Jan 21, 2013 171 comments

Exposed! The MMM Family’s 2012 Spending!

Wow, has it been a year already?

Every year, the Money Mustache family is forced to drop its drawers and reveal everything we spent money on, in as much detail as possible, to you the readers. It’s a fine annual tradition that is meant to set the stage for both learning and friendly competition. If you’d like to learn how to spend less and save more of your income, the categorized results and tips below might help you find the budgetary leaks. If you’re already running a tight ship, you can make fun of my spending and share the ways in which you’ve out-badassed me.

While we are far from being icons of perfect frugality, I still get regular accusations of living an impossibly inexpensive lifestyle, or at least questions about how it can be done, so this article is meant to answer some of the questions.

I went through last year living more lavishly than ever. With our basic retirement income (from one rental house and dividends from some index funds) locked in and stable, no debt, and most of the costs of a young child behind us, things felt quite cushy. On top of this, both Mr. and Mrs. MM continued to do enjoyable side projects, and gosh-darnit, they happened to provide still more income. The lady helped a few close friends buy houses, generating real estate commissions. I built a few nice things for friends and neighbors, generating construction invoices. And this blog took off unexpectedly and started producing cash – ridiculous amounts at times. By my standards, we were living in a bath of Infinite Money.

Although you’d never see me out shopping for a new Acura NSX or buying $200 wine even if I woke up with several billion dollars of net worth, I did feel like I was letting loose. I bought my son a beautiful little mountain bike, and ordered parts for all the other bikes whenever they were required. I flew to Lake Tahoe for the annual snowboarding trip with the Boys. I bought some new outdoor clothing to replace worn-out things.

And oh, the food. We started eating a more Primal/Paleo diet, which meant less low-cost starches and more pricey fresh vegetables and local, organic grass-fed meats. Wine with dinner whenever we felt like it. Homebrews and microbrews as needed. I built a huge and elaborate fence around the entire back yard, painted the exterior of our bulky 2600 square foot house, and added two big South-facing windows for solar heat gain. Plus there was the usual 2 month trip to Canada, and plane tickets to Hawaii in December.

Since all of our spending happens without a budget, I was expecting an embarrassingly large total to show up when Mrs. MM did the annual spreadsheet. And here’s what she came up with:

Total Spending: $25,046

Quick Note:
A few categories were rearranged this year to align with the way things are tracked in Mint, which has continued to be useful in doing much of the tracking.

Category	2010	2011	2012	Comments
Mortgage Interest	3,600	1,500	0	2012: Mortgage paid off in 2011 (should you? see article)
Property Taxes	2,292	2,334	2,358	I admit it: property taxes are low here in CO. Good consideration next time you move.

Food and Dining	4,689	5,382	6,238
Groceries	3,855	5,007	5,733	Adding occasional fancy meat is expensive.
Wine/Beer	269	226	280
Restaurants, Coffee Shop	565	149	225

Healthcare	366	1,087	2,048	2012: doctor visits, dentist, CPR class, pharmacy, insurance
Doctor Visits			1,034	2012: this includes the one-time $600 optional procedure ;-)
Health Insurance			710	2012: started health insurance premiums on Nov 1 (see article)
Dentist			172
CPR Class			65
Pharmacy			67	Any prescription antibiotics, aspirin, bandages, etc.

Auto and Transport	777	316	1,537	2010 & 2011 includes gas only
Gasoline	777	316	684
Insurance			313
Registration & Testing			217
Express Tolls			79
Speeding Ticket!			75	2012: MMM missed the "Speed limit 30" sign outside of Fairfield, IA. Photo radar reminded me of my sin.
Service & Parts			169	2 Oil filters, 12-pack of oil, windshield wipers, 1 new battery for construction van.

Utilities	1,260	1,456	1,463	Electricity, natural gas(heat,water,stove), water, trash, recycling. (33% of annual electricity use comes from the 1 month we rent out our house to other people each summer!)
Cell Phone	120	120	240	2012: Both Mr. and Mrs. MM have iPhones running on $10/month plans (see article) - Yahoo!
Internet Access			360	We keep this cost down by sharing a high-end connection with a friend: (see article)

Home	1,819	2,105	2,556	2010 & 2011 numbers included renovations only
Home Renovations	1,819	2,105	2,147	2012 Projects: Fence, windows, exterior paint
Home Insurance			353
Landscaping/Plants			56

Donations/Charity	374	1,886	1,734	Personal donations only (business including this blog donates separately)
Crossfit	1,080	1,110	1,175	This is Mrs. MM's ongoing present for financial independence. Fees are for Classes and Competitions
School Tuition	6,665	2,630	1,110	Tuition ended May 2012 (yay for public school! - see article)
Insurance (House+Vehicles)	707	648	n/a	2012: this year insurance was included in home and auto categories

Misc	2,582	2,843	2,351
Shoes & Clothing		444	327
Sporting Goods			426	2012: Bike stuff, REI
Shopping Misc			738	2012: Mostly Target, which could include clothing & groceries
Books			71	2012: All for our son, including xmas gift
Entertainment	26	223		2012: this is under "Other" this year, but our entertainment consists of Netflix for movies, Pandora for music, Library for books, a play or two at the local theater, and Nature for the rest. No TV service, of course!
Lessons for boy		156		2012: this is under "Other" this year
Target	500	765		2012: this is under "Shopping Misc" this year
Amazon	500	584		2012: this year we reviewed all Amazon purchases and sorted them into the right categories
Car Maintenance	32	96		2102: moved to "Auto - service & Parts"
Manly Items		245		When I buy non-business gadgets or accessories, they go here. None this year.
Other	1,524	330	789	2012: Netflix, kids activities, swim lessons, school supplies, annual haircut for Mrs. MM, local plays, apps, CC annual fee, cash withdrawals (typically used for groceries)

Travel	4,151	5,036	1,876	2012: Safety Pirates Snowboarding Trip, camping, two of the flights to Hawaii (this year we didn't include gas in this number). MMM's hawaii flight accounted for as blog business.

TOTAL	30,482	28,453	25,046
TOTAL Without Mortgage	26,882	26,953	25,046
Subtracting Tuition, Donations	19,843	22,437	22,202
Subtracting travel, crossfit	14,612	16,291	19,151
Subtracting organic/luxury food	13,340	14,639	17,259	Assuming a 33% increase on groceries due to organic + meat.
Subtracting home renovation expense	11,521	12,534	15,112	This is what our "no frills" living cost would be, unless we moved to a smaller house (Note: Misc category could be cut down a lot as well)

So wow.. that was a pleasant surprise. Even with the big grocery upgrade spending, our total still came out pretty close to the other years. It is amazing how things average out over time.

If you’re new to this blog and overwhelmed by all the numbers, and just want the top points on how to live well on less than half of what your neighbors spend, here they are:

Arrange your life so that you drive less, and use less expensive cars.
Cook your own food
Take care of your own stuff (yard, body, housecleaning, fingernails, etc.)
Don’t buy anything on impulse. Think about it for a few days (or years).
Ride a bike
Realize that all the steps above will dramatically improve your life, not representing any negative sacrifice or suffering at all.

It goes much further than that, of course, which is why there are 300 articles on this blog. But since new people show up here so often and want the low-down right away, those are good places to start.

Keep living the good life and here’s to an even better 2013!

Previous Post: How to Start a Blog Next Post: Halfway to the Goal: the Straight-Line Progress Tracker

Want More?

Will January 21, 2013, 8:38 am

Always nice to see the numbers and solidify the fact that WE CAN DO THIS!

Reply
TheHeadHunter January 21, 2013, 8:40 am

Great article, I noticed you left off income ;-)

The logo looks cool, btw. Was it the winner of the contest?

Reply
- Mr. Money Mustache January 21, 2013, 8:55 am
  
  Yeah, I like that “coin and planks” logo too. It is just one of the many entries in the logo contest, and more keep coming in for tomorrow’s deadline. I switched it just because there was lots of new traffic to the blog last week and I wanted a more fancy look.
  
  Regarding income: that’s a different article. Maybe I’ll share once we add it all up at tax time. This year it was probably 3-4 times higher than the spending (!), which I almost hesitate to share, because I don’t want to take away from the message that it’s easy and fun to live on less.
  
  On the other hand, if we earn so much and still only spend this amount, maybe people will correctly interpret it as, “Hmm.. maybe spending doesn’t have to depend on income at all, and a simple life is better regardless of how much I earn!”.
  
  Reply
  - mike crosby January 21, 2013, 9:15 am
    
    Sounds like another great post;)
    
    Reply
  - Mr. PoP January 21, 2013, 11:32 am
    
    Don’t be afraid to talk about your income MMM-I think your readers are smart enough to realize, as you mentioned, that spending and income don’t have to be linked at all.
    
    Mrs. Pop and I are looking at taking a break in another few years, and I’d be curious to see an article on how to build up an enjoyable part time income.
    
    Reply
Mark January 21, 2013, 8:53 am

Edit – didn’t mean for this to just be a random bike comment – I had clicked the link and read your bike posts again.
Read through the whole blog. Did my first ‘bike commute’ this weekend. I still live 13 miles from work. But I haven’t driven to the grocery store in over a week … and I’ve visited a few times to increase my pantry stores after moving to a new apartment in addition to buying beer/wine to take to events.
Another plus, I found 49 pennies on the road while biking! Ok, not really much of a plus, but my brother is a penny collector, so he’ll gain more enjoyment than $.49.

