The Shock of Calculating Our 2016 Spending Total

Spending Review 2016

The Enough Time Machine has a full 12 months of recorded expenses in its data log, so it is time to command “Computer! On screen!”, run an analysis and determine what we can learn from all of those numbers. We use YNAB to record all of our expenses, and now they have some nifty built in reporting features, it is easy to drill down and listen to the stories that our spending is telling us.

Spending Story: Horror

Donut Graph of 2016 Spending on Everything.

I still can’t quite believe that we have spent nearly $80,000. I’m starting to understand why the barely dressed blondes neglect to run away when the scary man with a knife comes for them – disbelief in reality! I didn’t think that we even brought home that much money to begin with! I’m still trying to process the shock. How on earth do two people with no debt and no housing costs manage to spend That. Much. Money?

Note: The report is based on “some categories”, because I removed the small amount we invested this year. That definitely doesn’t count.

Spending Story: Food Porn

Donut Graph of 2016 Spending on Food.

By far our biggest spending was on food. It made up 22.3% of our spending, for a total of $17,587.90. When I saw groceries topping the list, initially I thought phew! At least there’s some sensible spending. That just goes to show how the numbers can lie, because when I take all of the other non-essential categories and add them up, it amounts to $11,900.

Enjoying good food and the experience of dining out at cafes and restaurants is one of our values. I don’t believe it is that much higher a value than travelling, or retiring early to spend more time with family and friends. We will have to discuss how we might (be willing to) reduce spending in this category in 2017.

Spending Story: Frat Party!

Donut Graph of 2016 Spending on Savings.

Actually no. Truly not. Mrs. ETT is not a frat party kind of woman. 17% went on savings, which is really planned spending. A holiday to Tasmania, and making the backyard safe for Frank and Jelly comprised the bulk of this category. The rest was spent on home improvement. $13,411.86 is a lot of money, but it is something we are entirely in control of. We could have saved the majority of this if we really wanted to embrace frugality. The thing is, we made deliberate choices about spending this money in 2016, and we are still reaping the benefits. #livinglife.

Donut Graph of 2016 Spending on Just for Fun

13.9% went on Just for Fun, which encompasses personal spending for Mr. ETT and I, where we don’t have to be accountable to each other for the money. Ironically, we are both saving a lot of what we are receiving, so again in a pinch, we could not only stop taking the money, but we really have a backup emergency fund (as well as our regular emergency fund) if everything really started going to poop.

I feel a bit better now – here’s 30% of our spending this year that isn’t essential.

Spending Story: High Speed Chase

Donut Graph of 2016 Spending on Transport.

Like a time machine Speeding along with no brakes and a bomb on board (see what I did there?), we spent $10,155.45 on getting around (12.9%). The biggest expense within this was maintenance of our 2 cars and a motorbike, closely followed by petrol. Maintaining cars is expensive, however as I’ve discussed before, it is the best solution for us at this point in our lives. One day in the future, perhaps a single car with a motorbike will be all we need. Unfortunately before then we will definitely need to replace at least one of our cars, so that will be a new savings category in YNAB this year.

Spending Story: Boring Essentials

Donut Graph of 2016 Spending on Bills.

Bills represent 10.1% of spending, or $7,943.03, with the biggest expense being electricity. One of my goals for this year is to see how we might reduce the cost or get a better deal. It doesn’t help that while I am trying to support green power, they keep raising the costs. Ugh, balancing values and $, will they never align?

Spending Story: Oprah – spending for you, and you, and you!

Donut Graph of 2016 Spending on Expenses.

Our various expenses set us back $7081.53, 9% of our total spending. As discussed recently, the bulk of this went on gifts, and not nearly enough to charity. (Although charity also comes out of my personal spends, which you don’t see). I want to allocate equal spending on gifts and charity in 2017.

Spending Story: Paranoid

Donut Graph of 2016 Spending on Insurance.

Here, insurance companies, take $5,365.39 of our dollars. Six point eight percent! Enough said. Actually, no. A goal for 2017 is to review our life insurance, as we are both paying inside as well as outside of Super. Also, for all of our readers living in the United States, I’m sorry that I’m whinging when the cost of our health insurance for the year is less than the monthly cost for many of you.

Spending Story: The FIREd Life

Donut Graph of 2016 Spending on Quality of Life

Exercise, education and activities that bring meaning and contribute to society. A recipe for the perfect life post-FIRE. I think that this is one category that should grow (in time, not necessarily in $ costs) as we slowly move towards retirement.

Spending Story: Cute Furry Animals

Donut Graph of 2016 Spending on Pets.

3.1% of our spending was on our furry companions. I’d much rather spend on them than insurance! It appears that food for Frank and Jelly was the top sub-category here as well. Perhaps it is really just expensive to keep bellies full?

Summing Up

So there it is in all of its bald, horrible glory. We spent $80,000 this year. In order to make this much from passive income, if we take current return to be about 4% after fees, taxes and inflation, we will have to have 2 million dollars in the market. There is no way that will happen on our current wages in the time we have remaining, even if we wanted a 70% Savings Rate (which we don’t). But is it as doom and gloom as it first feels? Next post I’ll be trying to figure that out!

Also, Enough Time To is now on Twitter! Mr. ETT has accepted the mantle of Social Media Manager. You can find us @EnoughTimeTo

14 thoughts on “The Shock of Calculating Our 2016 Spending Total

  1. Wow that health insurance number is really great! Ours costs about $7,800 per year and another $1200 per year in a savings account for health expenses.

