Our mission for 2017 was to simplify, to get back to basics.
Despite the ups and downs, 2017 was awesome. Because we’re debt free, we have some cash freed up for new activities. Garrett pays for the local makerspace. We’re going bouldering at the local indoor facility. We’re museum members. We’re traveling. We’re quite nearly living in that Quality World I’ve written about.
Get our household budget spreadsheet that we use to track our spending. (You'll also get our 7 steps to financial freedom and monthly updates!)
What about our spending? How’d that go?
Our 2017 Household Budget & Actual Spending
|CATEGORY||2017 ESTIMATE||INCLUDED||2017 SPENDING|
|Auto Expenses||$2,800||This includes all expenses for the one car we own outright, a Volvo: oil changes, gas, insurance, and tolls.||$4,746 [YIKES!]|
|Electricity||$1,181||Our electric bill for our 100% electric small house.||$1,117 [WOOT!]|
|Garbage||$220||We pay our garbage bill annually, so we get a discount. Woot!||$180 [WOOT!]|
|Groceries||$7,200||Much of what we purchase is organic, fair trade, or grass fed, which isn't always cheap.||$6,990 [WOOT!]|
|Insurance & Taxes||$2,100||Since we have no mortgage payment, we don't have escrow. We have to save to pay taxes and insurance.||$2,626 [YIKES!]|
|Home Supplies||$2,450||Varies sundries, like soap, toothpaste||$2,103 [WOOT!]|
|Medical Needs||$1,100||We anticipate 4 visits to doctors this year, so this includes copays and coinsurance.||$1,221 [YIKES!]|
|Storage Unit||$1,284||We have temporary storage for the teardrop camper during the week when the camper isn't in use.||$1,791 [YIKES!]|
|Personal Care||$100||I pay for haircuts. I cut Garrett's hair, so his haircuts are free.||$339 [YIKES!]|
|Pet Care||$2,600||We have three cats, so this includes vaccines, vet visits, dental care, food, and cat litter.||$1,636 [WOOT!]|
|Water & Sewer||$636||Our water and sewer bills for the year for our small house are so low!||$631 [WOOT!]|
|Discretionary||$1,200||fun money 🙂||$4,363 [YIKES!]|
|Gym Membership||$240||Planet Fitness||???|
|Travel||$2,560||We're planning two and a half vacations (half of one vacation is half business).||$2,820 [YIKES!]|
Spending in 2017 was up significantly in some categories, namely anything related to the car and the cats. What’s not reflect in the “2017 SPENDING” column are several emergencies than ran several thousand dollars.
Tracking our spending in the “Gym Membership” category is a little difficult. Earlier in the year, we cancelled our Planet Fitness membership, started working with a personal trainer, stopped working with a personal trainer, and then started going to a rock climbing gym. For whatever reason, I also changed how I kept track of the health & fitness expenses and it created a lot of confusion. Going forward, we have a new system, one that’s more finely tuned to categorize transactions.
Regarding our taxes and insurance, both saw an increase that we need to account for in 2018. Due to a county-wide reassessment that changed property values from 75% assessed value to 100%, we’re going to need to set aside $3,000 each year.
In the fall, we moved our stuff to another storage unit. We needed something much larger to accommodate two travel trailers, one of which is the teardrop camper while the other is a super secret project. We expect that we’ll need the storage unit only through the end of November 2018.
Finally, our discretionary budget was off the charts. We went to NYC to see Wicked in July and it was awesome! For whatever reason, our bad habits crept back in with that trip and we were going out to eat more often than we were in the first half of the year. On a positive note, we were also spending on hobbies and other activities, like Wicked tickets. Another good reason to get a little more detailed with our tracking.
Despite the spending increases, we have a few wins to celebrate!
In March 2017, we paid off all of our debt. In October 2017, we fully funded our emergency savings account. And we contributed the max to our tax-deferred retirement accounts for the first time ever. Woot!
Our Grocery Budget
We ate the hoard of food we had in the cupboards and managed to cut our grocery spending, but some of this is offset by some unknown amount in the discretionary bucket. We’ll say mission accomplished, but next year we’ll know for sure.
