Once a year the rubber really meets the road for the Money Mustache Family, when we have to add up the entire amount we spent on everything, and reveal it to you the readers for comparison and scorn.
Last year’s Exposé had us spending a fair amount, but with bold predictions of grand reductions in the spending. To quote the old article:
Total of Everything for 2010: $30,500
Total excluding Mortgage interest: $26,885
Estimate for next year (no mortgage, child in elementary school, no cruises!): $21,695
You see, 2010 was quite a while ago, so its numbers included monthly mortgage payments on our main house. In early 2011, we paid off the rest of that mortgage. Plus, Little MM graduated from preschool and we all started enjoying the benefits of public education.
But in my optimistic forecast above, I forgot to account for the mortgage interest costs from the first few months of 2011, the preschool bills from January to May, and the fact that even the full-day kindergarten class in our local school carries a tuition of $275/month. So those bloated the budget quite a bit.
As it turned out, 2011 was also a bumper year for holiday travel. We began the year by waking up in a tent on South Padre Island, and the vacations continued regularly from there. As a family, we took trips to Canada, Moab Utah, and Arizona. And as individuals, Mrs MM went on a decadent Ladies’ trip to Las Vegas, while I spent an extremely fun and irresponsible week around Park City, Utah snowboarding with the Boys.
Food costs went up voluntarily as well, as the Mrs. switched to a gluten-free diet (and I partially followed her lead) leading to more eggs, vegetables, and meats. We also started buying even more organic food, which costs about 50% more in my area. I justified this only with the fact that we could truly afford it – if we still had debts or were stuck working in unpleasant jobs, I could have easily kept the food costs below last year’s levels.
As a side benefit of adding the vegetables and cutting out bread (and some of the booze), however, I think we accidentally boosted our health quite a bit. Both of us seemed to reach record levels of fitness and non-flabbiness in 2011, even though we’re more than double the age of when either of us last set a record (sometime around age 18). I think this whole health boost thing could make a good article in the near future, to coincide with finishing the popular Tim Ferriss book I’m reading called “the 4-hour-body”. (Hint: my approach is drastically simpler and less exotic than his).
So by now, you’ve probably heard enough of my excuses and are sarcastically making the Tiny Violin symbol at your computer monitor as you read these justifications for an expensive lifestyle, so I will shut up and lay out the spreadsheet:
Category 2010 2011 Diff Comments
Mortgage Interest 3,600 1,500 (2,100) 2011: paid off mortgage in June
Property Taxes 2,292 2,334 42 0.6% of home value - Gotta love the low property tax rates of the Western US.
Groceries 3,855 5,007 1,152 This increase falls entirely on my shoulders as I'm the shopper. But I am now using Costco more, which should bring it back down in 2012.
Healthcare 366 1,087 721 Mrs. M. experimented with a frivolous health care practitioner, then determined that plain old barbells were more effective at fixing all problems.
Utilities (gas, electric, water/sewer, weekly trash, recycling) 1,260 1,356 96 Lower energy consumption than last year, but city and utility rates went up.
Wine/Beer 269 226 (43) Brewing beer at home raised consumption due to deliciousness, while cutting costs.
Restaurants, Coffee Shop 565 149 (416) In this department, having a child who is a picky eater really pays off - no point going out to eat until he is a teenager.
Home Renovations/Maintenance 1,819 2,105 286 Renovated master bathroom this year.
Gas 777 316 (461) 2011 non-trip gas
Insurance (House+Vehicles) 707 648 (59) House + Car
Donations/Charity 374 1,886 1,512 More donations due to feeling more relaxed about income.
Crossfit 1,080 1,110 30 Damn that is expensive. But I believe Mrs. M. still makes a "profit" on it due to improved health. She looks like Jillian Michaels now, but without the annoying facial expressions ;-)
School Tuition 6,665 2,630 (4,035) May 2012, baby, then we're off the hook.
Cell Phone (MMM) 120 120 0 Mrs. MM still gets free phone from part-time work - smart lady.
Misc 2,582 2,843 261
Shoes & Clothing 444 Umm.. I don't think any of these clothes went to me, 'cause I have exactly one non-ripped pair of pants.
Entertainment 26 223 2011: Netflix, books, movies
Lessons for boy 156 2011: Swim + Soccer
Target 500 765 2011: May include some grocery
Amazon 500 584 Gifts, clothes, household items, school supplies
Car Maintenance 32 96 car battery, oil changes for two cars
Manly Items 245 Video Card, Stereo amp for Construction Van
Other 1,524 330 2011: Passports, checkbooks, crackpots DIY pottery shop, iTunes, Bike, Staples, Annual Haircut for Mrs., car registrations
2010: Clothing, lessons, car registrations
Travel (including gas for roadtrips) 4,151 5,036 885 2011 includes gas + food for trips
Denver Bachelorette 146
Pre-book summer 2012 trip airfare for 2 315
Winter 2011 Arizona Trip 1,265 gas, hotel, zoo admission, etc.
Family Summer 2011 Trip 1,008
Las Vegas Girls Trip 673 airfare, hotel, food/drink
Spring 2011 Moab Camping Trip 122
Safety Pirates March 2011 Snowboarding Trip 647 gas, lift tickets, accomodation, beer, whiskey, food
Late Summer 2011 Men's Camping Trip 21 Gas+campsite. The trip where we invented the future hit business called "Wilderness Cauldron".
2nd half of Mega Winter Roadtrip to TX 839 gas, hotels, etc.
TOTAL 30,482 28,453 (2,029)
TOTAL Without Mortgage 26,882 26,953 71
Subtracting Tuition, Donations 19,843 22,437
Subtracting travel, crossfit 14,612 16,291
Subtracting organic/luxury food 13,340 14,639
Subtracting home renovation expense 11,521 12,534 This is what our "no frills" living cost would be, (we'd have to move to a smaller house to go below this)
So what have we learned from this year’s figures?
First of all, I was amazed at how close 2011 was to 2010. Things tend to average out over a large period of time like that and become fairly predictable.
But secondly, I was pleased to note just how much of our expenses I consider to be optional luxury spending. If you take the “total without mortgage”, it looks like we’re living on about $27,000 per year. But if you back out things like the $2600 of tuition that we are now done with, the $5000 of travel, the $1800 of charitable donations, and all the other things mentioned at the end, our basic life could be sustained comfortably at just over $12,000 per year. Even after we start paying private health insurance premiums in the near future ($240/month for the family as quoted in this earlier article), the bottom line could still be under $15,000.
For a 3-person household, that’s well below the US definition of poverty, yet it would still let us pay for everything including property taxes and utilities on a large house, plus vehicle ownership costs on a car and a van, keeping the fleet of six bicycles in good running order, unlimited netflix movie streaming to the basement home theater.. and even my beer brewing habit!
So our lifestyle still has quite a toasty jacket of decadent fat around it, and this is important to note because we’re often accused of living some sort of bare bones lifestyle that people aren’t even sure if they could handle. This is just plain wrong: thirty grand plus a paid-off house is more than enough to raise a family.
So life goes on… and we’re now re-motivated to try to beat these figures for next year!
Great post! I like how it shatters misconceptions about how much one really needs to spend to live a comfortable life.