    Isn’t it amazing how much things add up to over a year. Sometimes I look at the totals and think “there’s no way we spent that much!” But then when I break it down down into monthly costs, I think “oh yeah, that’s true”. Those expenses really can add up over the entire year.

    • Yes, we don’t get much for this, but hopefully at this point we won’t need much either. The Government offers discounts for having health insurance, but penalises you by an accumulating 2% for every year over the age of 30 that you don’t have it. We’ve really only kept it because of this penalty. If we leave and come back, we’d be looking at a 30%(ish) premium.

  2. This is my first peek at YNAB, and it looks a lot like Mint. But Mint is free. Maybe switching to the free budget tracker would be a first step to saving money? What is it about YNAB that you love?

    Best,
    -PoF

    • Hi PoF, and thanks for your comment – it really made me stop and think. Back when I was first looking for a solution, I did look at Mint and Personal Capital, but I can’t remember why I decided to go with YNAB. Looking at the Mint website now, it seems to have all of the same features as YNAB. I know I was sceptical at first about paying for a budgeting software, but after I signed up for the trial, I knew well within the trial period that I was happy to pay for it. I like that it is available wherever we go, it’s easy to use, and the look of the interface. Thinking about it, though, I also like the Company. The philosophy behind the product, the content they produce, and the creator. I may have turned into a YNAB fangirl (like an Apple fangirl), just blindly following the product because that’s what I’ve always done (I do like Apple as well ;-)) I might download Mint and try them in parallel for a while. Thanks again for the question!

        • Hooray, you’re back! I missed you – I’m hoping you guys have been having an excellent Xmas/New Year’s break. You are right – I just tried to sign up to Mint, and they force you to put in a US or Canadian postcode. Even when I Googled one (Toronto), the next step is to attach your bank accounts, which are definitely not Australian! (Also the Australian law is still a little grey on connecting bank accounts to third party apps, hopefully that will be changing soon).

  3. Wow, that’s a big annual spend Mrs ETT. You haven’t mentioned what your combined annual income is but I’m guessing it’s a fairly typical Aussie income. As you point out, at this rate financial independence may be some way off if not impossible at the current spend. At the end of the day, it’s totally up to you guys whether you it’s business as usual or whether you want to make cuts to your spending to have some chance of reaching FI.

    I would recommend a couple of calculators that may be worth checking out. The first is the “Latte Calculator’ to compare how much things like purchased breakfasts and lunches and coffees could be costing you long term, and the second is called ‘The Ultimate Retirement Calculator’ that lets you work out when you’re likely to reach FI. Both can be found on Google or in links on the Get FIRE’d asap website.

    I’d also suggest checking out Pocketbook, an Aussie app that allows you to download all of your bank and credit card transactions so that you can analyse your spending in real time. It’s got a bunch of other features that may help keep better track of income and outgoings.

    I’m looking forward to reading about how you go forward on this.

    • Wow, that Latte Calculator really lays it out, doesn’t it? That may well be a catalyst for change, although Mr. ETT and I have discussed it and we want to cut our spending this year by $8,000 which will hopefully be mostly food. This is changing long-ingrained habits, so it “won’t heppen overnight, but it will heppen!” (Sorry, that isn’t a dig at New Zealanders, I promise!) Thanks for both the links, I’ll show Mr. ETT.

  4. The fact that you have full control over where all your money went sets you apart from the vast majority, so even if the numbers came as a bit of a surprise I’d argue that you’re still doing very well!

    Personally, I don’t even track my spending these days, I just budget on the line item level, and then track how my net worth develops. I suppose if I started tracking again, I could well be in for a surprise or two, like you.

    • Welcome Lars-Christian and thanks, that puts a little bit of positivity on the situation. I guess as they say, you can’t do anything about a problem if you don’t know it exists in the first place! 2016 was a year of discovery for us, now it is time to settle down to some hard(er) graft.

      If your system works for you, and your Net Worth is moving in the right direction at a suitable speed, then I say there is absolutely no need to complicate the process further. If anything changes, you know you’ll be able to begin tracking again.

  5. We spent a little bit more than you last year, but that includes hefty child support and our rent/mortgage interest. We were a bit disappointed and are hoping for a higher savings rate this year!

    I have no doubt that throughout 2016 you and I have both learned a great deal that we can apply to our 2017 spending and see those amounts trend downwards!

    • Clearly, we have a long way to go, but you guys made a fantastic start in knocking down that mortgage interest, and that was late in the year. I bet you see a big difference by the end of 2017.

      And this is the only situation where we both want to see graphs that are trending downwards!

  6. I hope you can cut that number down in 2017. It looks like there’s a lot of discretionary spend there to do so if you wanted. Our spend for our family of 6 in 2016 was $55 320 (we track everything!). That includes approx $11 000 investment mortgage costs that is offset by $15000 net rental income. So real spend is around $44k. There’s not much room for us to cut from there. Will go up this year. All the best with 2017.

  7. Well I hope you had a good time with all of that food and drink, haha. I guess it’s up to you to decide if you want to cut some of it out or not. It’s completely your money to decide what you want to do with it each year – there isn’t anything wrong with wanting to enjoy it.

    I’ll be very interested to see what you do 🙂

    Tristan

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