$46k for a enjoyable year. Without the renting $26,000! So I would be pretty happy with that!
January 5, 2019
For a while now, I’ve been talking a big game on frugality.
So I thought it’s only fair that you get to see me in my financial underwear and find out where our money really goes.
Admittedly, I never had a specific measure of how much we spent each year, only rough estimates. But in the last year I’ve started tracking it to the dollar.
So now, it’s judgement day! You get to see the juicy details, and decide for yourself whether we’re walking the talk.
Most of you will have an idea already because you know what our early retirement lifestyle looks like. But before we start, let me backpeddle a little…
In the last post I summed up how our year was.
In short, there was part time work involved, which meant some commuting. A full year of renting in a new location. And a few local and interstate trips.
So, let me be honest… our spending was a little bit higher than I thought!
Now, for those who are more frugal than we are, you get to point out where we’re bleeding cash. And for those who haven’t quite got their spending sorted yet, hopefully by reading this, you can nail down some areas to improve on in running your household.
We’ve mentioned before why small amounts matter, big time!
Obviously it’s not a competition. But sometimes it’s useful to see how others are doing things, as it can spark ideas of where we can improve.
Some readers will think this spending is plenty, and some will feel like it’s bare bones living. Well, I can tell you, it sure doesn’t feel like the second one!
But in all honesty, Mrs SMA and I do see it differently. She sees our current spending as being about right or towards on the low end. Whereas I feel it’s quite spendy with lots of fat that could be trimmed.
That’s a good point to remember! These things are always a balancing act to keep each party happy. And maybe, as usual, the best answer is somewhere in the middle.
Remember, it’s all about living a great life, and remembering how good we already have it, without being wasteful.
Anyway, let’s get into it…
|Travel – Interstate family visits x 3 (flights + spending)||$2,923||
|Travel – Country WA Trips||$2,648||
|Car (Rego, Maintenance, Repairs, Fines)||$1,716||
|Dental, Physio, Doctor, Glasses||$1,455||
|Vet bills, bulk dog food, heartworm etc.||$1,133||
|Gifts – Relatives and others||$868||
|Gifts – Our household||$689||
|Other (household items, bike repair, passport renewal, cash-out etc.)||$589||
|Vitamins, Protein Powders||$462||
|Clothes & Accessories||$367||
Total Spending: $46,182
Since rent is such a large chunk of our spending, it may skew the picture a bit and make everything else seem small.
So here’s how it looks for everything excluding rent. You can click each image to enlarge.
I could probably condense a few of those categories to be fair. But at least we can see exactly where it goes. Maybe next year I’ll do that!
Now that we’ve let it all hang out, here’s what is obvious to me.
Firstly, since moving in 2017, rent accounts for almost half of our spending. Now imagine if we had a paid-off house!
Well, for retirees who don’t go very far, we sure spent quite a bit on travel related stuff. Well over $5,000 in fact!
And the car costs us quite a bit, even though we’re not driving to jobs anymore. Not to mention that our dog cost us almost $3,000 this year! But that’s okay, he’s worth it 🙂
Overall, we live a good life and although it may seem frugal to some, our spending even feels a bit bloated. Because honestly, so much of this spending is entirely optional.
For any reason, if we decided to, or needed to spend less, that’s definitely possible.
For example, we could travel less often. Or we could try going car-free. And we could easily spend less on eating out, random things, charity, or moving to a cheaper rental house.
And some costs are a result of some part time work, like public transport and some additional social eating, which obviously aren’t needed in a regular FI lifestyle.
As it turns out, I do expect spending this year to come in lower. But we’ll have to wait and see how it pans out. Sometimes life surprises you and things don’t go according to plan!
Either way, we’ve designed a pretty damn enjoyable life for under 50 grand a year.
As each year passes, I’ll post our annual spending for you to see.
Hopefully you found this interesting. And if nothing else, you now know more about the Strong Money household than you did before!
If you’re living like much of the population, there’s an almost unlimited amount of ways to improve your household spending. Just start looking and you’ll find little increments everywhere!
Even looking at ours, there’s some cushion in there, but it’s still relatively frugal.
Sure, we could find ways to spend lots more. But I just don’t see the point in jacking up consumption to chase new short-term highs. Because we’ll just end up where we started in terms of life satisfaction.
We already live a happy and simple life. So dialling up the luxury would not bring us greater happiness. There’s far more important things in life than striving for the new, the nicer, the better.
Don’t get infected with The Disease of More.
As I’ve said before, we used to spend a lot more when we met, almost double. But we’re actually happier now than we were back then!
So don’t believe the scaremongers. One of the most important and unexpected lessons I’ve learned over the last 10 years is, if you’re doing it right, your happiness does not decline with your spending!
How was your spending for 2018? Did you run a tight ship or were you letting loose!? Let me know in the comments.