Reply
- lurker January 22, 2013, 9:15 am
  
  Mark how slowly do you ride if you can spot pennies that way???!!! actually way to go…biking is a blast.
  
  Reply
  - Mark January 22, 2013, 9:24 am
    
    Well, it was a funny story to me because there happened to be 40-50 some odd pennies in a pile.
    Someone else asked, but I think they deleted the comment … My brother indiscriminately collects pennies for quantity not quality. He has gallons of pennies. The thinking is they aren’t really worth much, so why not keep ’em around as a cheap/unique collection.
    
    In my frivolous days I bought a nice road bike that I do ~18 mph on. On my bike i don’t worry about with a minimum lock on in the city, I do probably more like 10.
    
    Reply
Cedyathome January 21, 2013, 8:57 am

Great information. Thanks for sharing.

Will you elaborate at some point on how you keep your dentist costs so low? We do two checkups/cleanings a year – and it comes to close to about $600 for the two of us here in Denver.

We have been Financially Independent and retired since 2008 (at the age of 48 & 45), so your blog and information is very relevant to us. Thank you.

Reply
- Mr. Money Mustache January 21, 2013, 10:12 am
  
  That dentist point is a good one. We are taking the little guy in for regular checkups. But Mrs. MM and I are on more of a once-every-five-years dentist schedule. And on those visits, they always say, “No problems, looks like you didn’t even need to come in!”
  
  I find that if I brush and floss well, drink lots of milk and don’t eat or drink sugary stuff (including no sugar in coffee and only whole fruit – no fruit juice), the teeth just sit there and never change.
  
  But I am not a dentist and results may vary with genetics, of course. And I can already hear the typing of all the dentists getting riled up and responding to this. OK, I will make a point of getting one of those appointments this year!
  
  Reply
  - Kenoryn January 21, 2013, 11:44 am
    
    My boyfriend is like that – he uses fluoride-free toothpaste and only remembers to floss about once a month, has a sweet tooth and likes to have something sweet after every meal, takes sugar in his coffee, and somehow, when he went to the dentist recently after not having been in 6 years or so, they told him his teeth were in great shape – not even any tartar build-up, didn’t even need cleaning. Me, I have a high-fluoride toothpaste the dentist gave me that’s supposed to strengthen tooth enamel, don’t drink sugary drinks or take sugar in my tea, eat fewer sweet things & floss regularly, and I am still having to get scaling done every 9 months and still getting occasional cavities (plus having my previous fillings replaced, apparently every 10 years or so). My dental costs are covered 85% by my work and I still spent more than you! ;)
    
    Reply
  - Marcia January 21, 2013, 11:47 am
    
    Ah, you can ignore my question below. I had the same dental question. We were definitely on the less frequent dental plan for awhile. I am blessed with good genetics, my spouse less so. But it seems all our costs came right in the same year.
    
    Reply
  - Rob aka Captain and Mrs Slow January 22, 2013, 7:41 am
    
    Sigh, genetics do play a huge role, first day of a temporary move Two COUNT UM two crowns broke, 2,200 Euros later I could eat. Back home broke a other tooth, 40 E from local dentist.
    
    Reply
  - Ashley Chiang January 26, 2013, 1:28 pm
    
    Question…
    
    And I come across this a lot in your posts …
    Out of pure curiosity – have you seen the documentary “Forks Over Knives”? I think it has the potential to change your numbers – not that you couldn’t take the hit ;)
    
    In my family of four – we are sort of opposite paleo/primal diet- we are high Raw and generally fruitarian – the grocery bill is where we struggle the most – I buy in co-ops, bulk, markets etc already – and my staples are bananas/ oranges / dates during the winter months which aren’t all that expensive …. But I digress – I commented here to say that drinking cows milk has actually been linked to osteoporosis and leads to an overly acidic nature which is bad for teeth among other things. Just a thought I wanted to pass along….
    
    Reply
Jungle January 21, 2013, 9:00 am

For two adults, our spending came in at $23,000 canadian, which does NOT include mortgage payments but does include over $3000 used for commuting to work and $1200 spent on rental property repairs. Also our property tax is $4100 here in the GTA.

Our grocery is lower, but we also spent over $2k on new furniture, bbq, etc since we moved in a new house.

Amazing how everything adds up and how much of a difference it makes saving money on everything. We’ve been tracking our spending for over 5 years now it to me, it was one of the best “ah-ha” moments to financial success.

In question for MMM: does your spending include everything? Such as personal grooming, etc.

I know every year, we spend about $400 on grooming for two adults. (this is soaps, toothpaste, deorderent, hair cuts etc)

Jungle

Reply
- Mr. Money Mustache January 21, 2013, 10:06 am
  
  Great comparison, Jungle!
  
  Here’s why Men’s Grooming costs nothing: http://www.mrmoneymustache.com/2011/05/30/get-rich-with-the-universal-mens-grooming-device/
  
  Mrs. MM recently figured out how to cut her own hair too.. it is a really neat technique and it looks great.
  
  The other stuff like toothpaste gets lumped in with groceries, as I buy it at Costco or the grocery store. Shampoo costs $1 and lasts a month. Deodorant is similar. Mrs. MM feels that makeup and other “product” items are unnecessary inventions: http://www.mrmoneymustache.com/2011/06/05/mrs-money-mustache-eliminating-lady-temptations/
  
  Reply
  - Amicable Skeptic January 21, 2013, 1:29 pm
    
    You gotta have the Mrs. share her hair cutting technique ASAP. My wife cuts my hair and has experimented with me cutting hers, but so far I suck. At it. Another idea which may work for some depending on genetics is to just cut out shampoo entirely and just wash hair with water. I’ve been doing this for the last few months and my hair looks and feels great. The first week it was a little scraggly looking, but after that it got nice. When you think of human history there had to be centuries where no one ever washed their hair, so you’d think our bodies would be evolved for this. The wife has also experimented with making our own deoderants. I don’t think they’re cheaper than bulk stuff at the store, but it works and it’s a fun little science project. http://wellnessmama.com/1523/how-to-make-natural-deodorant-beating-the-b-o-with-natural-deo/
    
    Reply
    - Allison January 21, 2013, 4:30 pm
      
      I can personally recommend the Crea Clip and I wish I had known about this years ago, so now I’m spreading the word. Check out these videos and see if it will work for your wife’s hair. http://www.creaclip.co.za/videos/
      I think it is ideal for straight and thin/medium hair. I managed to find one from China on ebay for $8.
      I’ve also heard of the pony tail method for DIY cutting women’s hair.
      
      Reply
    - chopperdave January 21, 2013, 8:38 pm
      
      At the risk of sounding like a stinky hippie, I wanted to chime in on the soap/shampoo thing.
      
      At the end of September I learned (I think from a comment by Bakari) that soap and shampoo is not necessary, and “crystal” deodorant is effective. I felt a little itchy and oily for about 10 days, but since then I feel as clean as ever, and my wife told me that my shirts’ armpits used to get BO, but since this change my shirts and I don’t smell at all.
      
      I do still use bar soap to shave, however. If anyone knows a way of avoiding that, I’d like to hear it. The new deodorant has been in service for at least three months, and is showing no signs of wear.
      
      Reply
      - Kevin January 21, 2013, 9:14 pm
        
        I’ve been using crystal deodorant for a couple years. Normally It works great, but I’ve noticed that if I’m eating a lot of junk food, I’ll start to smell.
        
        Reply
        
        Kaytee January 22, 2013, 8:55 am
        
        The effectiveness of crystal varies by person, I think. I gave it an earnest effort in college and the result was a crystal rock applicator that reeked of armpit. Now I use a mixture of coconut oil, cornstarch, baking soda, and lemon essential oil. This is much more successful for me.
        
        Question about the food bill – for how much of 2012 does this cover? It is just the months MMM was in residence or that plus times when on the move. I’d be curious what the in-residence per monthly cost is.
        
        I simply cannot wait until the baby is big enough/old enough to ride in a bike trailer, so we can reduce our fuel bill even more.
        
        superbien January 22, 2013, 7:37 pm
        
        There is a lady at work who went the “no-poo” route – a horrible scatalogical sounding term that means no shampoo – and it looks awful. She ‘washes’ her hair with water and baking soda, and conditions with apple cider vinegar. She always looks greasy and dirty. I had flirted with the idea (both as a natural and frugal technique) quite strongly, and that scared me off totally.
        
        From a natural/low toxicity standpoint, I also tried many natural deodorants, and my personal chemistry did not cooperate. The crystal (hard form, just the actual crystal) didn’t work at all, it was like not wearing anything. Crystal (liquid format) also did not work. Pit Putty (several different kinds) just made my underarms break out and smell weird – not like BO, but like something else odd and very unpleasant. Tom’s of Maine (several different versions of the “24-hour” solid variations) did not work, they stopped working after something like 4 hours and then my BO again smelled weird and bad – but a different weird-bad than Pit Putty. The only thing that has worked for me is Tom’s of Maine “unscented” liquid roll-on.
        
        Ooops, sorry, threadjack. :)
        
        Crystal July 25, 2013, 10:15 pm
        
        No poo can work for some people. I started it two months ago and it takes awhile for the hair oils to adjust. I also wash twice with baking soda and condition twice with the cider sometimes. I use spray bottles to have even coverage on my hair and to save product.
        
