There’s A Fly In My Ointment – 2018 Spending Goals

This time last year, I’d recorded our first yearly spending, and the shock of the number drove me to set a goal of reducing our spending by 10% in 2017. I was fired up and ready to commit, to both financial and personal goals. After achieving our 2017 spending goals, I find myself at a bit of a loss. There isn’t this big, horrible thing driving me, although we know we still spend a good $20,000–$30,000 more than most other Financial Independence bloggers. I’ve been collecting possible ideas in my brain, reading what others are doing, and letting it all swish around. I’m finally ready to put something together.

First, the numbers. We own our house, so no mortgage payments or rent are included. We spent $70,300 in 2017. Not including a holiday, we spent $64,000 on everyday living. What do others spend without housing?

Adventures with Poopsie = $51,397
Aussie Firebug = $40,619
All About Balance = $30,000
Wealth From Thirty = $26,564
LadyFIRE = $9,900

But you know, these awesome people are all on FIRE. They represent the pinnacle of what we should be striving for—the Big Hairy Audacious Goal, if you will. What about comparing ourselves to the average Joe?

Comparative Categories

Since my comparison of our 2016 spending, the ABS released results of a new, up-to-date HILDA survey. Let’s look at how we compare to the rest of Sydney, and the highest earners in Australia.

Back in 2016, we spent more than the Sydney average in all categories, and more than the top quintile average in half of the categories. This year, food is the big winner. We’ve also reduced our bills, and our expenses would be comparable if I removed our charitable giving. The efforts we’ve made are clearly visible, but in almost all other categories we still spend more than the average Joe. This makes me angry. If the average person who saves $5,000/year and is on track to retire on little more than their Superannuation and a pension can spend less than us, what are we doing?

Comparative Totals

I’ve realised the graph above only includes categories where I could do a fairly close match to the way I categorise our budget. It doesn’t include every single dollar. We invested $33,000 last year, so we must be doing better than the average Joe. Time to go to the totals before we decide to give it all up and buy a Learjet (are they even a thing anymore?)

Now this—this is much better, but I don’t want to get too cocky. We still need to make an improvement. We spent higher than all quintiles* when I remove rent/mortgage. Clearly we still have a way to go if we really want to keep improving our chances of retiring early.

*I don’t know why all quintiles and all Australia aren’t equivalent, and I’ll admit to not having enough time™ to investigate further before this post is due. Sorry!

How Do We Keep Improving?

I’ve always had in the back of my head that we were capable of living on one wage. It made me feel comfortable to know that if anything went really wrong, we’d be okay. I realised in 2017 that the numbers don’t bear that out. Right now, if we lost one wage, there would definitely be an impact on our lifestyle. I don’t want to court disaster, but maybe this is the type of thing we need to have happen to shock us into doing what we need to. I digress.

Ideally, we repeat the goal of last year—that is, to reduce our spending by another 10%. I just don’t feel like we could do it, and I don’t want to set a goal I’m not comfortable having a reasonable shot at meeting. That would be too discouraging and frustrating for me.

Instead, inspired by J at Hey, It’s Just Money, I’ve decided my goal for 2018 is to be able to live off one wage (not including our holiday to the U.K.) For us, this means reducing our expenditure by another $4,000, down to $60,000. This is a 6.25% reduction. Our Daily Spending Rate in 2017 was $192 ($175 excluding the holiday). That means we need to meet a new Daily Spending Rate of $164, or to spend $77 less every week. Putting it that way sounds achievable to me.

Great—But How Will We Meet Our Spending Goals?

Where are we going to find the savings from? Remember, this isn’t about earning more—it is purely about spending less.

Solid Reductions

Food definitely. We are going to stick to the budget this year. That will gain us $1,229; we’ll be a quarter of the way there.

I want to halve the amount we spent on clothes—that will save us another $350.

Transport—we won’t have to pay for the NRMA, which should mean $1,100 less.

Cheshire Cat sculpted from sand.
Frank has shiny clean teeth that won’t need the vet!

Possible Reductions

I’ll be cancelling gym membership in March, but Mr. ETT will then pay as he goes, so I’m unsure of whether we’ll see any gains there. If he decided not to go at all, it would be worth $718.

Now, if I simply dropped all charity giving, then we have made it! But that’s not in the spirit of the #FIREd individual I want to be.

Bills are pretty much static. I will investigate other energy providers and see if we can shave something off there. Ditto with insurance. We shopped around last year, so I can’t see too much potential for improvement in reduced premiums, unless we want to reduce our level of cover.

Expenses – we could get the lawn mowed less, but I really value this service. Also, I’m supporting a local business, and I like to have a tidy yard so I can enjoy it. I gain pleasure from our mowed yard.

