Author Topic: Spending is crazy!  (Read 2577 times)

Harper

  • 5 O'Clock Shadow
  • *
  • Posts: 44
Spending is crazy!
« on: July 17, 2017, 11:58:36 AM »
So I spent hours yesterday backtracking all of our spending (that I could get at) since Feb.  I thought we (2 adults, 1 teen) were doing ok (we're saving a good bit ~25-30%).  We don't buy super expensive food (no organic, single serve, etc).  We don't indulge in luxuries (nails, mani, hair).  But clearly, we like to eat.  I don't like that there's a ton of cash that I don't know what it's going to.  I asked husband to use cc whenever he could and not cash so it's trackable.  We have never carried a cc balance so that's not a worry.  He even said he would text me when he spent cash.  I also need to breakdown what the Walmart spend is (household, personal hygiene, crap). 

I'd like to tackle the food bucket (groceries, restaurants, take out) first.  Husband also suggested we check out Aldi so he is on board with cutting this.

Other than the mortgage, we have no debt.  We have retirement and investments but we could be saving more.

Any other thoughts?  Thank you!

TLDR: Longtime lurker thought she was in good shape until she really tracked her expenses.

This is a monthly average over Feb-Jun.

Mortgage   1695.8
Phone/internet   71.652
Cable   115.4
Electricity   107.895
Water   72
School tuition/After Care/lunch   377.06 hopefully can get rid of after care this year saving $300/mo
Cash   1100 will start tracking this
Medical bills   93.314
Car maintenance   37.5
House maintenance   2250 (new HVAC in April)
Gifts   27.5
Misc   297.5
Grocery   626.036 will be more careful; try Aldi and BJs
Restaurant   264.13 this needs to be cut unless traveling
Gas   458.684
Takeout   134.258 cut
Walmart   147.998 need to track better
Home Depot   193.942 need to track better
Gym   38.196 will cancel mine for $10/mo savings
Entertainment   24.304
Hair   30.16 Supercuts for husband (8w) and son (12w)
Clothing   99.936
Pool   26.586
His Misc   73.138
Her Misc   143.532
Walgreens   29.048 I logged in online to see the purchases and it's just crap - stop going there
Travel   210.21 2 weekend hotel for travel sport; anticipate 2 more this year



« Last Edit: July 17, 2017, 05:20:50 PM by arden »

tarheeldan

  • Pencil Stache
  • ****
  • Posts: 674
Re: Spending is crazy!
« Reply #1 on: July 17, 2017, 12:21:57 PM »
Whoah! Good on you for putting in the work. I think you are on the right track:

$1,316 = ?? ($1,100 cash + Her/His Misc 73+143)         and

$1,024 = food (626 grocery, 264 restaurant, 134 takeout)

are two big fat targets to figure out and slash.


Lepetitange3

  • Guest
Re: Spending is crazy!
« Reply #2 on: July 17, 2017, 01:09:25 PM »
Please tell me cable is internet and you didn't bring spending that included actually for real cable tv.

1316+297 (another misc-how many misc categories do you have??)

Pool and gym??

Clothing?

Walgreens, Walmart, and Home Depot?

And then you say you don't indulge and specifically say you don't do hair then there a line item for hair?

It seems like the vast majority of your spending is unneeded...where's it all going?  Do you and hubby know what was bought with it?

And finally, I feed a family of 6 for HUNDREDS less than your grocery line item.

You've seen the light, now there's tons of room to improve here!

DarkandStormy

  • Bristles
  • ***
  • Posts: 350
  • Age: 28
  • Location: Midwest, USA
Re: Spending is crazy!
« Reply #3 on: July 17, 2017, 01:19:48 PM »
To start, I don't know your particulars (age, assets, goals, etc.) so I'll just leave this here - http://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/  If you're starting out, with a 25-30% savings rate you're looking at ~30 working career.

I'll just call out some examples where I personally see some room for improvement or have questions.

Mortgage - is this PITI?  If not, you'll need to budget for property taxes / insurance.