Becoming a One-Car Family
Between the regular car stuff and a couple of car emergencies, this was an expensive year to have an automobile. Next year, we’ll require tires and brakes, so setting aside at least $2,000 just for those items is a must.
We stopped using this line item in the budget as the “junk drawer” and it looks like we didn’t spend as much as we anticipated. Woot! For 2018, we need to use up whatever stockpile of home supplies we have, like the hoard of floss that’s in our cupboard. 🙂
Investing for FIRE
After several months of debate about how we plan to fund financial independence/early retirement, we figured out a system that works best for both of us, one we could both live with: dividend investing. We dismissed every other idea we had based on the Headache Factor because all the other ideas increased the likelihood of a headache.
Now, we have a taxable brokerage account with a teeny tiny bit of money; we’ll invest via this account until we are able to live off of the dividends generated.
2018 Household Budget
|Automotive Expenses / Repairs||$2,200||repairs and maintenance, like new tires|
|Automotive Expenses / PennDOT||$72.50||vehicle renewal and one driver's license|
|Automotive Expenses / EZ Pass||$210||tolls|
|Automotive Expenses / Fuel||$2,400||gas|
|Personal/Family / Clothing||$500||new socks and whatnot|
|Personal Family / Supplies||$1,200||varies sundries, like soap, toothpaste|
|Personal Family / Personal Care||$180||(4) haircuts|
|Utilities / Electricity||$1,153||small house is 100% electric|
|Utilities / Water||$727||small house water and sewer bills|
|Utilities / Garbage||$180||small house curb-side service|
|Utilities / Phone||$475||Garrett's phone bill|
|Insurance / Home||$426||small house|
|Insurance / Automotive||$1,094||Volvo insurance, which includes necessary commercial coverage|
|Health / Medical||$1,000||copays, coinsurance|
|Health / Fitness||$1,095||climbing gym where we go bouldering|
|Rent / Storage Unit||$2,101||where we keep the teardrop camper|
|Pets / Supplies||$1,200||cat food, litter|
|Pets / Vet||$500||vaccines, flea & tick prevention|
|Taxes / School Property||$3,000||property taxes|
|Taxes / Federal||$1,000||estimated federal tax due for 2017 (additional to withholding)|
|Taxes / State||$400||estimated state tax due for 2018|
|Taxes / Local||$70||estimated local tax due for 2018|
|Entertainment / Restaurants||$300||we're going for a major cut here|
|Entertainment / Entertainment||$375||movie rentals and whatnot|
|Entertainment / Travel||$2,800||(5) trips planned|
2018 Household Budget Tools
Like we did last year, we’re using the Debt Free Guys’ spreadsheet to track spending in each category.
We were using Mint until the end of 2017, but we’re making a change. We’re leaving Mint and going to BB&T U. BB&T is our bank, which we use for checking; they have a suite of tools similar to Mint with the ability to connect to our credit cards. Between the issues that Mint is having with access and the desire to reduce our digital footprint, it makes sense to get rid of Mint.
As a result of the switch, we have an opportunity to set up a more finely-tuned system for tracking our spending. Switching to a new platform is like getting a do-over. In this new system, we’re leveraging a category/sub-category system.
Here’s what’s not represented in our budget…
- Our automated transfers to our savings and investing accounts transfer a portion of our income on the first of every month so that we always “pay ourselves first.” The exact amount each month varies wildly because of annual expenses (like car insurance), Garrett’s bonuses, and business income.
- Charity. We donate and that’s all the more we’re going to share for lots of reasons.
- We continue to mow our grass and shovel snow.
- Since I work from home, our business pays for most of the Internet service and my cell phone (the personal portion is handled when we file taxes).
- We’re debt free, so no mortgage payment, car payment, etc.
2018 Household Budget Procedures
To keep us on track, we have weekly budget meetings on Saturdays. We use this time to recap our spending for the week, discuss upcoming expenses, and to say what we’re grateful for.
At the beginning of each month, we take our figures from our DFG spreadsheet and put ‘em into BB&T U to create the monthly budget. And the system starts over.