If we reduce gifts, that will also reduce charity so it’s a double gain, but I’m already a bit of a miser—I don’t want to encourage that in myself!

Pets—food and healthcare. We don’t want to move to non-premium food, so there won’t be any cuts here. Fingers crossed for a healthy, non-expensive 2018 for Frank and Jelly!

Quality of life. I don’t want to reduce activities—they are what life is about, after all! I may be able to look for or encourage free activities this year. We don’t have any paid education planned.

Just for fun—Lotto will remain the same for the family syndicate. I’ve already broached dropping our spending money; Mr. ETT would rather not. (Let’s be honest. Last year, our spending money totalled $8,800. We only need to drop $4,000 to be able to live off one wage. If we halved our spending money, we’re done!)

Potential Savings

So, the potential savings I can identify here is $2,679. That means we still have to find another $1,321 in reduced spending. If we each dropped our spending money by $50/month, that would complete our goal…

  • Food $1229
  • Clothing $350
  • Transport $1,100
  • ??? $1,321

The Fly In The Ointment

This is going to be the YEAR OF SPENDING (in my head, this phrase booms out over a canyon, then echoes back as it fades away: SPENDING SPEnding spending spending). Like NZ Muse’s recent post, we have been lazy all our lives, and it costs us. We have a bunch of planned spending that we’ve never gotten around to, and our goal to live off one wage aside, it’s time.

Oven door held closed with a vacuum cleaner tube.
Surely I get some points for ingenuity?

For example, this is how I’ve been cooking with our oven for years. Literally years. The light doesn’t work. The fan doesn’t work. The door won’t stay shut. It won’t light on first go. Or second. Sometimes we have to come back in 10 minutes and try again. The stove has a faulty starter. The gas has begun making scary “whomp” sounds. Unfortunately, in the time since our house was built, standard sizes have reduced. This means we can’t just buy an oven and stove and have them installed. We have to get creative to fill up the spaces that will be left. And it’s that I didn’t want to deal with. I’m lazy; this seems like too much work and I can’t be bothered. It’s the “whomp” that has driven me to finally take action.

There’s a whole bunch more things that we’ve got lined up. I planned on doing one thing a month, but I’ve decided one thing every two months will be enough. I’ll detail what we want to do in a future post.

After initially feeling lost, writing all this helped me to figure out what we want to achieve in 2018. It would be fabulous to be able to say “we can live off one wage”, if it ever comes to that. It will be even more fabulous if we manage to embed this as a habit for our future.

Can you see any glaring inconsistencies? Is there anything I’m missing? (Aside from the spends, I know it’s ridiculous)

27 thoughts on “There’s A Fly In My Ointment – 2018 Spending Goals

  1. Omg the oven! You poor thing!

    I think y’all can make your 2018 goals work. 🙂 It’s all about monitoring them weekly and adjusting as needed. I’m thankful that we’ve been able to adjust spending so that we could survive on one income, but we wouldn’t be able to pump so much money onto our debt payments. As far as 2018 goals, we’re set to pay off all of our student loans, as well as our car payment. We’re hoping to have only a mortgage left by 1/1/2019. 🙂 Woop woop!

    • Hahaha, I thought this might be a bit traumatic for people who love cooking! The other thing I forgot to mention is that it takes everything nearly twice as long to cook. I hadn’t thought about it that way, but we are wasting money because it’s not as efficient as it should be.

      You are right about the weekly monitoring; it’s something I need to implement this year. Last year it was monthly when I wrote the blog post, but by then I was often surprised. This year we have to keep on top of it because it’s going to be a lot harder for us.

      How amazing will it feel when you’ve paid off all of that debt? Especially the car. 😉 2018 is going to be amazing for you.

  2. When you first time me about your oven I didn’t imagine it to look like that! I can’t believe you’ve put up with that for years, you are one patient person/pair. That would be something I would have had to fix as soon as possible…but I do love to bake so maybe that’s extra motivation for me.

    I think you’ve come up with a great plan for 2018, a good balance between finding something meaningful and that will feel good achieving. I look forward to following along and keeping you encouraged 😊

    • Thanks Miss Balance! Never underestimate the power of laziness. To me, the oven is a slight inconvenience, certainly not enough to have overcome my inertia. Also, I’m pretty ‘meh’ about cooking, so it wasn’t a huge priority for me.

      If we reach our goal in 2018, that means our next step for 2019 has to be your 1% more method! January has been a terrible start; we are going to have to work a lot harder to recover. But the goal is there. We just have to keep striving for it.

  3. gregdarthoit says:

    i don t know. i think you re doing great.
    after all it s all about your savings rate and see how much of a struggle it puts in your life to monitor everything.
    it s only my opinion and i m spending much more than you do but consider doing things ok by just checking where the money goes every month.
    i don t know any of my friend who does.

    in short you re on the right track!