Quote
Phone/internet   71.652
Cable   115.4
Is phone a landline? If so, drop.  Otherwise, that's pretty good on the phone/internet for two per month.  I'd drop cable though and either buy an HD antenna for local channels and/or Netflix/Hulu.  This alone will give you ~$1,200/year to invest.
Quote
Electricity   107.895
Water   120.5
Does your state have a rebate program on "smart" thermostats?  That could be an easy way to monitor your thermostat and a/c/heat usage.  $120+ per month seems high.  We (two of us) use less than that per quarter.
Quote
Car maintenance   37.5
What kind of car maintenance?  That's $450/year.  I'm not a car expert, but don't most vehicles require basic servicing every 6 months?  That usually costs about $40, I thought?  I know some big mileage numbers require tire rotation, bigger items, etc. but still.  For oil changes, you could look at signing up for Mystery Shop (you basically rate your trip there and get reimbursed ~$20-$30).
Quote
Misc   297.5
  $3,570/year on "miscellaneous" items that aren't broken down below in his/her misc.??
Quote
Grocery   626.036
Restaurant   264.13
Takeout   134.258
Over $1K per month on food (and that's ignoring if any of "Walmart" is food products).  $12.3K (ish) per year on food.  Buy bulk at a Costco or Sam's Club.  Eat out very little if you can - meal planning is very helpful as is making larger batches if cooking at home (put the excess in the fridge for the next day).
Quote
Walmart   147.998
Home Depot   193.942
You're spending over $4k per year at these two stores.  Is there anything, like food, you're getting at Walmart that could be cheaper at Costco/Sams? This isn't factoring in Walgreens below, which I'm guessing is more prescriptions.
Quote
Gym   38.196
Is this a contract or something you can cancel?  Can you run/bike in your neighborhood area for some cardio?  Some free weights can be bought for ~$100 and then you could save nearly $460/year on gym memberships.

Travel - are you comfortable spending $2,500+/year on travel?  That's your current rate.  Could travel hack some of this?

Quote
Gas   458.684
Is this automobile gas, natural gas (home), or both?  If it's just automobiles, holy ****.  Even if $300/month is gasoline for your vehicles, that's $3,600 of fuel.  At ~$2.25 per gallon average, that's 1,600 gallons annually.  At a modest 25 mpg (which is actually quite terrible, but it's an average) that's 40,000 miles per year.  That's insane.  It's obviously worse if the whole $459/month is auto fuel.  How are you driving this much?

I don't know if any one category sticks out, but lots of room for improvement across many categories, which will be huge if you can tackle several of them.
« Last Edit: July 17, 2017, 02:02:54 PM by DarkandStormy »
The Chase Trifecta:
Earn 50,000 Ultimate Rewards points with Chase Sapphire Preferred - $4k spending in 3 months.
https://www.referyourchasecard.com/6/2MOVOLZCEJ
Earn a $150 bonus with Chase Freedom Unlimited - only $500 spending needed in 3 months.
https://www.referyourchasecard.com/18/ENYF0FTS66
Earn a $150 bonus with Chase Freedom - only $500 spending needed in 3 months.
https://www.referyourchasecard.com/2/DBOP9XI9XT

Recommended Cell Servce - Google's Project FI: https://g.co/fi/r/THK0WX

Harper

  • 5 O'Clock Shadow
  • *
  • Posts: 44
Re: Spending is crazy!
« Reply #4 on: July 17, 2017, 01:44:26 PM »
Please tell me cable is internet and you didn't bring spending that included actually for real cable tv.
It's real cable.

1316+297 (another misc-how many misc categories do you have??)
Yes, there's multiple misc.  As opposed to Walmart, I know what these are.

Pool and gym??
We each belong to a $10/month gym.  This also includes the yearly upgrade fee.
We have a pool.  I know it's not mustachian but we love it.  Outside of electricity which is costly, we won't spend anymore for chemicals, etc than this.


Clothing?
We have a growing teen.  We won't spend $100/month on this.  Some months are 0.

Walgreens, Walmart, and Home Depot?
Yes, we need to track this better.

And then you say you don't indulge and specifically say you don't do hair then there a line item for hair?
I get a haircut once a year.  This is for my husband and son at supercuts.  I guess I was referring to women that get their hair done every 6 weeks.
« Last Edit: July 17, 2017, 02:09:23 PM by arden »

Harper

  • 5 O'Clock Shadow
  • *
  • Posts: 44
Re: Spending is crazy!
« Reply #5 on: July 17, 2017, 02:05:26 PM »
Thank you to the posters.  I've read a lot of these and never realized how much it smarts.  :)  I do appreciate it.  Honestly.

For the record, we saved in the 60-70% range for 12 years.  With a house and a kid, it's really just changed.  I know that it sounds like excuses but we are really doing ok.  I just want us to do better AND know where our money is going.