Also, there’s a ton of great content in the works, so make sure you subscribe below 🙂
$46k for a enjoyable year. Without the renting $26,000! So I would be pretty happy with that!
Woo I love this! I had to get my spreadsheet out to compare numbers of course. I was quite surprised that we are pretty on par with a lot of things (taking into account 1 person vs 2 for some things).
Rent and groceries were about on par once you doubled mine. Though I seem to eat out more than 4 times as much as you ????
Car costs were relatively similar for both categories (I also don’t drive to work as I moved to be close enough to walk). But that’s one car each so makes sense.
Charity and gifts we spent about the same without doubling mine though.
Two thing that stood out though were electricity prices and internet. Your electricity is more than double ours here. Though on the flip side, internet costs more than twice as much on the east coast it seems.
Looks like with totals as a couple you spend 30% more than just me. It sounds about right to me, not everything doubles exactly when you live together. I’m hoping one day my family spending looks a bit like yours. Though I’m also a bit more spendy than you guys too it seems…so I’ll probably have to reign that in a little ????
Anyway nothing is ever going to be exactly the same but I’m always interested to compare, especially in other parts of Aus. Thanks for being so open and sharing your numbers ????
Great work! And I definitely think sharing increases the street cred.
I think the big question is; Does passive income flow cover the expenses? Is the part time work more for interest than need at the moment?
And do you actually budget? Or just save whenever you can and let it play out?
Thanks for sharing your 2018 Household Spending Dave. Excellent achievement in keeping your total expenses to around the $45k mark for a couple. I am using the Track My Spend App from ASIC-MoneySmart since 1 Jan 2019 and frankly I am shocked at how much I have spent in just 5 lousy days! Must try harder… I will use your yearly totals to inspire me! Can’t wait to read more of your posts this year ????
Very interesting Dave, thanks for sharing. Plenty of stuff that stood out to me here.
First and foremost, rent is a huge expense. Not as much as mortgage repayments would likely be, but you really need to factor it into your plans for how much income you would need in early retirement.
Next up, the lack of insurance really makes a big difference. We have personal insurance (https://aussiehifire.com/fire-and-personal-insurance/) and health insurance mostly because of having two young kids. We’re not at five figures for the combined total yet, but give it a couple more years and we might be.
It also looks like you grocery strategy is paying off, in particular being mostly vegetarian. I love eating meat so no plans to give it up but you really notice the extra cost when you buy it vs when you don’t. It would appear that we also eat out a fair bit more than you do.
Also (and I really hope this isn’t a sensitive subject) the absence of kids really shows up here too, no kinder, no swimming lessons, no sport and all your bills for the other stuff are reduced a fair bit as well. I love our kids and they’re a lot of fun but they definitely cost a bit.
Oh and lastly good on your for the charitydonations!
Thanks for another enjoyable post. It’s great to compare spending habit’s with others. You may have covered this in the past? I was just curious what your plans were around kids and then home ownership and how this will effect your current Financial Independence situation. My wife and I currently have two young one’s and have decided to purchase a home outright and have no house debt, which will mean we lose our income from investments, which could provide us with about about 70% of our current total living expenses, which includes $22,000 rent p.a similar to yourself. We have decided that having a long-term family home to raise our boys in is probably just a little more important. We will then pump as much as possible into investments again and hopefully build up a significant portfolio to live off in around ten years.
I really struggled with this, as I currently have so much freedom and choice with my life, but this was very important to my wife, as she wants a forever home for our family.
Thank you for sharing such personal area!
Don’t feel too bad about the $20k rent, we own our own home but it isn’t all free. Rates ($2600), water bills ($370 on top of use per qtr) and insurance ($900) come to around $5k. Then there are repairs, maintenance and of course insurance excess when things go wrong (burst water pipe in ensuite & solar water heater as recent examples). You would want to budget in a conservative $10k a year to be safe there.
We feel fortunate to have a paid off house but it did come at a cost (interest over 8yrs) and missed opportunities (no investing). In hindsight continuing to rent and smash the money into shares the past 10years would have worked out better but we can ways sell, downsize or get a line of credit to speed up our journey to FI.
Loving your blog, your grocery budget makes ours look excessive and definately an area I have been trying to negotiate some reductions in with my wife. This might help give a reference point that breaks the mental barriers that have been built up over the years.
I noticed the grocery spend too!
Going vego definitely makes a difference. Our household is currently 3 meat-eaters and I spent 12K on food last year. (That also includes restaurants, cafés and takeaways as well.)
When those kidults eventually move out my cost of living will take a huge dive!
Thanks for the great post.
Was wondering how you spend so little on internet. Do you watch any streaming services at home(netflix,stan etc)?
Ours is $650 for the year (unlimited NBN), but wondering if we should downgrade to mobile data to save some money.