    • Welcome Greg! Monitoring is a slight struggle, but it’s actually something I enjoy. Mr. ETT doesn’t enjoy it at all, but it’s only through the monitoring that we’ve been able to make the changes that we have. We too were spending much more back in 2016. Can I ask, with your spending – are you spending for more than two people? Sometimes I find it tricky to compare on a per person basis.

      Thank you so much for reading, and your supportive comment. It’s really encouraging to hear from you.

  4. I think if you have to put that much work into cooking it’s time for a new oven. You are spending more time and effort cooking which is probably costing you money in the long run-you could spend some of that time working/earning money. But in addition, it looks like you are putting a lot of time and work into running the numbers so you can find more ways to save. I commend you for that! Don’t give up! Keep on saving!

    • Thanks Kayla. You’re right about the waste of time we are spending while cooking. When I’m around at friend’s and family’s houses, I’m amazed at how quickly they can cook a meal! I’m sure it’s not great for the kitchen island, either, as it puts pressure on the bench top. We’re likely creating another problem for ourselves in the long run. This is the year to bite the bullet and just get it done.

  5. I’m getting confused. You sound conflicted. You’ve said you ‘don’t want to do what it takes to save more’, but it sounds like you really do want to?

    Pay as you go gym? Those rates are scandalous! I couldn’t pay that just on principle. I’d rather do some push ups and bike riding or something. Takes some discipline yes, but discipline is well rewarded. And it seems you guys could probably benefit a lot from a bit of discipline in your lives. I find it makes me a lot happier, because after I do something that doesn’t sound great but it’s obviously the best decision…you feel a lot better for having made the hard choice and happier that you completed the task and followed through.

    I’d be mowing that lawn too, that’s for sure.

    Most of the time self-discipline is seen as a source of pain, but really, it’s the only thing that gets us out of bed in the morning and gets our lives moving. It should be cherished in my view.

    Just force little changes on yourself in every category (just to try it), and when you see your life doesn’t collapse and you’re just as happy, it gives more encouragement to keep going.

    Sorry if it sounds like I’m being harsh, I mean well 🙂

    • Hey SMA. Not harsh, realistic from a person with experience. It’s great!

      I totally agree with the pay as you go on the gym. However, with the amount of times Mr. ETT has attended using the membership, it’s costing far more than a day visit rate every time he walks through the door. I’d rather cancel the membership, then gather the evidence that he’s going consistently enough to justify taking it up again. We can always re-sign once the numbers justify it.

      The lawn mowing – I did it for 15 years, then was diagnosed with a grass pollen allergy that is partially responsible for my migraines. The doctor said I wasn’t allowed to mow the lawn, and I danced away from that particular appointment! I was never any good at it anyway. What takes our lawn guy 1 hour used to take me 3, and it still looked like rubbish. I didn’t know it was possible to have different outcomes from pushing a mower, but it’s definitely true. Because I didn’t do it frequently or well enough, I never used to enjoy our backyard. That means we never went out there, which meant that half of where we lived was essentially wasted. Now we have our guy, I spend time out there and it brings me a sense of peace. Of course, I’m happy to take volunteers!

      I’m pretty self-disciplined when it comes to the cash, but it isn’t as easy for Mr. ETT. He’s always been a “cake and eat it too” man. It’s tricky when half of a partnership is a spender while the other is a saver. In normal life, that’s balance. In FIRE life, it slows things down a bit. We’re working on it; it’s good for me to ensure I have experiences and live life in the now. I would be at a real risk of becoming a hermit in my quest for FIRE.

      • Thanks for walking through it with me. Makes a lot of sense!

        Sorry to hear about the allergy, but awesome that you now get to spend more time outdoors and enjoying the yard. Massive boost to happiness!

        I see what you’re saying about the partnership. It’s tricky to navigate those waters. Baby steps is usually the best approach 🙂

  6. Hey Mrs ETT

    Your spending might be high compared to some others but everyone is different, leading different lives, spending money on different things, living in different places etc. Quality of life is important to you but the good thing is that you are aware of the costs and will do what you can to reduce them, eg free activities. You made a fantastic effort in reducing your costs by 10% and I think you will make a good go of reducing it further by 6.25%, ie living off one wage.

    That oven though, haha! I use mine all the time (for nothing fancy, just stuff like roast chicken, barbecued ribs, casseroles) so would have gotten it fixed/replaced asap! I know I can’t really talk as my kitchen is still incomplete (currently there’s no fridge, but I do have a spare one I can use, it’s just in another room.) Fingers crossed you can find a good solution for replacement and it doesn’t cost too much.