Mortgage - is this PITI?  If not, you'll need to budget for property taxes / insurance.
This is everything

Quote
Phone/internet   71.652
Cable   115.4
Is phone a landline? If so, drop.  Otherwise, that's pretty good on the phone/internet for two per month.  I'd drop cable though and either buy an HD antenna for local channels and/or Netflix/Hulu.  This alone will give you ~$1,200/year to invest.

We have a landline.  Both of our cell phones are from work.  If I were to lose my job, I would lose my phone.  This has happened in the past.
Quote
Electricity   107.895
Water   120.5

I realize I did some bad excel and didn't have 0 in some of the months.  Water is $72.  It's also water/sewer.  Not sure if that's everywhere.

Does your state have a rebate program on "smart" thermostats?  That could be an easy way to monitor your thermostat and a/c/heat usage.  $120+ per month seems high.  We (two of us) use less than that per quarter.
Quote
Car maintenance   37.5
What kind of car maintenance?  That's $450/year.  I'm not a car expert, but don't most vehicles require basic servicing every 6 months?  That usually costs about $40, I thought?  I know some big mileage numbers require tire rotation, bigger items, etc. but still.  For oil changes, you could look at signing up for Mystery Shop (you basically rate your trip there and get reimbursed ~$20-$30).
This was a specific fix.

Quote
Misc   297.5
  $3,570/year on "miscellaneous" items that aren't broken down below in his/her misc.??

I know what this is and won't be recurring.

Quote
Grocery   626.036
Restaurant   264.13
Takeout   134.258
Over $1K per month on food (and that's ignoring if any of "Walmart" is food products).  $12.3K (ish) per year on food.  Buy bulk at a Costco or Sam's Club.  Eat out very little if you can - meal planning is very helpful as is making larger batches if cooking at home (put the excess in the fridge for the next day).
Agree!

Quote
Walmart   147.998
Home Depot   193.942
You're spending over $4k per year at these two stores.  Is there anything, like food, you're getting at Walmart that could be cheaper at Costco/Sams? This isn't factoring in Walgreens below, which I'm guessing is more prescriptions.
I agree! Walgreens is crap.  I need to just stop going there.  It's near work so I'm just running in to grab stupid stuff that I should have bought somewhere cheaper (tampons) or not at all (snacks).

Quote
Gym   38.196
Is this a contract or something you can cancel?  Can you run/bike in your neighborhood area for some cardio?  Some free weights can be bought for ~$100 and then you could save nearly $460/year on gym memberships.
This is 2 $10/month for my husband and me.  It includes the yearly "upgrade" fee.  I'm thinking of canceling mine.  Husband uses his every workday.

Travel - are you comfortable spending $2,500+/year on travel?  That's your current rate.  Could travel hack some of this?
This is one month of travel.

[quote[Gas   458.684[/quote]
Is this automobile gas, natural gas (home), or both?  If it's just automobiles, holy ****.  Even if $300/month is gasoline for your vehicles, that's $3,600 of fuel.  At ~$2.25 per gallon average, that's 1,600 gallons annually.  At a modest 25 mpg (which is actually quite terrible, but it's an average) that's 40,000 miles per year.  That's insane.  It's obviously worse if the whole $459/month is auto fuel.  How are you driving this much?

Yep, this is automobile gas.  We both drive 30-40 minutes in opposite directions for work.  We travel for sports on the weekend.  Yes, facepunch worthy but is a priority for us.

ETA:  Sorry I don't know how to quote this and make it readable.  My apologies....
« Last Edit: July 17, 2017, 02:08:25 PM by arden »

DarkandStormy

  • Bristles
  • ***
  • Posts: 350
  • Age: 28
  • Location: Midwest, USA
Re: Spending is crazy!
« Reply #6 on: July 17, 2017, 02:10:02 PM »
^Thanks for filling in more background.  It sounds like you identified food as an area of opportunity to lower cost.  Don't know if Costco/Sams (or similar bulk store) is in your area, but they're big savers in the long run.  Aldi's can be pretty cheap, comparably, on a lot of items than the bigger chain stores or Trader Joe's.  Good luck!
The Chase Trifecta:
Earn 50,000 Ultimate Rewards points with Chase Sapphire Preferred - $4k spending in 3 months.
https://www.referyourchasecard.com/6/2MOVOLZCEJ
Earn a $150 bonus with Chase Freedom Unlimited - only $500 spending needed in 3 months.
https://www.referyourchasecard.com/18/ENYF0FTS66
Earn a $150 bonus with Chase Freedom - only $500 spending needed in 3 months.
https://www.referyourchasecard.com/2/DBOP9XI9XT

Recommended Cell Servce - Google's Project FI: https://g.co/fi/r/THK0WX

Harper

  • 5 O'Clock Shadow
  • *
  • Posts: 44
Re: Spending is crazy!
« Reply #7 on: July 17, 2017, 02:12:16 PM »
Quote
^Thanks for filling in more background.  It sounds like you identified food as an area of opportunity to lower cost.  Don't know if Costco/Sams (or similar bulk store) is in your area, but they're big savers in the long run.  Aldi's can be pretty cheap, comparably, on a lot of items than the bigger chain stores or Trader Joe's.  Good luck!


