In 2017, we spent $64,000 on everyday expenses. In 2018 we have the goal to be able to live off one wage, or $60,000. To generate that using passive income and the 4% rule, we’ll still need $1,500,000 invested! Every dollar less we spend is another dollar we don’t have to save up for in retirement.
Not a good start to the year. Our Net Worth dropped and the number of days to retirement increased. Let’s hope we can turn it around!
Daily Spending Rate
Armed with our new goal, we immediately had a massive spending month. Even including our holiday, in 2017 we only spent $193 a day. This is going to take some work to recover from…
As I reflected after one year of blogging, I want to be more transparent in reporting our numbers. Here is everything we budgeted and everything we spent via our top-level YNAB categories.
In my 2018 Spending Goals post, I identified three areas of spending I thought we could cut to reach our goal:
We came in under-budget for 3 of the 4 categories, yay! Why the discrepancy in amount between the screenshot above and my title? Regarding alcohol, Mr. ETT wanted to purchase some beer at Aldi. We looked at the budget while standing in the queue (thanks, YNAB) and realised it would go over. He decided that he still wanted the beer enough that he would cover the remainder from his personal spending. This is how budgeting should work—making informed decisions based on values before making the purchase. He repaid the extra $ after the end of the month.
On the first of each month, I look ahead and quarantine eating out money for planned social activities by adding fake budget entries. This means we know exactly how much is left for coffee, or any spontaneous purchases. Once we attend the lunch or dinner, I update the line item to reflect the actual amount spent, along with the date we spent it.
We have a budget of $350 this year for underwear and essentials (all other clothes come from our individual spending). Mr. ETT bought a bucket of earplugs for motorbike riding; we have $315.15 left for the rest of the year.
I originally stated we could drop spending by $1,100 as we won’t be paying 5 yearly NRMA membership. This is a false economy, though. Really, we are still ‘spending’ 20% of it this year, regardless of whether it actually left our account. We’ll have to find the savings elsewhere.
Gifts and Giving
Still drawing from our list of charities for 2017. This month we donated to the RSPCA. While there, I also signed their petition to “improve layer hen welfare, and end the battery cage”. I always buy free-range eggs, but not free-range chickens. Because I buy half-price meat, I take whatever is marked down. This is something I need to compromise on—I value spending less money, but I also value animal welfare. I’ve got some thinking to do…
I thought I might start reporting on our spending in terms of the number of days early retirement it costs us. Some of these items are essentials—there’s no way to avoid them, so counting the cost in days is pointless. However, I’m hoping to embed the concept that the way we choose to spend our money now has a direct correlation to how long we have to work in the future. Calculations are based on 2017’s Daily Spend Rate of $193.
NAS (Network Attached Storage) = $1,676 (9 working days early retirement)
This is one of the big spending items that has been on our list for a long time. Mr. ETT saw a great deal, and decided it was time to purchase. I’ll let him tell you what it’s for:
“We purchased a QNAP NS-451A NAS bundled with 4 x 6TB Seagate IronWolf hard drives. I like the QNAP operating system and use it at work. I set it up in a RAID 10 configuration, so although that halves the 24TB of usable storage, it gives the redundancy of 2 drives being able to fail within the NAS without any loss of data. The model has a card reader so a camera memory card can be directly inserted into the NAS to download photographs, and it has a USB 3 port on the front so it can be connected to a PC or Mac to function as a DAS (Direct Attached Storage) should our router die and the network go down. At the back is a couple of USB ports so a backup of the NAS can be taken to an external USB drive (you can’t have enough backups).
This means we can centralise data from all our devices and know that it is backed up. We don’t need to worry about what happens if an individual computer dies. It is easier to refresh operating systems on existing computers, or rebuild them without worrying about lost data. It’s also cool to be able to use features like its media centre capabilities: run slideshows on the TV in the lounge, or play music from any network connected device in the house.
The model had good reviews and seemed to be the best fit for what I intended it to be able to do.”