        Beth September 7, 2014, 12:55 pm
        
        I started taking my baby in a bike trailer when she was just a few months old. I strapped the car infant seat into the trailer.
      - Alexandra January 23, 2013, 7:42 am
        
        I read in Kelly Coyne/Erik Knutsen’s book to use olive oil for shaving. They also advocate less/none shampoo and soap.
        this would be inexpensive olive oil, not top shelf for fine cooking.
        
        Reply
    - addieforshort January 24, 2013, 9:21 am
      
      The “Thai” brand salt spray deodorant works great and lasts a long time…added benefit of no aluminum and other crap on your skin.
      
      Reply
  - Phae January 24, 2013, 6:04 am
    
    Pleeeeeeeeeease have Mrs. MM share her hair cutting techniques! So far, I’ve only managed to find vague YouTube videos and bad blog instructions. What did she find?
    
    Reply
  - Erica / Northwest Edible Life January 28, 2013, 2:12 pm
    
    Baking soda as toothpaste. Try it. Just dip a wet toothbush into a small pile of baking soda. The salty bitter flavor isn’t what I’d call delish, and it takes some getting used to, but now I hate the idea of really sweet, minty toothpaste and LOVE the full clean feeling with no residue after brushing my teeth. Plus, baking soda is the ultimate multitasker and toothpaste just sits there totally useless for 23 hours and 56 minutes a day.
    
    Reply
Di January 21, 2013, 9:09 am

Thanks, this is really interesting (and I am also a big fan of the new logo!)

I have been getting increasingly interested in achieving financial independence these last few years (now entering my late 30s), but for some reason have really struggled to make myself sit down and figure out how much I spend, so I have no idea how far away I am from achieving it. I am lucky enough to have been in a job with a very good/ridiculous income for my entire career, and as a result to have been able to have good savings and buy a house for cash a couple of years ago, so the key to FI for me truly is expenditure. It wouldn’t even be that much work to find out the answer, so I don’t know what the barrier is … maybe I’m scared I’ll be disappointed how much I spend … or maybe I’m scared to find out FI is not so far away? Seems to me the leap of giving up the big income is always going to be scary, as it would be very hard psychologically and practically to ever go back to the same earnings level. How do others deal with this fear of the unknown/uncertainty? I wonder if I’ll ever have the guts to actually take the leap?

Anyway, seeing all your figures set out so nice and neat makes me really want to sort myself out, so I am determined that this weekend (tax return weekend – yay!) I am going to go the extra few steps and actually build my spreadsheet and work this out, even if I have to do it peering through my fingers or hiding behind the sofa… Thanks for the spur to action!

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- Verogall January 21, 2013, 1:59 pm
  
  I have the same problem. After talking to a few people, I think for me the solution is finding a way to make tracking a no-brainer. Anything that takes a lot of concentration or time isn’t going to work for me. Make it easy to fit in around the daily stuff and I’ll stick to it. A friend uses an app on her smartphone and updates it at lunchtime and again in the train during her commute. I’d need a reminder to get me into the habit — something as simple as a daily alarm will do the trick. A few weeks of daily reminders and I should have the habit down. This is also a technique used for overcoming phobias or bad habits. Make small easy steps that you don’t link to ‘the problem’ and it becomes a lot easier to chip away at the resistance.
  
  Reply
  - Kenoryn January 21, 2013, 5:47 pm
    
    I use my bank (Bank of Montreal) – they have a tracking system called MoneyLogic that categorizes everything that goes on my credit card or debit card. Therefore, I just put everything on my credit card or debit card, and it`s all there for me, except a few occasional cash purchases where I categorize the ABM withdrawal manually. I bet other banks have similar systems.
    
    Reply
    - Di January 22, 2013, 1:29 am
      
      Thanks both! I am using an app to track cash spending. I’m not too comfortable giving my bank details to software, but I don’t think it should be too hard to figure out the bigger stuff from bank statements, specially as I have to go through them this weekend for my tax return anyway! I genuinely think I am just scared of the answer … What if it turns out I could make the leap pretty soon? That would be fantastic but also scary. Or what if I am years away? That would mean some real budget-slashing, also a bit scary…
      
      Reply
rjack January 21, 2013, 9:09 am

Thanks for being so open! It gives me something to aspire to. I really wish I had your property taxes.

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- TOM January 21, 2013, 9:27 am
  
  I recall from previous posts that you’re in the suburbs of Philadelphia… why not just move to Delaware?
  
  Reply
  - rjack January 21, 2013, 10:54 am
    
    Tom – We may move eventually, but right now I have one son that works in downtown Philly and another son that goes to a state college in downtown Philly. I need to stay here until my son finishes college for in-state tuition.
    
    Reply
    - Sam January 22, 2013, 11:33 am
      
      In my experience that wasn’t true. I went to a state school in Michigan and my parents moved the summer before my senior year. Both myself, and my sister who was going to be a sophomore, were able to receive the in-state rate for the rest of our time as undergrads.
      
      Reply
- Wilson January 21, 2013, 9:57 am
  
  We have similar taxes but wish I had that home insurance! I pay more than that per month for home + flood, and I have $4,000 deductibles (the diff btw that and a $10,000 deduc was less than $35/yr in add’l savings). Of course, I live in a high risk area (we had a prominent hurricane some time back and that flood policy was a life-saver). I file the added expense in the keeping the wife happy category.
  
  Also hoping we can get our health ins. policy down more this year. We have a high-deductible plan for a family of 3 that is a good deal but still a decent bit more than the MMM family. We’re going to be forced to shop around yet again as the insurance provider for our professional association from whom we buy our policy has decided to stop underwriting those policies. Hope that doesn’t mean the new provider will be higher.
  
  Reply
  - Kenoryn January 21, 2013, 11:57 am
    
    I too am baffled by the home and car insurance figures. I pay about $800/year for each of those, with no comprehensive/collision on the car and highest deductible available, and basic policy with highest deductible on the house. I drive an elderly sedan and have a claim-free driving record (I do have a speeding ticket still on the books though). I live in a low-risk area for natural hazards/disasters. My house is 120 years old which means quite a few places won’t even consider insuring it, but of the places I’ve found that will, I have the best deal available (the place I’m with also gives me a 10% discount under my university alumni plan).
    
    Is this maybe another US/Canada difference? Anyone have suggestions for good providers in Canada I could try?
    
    Reply
    - Jason January 21, 2013, 2:43 pm
      
      I don’t understand those two either. Maybe he’s able to insure his house for much less because it’s paid off. No idea what his homes value is.
      
      Reply
      - Kenoryn January 21, 2013, 6:04 pm
        
        About $400K, which is a little more than twice what my house is worth, according to this: http://www.mrmoneymustache.com/2012/06/01/raising-a-family-on-under-2000-per-year/
        
        Reply
      - Lucas January 22, 2013, 4:16 am
        
        Home insurance should be based on replacement cost, not appraised value (which always includes the land). I have a townhouse near DC that i could sell for $300k, but it is only insured for $250k. I could probably go lower as the land is appraised at $80k, and i think the true replacement cost would be around $200k, but i would rather be a little on the safe side.
        
        You are right though that if you have a morgage they make you sign something saying you will keep the house insured for more than you owe on it (or sometimes full value).
        
        You also have to look at the different options on your insurance. Do you really need identity protection with your home insurance? What is your deductable? Do you need sewer and drain backup, etc. . ?
        
        Reply
        
        Cline January 23, 2013, 5:11 am
        
        Mmm is a big proponent of geico and whoever they use in Colorado for homeowners. I differ with him there philosophically, (disclaimer I’m an independent insurance agent). I would look for an agency that has several companies and let them compare for you. Many of the captive company get you in with an attractive rate then slowly turn up the burner (how to boil a frog). Inpendent companies don’t tend to do that because the agent will switch the client to another company. I’m in a hurricane prone area too and there is no such thing as cheap insurance here!
        
        Mark January 23, 2013, 5:27 am
        
        I have Geico for auto insurance. I started with them back in June, before I started reading this blog.
        
        It’s tough to say what the reason is, but at the time I was a 22 year old male. I have one at fault accident, one not at fault accident and a speeding ticket. One of the last 2 is more than 3 years ago now but wasn’t when I started. Yet, my rates went UP after being with them 6 months. They went up again when I moved a few weeks ago. I asked them if it was due to the new location, and I got a verbose email back that didn’t answer the question while leading me to believe that my assumption was correct.
        
        Anyway, I’m fed up enough that I think I’ll be switching when the time comes.
    - Rob aka Captain and Mrs Slow January 22, 2013, 7:49 am
      
      Car insurance in Canada is just insane, I pay 650E (bit less than a grand) for full low deductible everything insurance, this is a touch higher than it should be due to the fact I put a claim in last year.
      
      I live in Spain.
      
      Reply
      - Dave January 22, 2013, 11:40 am
        
        Insurance in *Ontario* is insane. Other parts of the country, where the health side is covered provincially rather than privately, is better… I think pretty much everywhere else.
        
        Reply
    - Ib January 26, 2013, 7:33 pm
      
      I’m in Manitoba. We have to isure our car through Manitoba Public Insurance. It is about $1500 or more per year no matter what car you drive.
      