Thank you!!

Lepetitange3

  • Guest
Re: Spending is crazy!
« Reply #8 on: July 17, 2017, 04:46:24 PM »
Before we take this further?  Any debt beside the mortgage? And how are your present investment/retirement accounts looking? 

You can always do better on spending (and you DEF can) but before applying face punches , there is how much of a situation you're in over all to consider ;)

Harper

  • 5 O'Clock Shadow
  • *
  • Posts: 44
Re: Spending is crazy!
« Reply #9 on: July 17, 2017, 04:59:52 PM »
Quote
Before we take this further?  Any debt beside the mortgage? And how are your present investment/retirement accounts looking? 

Only the mortgage.  No student loans.  No credit card debt.  Never pay CC interest.  Any projects for house are paid for in full.

Cars are old.  1994 Sentra (commuter car with 50K inherited from my mom); 2002 Max with 165K; 2007 Rav with 150K
We will replace with used cars and pay cash when they die.

Investment/retirement all look good.

Unique User

  • Bristles
  • ***
  • Posts: 362
Re: Spending is crazy!
« Reply #10 on: July 18, 2017, 08:16:47 AM »
It sounds like you know you have a problem and that is the biggest hurdle.  There are tons of ideas on lowering your food costs - eat everything in the house, batch cook, etc.  I don't need to go into those, you can easily search the forum.  But, I'd recommend a month spending fast.  We did one when we noticed things were getting out of control because we had more disposable income.  It was a great reset to start thinking about every purchase.  Now that we've set our FIRE date four years out, I think we'll be even more vigilant of all purchases (except travel).  Good luck!!

Harper

  • 5 O'Clock Shadow
  • *
  • Posts: 44
Re: Spending is crazy!
« Reply #11 on: August 03, 2017, 12:22:02 PM »
So...did the expenses for July.  We are down $150 total for food (restaurants, take out, groceries) and that is with feeding 7 extra people for the weekend over July 4th.  Restaurants went significantly down but groceries did go up.  Given this was only about 2 weeks or so, I'm pretty proud of ourselves.

We had our insurances (house, car, umbrella) this month but even with that our total expenses were down this month. 

We were on vacation this week and just did a mini beach trip and the rest staycation at home.

Laura33

  • Handlebar Stache
  • *****
  • Posts: 1131
  • Location: Mid-Atlantic
Re: Spending is crazy!
« Reply #12 on: August 03, 2017, 01:28:56 PM »
One thing that might help for tracking purposes is to separate out routine expenses from the "occasional-but-less-predictable" ones.  E.g., your "home maintenance" category is massively skewed from the AC replacement, and it sounds like the "misc" category was a single big thing as well, as was the car maintenance; you will also presumably need another car at some time given the number of miles you drive, and a new roof, and all that stuff.

Yes, you need to account for those things in your overall budget, including your FIRE budget -- they happen, need to plan for them.  But I find it confusing to lump those into my regular annual spending, because then you can't do an apples-to-apples comparison across several months or years.  So for example, if you looked at our total spending last year, it looks like we crashed and burned, because we spent waaaay more than the year before.  But the reality was that we built a garage and paid for it out of cash that we had already saved for the purpose.  So looking at the total doesn't tell me whether my baseline spending went down or up.  And just like I don't want to think I had a horrible year because of a big, planned project, I also don't want to think I had an awesome year just because I happened to run into that one year out of ten in which nothing big went wrong. 