Dentist = $1,029 (5 working days early retirement)
Mr. ETT went to the dentist for the first time in 11 years. So far it has cost $1,029. He had another appointment in the first week of February, and apparently has a lot more work that needs doing. Cheeky bugger tried turning our newfound frugality against me when he logically reasoned that over 11 years the cost so far could be amortised to only $93 per year! Can’t really argue with that one…
Pest Man $490 (3 working days early retirement)
We got a pest man. The ants have been going crazy over the past few years. We finally got sick enough of being bitten when putting clothes on the line that we called someone. I haven’t done it before because: I worried about the effect on our dogs or cats; we like having spiders around; and I was scared we might have termites.
We have friends who spent thousands of dollars remediating termites, so I was hiding my head in the sand. Two pieces of good news – we don’t have termites, and the cost was only $490. I’ve put a yearly reminder in for spraying. It should be a lot cheaper without a termite inspection.
It’s February, and I don’t have any. I know I’ve been overthinking it. I’ve read a million posts on figuring out my why, answering questions and doing exercises to help guide me. Then I haven’t devoted the time needed to do the really in-depth thinking required, so I feel guilty and… I’m focusing so much on the process and doing it “properly”, that I don’t have an outcome!
Adding to that, work will ramp up significantly until project go-live mid year. Even if it doesn’t end up taking any more of my time (I’m sure it will), it will definitely take up more and more brainpower. I feel it will get to the point where it takes everything I have just to keep my head above water.
This is fine, I’m prepared, and in a way I’m looking forward to it. The project will be over 2 years old by then—I can’t wait to see it come to fruition. I’m frightened, though. Frightened to commit to anything knowing this is in my future. I do not want to overextend myself to unhealthy levels. I don’t want to reach burnout.
That’s a bit trite, but what I mean is to make sure I sustain some sort of work/life balance, and don’t let myself become consumed. Reporting on this once a month will keep it to the front of my mind. Hopefully the reports are all simply ”doing good”!
There is one goal I was pursuing last year, that I started well on, then dropped off. My eternal nemesis…
All the time I did spend doing it in 2017 must have made some sort of impact, because I find myself feeling like I need to start again. I don’t want to spend the time, but my body is telling me that I felt better when I was exercising, and my brain is actually listening. Time to start back up, with a walk before work once a week.
Not so much a goal, but at the end of 2017, I decided I wouldn’t drink any alcohol in 2018. A few people have asked me about why I made that decision; it’s a little difficult to explain without coming across as a bit ‘holier than thou’—that’s not the case, truly!
I’d already reduced my drinking in 2017, as previously I’d developed a habit of having a glass of wine each night after work. It wasn’t excessive, but it was a habit—a habit that cost money and added empty kilojoules. I recently came across this article which points out how dangerous moderate daily drinking can be for people in our age group. I’ve also done Dry July for the last 2 years.
We all know Australia has a culture of drinking, but I didn’t really understand it until I decided to do Dry July. Then, I suddenly tuned in. There’s barely a TV program/episode/movie that I watch that doesn’t have someone drinking alcohol in it. Perhaps I watch the wrong shows, but it’s just so normal.
Every time we socialise, whether at our house, someone else’s, or at a restaurant, drinking happens. The final trigger for me was when we went on a picnic for a 2 year old’s birthday party, and there was alcohol. Why? Why do we need alcohol at a party for a toddler? So, I decided I would walk the talk, and abstain. Although we don’t have kids, I’d rather show an alternative—that it’s OK not to drink. It’s kind of a cop-out, because it’s much easier to say “I’m not drinking in 2018” than it is to explain my newfound awareness (and sound like I’m being Judgy McJudgeface).
So far, most people have just shrugged and accepted when I’ve said it. NBD, if you will. Also, I haven’t missed it at all.
I use (and totally love) YNAB to track my spends and budget. Mr. ETT doesn’t exactly love it, but he does use it—super important when more than one person is involved in spending money. YNAB offers a 34 day free trial period. If you try YNAB and after your free 34 days, you love it as much as I do, then by signing up through this link, both of us will get a free month in our subscriptions!