Author Topic: Family of 4, $26k/yr expenses  (Read 3668 times)

APowers

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Family of 4, $26k/yr expenses
« on: March 03, 2020, 11:16:14 PM »
I'm branching this off from my other thread, at @waltworks request. Not sure exactly what I'm doing here, but I guess....treat this like a reddit AMA?

General background: two adults (ages 31, 29), two kids (ages 7, 8). We live in Colorado (the Springs, not Denver). I run my own handyman business; I own a single-fam rental, and rent the basement of our current house on airbnb.

I took Walt's admonition to review my spending more accurately, so I did. I reviewed my spending records, and here's what I found (with notes):

*"accurate" means I have actual tracking to back it up, and I'm within a dollar
"good" means I have actual tracking, but it's incomplete, and I'm within 5-10 dollars
"guesstimate" means I have some tracking, but am basing this on past year averages, I'm reasonably close-- not off by more than $15 for sure.
"HIGH" means the actual could be lower, but I erred on the high side.
"LOW" means the actual could be higher, but I think I'm accurate.

mortgage                 1,138   accurate | PITI + HELOC
utilities                     262      accurate | gas/water/sewer/electric
internet                    40      accurate | comcast
phone                      36      accurate | 2 lines, MintMobile
trash                        22.5   accurate
work expenses        192      accurate | work truck/gas/insurance/maint/tools/supplies
         
food                         240      good | groceries/restaurants total
household misc       100      guesstimate
clothing                    15      accurate | mostly shoes/clothes for the kids
toiletries/medicine   15      HIGHguesstimate

↓↓↓ two drivers/two cars ↓↓↓      
license/registration  16      accurate
auto insurance         66      accurate
auto maint                45      good
gasoline                   50      accurate
         
life ins                       17      accurate
         
fun stuff/birthdays    20      LOWguesstimate
school supplies         15      HIGHguesstimate

Total                        $2,289.50 ($1,151.50 without the mortgage)


With regard to FIRE expenses-- since we're not married and finances are separate, I actually only pay half the vehicle expenses, half the school/children's expenses, and half the shared expenses (food/utilities/phone/household/etc.), while I pay the full amount of the mortgage (I own the house) and all work expenses (obv). I'm sure SO has expenses of her own (e.g., going out w/friends), but they don't really change the bottom line, and this current budget/expense iteration is full of luxury and extra in almost every category.


Whoa, you live on $26k a year *with multiple kids*, with over half that being mortgage? As in, <$1000/mo in *all* other expenses?

Holy shit. That is freaking amazing. I figured you were single. Our family of 5 spends twice what you do a month (outside of the mortgage), and we're pretty darn frugal (basically free ACA healthcare, inexpensive homecooked food/never eat out, take the bus everywhere, get all clothes as hand-me-downs or thrift store, ultra cheap phone plan, no TV, etc).

You should post a case study, you guys are killing it.

-W

Umm...thanks!? Maybe it makes a bit more sense that I'm like "HOLY COW, A HUNDRED THOUSAND DOLLARS!!!?!?!?" with this whole refinance thing, lol!

$26k/yr spending, yes. Two adults, two kids (ages 7 & 8). Mortgage is $1160, so basically half the expenses are mortgage. Income this last year (2019) was $39k, which is way above-average for me-- average over the last 10 yrs has been $27-28k.

I take that back. Actual spending in 2019 was ~$22k. I made $39k net, and for sure spent: $12k on a kitchen remodel, $3.5k on a bathroom reno, and >$1.5k on landscaping (I tracked remodel expenditures a lot more closely than normal spending this year). I didn't end the year much different financially (better, if anything) than I started, so all other spending must have been the difference-- $22k, or ~$1850/month.

*looooooong exhale*

*has existential crisis*

I.....think I need to switch gears toward making FIRE plans instead of OMY plans.
I think you need to track your actual spending. Sounds like you don't really know what it is.

If you are actually spending $22k a year, yes, you are FIRE.

Again, post a case study. I want to see how it's even vaguely possible to live a modern (ie, access to this forum, own a car, etc) lifestyle with a family of 4 in a HCOL area and spend well under $1000 a month doing so.

-W

I've tracked my spending religiously for the previous 9 years, so last year I didn't feel compelled to track quite as closely, based on how consistent we've been historically. I'm 90% certain that my back-of-the-envelope estimate is about as accurate as rounding everything off to the thousands' place.