So for me, it helps to keep a "sinking" fund that covers those various things -- it's sort of like the accounting distinction between O&M vs. capital.  My budget for car maintenance includes things like normal oil changes, but not the cost of the car DH will need in 5 years or so; my home repairs budget includes all the various Home Depot runs, but not the new roof we will probably need in another 10 years.  Those less-frequent costs are accounted for in my budget as one combined monthly transfer to the sinking fund (e.g., "$500 to T. Rowe Price Prime Reserve").  Then when the those things happen, we take the money out of that account, and categorize that withdrawal as "special" in Quicken (DH's term).  That way, it's easy to include or exclude those costs in the reports, depending on what we're trying to figure out.  It doesn't change the overall numbers, but I feel like it gives me a better baseline to compare "normal" spending across multiple years to track progress (or lifestyle creep).
Laugh while you can, monkey-boy

With This Herring

  • Handlebar Stache
  • *****
  • Posts: 1063
  • Location: New York STATE, not city
  • TANSTAAFL!
Re: Spending is crazy!
« Reply #13 on: August 03, 2017, 04:20:52 PM »
If you want to cut down on that Walgreens tampon spending permanently, buy a menstrual cup.  It's one little silicone cup that can live in your purse until you need it.  You can even insert it when your period is close to starting, so you won't be without.  It is the best thing for women.
Because your toaster got hacked because you tried to watch porn on your blender.

6-year CPA currently on hiatus.  Botched this.  Working again. 
Go soak your beans.  You know you keep forgetting.

Harper

  • 5 O'Clock Shadow
  • *
  • Posts: 44
Re: Spending is crazy!
« Reply #14 on: August 03, 2017, 05:59:44 PM »
Quote
One thing that might help for tracking purposes is to separate out routine expenses from the "occasional-but-less-predictable" ones.

Thank you, I like this idea.

Harper

  • 5 O'Clock Shadow
  • *
  • Posts: 44
Re: Spending is crazy!
« Reply #15 on: August 04, 2017, 06:44:45 AM »
@Laura33 - I'm going to institute the "special" category for things like unexpected repairs (house, car and medical).

How do you deal with yearly payments (for me: insurance) as it blows your monthly budget out of the water.  It is planned though.

Harper

  • 5 O'Clock Shadow
  • *
  • Posts: 44
Re: Spending is crazy!
« Reply #16 on: August 04, 2017, 06:45:37 AM »
Thanks for the info re: menstrual cup. 

schriscoe

  • 5 O'Clock Shadow
  • *
  • Posts: 1
Re: Spending is crazy!
« Reply #17 on: August 04, 2017, 07:08:03 AM »
Quick overall comment - stop using a credit card.  Your spending habits change when you have to pay cash.  You won't spend as much because it HURTS.  Plastic is like playing with monopoly money.

Laura33

  • Handlebar Stache
  • *****
  • Posts: 1131
  • Location: Mid-Atlantic
Re: Spending is crazy!
« Reply #18 on: August 04, 2017, 07:36:34 AM »
@Laura33 - I'm going to institute the "special" category for things like unexpected repairs (house, car and medical).

How do you deal with yearly payments (for me: insurance) as it blows your monthly budget out of the water.  It is planned though.

Yearly/semi-annual I account for in the monthly budget.  I generally run reports over longer periods of time, so that stuff averages out.  Where I try to distinguish is between "known and predictable" periodic expenses (that is, I know both that they will happen and that they will happen annually/semi-annually, like insurance, subscriptions that renew annually, any sort of annual dues payments, etc.) and "known but unpredictable" expenses, a/k/a "stuff that is gonna happen at some point but I can't predict when," like a major car repair or roof replacement.  Basically, if it is something that occurs at least once a year on a given date, it goes in the normal expense bucket, even if that causes a blip on an individual month. 

The other thing is that those sorts of periodic known expenses are only going to fall in a few categories, like insurance and subscriptions.  So you can always just run reports ignoring those categories, since they shouldn't change.
Laugh while you can, monkey-boy

Feivel2000

  • Stubble
  • **
  • Posts: 158
  • Age: 32
  • Location: Germany
Re: Spending is crazy!
« Reply #19 on: August 05, 2017, 01:34:50 AM »
@Laura33 - I'm going to institute the "special" category for things like unexpected repairs (house, car and medical).

How do you deal with yearly payments (for me: insurance) as it blows your monthly budget out of the water.  It is planned though.
I use an Excel spreadsheet for this purpose alone. I wrote up my thoughts here: https://medium.com/@helloludger/don-t-fool-yourself-by-not-expecting-expenses-8a71601fc421
and have an updated spreadsheet posted there: https://medium.com/@helloludger/myfreedomaccount-revised-for-2016-c6598a00cf2d

The "FreedomAccount" is inspired by Mary Hunt’s (@DeptProofLiving) book “Debt-Proof Living” and a blog post from J. D. Roth (@jdroth).