous mental back-and-forth, after having a strong savings habit for a long time.
I am getting used to it though (maybe too used to it, you might say). And I want to be an example of how you can switch on frugality when it benefits you most, while also learning to dial it back and spend more freely when you no longer need to save.
You can learn to make different decisions and reprioritise things as your situation evolves, allowing you to live in a way that your younger frugal-self would’ve considered crazy or at the very least unnecessary.
So even though I may no longer be flexing my frugal ninja muscles quite like I used to, building up those savings muscles is so incredibly important in the earlier years.
It may not be exciting, but the benefits it brings are enormous. So keep focused on what you’re building and just remember:
Frugality isn’t forever, but freedom is.
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Great post. 2 questions:
1. How is the mortgage tax deductible?
2. Why. O private health insurance?
Cheers
Dave may want to expand on this but mortgage is tax deductible because he has used debt recycling. He effectively “paid off” his mortgage by selling investments then reborrowed it to buy more investments, which are then tax deductible.
As far as health insurance Dave may be of the same opinion as me that we have a great health system in Australia and health insurance is a big extra cost which I am not prepared to pay. I would rather self insure by possibly putting aside the equivalent of the health insurance premiums and then having the cash to pay for any health needs. I have done this for kids braces, physio etc and would say we are well in front.
Nailed it on both counts, thanks Paul!
Do you not get hit with the Medicare levy at tax time instead?
Depends on taxable income for the year, in many cases it’s certainly less than health insurance (for us at least). Edit: Baz has provided the specifics, I assumed you were referring to the surcharge (MLS, the extra tax).
Thats what I though, there’s also the Medicare Levy (2%): A standard tax most Australians pay to fund the public health system. You pay this even if you have the best private insurance in the country.
Medicare Levy Surcharge (1%–1.5%): An extra tax on top of the 2% levy. This is the one you avoid by having private hospital insurance
Hi Nathan. Sorry I should’ve linked to a post explaining that – the mortgage has been fully debt recycled. I wrote about that here: https://strongmoneyaustralia.com/why-were-not-paying-off-our-mortgage/
More on debt recycling here in case you aren’t familiar: https://strongmoneyaustralia.com/debt-recycling-ultimate-guide/
No private health insurance is correct. I’m happy to just use the public system or pay out of pocket.
You may want to rethink Health Insurance (particularly to avoid the lifetime loading).
We are FI in our 50’s in the last 3 years ive had full cardiologist workup including an Angigram procedure. Also due to a C scare.. had colonoscopy, Endoscopy and had a referral to an Oncologist that involved a full body PETscan
Because of health insurance apart crom the annual excess all costs covered plus i was seeing specialists and having procedures all with 7-14 days rather than waiting on the Health System
Yes ive often thought do we need Health Insurance and its not until you do you realise Health is so important as uou age and getting things done quickly os so re assuring.. well worth the 4.5k a year we currently pay for Silver Plus Cover (and i know one day my knees need doing as well!)
Could you not just pay out of pocket for those things? It’s not like you either have insurance and get treated, or don’t have insurance and miss out. It’s still the same game – expecting to receive more benefits than you pay in fees.
The lifetime loading really isn’t that much if I decide in 10-20 years it’s really worth it – then it just gets factored into the cost/benefit analysis. Plus it becomes increasingly miniscule relative to the compounding portfolio.
It doesnt come cheap, Angiogram alone $6k just for the hospital. Colo and Endo another $4.5k
Yes you get private facilities,
That was just relatively minor fairly non invasive procedures without full Anesthesiology. Imagine something like a bypass or jpint replacement!!
Hi Dave, just giving you another real life perspective. My wife had to do a heart ablation about 6 years ago. We’re public patients and paid nothing, we also got referred to the best heart surgeon. All test was also free. From initial diagnosis to treatment took less than 3 weeks!
Thanks for sharing Ronald. It’s amazing how varied the opinions are on this topic. Most of the pro insurance camp seems to just really value being able to mostly avoid the big unpredictable costs and the certainty associated with it (reading between the lines). Not saying it doesn’t make sense or is irrational, just clearly a different set of priorities rather than playing the odds, accepting the system, and paying where necessary. Basically they like spreading the costs out yearly rather than one big scary hit every 10 years or something.
Hi Mark I tend to agree with you I hate paying it but it’s like a spare tire in the boot of the car. My uncle had prostrate treatment and he Said it would of cost him 41000 if no insurance or be on the waiting list but of course to each his own
$41k isn’t much in the grand scheme when you consider compounding from investing the premiums you’d pay annually.