      We have an old house that cost $1000 per year to insure. It is more because it’s an old house, eventhough everything has been upgraded.
      
      Plus our house tax is $140 per month, it will be going up 4% this year. Some areas are 5-6k per year!
      
      Reply
mike crosby January 21, 2013, 9:10 am

Video on Plant vs Paleo Diet

It’s amazing with all the travel, raising a child, positive savings, you can live on so little. Perhaps so little is only in my mind. You live a fantastic life.

I find that I keep going through your posts and those of ERE. I keep learning and being inspired.

BTW, what you spend in a year on restaurants, we spend in a week. Throw in our housekeeper, property tax/association fee, that alone matches your yearly spending budget. All pissed down the drain.

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Michelle January 21, 2013, 9:15 am

Wow you guys did great with your spending!

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Chris January 21, 2013, 9:22 am

Nice work MMM family! MY goal is to get to 30K or less/year, if/when our mortgage is paid off. Hopefully inside of the next two years. Thanks for demo’ing that it can be done while still living a great life!

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Frugalapolis January 21, 2013, 9:52 am

WOW! What a goal to aspire too. I thought I was doing good at being frugal, but as we all know it is a never ending process. Here’s are our spending numbers for last year.

http://www.frugalapolis.com/2013/01/how-we-spent-our-money-in-2012.html

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Mrs PoP @ Planting Our Pennies January 21, 2013, 10:34 am

How do you account for taxes, etc? Do you have an LLC that you run all the rental properties through? I typically keep track of them along with our own finances since we’re not LLC’d on them.

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Joe @ Retire By 40 January 21, 2013, 10:51 am

Wow, very impressive. We spent $25,000 without the mortgage.
This year should be a little less because I’m not driving much anymore.
Well, it’ll probably be close to $25k because of health insurance and a couple of other things.
Do you have life insurance?
Here is our 2012 summary
http://retireby40.org/2013/01/money-2012/

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- redagain January 22, 2013, 8:32 am
  
  Yes, life insurance. That’s over $1,500 a year for us. We have hefty policies because of young kids, and about 15 years left on the policies. With kids, even with pretty significant net worth, I wouldn’t feel comfortable with no life insurance.
  
  Reply
  - Mr. Money Mustache January 22, 2013, 2:47 pm
    
    We’re definitely in the no-life-insurance camp here.
    
    Back before having kids, Mrs. MM and I both had jobs – thus, either person could easily manage financially in the absence of the other. By the time we started the family, we were retired and thus earning money through work was not an issue.
    
    But even if we were not in this situation, I’d only carry life insurance if the financial consequences of losing one parent would be disastrous.
    
    Two income earners each earning $50k with a family living cost of $30k? Not disastrous, no insurance needed.
    
    One income earner earning $100k with a family living cost of $80k and no saved assets? Disastrous – insurance needed (along with more careful study of MMM blog to get out of that emergency! :-))
    
    Reply
Lucas January 21, 2013, 11:18 am

Great job! You had more than half more fun than most on less than half the expenses many have having half the fun!

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Geek January 21, 2013, 11:21 am

I’d love to see more of a breakdown of the paleo diet you’re eating – I’m going heavy on the coconut milk and chicken curry and the price of grassfed beef is still hurting. Do you buy whole cows? Eat only a little meat each day and nom broccoli the rest of the time? Lots more olive oil?

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- Bo January 21, 2013, 2:16 pm
  
  I also would love a breakdown of their typical grocery run too. I feel the same as you. We eat meals that mostly consist of meat+veg, and it gets expensive quickly. We might be going for a half-cow and whole pig sometime in the near future…
  
  Reply
  - Mr. Money Mustache January 21, 2013, 9:15 pm
    
    In a word, OIL!
    
    Look at the cost-per-calorie of olive oil (in large quantity from Costco), and the health and metabolism benefits. An entire day’s worth of calories (2000) of olive oil costs under two bucks.
    
    Then, start drizzling olive oil over everything you eat. Throw in some coconut oil for cooking too. Olive oil over your eggs, on your avocados and salads, on the seasoned sweet potatoes and grilled fish, etc. Make it into an olive-oil-and-basil pesto and then it’s even yummier.
    
    On mornings before high-activity days, I have a bowl of almonds drowned in coconut oil, with ground flax seed and a few dark chocolate chips thrown over top. And a fuckin’ BANANA sliced over top of that!! Infinite calories and healthy fats, near-zero cost and preparation time!
    
    You will find that your portions suddenly shrink drastically (because they are more calorically dense), AND they keep you full longer (because your body digests fats slowly). Your blood sugar will be stable and if you are carrying any extra fat, it will hopefully burn away as well.
    
    As for meat/fish/chicken.. I probably eat it for one meal every day or two. Much more than before, but much less than 3x/day. I eat many eggs, though, as well as loads of nuts, high-fat dairy and some whey protein. So not a very strict Paleoist at all.
    
    Reply
    - Bo January 22, 2013, 6:15 am
      
      I appreciate the response. I feel like I typically eat the same as you, but you seem to have meat 1x less per day.
      
      I’m typically eating Fruit/Almonds for breakfast, and meat+veg for lunch and dinner. Though, I’ve recently been avoiding eggs as a little experiment (seeing if it effects inflammation).
      
      We definitely use a good amount of olive oil and coconut oil (and coconut milk) as well. Tried making a “hot chocolate” from cocoa powder and coconut milk, and holy hell was it dense. 4 servings out of that.
      
      Reply
Aloysa @ My Broken Coin January 21, 2013, 11:34 am

I need to do this calculation. But I am afraid. After I calculated how much I spend on shopping alone, I am afraid to see other number. But I am sure it will be quite eye-opening.

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Marcia January 21, 2013, 11:43 am

Sorry if this has been asked, but do you have dental insurance? $172 would only cover one cleaning here. 3 people x 2 cleanings a year = $1200 (approximately) without insurance.

We used our HSA to pay for dental this year. For next year, I signed up for the premium insurance plan (annual cost $1200, funny that). I elected to do so because both spouse and I needed crowns this year, and he expects to need one in 2013. Our dental costs were quite high. Up until this year, they were much lower, only cleanings.

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- kyle January 22, 2013, 2:20 pm
  
  He said that dental costs were for his son’s yearly cleaning. He and his wife go only once every 5 years or so.
  
  Reply
BeatTheSeasons January 21, 2013, 12:04 pm

How far does $225 go in restaurants and coffee shops? We spend a lot more than that and I was just wondering if it’s because eating out prices are higher in the UK (as they are ultimately linked to land/property prices) or if it’s because you rarely eat out.

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- Bo January 21, 2013, 1:40 pm
  
  I think you’ll find that MMM’s “eating out” budget is so low, because he simply doesn’t eat out much. Even if you’re hitting up a local cheap-o sandwich place, you’re talking $6-7/person for a lunch. For a family of 3, that’s 10 outings a year, if that.
  
  I think restaurants ARE a bit more expensive in the UK, but I think that MMM is particularly good at avoiding eating out.
  
  Reply
  - Mr. Money Mustache January 21, 2013, 3:24 pm
    
    Bo is right on this one: the thrill of restaurants wore off 10 years ago or more for me. Nowadays it is more fun to cook things at home, sharing them with friends when we are feeling sociable. More learning and challenge, better nutrition, and much better venue. Cost is almost an afterthought.
    
    Plus, I’ve got a wife who can’t eat wheat gluten, and a boy who will only eat things his Mum or Dad prepares for now. Thus, it would be difficult to go out even if we wanted to.
    
    Once you start, preparing all your own food is an easy habit to sustain. For anyone wanting more wealth, it’s a great place to start.
    
    Reply
TicoHombre January 21, 2013, 12:10 pm

Excellent job, MMM!

Been reading your blog for about a year now.

We are consumer debt-free including our personal residence. However, our big ole goal is to pay off the three remaining mortgages on my rental properties ($177,650.00 remaining) in 42 months by adding $3,400 per month and snowballing each new payoff into the next. Just started a blog to hold myself accountable to that goal. http://payoffmyrentals.blogspot.com/

Been semi-retired since my 20’s (now 51). The vast majority of my investments are my Commercial Cleaning Business and my 6 Rental properties. Once accompished, we’ll be able to live on about the same budget as you–approximately 24k/yr. This post drives home how critical it is to watch impulse spending. I have much room for improvement in this area.

Thanks for the insight and handing out free microscopes to peer into the inner workings of the Mustache household spending.

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Bo January 21, 2013, 12:29 pm

I love the budget. As a fellow paleo-go’er for the past few years, I find it really tough to keep the grocery bill down. Even accounting for the difference in “food cost” between our two areas (as listed on common COL comparison calculators), We still spend 20% more than your family.

We make almost everything from scratch. I wonder if we’re just buying more meat and don’t realize it? We go through bouts where we don’t eat much rice (which is a cheap filler) and my wife detests beans, so there’s a couple cheap staples right there.

I guess I won’t fret too much. We should work more on out “eating out” category anyways lol.

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Kirkland January 21, 2013, 1:06 pm

Thanks for sharing this.

I copied your data to a Google Spreadsheet so I could input my own and compare, and I found some errors in the 2012 column (I didn’t look at the others). For example, the Auto and Transportation subcategory actually adds up to 1537, not 1437. Also, the grand total I got was 25,046, not 23,524.