    Also, I’m with you with mowing the lawn – I pay a guy to do mine, he does it quickly and does it well, whereas it would take me ages, I’d do it infrequently and it would be a mess. Plus, it would play havoc with my hayfever!

    • Thanks for sharing about your lawn man, Weenie. I was amazed at what ours could achieve, and it’s made such a difference to how I view where we live. I used to avoid the back yard because all it represented was hard work and failure! Now I love it, and because he’s doing the hard yards, we do all the extras like weeding and trimming the bushes ourselves. That’s certainly a change as well.

      Your poor kitchen – 2018 will be the year, won’t it? It’s almost done?

      • I do the extras too, ie weeding and shrubbery, although it’s a tough job to try to keep on top of, especially with the not-so-nice British weather!

        My kitchen MUST be complete by the summer because my parents are over for their biennial UK holiday and I do still fear my Mum’s wrath! It’s a step closer to being done!

        • That’s a crack-up, but I totally empathise. There’s some things where it’s actually easier to just do the thing than it is to explain to mum that I haven’t gotten around to it yet!

  7. J @ Hey, It's Just Money! says:

    I think you have a solid plan for 2018. It’s great that you already know which expenses you need to tackle and roughly how much you’re going to cut them. I believe you can do it! We’ll be here to cheer you on!

    Writing helps me clear my cluttered mind, too!

    The oven, isn’t that dangerous? I’m a wuss when it comes to this things. I get super paranoid. That’s something my boyfriend will do though.

    • Well, possibly its dangerous? We never smell gas so I’m not worried we have a leak (I’d be on to that immediately). I’m pretty laid-back regarding home improvements… we try not to do them!

  8. haha, that’s how my oven looks!!

    Curious how you calculated my spend numbers? I get $9900 (exc investment property – $24700 (including investment)

    I was stoked to see the small numbers you put for me, but I don’t think it’s quite right :p

    • Hi LadyFIRE – I can’t remember exactly how I calculated. I think I took “Right now I spend between $25,000 and $30,000 a year” from your investing post, then took away the 12 month average of your investment property (although that maths no longer works, so who knows what I did). That gave me the range of $9,000-$12,000, which isn’t too much lower than your $9,900! I’ve updated the post, thanks.

      • Thanks – I didn’t mean you were wrong, I was just nosey :p I’ve never actually looked at what I spend outside the houses, I just look at it as a whole. Always interesting to see what the breakdown is 🙂

  9. That was actually a rather interesting read right up until I saw your oven. WHAT IN THE WORLD. I salute your patience, I could never live with that. Also as many have mentioned above, I do think the effort and time is actually costing you more money. If your appliances aren’t efficient, you end up paying more in gas and electricity.

    Anyways, living off one wage has always been one of my biggest goals when I realised how much we were overspending. And for us, as we have a huge wage gap difference, my one-step-further was always to be able to live off the lower wage. Given that Mr BKLA earns maybe 30k a year (when he had an income), that’s a huge ask but we try. Can’t wait to see how this year pans out for you – looking forward to reading the reports!

    Also I absolutely love your use of tableau – but darnit I can’t justify the per month cost! Sigh.

    • Yay! You’re back! My use of Tableau is entirely free – I’m using Tableau Public linked to Google Sheets. Anyone can sign up and download for free. Of course it’s nowhere near as powerful as the full package, but as a totally amateur user who doesn’t make time to learn it better, there’s enough functionality for me. Go check it out – https://public.tableau.com/en-us/s/

      • omg! Thank you so much! I was looking on the tableau site and didn’t see a free option. I can’t wait to play with it! You’ve made my day haha.

  10. Holy cow, that oven!!! I could not cope with that haha.

    We’ve been living with half a kitchen for probably 6 weeks now and today we’ve started ripping out the rest. Wish me luck for the next few weeks…

    • Are you doing it yourselves? I’m very impressed. Clearly from my track record if we started something like that, it would be three years later and still not finished… this is also why being lazy costs us more. How good will you feel when it’s finished!

  11. I think you guys are making great progress! If you can live off one wage this year it will be outstanding – and the fact you saved over 30k shows you must be doing something right. You get points for dealing with that oven for years…when I saw it I literally cried “good god”. Good luck with your goal!

    • Thanks WFT. Sometimes it’s disheartening to see how we choose to live compared to others. It’s a fine line between striving to get better, and settling into discontent. I need to remember that we are competing with ourselves, not anyone else. I would love to be able to live off one wage. I think if we can get to that point, I’m happy to stop reducing beyond that. And the oven… it’s still here! We’ve had such an expensive year that I keep putting off the replacement, because other big items take precedence. We’ll get there, though.

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