Hi Dave, I have numerous experiences and the public system we have in this country is good. When my second child was born, it was a complicated pregnancy requiring 2 weeks hospitalisation before and another 2 weeks after and a C-section. No cost to us and 1 to a room at Joondalup hospital. The only difference between private and public at the same hospital was private gets free TV and daily newspaper. Private also needs to pay a gap and another parent asked to discharge early as it’s getting expensive for them. My ex-wife also years later got breast cancer, surgery and chemotherapy. No cost as well.
Council rates seem very affordable where you are. Ours are over double that – we’re in in NSW. Happy to see you’re enjoying a life balance together and thanks for sharing. Kind regards.
Thanks! Yeah I think council rates are just under $2k. This area was fairly cheap until the last few yrs so I expect it’ll go up a bit.
Interesting post Dave, thanks!
I wondered if the numbers in the graph are measuring nominal dollars?
As you know, personal ‘inflation rates’ are quite individual in nature, and to some degree, can be managed by lifestyle choices.
Putting that aside, if they are just nominal dollar amounts, a significant element of the apparent increase in spending is likely to be inflation impacts over the period.
Depending on assumptions the exact values in the graph, it’s possible your ‘real’ e.g. after inflation growth in expenditure has been more like 15-16% over the period, and that 50-60% of increase in spending is just the result of higher price levels.
The ultimate good news, bad news story, depending on how you look at it! 🙂
Hey mate, good thoughts thanks! Yes, it’s all nomimal dollars, so when put in that context it’s actually fairly reasonable.
I think part of it is the obvious cafe/restaurant/travel spending which feels very obvious when you’re doing it, so it stands out in your mind as lifestyle inflation (Tesla aside lol).
Interesting also is probably the ‘non housing spending’ as going from say 20k to 40k. That probably highlights it a bit better. I should’ve made a chart to carve out that difference – maybe next time I will.
Has inflation been invited to the table?
Nah it hasn’t. I see a lot of inflation as optional, or workaroundable. I can tell from my own behaviours that quite a good amount of the increase over time in our case is actually purchasing choices rather than cost inflation.
If you go back and look at ‘non housing’ spending for like 2019 (or one of those lowest years), it was about 15k, now it’s over 40k, and it’s largely due to travel, restaurants, and random ‘household’ purchases.
Thanks for sharing! Obviously you are both still bringing in some part time income. If you were both not working and had no Perth properties left what would be the amount of assets in and out of super you would be comfortable on do you think to cover your current yearly expenses? Would it be like 4% so 2 million or would you go leaner or the other way?
Well given this current level of spending is pretty comfortable, and could easily be trimmed back, I’d be very comfortable with say $1.5m invested to cover $60k ish expenses. I’d prefer it mostly outside super for obvious reasons. But when the properties are sold we’ll end up with quite a bit more than that across shares/super.
Are you getting 4% dividends from your portfolio?
I’ve gone the VAS and VGS route and have been getting closer to 2% this past year..
Just want to make sure I’m not doing something wrong?
I just checked my Sharesight account (which includes franking credits), and it’s telling me 4.3% for VAS and 1.6% for VGS, which makes 3% for a portfolio. This is a bit lower yield than previous years, but fairly standard. For context, the June payout is usually a larger one.
Okay cool, and would it be safe to assume that some years the yield would be higher than 4% in order to average out as 4% over a longer period (e.g. 10 years)?
No not necessarily. But because of the higher growth rate vs lower yield investments you can just trim some of the growth to make it 4%. This is how the ‘4% rule’ works. We break it down in Aussie FIRE Episode 62 if you want more detail of how it works.
Apple: https://podcasts.apple.com/au/podcast/62-is-the-4-rule-for-early-retirement-still-relevant/id1684883300?i=1000750702404
Spotify: https://open.spotify.com/episode/1IjDf37efLFSxbisxMxWc4
Keen to see your gas / electric provider and breakdown as we de 2 person house with one fifo and even the daily electric supply charge would eat half your yearly limit. Also consider ourselves frugal and lower the avg users when interrogating provider website. Also have solar….cheers
Power provider is Synergy – it’s the only option here in WA. I think the supply charge is about $1 a day from memory. Some of the reason for the low cost is the credits/handouts as mentioned. Gas is AGL – last bill was $90 for the quarter.
Hi,
https://eatclub.com.au/venues/perth
https://www.firsttable.com.au/perth
To help with the Restaurant and eating out costs I have recently started using these 2 sites for our fortnightly date night.
It might help to reduce costs but also try some new places and might even allow more eating out nights from the same spend.
We have been getting 50% of food with a full priced drink at some great Brisbane restaurants.