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- Mrs. Money Mustache January 21, 2013, 1:36 pm
  
  Thanks for pointing that out, Kirkland. We figured out the problem – MMM had been meddling with the spreadsheet, shifting $100 from ‘groceries’ to ‘auto’ to account for a car battery bought at Costco. But he had forgotten to update the overall auto heading. It should be fixed now.
  
  Reply
  - mike January 22, 2013, 9:13 am
    
    the auto category looks right, but I’m still getting a total of $25046, rather than $23524. I could have a mistake, though.
    
    I love your blog. Thanks for sharing – I’ve learned so much.
    
    Reply
    - Mrs. Money Mustache January 22, 2013, 10:08 am
      
      Yes, you are correct. This has been fixed. Thanks!
      
      Reply
- Mrs. Money Mustache January 22, 2013, 10:06 am
  
  You’re right – the total is $25,046. The spreadsheet I used had a messed up formula for the total. I’ve updated the article with the changes. Thanks for pointing that out!
  
  Reply
Johnny January 21, 2013, 2:04 pm

Golf clap on your fantastically frugal 2012. Congrats!

Might be a stupid question, but seems like everyone’s got their own method: how do you track your spending? Do you do it month-to-month or just at the end of the year? Since you don’t budget, do you track it closely or just lean on the fact that you’re so ingrained in the MMM philosophy that you won’t mess up?

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- Kristin January 29, 2013, 5:45 am
  
  I too am curious about your method of tracking. I was thinking of copying your categories and just entering in expenses by month, perhaps noting the day of the expenditure as well.
  
  Reply
  - Ralph December 26, 2015, 8:07 pm
    
    Late to this, I think somewhere it was written MMM does not do a budget as such but simply enters the spending as it occurs.
    
    I do not track that heavily now, but did a budget and tracked like crazy to see if it worked. This took about 15 months. Once the spending was sorted we just utilise that money every week and only track if it goes off line more than 10%.
    
    At the end of the year we check spending and do totals and then adjust anything needed.
    
    Reply
Tyler January 21, 2013, 2:04 pm

Always interesting, MMM. Thanks for sharing.

Just curious – what are your investment expenses and income taxes on your investments / rentals? I understand the tax bit can be deceiving if you are also bringing in good income, but many people account for those two things as expenses in retirement.

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- Mr. Money Mustache January 21, 2013, 9:20 pm
  
  In general, taxes are near-zero if we earned only as much income as we spend. But because of higher income in recent years, we seem to pay about 10% overall taxes. Detailed in this article:
  
  http://www.mrmoneymustache.com/2012/06/04/the-lovely-low-taxes-of-early-retirement/
  
  Reply
KB January 21, 2013, 2:25 pm

I love it! I do have to say that I think the early years of kids are the cheap years except for daycare/preschool for those who have those expenses.
I will have to look back at this post once in awhile to try to kick ass our middle class lifestyle! Very inspiring!

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- Mr. Money Mustache January 21, 2013, 9:09 pm
  
  Hopefully I can prove you wrong. Young kids are expensive because of the birth costs (in the US) and more frequent medical checkups, then childcare if you choose to use it, formula if applicable, diapers, cribs and carseats, etc.
  
  Older kids can find their own fun and *earn their own money*. Ideally, your kid will enjoy working in YOUR business, where they will learn advanced skills, earn money for themselves, and you might even make a PROFIT off of their labor. Just like back in the ol’ farm days ;-)
  
  Older kids are only expensive if you do it USA-entitlement style, where mommy and daddy pay for the sweet 16 car, insurance, all organized activities, and college tuition, room-and-board, and the wedding to boot. Since I had to pay for all those things myself, I like the kids-earn model better.
  
  While we could afford to pamper him in this way, I feel it would not be helping him in the long run.
  
  Reply
  - Chris January 22, 2013, 3:13 pm
    
    Several comments all totally random
    
    I too have an Iowa speeding ticket has a dark mark on my 2012 spending. Damn Sioux City camera inforced speed trap.
    
    Two I would question both the wisdom and the sustanability of the 5 year dental check-up schedule. I had no fillings or cavities ever at forty now at almost 44 I have five or six and have a couple more I am getting done next week. Maybe it’s my diet Coke habit from the 1990’s coming back to get me, but it has been a sudden and depressing development.
    
    Three doublecheck to make sure that your voluntary procedure worked. It isn’t always one-time. Both DH and my FIL have had two. FIL didn’t check and has one more child than he planned on.
    
    Four IMO kids get more expensive as they age. I guess that is because we used cloth diapers, homebirthed, breastfeed, and have been very lucky to have healthy kids. We also forgo preschool and ended up with pretty cost effective childcare. Older kids eat more. They wear bigger more expensive clothes that are much harder to find in thrift stores. Even cheap activities like 4-H and wrestling cost some money. I whole heartedly agree that you get more work out of them, but the ravenous hunger makes it less than cost effective. DS1 loves to do homesteady stuff like making jam, husking sweet corn, hauling wood, and going to farm shows with grandpa. But he also wants to do stuff with his friends and eat hot lunch instead of brown bagging it everyday.
    
    Reply
Jason January 21, 2013, 2:37 pm

We have two kids and one of them is into sports (baseball and basketball mostly). The fees to play both are infuriating. Sounds like your kid is more into snowboarding, biking, etc. Is this how you avoid the organized sports fees? I also get burnt by partner wanting documentation* that he played all these sports.

* “Professional” team and individual pictures.

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- Mr. Money Mustache January 21, 2013, 9:04 pm
  
  Yeah, we both like self-organized and freestyle outdoor activities. While I think team sports are good in theory, in practice I find them incredibly non-fun, and I think my son is turning out the same way so far.
  
  My strange athletic philosophy is “Why would you ever want to *beat* another person or team at anything? Don’t we all want to Cooperate for mutual gain instead?”
  
  I was born without any sense of competitive spirit. I want us all to win.
  
  Reply
  - Mr. Frugal Toque January 22, 2013, 7:23 am
    
    Sad but true.
    As a person who, unlike MMM, has played a lot of team sports down through the years, I’m quite happy that neither of my kids are into it. Right now, their fascination is with martial arts, which is going very well, precisely for the reasons you state: everyone wins because everyone is trying to help everyone else to succeed. I don’t get worse at karate because someone else is getting better.
    I used to think that there was something healthy about “being on a team” and “developing a healthy competitive spirit” or whatever, but I’ve since determined that the world is full of (dangerously) sore losers and there’s really nothing healthy about raising children to be “competitive” in the sense that any of these people mean.
    As for cost, it’s true that it isn’t cheap, but the Toque family (2 adults and 2 children) still keeps its costs at $2k/month including our quite non-Mustachian fitness program.
    
    Reply
    - Kenoryn January 22, 2013, 9:06 am
      
      My problem with team sports is that I was always REALLY BAD at them and therefore was letting others down, and the competitive ones would be annoyed with me. Growing up I did swimming and skating (basic skills everyone should have), horseback riding (we had horses), and gymnastics (I think my parents thought this might help my coordination, but alas, didn’t seem to have any effect).
      
      Where my parents did make a significant investment was music lessons, for which I am eternally grateful. That skill allowed me to make money teaching as a teenager, to get the most fun job I have ever had (as a wandering minstrel at a renaissance festival), and now, to play in a symphony and a band. It also gives me a guaranteed part-time income opportunity if I ever want to teach again, as people are always looking for violin teachers.
      
      Reply
  - Ceaps January 22, 2013, 7:36 am
    
    Wow, you just spoke from my heart. I am exactly the same and I recall how difficult it was at school or with a friend who took everything super competitively. Losing at a board game was the end of the world for him and once he was winning, he would boast as if he were the greatest man to walk the earth. Add to that his desire to turn everything into a competition and you see that it’s little fun to be around such people, as they need someone else to be the loser.
    
    The older I get the more I dislike all the fuss about being the best, having to compete and being better than everyone or someone else. I very much prefer the idea of cooperating to benefit everyone. Sadly I find it rather hard to find people who think alike. But let’s try and spread the idea :D
    
    Reply
  - Nerode January 22, 2013, 12:14 pm
    
    As a counterpoint to this perspective, when my son (8 years old at the time) was put on the U10 soccer team, his attitudes to life grew immeasurably better.
    
    Because it’s what he wanted to do, he learned to work hard, to listen to and respect his coach, to find tolerance and the ability to work together with boys he previously had troubles with (and may still not like).
    
    While he enjoys winning, he’s learned to lose well and to give credit to the winners, to deal with pain with quiet determination and to encourage and lead the younger kids.
    
    Some of these things he could have learned in other, non-team/competitive environments; others not so much – for him, at least.
    
    For us, the few hundred dollars we spend on this activity in a year is probably the best money we spend. YMMV.
    
    Reply
    - Mr. Money Mustache January 22, 2013, 1:05 pm
      
      Sounds good Nerode – I didn’t mean to say I think team sports are a bad idea in general.. I think they are GREAT for the people who enjoy them. It’s just that they never happened to work for me. Even though I love and support all those values of learning to lose, give credit, encourage, work together, etc.
      
      Reply
      - Nerode January 23, 2013, 2:01 pm
        
        No offense taken, no axe to grind – just an illustration of your oft-mentioned point that everybody has to work out the implementation of (and the exceptions to) the path to FI for themselves.
        
