Exposed! The MMM Family’s 2016 Spending!

By Mr. Money Mustache

Fri, 19 May 2017 18:44:03 +0000

Well, I might as well come clean on our spending for last year.  It either went up, or way up, depending on how you want to account for things.

Every year, this annual report seems to come out a little bit later – mostly because I’m no longer all that interested in how much money we spend. And Mrs. Money Mustache, my faithful assistant in creating these reports in past years, has disappeared completely from the blog – justifiably more interested in her Etsy Shop than family finances. Such is the nature of retirement.

If you are early on in your journey to financial freedom, you should not do what we are doing. Until you have your finances on auto-pilot so that you are saving 50-75% of your income, you should absolutely be reviewing every piece of spending and adding up all the categories.

(Related Article: How Rich are You? How to find your Net Worth and Savings Rate)

But we’re all done saving for retirement. Our cash outflows feel both luxurious and reasonable, and they are well below the retirement income budget, so it seems less and less necessary to measure them.

After all, if you are happy with your body composition, do you still need to keep measuring every calorie you eat? If your breathing is clear and uninterrupted, do you track your annual number of breaths?

But our Supposedly Low Spending has kind of become my brand. And because of that, there are even conspiracy theories that form around this spending:

“There’s no way he’s making that much money and only spending $25k.”

“Oh, looky there.. Mustache bought an electric car as an “experiment”. I wonder if that will show up on their annual spending!”

“How much of his [travel/entertainment/home renovation/marijuana] expenses is he hiding from us as business expenses?”

So I thought I could do things a little differently this year. I can share the normal family expenditures as well what our businesses spent, and everything in between.

The Basic Expenses

Here’s the familiar chart, updated for 2016, complete with last year’s numbers for comparison.

Category20152016Comments
Mortgage Interest00If we had a $400,000 loan at 4%, we would have paid $16,000 in interest (!)
Property Taxes14111895Massive house price increases in my neighborhood come at a cost (prices have doubled in 4 years).
Food and Dining7,4006,807
   Groceries   6,232   5,980A warehouse store opened up in town, within biking distance of home. This reduced grocery costs a little as I shifted more purchases there. See article: Killing your $1000 Grocery Bill
   Wine/Beer   627   321Fewer large parties this year (boo), plus we cut down our glass-of-wine-or-beer-with-dinner habit (yay!). But many people have been giving me free boxes of beer in exchange for helping them with stuff, which probably makes this cost artificially low.
   Restaurants, Coffee Shop   541   506Mrs. and Little MM started ordering fancy pizza deliveries every time I'm out on a trip.
Medical3,73310,868Here's where the costs went way up this year.
   Doctor Visits   0   3807My poor little lad broke his arm on December 30th (fell from a play structure while playing with me!)
   Health Insurance   3,000   6720A new Kaiser health insurance plan. (A downside of the ACA for those with higher incomes)
   Dentist   256   256
   Pharmacy   42   0Aspirins, bandages, toothbrushes, and such included under "groceries". Thankfully no prescriptions for any of us this year.
   Physical Therapy   435   0
Auto and Transport945490
   Gasoline   332   1051 snowboarding trip, plus assorted errands in the van.
   Insurance   357   449Cost increased in September due to newer car (Nissan Leaf).

Still fantastically cheap thanks to Geico
   Registration & Testing   169   75
   Express Tolls and Uber/Lyft   0   70Still taking Uber/Lyft to the airport instead of driving. Much cheaper than driving/parking, especially if you have some referral credits.
   Service & Parts   88   0Both vehicles in top shape this year, no scheduled maintenance intervals reached. I'll definitely be buying some windshield wiper blades in 2017 though.
   Public Transportation   0   0Nothing against the bus, Bikes are just faster
Utilities16521,575Electricity, Gas (heating, cooking), trash/recycling, city park fees, etc.
Cell Phone5396002 smartphones with data on Google Fi and Republic Wireless
Internet Access692540I negotiated a lower rate for part of the year, then ditched Comcast for Longmont's amazing Gigabit Fiber service ($50/month for 1000 Mbit/S access! - Nerdvana!)
Home<120>1696
   Home Renovations120   1696Finish materials for my house and the homes of some friends/family. Does not include the $30k detached Studio I built.
   Home Insurance0   0Still self-insured for the primary house. Please don't complain about this in the comments section ;-)
Gifts/Donations1,7472000Does not include donations made by the business.
Crossfit/Yoga230150
School Tuition00Little MMM was back to 100% public school this year, due to increased confidence/toughness in getting over anxiety. Go little man! But we also do a shitload of learning at home, because it's fun.
Misc30952,564
   Shoes & Clothing   754   622Lots more fancy stuff for the gang from Gap, Old Navy, etc.

(my clothes are mostly free stuff, thrift shop or included in grocery receipts from Costco)
   Sporting Goods   0   98Sweet Compound Bow and arrows!
   Shopping Misc   1,274   1000Mostly at Amazon - household/kitchen goods and computer parts
   Books, games, gifts   488   383
   Other   580   422Stuff I am too lazy to sort out. If something is not listed, assume it is here.
Travel2,3762,335Flights to Florida in January, Canada in July and December,
TOTAL$23,941$30,193Adding in our artificially high medical costs is what did this budget in.
   Subtracting Tuition, Donations22,194   28,196
   Subtracting travel, crossfit19,588   25,861
   Subtracting organic/luxury food17,531   23,614Assuming a 33% increase on groceries due to organic + meat.
   Subtracting home renovation expense17,411About $22,000This is what our "no frills" living cost would be (although you could subtract another $6,000 if we had a lower income and qualified for the health insurance subsidy)

So What is Mr. Money Mustache Hiding From Us?

In a word: Nothing – this is my best guess at what our true expenses would be, if we lived a normal, retired life.

But here are the exceptions and special situations, which you can account for however you like:

Overall, it looks like another fairly reasonable year. The biggest lesson that I try to emphasize is that spending does not have to scale with income. We spent less than 10% of our taxable income this year, and still cannot see any reason to inflate the lifestyle any further than it is already.

It’s a beautiful life!

 

Unrelated but Special Thanks to a Reader: Over the last few months, a lot of technical stuff has gone on behind the scenes here. If it weren’t for some serious help from skilled tech people,  this blog’s heavily used forum would no longer be functioning.

 I wanted to thank Kevin Clack – aka Clack Consulting for stepping in to upgrade the forum and continuing to help me with necessary fixes to this day. And if you have a well-established business with technical and web presence needs, you may even be able to become one of his clients as well.