Tracking household spending for the first time this year. It’s probably gonna be a challenge though, as the missus believes in financial independence in the sense that we have separate bank accounts. She contributes to combined savings, but not sure what percentage of her salary it is and where the rest of it goes.
I know that $9k is disappearing on installing air conditioners in all the bedrooms thanks mainly to two hot days in December. I feel sick in the stomach over that, as I reckon we’ll use it no more than 5 times a year. In 20 years, 9k compounds to $36k or so and in that time we’ll have needed the air conditioners 100 times. That’s $360 each time we turn it on! No talking her out of it though, unfortunately.
I feel your pain Chris… There are some excellent FI- and FIRE-related books out there that your wife might find enlightening. I’ve just read Meet The Frugalwoods by Elizabeth Willard Thames (aka Mrs Frugalwoods) and it’s a very good read.
Although the book is quite America-focused, the basic principles are very good. It’s like a 2018 version of Your Money or Your Life.
Scott Pape’s The Barefoot Investor is another good one of course. These books are good at making you stop and question what the ‘eff we are doing with our money. And Dave’s Blog is obviously very good too!!
Great breakdown Dave and I find it really helpful to compare our budget to yours.
I have a bit of a strange question though. I know you like keeping fit and have some weights at home for workouts. When you cut meat from your diet, did you see any change in your muscle mass over time? I would like to cut some meat from my diet, but I am a bit worried it will be hard to get the required protein from a more plant based diet. I workout 3-4 times a week and I am pretty vain so don’t want to lose my hard earned muscle lol.
Great stuff, Dave! This was really insightful and a great way to see what others are doing. Biggest surprise for me was your spend on groceries. We try to eat quite healthy and spend around $1000/month on food (2 adults and an 8 year old) and another $400/month on eating out. I know you guys have gone vegetarian which would be a big saving but I feel like there must be more to it than that. We are pretty frugal but do like to cook nice food at home and stay away from processed food as much as possible. We also buy coles gift cards at 5% off and also shop at Aldi.
Happy new year, and all the best for 2019!
Nice post, always interesting to compare spending against other Aussie’s. Especially people who are also DINKS. We are in Adelaide which i would think is pretty similar to Perth for costs.
We are on track to spend maybe just above 30K this year, with no mortgage interest. Can’t really call it a paid off house until we knock off the interest free credit cards that we chucked in the offset, but at least its only costing us rates etc.
Funnily, we were much happier back when renting and will eventually sell it and travel once we hit our number.
I’m pretty impressed with your grocery costs! Ours ran away a bit last year so we are trying to get them back down to around 5K, last year about 7K. Lots of meat though.
Restaurants is super low also, we struggle to keep ours under $200 per month.
I feel like we are kind of extravagant looking at your budget, especially considering we have no pet costs!
Good on you, SMA. I’ve been tracking every dollar we spend in a spreadsheet for the last 6 years. I’m the only person I know that does this (my friends don’t) so I’m really interested to read others’ results. Thanks to you all for the contributions. Here are a few of my key figures.
$30K mortgage repayments, of which $6K were extra repayments.
$19K on investing. Not sure that this counts as a ‘spend’, but it’s a hobby of mine and there’s no guarantee the value won’t go down!
$9K on cars. Includes servicing, rego, petrol, and the most financially hedonistic thing I’ve ever done in buying (now maintaining) that sports car I always wanted!
$7K on groceries, plus $400 on non-edible groceries (toilet paper, toothpaste, etc).
$7K on bills. This is the one that really bugs me and I haven’t yet figured out a way to reduce it. In order – council rates, internet and 3 sim cards, home & contents insurance, water, electricity, gas.
$4K on health. We prefer to spend money on keeping healthy and not getting sick, instead of health insurance.
$1.5K on alcohol. Too much. Want to reduce down to $500 p.a..
They’re the main ones. My ‘win’ is only $200 in the category I call ‘entertainment’. We’re good at finding low cost ways of enjoying life. Bushwalks and picnics only cost the petrol to get there. DVDs from the library, no netflix/Foxtel etc.
Annual spend for couple with no kids, excl. business expenses and money spent on investing was approx. $72K. Live in Brisbane, 1 self-employed, 1 (commuting by car unfortunately) employee. I wouldn’t call us ‘FIREys’, just a couple that work hard and save hard for a better future. We’re both ‘savers’ by nature.
Very lean for WA! Well done!
Hello again ,,,
More frugal shopping ;
Freo Markets at 4 pm Sunday for fruit and veggies all at half or less than normal
prices . Same for for bread and most cakes .
Eating out ; buy your cooked lunches circa half price at or about 2-30 pm .
Use public transport whenever possible if your destination is beyond walking distance .
Your favourite tight-wad , Ramon .
P S . Avoid cooking as much as possible ; salad sandwiches are easy to make .