        Taking the MMM budget, for example, and attempting to replicate it exactly is not going to work exactly in many locations or many families. Taking your principles and applying them to our circumstances IS likely to work.
        
        As to you having passed the expensive years of child-rearing, I await your discoveries with interest – and a little skepticism. Consider that a challenge if you will! If you succeed, I’m sure we’ll learn.
        
        Reply
Cheryl January 21, 2013, 2:43 pm

What I love about your blog, as well as the attitude and useful stuff, is that I almost always finish reading feeling more positive about my finances. Stuff to work on for sure, but it’s improving – dropped house insurance by $270 when I renewed it and I’ve been cutting out the short car trips, taking the bike out to the post office and shops instead. I love the ride, am up to being able to make it all the way up the hills too!

Next up is the power bill – a letter came this week to tell me it’s going up to 35c/kw. Some shopping around to do,

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- Mr. Money Mustache January 21, 2013, 9:01 pm
  
  Holy Shit!! At 35 Cents/kWh, saving electricity becomes an incredible emergency (it starts at 6 cents in my area, or 10 cents for wind-generated which is what I buy).
  
  Here’s the old electricity article: you’d want to apply the principles pretty religiously if low power bills and 35c electricity were to coexist: http://www.mrmoneymustache.com/2011/05/10/ill-show-you-my-electricity-bill-if-you-show-me-yours/
  
  Reply
  - Rob aka Captain and Mrs Slow January 22, 2013, 11:46 am
    
    Yesterday went out and read my meter, time to start figuring that bill. Secondly we’re moving in a few months, a move which unfortunately will require new appliances (checked used but won’t work out) so normally everything is about price, this time I paid very close attention to energy ratings,
    
    For example two dishwashers close in price, but one uses 50% less water and a third less electricity. Guess what one is going in our place.
    
    Ever heard of induction hubs, neither had I till researched then. 30% less electricity.
    
    Sorry way off topic but before this it simply never occurred to me that I could do anything but complain about utilities!
    
    Reply
- Purple January 22, 2013, 12:54 pm
  
  You must be in Australia.
  
  Reply
  - Ralph December 26, 2015, 8:16 pm
    
    She probably is, just to note that in some areas 35c is cheap. My cost is up to 52c peak but we do not use much.
    
    The cost for us to go off grid is break even now even with batteries every six years. And we export massive amounts of coal to other countries to burn which are cheaper than us per KWhr.
    
    Reply
ACanFan January 21, 2013, 2:46 pm

Congratulations on keeping your 2012 expenses so low and focusing in on what is really important for you and your family to live the life you decide.

Like your wife, I tally our previous year’s expenses in January but I seem to have a blind spot for remembering to include our largest expense each year, which is our Canadian and provincial income/health insurance tax. Probably because we don’t know the exact amount until April. My goal this year is to figure out the best long-range plan for paying the least amount of tax through our retirement years as we start to take pensions and cash out our Registered Saving Plans.

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fern January 21, 2013, 2:54 pm

I’ve been living on a barebones budget since a 2009 layoff. I’m a single person, but still, my 2012 expenses came to nearly $36,000. I paid off the mortgage in July.

However, my property taxes here in CT are considerably higher than yours ($6600) And becus I’ve been paying for Cobra, my health insurance cost me $6,372. That’s not including my out of pocket co-pays, either.

Next year should be better, sans mortgage.

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Johnny Moneyseed January 21, 2013, 3:09 pm

Our annual expenses will look pretty similar to yours once Mrs Moneyseed and I can knock out our mortgage. We spend a significant portion of our annual budget on food as well.

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David Horne January 21, 2013, 3:16 pm

Another inspiring post. I still need to take a closer look at the particular but despite my best intentions I flubbed and spent more this year than last. At least it gives me that much more room to improve this year. Also it seems amazing that your are able to do all that for three when it costs so much just for myself. I think I might need to prioritize some things.

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Robert Coffin January 21, 2013, 3:38 pm

This lifestyle is so much better than the life of the high spender. Years ago I had all the latest gadgets and all the greatest debt. I was a slave to the objects in my life. I had to use my possessions to relieve the stress of having enough money to pay the next bill or losing my job or getting hurt and having to pay medical bills. Now I have my debt down to where I can pay my bills on a minimum wage salary (not that I would ever work for minimum wage). I just closed on my first house that is 10 miles from where I work and within biking distance. The best part……My house only cost 71K and I’ve already put in $3000 in renovations and I could easily sell it for 90K just one month after buying it, not that I will. It would be madness to sell a house where my mortgage payment is less than $500 a month. That’s 500 bucks cheaper than the apartment I was living in 25 miles from work. There is only one way to become financially independent and MMM has it right. A penny saved is penny earned!!! Don’t spend your money on stupid shit and you’ll be amazed at how much your life just keeps getting better and better. Thanks to MMM and everyone else who supports one another on this site. Cheers!

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Joe January 21, 2013, 3:55 pm

Does Jr MM get an allowance? If so, how does that factor into the budget? More importantly, how does your family determine how much $ and what he does (or doesn’t do) to earn it?

Either way, I’m curious to hear your views on allowances.

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- Mr. Money Mustache January 21, 2013, 8:53 pm
  
  He does have a little money ‘stash going, from which he can buy toys and computer games. No regular allowance, but he earns rewards for meeting certain goals through an elaborate “magnet board” system Mrs. MM dreamed up. I can’t claim to fully understand it :-)
  
  When he is older, I plan to help him earn loads of money from early entrepreneurial things in elementary or high school. Maybe developing a popular comic strip with an online cult following (similar to the Super Diaper Baby phenomenon), or a video game or phone/tablet app, or helping me rebuild some houses in the neighborhood. He already knows that money doesn’t just come from following the rules and working for The Man.
  
  Reply
  - C January 22, 2013, 6:43 am
    
    I would love to see a post from Mrs. MM on the magnet board sometime!
    
    Reply
  - L'Enginieuresse January 23, 2013, 2:37 pm
    
    “He already knows that money doesn’t just come from following the rules and working for The Man.”
    
    Ain’t that the bucket-of-cold-water-in-your-face truth.
    
    Reply
  - Brian January 24, 2013, 9:50 am
    
    I once saw a cool story (can’t remember where) about a dad that bought his son a vending machine. They put it in a school or somewhere similar, would refill it, collect the cash, fix it, etc. Then use the proceeds to buy another machine. Thought that was pretty great way to learn about running a business.
    
    Reply
- Kenoryn January 22, 2013, 9:18 am
  
  We didn’t have an allowance growing up, but my parents paid us for books we read (from a list my mom developed for each of us). I think we got 25c per book, or more for bigger/more complicated ones. Les Miserables was worth $5, but I never made it past Part 1. ;)
  
  Reply
  - Joe January 22, 2013, 11:52 am
    
    Reminds me of a story from my childhood: my dad felled a tree in the front yard and chopped it into firewood. He said he’d pay me 25 cents per log to move them to the wood pile in the back yard.
    
    I worked all day and moved about 400 fire logs, earning myself nearly $100! Which at the time was probably a year’s allowance.
    
    That was the last time my dad ever paid me a per-unit fee for doing work for him.
    
    Reply
Jeff January 21, 2013, 4:16 pm

Are your summer travel costs to Canada included in the totals? I know you drove, so $684 for gas for a whole year seems really low. If I recall correctly, there were also some plane tickets for Jr. and Mrs. as part of the trip.

Reply
- Mr. Money Mustache January 21, 2013, 8:48 pm
  
  Yup, that gasoline bill includes the Canada trip (although the inlaws pay for gas while I’m there, since I use the van to shuttle materials to and from their cottage as I build it). We have very little reason to drive other than the annual family roadtrip and occasional trips to the Denver airport to pick up visiting family and the Scion gets over 40 MPG.
  
  Plane tickets for Canada 2012 were bought during a sale in 2011, so they were in last year’s report.
  
  Longmont, CO is only about 5 miles x 5 miles and we are in the center – everything is blissfully within biking distance.
  
  Reply
KB January 21, 2013, 4:46 pm

Jason, (posted above) My biggest cost over the MMM budget is no.1 kids activities, no. 2 cars. I also spend more in several categories and I think I can really work on those especially food.
My 3 kids activities are probably about $12,000 per year now – my oldest is at about $3500, my middle child – competitive figure skating – $7500, my third is at about $1000. There are competitions, tournaments, hotel costs and food, equipment. I just don’t know if I’m doing the right thing some times – in some cases it’s their dream, in some it’s to keep them busy and out of trouble (13 year old teen is my oldest.) Even house league hockey has equipment expenses, tournaments, etc.
If you don’t want to go this route, consider not exposing your kids to the competitive stream. It’s hard to take away something than to have never started it. Sometimes hard to do, especially when their friends are doing it!
Never mind skiing and snowboarding – lift and rental fees are crazy expensive from what I have researched!

Reply
- August West January 21, 2013, 11:18 pm
  
  Two of my kids started snowboarding this year. The local ski hill is a bargain so the annual cost is not too bad:
  
  used board+boots from local ski swap in September approx. $100 each kid
  annual family ski pass during President’s Day sale $800 per family
  gasoline cost per trip approx. $18
  
  We are strict about bringing our own food with us each time.
  