As always thank you for the great read… 🙂
Nice work Kelly, and thanks for the suggestions 🙂
Thanks for sharing Dave. Spending looks like it’s going on areas that bring joy which is fantastic.
In terms of your spending tracking I agree PocketSmith is awesome but a bit overwhelming. I have ended up using Billroo which is Australian and is a pretty simple to use spending tracker with some great features.
Cheers for the suggestion Paul. Does it to the auto categorisation thing well? That’s the main time saver. All I need is well trained categories and a pretty/flexible chart feature
$700 a month in groceries!
Wow! We live in Perth as well, about 20min from you I think. We shop at Aldi, Coles and Woolies. We are a family of 3 with a dog. Wouldn’t say we are frugal or extravagant and we’re spending double per month. Damn.
I agree 700 is bottom end maybe Dave you can give us a break down of this to see how we can do this
I wrote an article a long time ago on it, the numbers have changed but the principles haven’t: https://strongmoneyaustralia.com/frugality-and-food-the-grocery-strategy/
Some of that category now goes into cafes etc. If you add 30-50% for meat, an extra person and a dog, and add 20% if you’re larger people than we are (at 55-70kg), it’s easy to double the figures.
Agreed just the two of us and we spend around $350 a week on groceries. To be fair Food is the one thing we don’t compromise on with our budget. Good quality meats, fish, salmon, veggies all the time. We also have $400 for eating out a month for the odd nice breakfast, lunch or dinner somewhere.
Wow I am envious of your low annual spend. Our household easily spends over $100k pa. We have two adults and two teen boys. No mortgage or car loans (running two cars). This is just what it costs us to eat, insure everything and keep the house maintained. Hence our FIRE number is pretty high.
My favorite is how you clearly separate holidays from family trips! I definitely feel this- they are not the same! Haha.
Also, I wrote to you a while back about potentially leaving my job at 80%-ish of the way to FI in 2022 as I had no one who understood this in real life to talk to- I left happily and all is well 🙂
Haha yes exactly. Great to hear you pulled the pin and are going well – thanks for checking in!
$66k is a fair bit, I’m sure many pensioners spend less than this. A couple on the full pension receives approximately $47,070 per year (as of March 2026).Its an interesting read as always
It sure is, we could certainly spend less. Thanks for reading!
PocketSmith does a pretty groovy Sankey chart, by the way. I’ve been using it for the past few years, but I’m finding the cheap version a bit limiting due to having bank accounts in various places.
Re health insurance, I was a poor student at university when the loading for over-30s was brought in so I didn’t bother with it until a few years ago when my wage reached a point where it became approximately the same cost to have the insurance as the extra in loading was. The good thing is that you only pay the extra loading for 10 years, so I figure I’ll come out ahead in the long run. By the time the 10 years is up, I’ll want to up my cover to include things that are likely to affect me in old age.
Appreciate your thoughts. Re Pocketsmith, I must admit I haven’t played around with too many of the features, just setup what I wanted and ignored the rest haha.
Good to see other people are using PocketSmith, and thanks @FireforOne for the Sankey Chart idea. I had no idea what that was before today, but it does create a very nice visual in PocketSmith.
I started using PocketSmith earlier this year when my circumstances changed – I went from being single, to having a wife and two kids in the last few years.
I went from having a tight bead on all my costs, to expenses which feel like they’re coming from a fire hose. PocketSmith has been great for me. I do keep a spreadsheet as well, but it is much easier to direct expenses automatically to categories in PocketSmith and summarize at the end of the month.
Also thanks @Dave Gow for all the information you have provided. I have got my wife on the FIRE bandwagon and we listen to your podcast with Hayden regularly. Currently looking at transitioning from a property portfolio to ETFs, and we are also implementing the debt-recycling strategy.
Appreciate all the info you put out there!
Cheers
Dave
Thanks for sharing David, and nice work getting your wife involved 🙂
I understand the logic in not wanting to pay down your mortgage as it is tax deductible through debt-recycling. But is your mortgage interest-only for a short period or indefinitely? I found that I can only go interest-only for one year and then I have to request it again. Each time this lapses, my montly repayments end up higher than before. How does going interest-only work out for you?
It’s interest only for 5 years, then it either switches to P&I or we reapply for another 5 years. The main benefit to me is that the monthly payment is lower leaving us with more cash each month to invest (so I would be happy with interest only even if the loan wasn’t tax deductible). Most banks offer 5 years interest only as standard so I’m not sure why you’re only being offered 1 year.
Hi Dave, thanks for sharing. I’m sorry if I missed it, I noticed your transport costs are very low can you tell us more about it?
The main costs are rego and insurance, and we only have one car (no loans or leases). It’s an EV so petrol cost is now zero also.