  Reply
  - Jamesqf January 22, 2013, 10:49 am
    
    For skiing, go cross country. You climb up the hills, then ski down, or enjoy going along the fairly flat. Snowboarding, you use snowshoes to climb up the hill, then snowboard down. And you can take the dogs along, too.
    
    For ice skating, you wait until the local lakes & ponds freeze over.
    
    Reply
- Dee January 22, 2013, 8:35 am
  
  You raise an excellent issue for parents of young children. Plan ahead and have your child try several sports that will not be expensive and that can be continued through high school. Figure skating (which I did growing up) is going to be expensive because you have to pay for ice time as well as instruction. It also will probably not be a family sport, or even one that includes many classmates as the child gets more advanced. Same for gymnastics. Track is inexpensive and you can run most of your life. Bicycling is similar. Depending on your school system, they may have a program for swimming or even skiing so the cost is low. I made sure my daughter developed good skills for swimming and ice-skating (and minimal for skiing since we live in the south), but then encouraged her to play soccer and basketball. When it became clear her adult height is going to be 4’11”, she switched from basketball to tennis. She also dropped soccer due to her dislike of heading the ball—a wise choice on her part I believe as more research has come out.
  
  Reply
SusieQ January 21, 2013, 5:11 pm

OUCH! $75 Speeding Ticket???? No excuse, Big Boy! Hope the wife was all over your A$$ for that!! ;-)

Reply
Justin@TheFrugalPath January 21, 2013, 5:17 pm

Wow, those are some impressive numbers. One way that I’ve found to save money is to use more permanent items rather than use and toss type items. We got rid of the disposable bathroom cups and replaced them with reusable plastic ones. And got rid of disposable dusting cloths for our hardwood floors and replaced them with reusable microfiber ones.
Every little bit helps plus we’ve noticed a lot less trash so score one for the environment as well.

Reply
- Frances January 22, 2013, 1:17 am
  
  What on earth is a disposable bathroom cup?? (And at that, what’s a reusable one used for?)
  
  Reply
  - Mr. Frugal Toque January 22, 2013, 7:29 am
    
    Just guessing, but Justin is probably talking about the cup you use for water when you rinse your mouth. Y’know, after brushing your teeth?
    You can get a stack of disposable cups every month and a little dispenser, or you can get six colourful plastic cups from IKEA for about a dollar and use them forever.
    
    Reply
    - woodnclay January 22, 2013, 8:15 am
      
      Or you can just use your hands, as I have done all my life!!
      I’ve never seen disposable bathroom cups here in the UK but then perhaps I just haven’t noticed them!
      My son uses the base part of his old baby cup after throwing the chewed lid away many years ago. i.e. you don’t even need to buy plastic cups.
      
      Reply
      - Venturing January 22, 2013, 10:24 pm
        
        I don’t think bathroom cups have made it to New Zealand either, let alone a dispenser! hands seem to do the job around here. It’s amazing what people come up with….
        
        Reply
        
        Frances January 23, 2013, 8:26 pm
        
        Oooh, wow. I just use my hands. We’re not very high tech here in Oz :-P
        
        bshine April 20, 2013, 6:00 pm
        
        I just had to go and google disposable bathroom cups.
        
        I laughed, a lot.
Andrew January 21, 2013, 5:44 pm

Now that I hear your eating a more Primal/Paleo Diet including grass feed beef, I would really like to see an new article on your Groceries, Are you buying half a cow and freezing it? Are you drinking raw milk, and raw milk cheeses? Are you growing allot of your food, what is your take on the profit return of gardening, do you plan to get a goat?

I would really like to see a monthly MMM family Groceries bill now that your on Primal/Paleo Diet. Also, do you filter your water to remove things like fluoride?

To be clear this is a request for a new article, not a comment reply. It is your show, I’m glad to be entertained as you see fit.

Thanks.

Reply
- Mr. Money Mustache January 21, 2013, 8:40 pm
  
  Sorry, not enough interesting stuff to report for a new article.
  
  The occasional meat comes from the freezer of a local food co-op. No half-cows. No raw milk or cheese.. just organic milk and non-organic Costco cheese. I’m not sure what an “allot” is, but I don’t grow much food (this summer will hopefully be better). Gardening can be profitable with the right climate and if you grow expensive things like tomatoes. No domestic animals – unless you raise them commercially, these are a money-losing proposition (but still worthwhile if you enjoy the raising experience). I don’t worry about fluoride – it is good for your teeth (don’t believe the conspiracy theorists, and see my earlier comments on my $0/year dental costs).
  
  Reply
  - fire January 21, 2013, 10:47 pm
    
    Not sure what an allot is but here’s all about alot:
    
    http://hyperboleandahalf.blogspot.com/2010/04/alot-is-better-than-you-at-everything.html
    
    Sorry, couldn’t resist.
    
    Reply
    - L'Enginieuresse January 23, 2013, 2:42 pm
      
      :)
      
      Reply
Amanda M January 21, 2013, 6:00 pm

Holy Crap ! That is one impressive list. I feel so ashamed right now. Well done ! I’m going to go punch my self in the face now :]

Reply
My Financial Independence Journey January 21, 2013, 6:33 pm

What would your costs be if you had a mortgage to pay? I would guess 50-100% more depending on what property values are around where you live.

If I didn’t have to pay rent, I’d have expenses around $17K for the year.

I’m doing the first four things on your list, and those help a lot.

I tend to be very hesitant to pay money. And I think about things for way too long. Several potential purchases have been in the thinking phase for years and still show no signs of moving to the purchasing phase. About the only thing I didn’t ponder over for an agonizingly long time was when I bought new clothes after losing a bunch of weight. I don’t think I have ever been happier to part with that much money that quickly.

Reply
- IAmNotABartender July 24, 2015, 5:01 pm
  
  If you traded your rent for a paid-off house, you’d still have property taxes, so add a bit to that 17k. Still impressive, though!
  
  Reply
Joshua Spodek January 21, 2013, 6:55 pm

Regarding Crossfit — about 5% of your budget — what would you say to something that could replace it for zero cost.

Last year I discovered burpees and have been doing them daily since. I started with ten and am now up to forty daily, every day. I’m in the best shape of my life.

Total cost: $0

If you don’t mind me copying from my blog:

Top thirteen reasons to make burpees part of your daily routine

1 They put me in the best shape of my life!
– At 41 years old
– After a lifetime of athleticism including playing Ultimate Frisbee at the Nationals and Worlds level
2 Zero cost!
3 Zero equipment!
4 Negligible risk of injury
5 Can learn to do them in seconds
6 Documented by fitness experts as single best exercise
7 Under five minutes per day!
8 Can do them anywhere, any time, in any weather!
9 Don’t interfere with any other workouts
10 Can work at any level — just do as many or as few as you want
11 Many variations can work specific parts of body
12 They make you feel great!
13 discipline, dedication, drive, and focus

If you know of any other exercise with these advantages, please tell me. In the meantime, I don’t see how you can beat daily burpees.

http://joshuaspodek.com/burpee-overview

Reply
- Mr. Money Mustache January 21, 2013, 8:31 pm
  
  I sort of agree with you Josh.. although my own take is a good barbell set: http://www.mrmoneymustache.com/2011/05/17/get-rich-with-olympic-barbells/ , since the burpees can’t build the deep inner-body and leg strength that a good set of squats with far more than your bodyweight can produce. And burpees do nothing for your back and biceps.
  
  Crossfit is totally unnecessary, and Mrs. MM only does it because it is fun, sociable, and we have unlimited money (and we know the owners and don’t mind transferring money to them). I would NOT recommend such an expensive fitness program to anyone with financial problems. With all that said, it is a very motivating program and it makes you work hard – really hard – which is ideal for anyone with limited self-motivation.
  
  Reply
  - Rob aka Captain and Mrs Slow January 22, 2013, 12:03 pm
    
    Another excellent home program program is P90X, up front cost is about $200, and takes an hour a day but is a brilliant program. Plus 12 DVDs means it will take a long time to get bored
    
    For those tight on time 10 Min Trainer 15 mins total but is a killer!
    
    Reply
    - Mr. Money Mustache January 22, 2013, 12:05 pm
      
      That’s definitely a good one to find used, borrow from a friend, or check out from the library! I like the idea of the P90 program, but $200 is a bit of a moneymaking scam price in my opinion.
      
      Reply
      - Sister X January 22, 2013, 4:22 pm
        
        We did Insanity (similar to P90X) with a bunch of friends. Several people pitched in to buy the DVDs and then they made the rounds of our social group. (Many of us burned them onto our computers so that we could all do it together.) For a while, many of us were in the best shape we’d ever been in! I’ve moved on, but my husband still uses those for his default workout and if I don’t have something else I’d rather do instead I pick one of those.
        
        Reply
      - Bo Boland January 22, 2013, 5:27 pm
        
        I *ahem* acquired P90x for free, right after graduating college. While I think that it’s an OK program, if I have to hear Tony Horton’s voice one more time, I’m going to rage and break the computer monitor.
        
        As MMM has alluded to, A good barbell, some weights, and a squat rack are an excellent investment. They can generally be had for cheap on craigslist, and will literally last a lifetime (barring any strange clean&jerk accidents). One of my better investments has been my little basement gym.
        
        Reply
        
        Rob aka Captain and Mrs Slow January 23, 2013, 2:19 am
        
        MMM I agree it is expensive, thought of it afterwards as with all thing “fitness” related someone some where bought and never used it. As the old joke goes excercise bikes are perfect for hanging clothes.
        
        So look for a Craig’s list or eBay deal
        
        Also the DVDs are 120 we got it slightly used for I think 80, reason we bought it that was was we were only in The states for a week and it was much more expensive in the UK.. The rest of the cost is bands or weights, again look for it used.
        
        Bo Band that is the big problem with any DVD learning program that is played over and over (fitness language etc). On the DVD there is a setting Cues Only (with or without music) That setting removes 90% of the talking and all the I’m between talking.
        
        I gave P90X a five star review on Amazon
      - Joshua Spodek January 23, 2013, 6:16 pm
        
        While traveling the past eight months, I’ve been doing only burpees, and I don’t think anything can beat burpees on the road.
        
        I have a rowing machine (Concept 2, from Craigs List, $500) that I expect to last the rest of my life. I plan to start again when I get home for good.
        
        Coincidentally, I’ve been planning to borrow Ripptoe’s Starting Strength from the library when I get home for good and decide between a squat routine and borrowing P90X from a friend. Or just sticking with burpees and rowing.
        
        Reply
        
        Erica / Northwest Edible Life January 28, 2013, 2:31 pm
        
        Mark Rippetoe is basically the God of Strength Development. I’m happy anytime I hear of someone who’s found Starting Strength. SS is about mass and strength building, not leaning out. p90X is more metabolic conditioning. It will lean you out and tone you up, and you may get a fair bit stronger, depending on your starting position, but you won’t pack on slabs of strongman muscle like SS. Burpees are met-con, so a SS type program will be more different than what you are currently doing the p90x. Both great ways to workout, just different objectives for the two programs.
        
        Mr. Money Mustache January 28, 2013, 8:48 pm
        
        Haha.. well-said Erica! I definitely dig the badass attitude of Mr. Rippetoe, even if we disagree on some of the finer points (he mocks people for wanting to be able to see their abdomen muscles, whereas I insist that we should all strive to end up that wiry eventually. He says you should drink a gallon of whole milk per day and a bunch of cake, I think we should take things a bit more slowly and live a bit longer in the process, etc.). But what he did teach me is: “Squats, deadlifts, bench, clean and presses, pullups”. Just do those five, and you’ll progress much more quickly and waste much less time. Once you’re in the Mr. Olympia contest you can get into the lateral raises and the various circuit machines to fine-tune your cuts for the magazine photo shoots. But until then, shut up and lift heavier weights in the five exercises.
        
        Whoa, I just realized this is the 2012 spending article.. I’m way off topic here :-)
ClevrChico January 21, 2013, 7:11 pm

Thanks for posting the numbers! Did they really have photo radar in SE Iowa? I remember them using planes 20 years ago, but I’m surprised they’ve gone that high-tech.

Reply
Prob8 January 21, 2013, 7:51 pm

FYI, your spending puts you at about 125% of the federal poverty level. Nice to know a full and enjoyable life can be had at a level most consider poverty.

Reply
- Rob aka Captain and Mrs Slow January 22, 2013, 12:08 pm
  
  His no frills budget would be 5000 less than the poverty level for a family of three, but don’t forget that doesn’t include rent mortgage.
  
  Reply
Spencer January 21, 2013, 8:40 pm

I think it’s important to keep in mind the opportunity cost of MMM’s house when comparing your spending to his, especially if you’re renting. If his house is valued at $350k this turns out to be $17.5k a year at 5% interest.

Reply
- Lucas January 22, 2013, 4:46 am
  
  Yes he is trading a fixed purchase price for “guaranteed” reduction in expenses. But I think your calculation is a bit off. Let’s stick with your $350k as $17.5k at 5% investment for a starting opportunity cost. Opportunity cost should be offset by appreciation on the asset – lets use 3% as a historical average – so $10.5k. So we are down to $7k in lost potential opportunity.
  
  Then you have to look at the fact that earning realized income from an asset or amount of money is much less effective than using it to reduce expenses. Of course your numbers may vary based on your marginal tax rate, investment vehicle, other income, etc. . But assuming it would take quite a number of years to move $350k into a tax sheltered retirement vehicle, and assuming 15% minimum tax on capital gains or dividends, you are looking at 17.5*.85=$14.875k-10.5k=$4.375k in potential lost opportunity cost. I guess you would also have to consider taxes on sale of primary residence in the future, but most people can get by with 0% on that.
  
  Deciding to rent/buy is a much more complicated question, where you would need to do a net present value calculation of the cost of renting vs. owning over the time you expect to live there. To do this right though you need to know how long you are going to live there, as well as future rent increases, and property values. If you figure these out let me know ;-) . Main things to look at are the interest + property tax + maintenance + amortized cost of transaction, to see if they are close to rent in your area or not. The longer you plan to live somewhere or if you can generate good positive cash flow from renting if you move the more likely you should buy.
  
  So yes, look at his assets that are generating unrealized income in the form of expense reductions, weep for a minute, and then aspire to do the same.
  
  Reply
Kaeldra January 21, 2013, 9:44 pm

Consider my face punched. I was feelin’ mighty fine about my 48% savings rate last year, but I alone spent (barely) more than your three person family! What the hell do I have to show for all that… need to eat out less, and suck it up for winter biking :/

Reply
James @ Free in Ten Years January 22, 2013, 4:20 am

Awesome numbers. Your 2012 spending level is almost exactly the same as my target. So far, so good, but I’m not sure I can quite emulate your level of badassity just yet, but I’m on the way.

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Jane Savers @ The Money Puzzle January 22, 2013, 4:26 am

Your restaurant meals for 3 are less than what I spend on myself. This will be my main area to reduce because it is a waste and hard on waist.

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Amanda January 22, 2013, 7:43 am

I am pleasantly surprised to see that my spending is just under yours if I ignore my mortgage P&I (home and rental). Although, I’m just one person, so there is definitely some fat to trim. I’m working towards paying the rental house off, plus I’m moving closer to work in about a month. I’ll buy a bike and start riding to the office.

Thanks for all the information, it really helps my motiviation to see that I am on track. I plan to go part time in 3 years and this blog has been a huge help – before I started reading MMM I estimated 7-8 years before I could get to FI.

Reply
redagain January 22, 2013, 8:08 am

This is really inspiring. I just want to punch myself in the face in every category. Our property/income taxes were more than your whole budget, doh! And my restaurant budget was that for one month.

Keep it up, little by little, we will get closer to your way of really living. This is just amazing. If nothing else, you inspired me to really comb through those Mint numbers.

Reply
Mark January 22, 2013, 11:11 am

Just laid my own expenses out in this format. The only area I would have beat you is Clothing. But alas, I was a groomsmen in a wedding, and my tux rental was more than half my clothing budget for the year!

I also got serious about saving in the 2nd half of the year, so the first half was bloated.
I’m looking to cut $22K (Insane for a single person) down to $14K for 2013. This is about in line with MMM as a ratio to the poverty line.

Reply
Art January 22, 2013, 11:41 am

I think one indirect but helpful category missing from the Spending is car depreciation. Older, used cars similar to the ones driven by MMM’s family will depreciate at a very low rate (couple of hundred per year?) while newer, more expensive cars might drop a couple of thousand per year. It could be eye-opening to see these indirect expenses in a spreadsheet since they are draining your wallet as long as you own a car. It would make a nice segway into why you should drive a cheaper used car if you want to get where MMM is now. Cue the “Top 10 Cars for Smart People”.

To calculate the number, one can go to kbb.com once per year and plug in the numbers using the same criteria (options, packages, car condition, private party value, etc) while changing the mileage to be up to date. Take last year’s number and subtract this year’s number and that’s your depreciation for the year. And of course, the more miles you put on that car per year, the faster it will depreciate which is a nice segway into another favorite MMM topic.

Reply
- Mr. Money Mustache January 22, 2013, 11:58 am
  
  Very well said, Art! To be more formal, I could be throwing a $500-$1000/year “allowance for car depreciation” into the table. On a reliable car over 5 years old, you could also calculate it at about 10 cents per mile (plus you still account for all maintenance and gas costs separately). Instead, I’ll just throw the replacement car onto the annual budget in the year that I actually buy one. But with only 72k miles used out of the Scion’s 200k lifespan, and less than 7k miles/year on that car, it will be 18 more years before that 2005 car even grows old! (Although in reality I’ll surely replace it before then with some nifty used hybrid car that gets even better mileage).
  
  With knowledge of the car market, some people even get their depreciation for free. One reader recently shared his story of buying an old Lexus for $2500 and selling it years later for $2500.
  
  On the other hand, those of us who insist on NEW cars can pay an incredible amount for the same amount of driving. Start with a $30,000 Audi ($34,000 with tax and registration) and drive heavily it for a year (say, 15,000 miles). Try to sell it. You’ll be lucky to get $24,000, meaning you just paid 66 cents per mile for that first year – 6.6 times the rate that the Mustachian driver with a still-nearly-new 2005 Toyota Matrix pays to drive. In depreciation alone. Around here, a factor of 6.6 is more than enough to make the difference between “Broke” and “Multimillionaire”.
  
  In fact, even reducing expenses by 75% makes the difference between “Lifetime of mandatory work” and “7 years from graduation until retirement”.
  
  Reply

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