Monerexia

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Re: Family of 4, $26k/yr expenses
« Reply #1 on: March 03, 2020, 11:41:15 PM »
I'm branching this off from my other thread, at @waltworks request. Not sure exactly what I'm doing here, but I guess....treat this like a reddit AMA?

General background: two adults (ages 31, 29), two kids (ages 7, 8). We live in Colorado (the Springs, not Denver). I run my own handyman business; I own a single-fam rental, and rent the basement of our current house on airbnb.

I took Walt's admonition to review my spending more accurately, so I did. I reviewed my spending records, and here's what I found (with notes):

*"accurate" means I have actual tracking to back it up, and I'm within a dollar
"good" means I have actual tracking, but it's incomplete, and I'm within 5-10 dollars
"guesstimate" means I have some tracking, but am basing this on past year averages, I'm reasonably close-- not off by more than $15 for sure.
"HIGH" means the actual could be lower, but I erred on the high side.
"LOW" means the actual could be higher, but I think I'm accurate.

mortgage                 1,138   accurate | PITI + HELOC
utilities                     262      accurate | gas/water/sewer/electric
internet                    40      accurate | comcast
phone                      36      accurate | 2 lines, MintMobile
trash                        22.5   accurate
work expenses        192      accurate | work truck/gas/insurance/maint/tools/supplies
         
food                         240      good | groceries/restaurants total
household misc       100      guesstimate
clothing                    15      accurate | mostly shoes/clothes for the kids
toiletries/medicine   15      HIGHguesstimate

↓↓↓ two drivers/two cars ↓↓↓      
license/registration  16      accurate
auto insurance         66      accurate
auto maint                45      good
gasoline                   50      accurate
         
life ins                       17      accurate
         
fun stuff/birthdays    20      LOWguesstimate
school supplies         15      HIGHguesstimate

Total                        $2,289.50 ($1,151.50 without the mortgage)


With regard to FIRE expenses-- since we're not married and finances are separate, I actually only pay half the vehicle expenses, half the school/children's expenses, and half the shared expenses (food/utilities/phone/household/etc.), while I pay the full amount of the mortgage (I own the house) and all work expenses (obv). I'm sure SO has expenses of her own (e.g., going out w/friends), but they don't really change the bottom line, and this current budget/expense iteration is full of luxury and extra in almost every category.


Whoa, you live on $26k a year *with multiple kids*, with over half that being mortgage? As in, <$1000/mo in *all* other expenses?

Holy shit. That is freaking amazing. I figured you were single. Our family of 5 spends twice what you do a month (outside of the mortgage), and we're pretty darn frugal (basically free ACA healthcare, inexpensive homecooked food/never eat out, take the bus everywhere, get all clothes as hand-me-downs or thrift store, ultra cheap phone plan, no TV, etc).

You should post a case study, you guys are killing it.

-W

Umm...thanks!? Maybe it makes a bit more sense that I'm like "HOLY COW, A HUNDRED THOUSAND DOLLARS!!!?!?!?" with this whole refinance thing, lol!

$26k/yr spending, yes. Two adults, two kids (ages 7 & 8). Mortgage is $1160, so basically half the expenses are mortgage. Income this last year (2019) was $39k, which is way above-average for me-- average over the last 10 yrs has been $27-28k.

I take that back. Actual spending in 2019 was ~$22k. I made $39k net, and for sure spent: $12k on a kitchen remodel, $3.5k on a bathroom reno, and >$1.5k on landscaping (I tracked remodel expenditures a lot more closely than normal spending this year). I didn't end the year much different financially (better, if anything) than I started, so all other spending must have been the difference-- $22k, or ~$1850/month.

*looooooong exhale*

*has existential crisis*

I.....think I need to switch gears toward making FIRE plans instead of OMY plans.
I think you need to track your actual spending. Sounds like you don't really know what it is.

If you are actually spending $22k a year, yes, you are FIRE.

Again, post a case study. I want to see how it's even vaguely possible to live a modern (ie, access to this forum, own a car, etc) lifestyle with a family of 4 in a HCOL area and spend well under $1000 a month doing so.

-W

I've tracked my spending religiously for the previous 9 years, so last year I didn't feel compelled to track quite as closely, based on how consistent we've been historically. I'm 90% certain that my back-of-the-envelope estimate is about as accurate as rounding everything off to the thousands' place.
No health insurance? Also $50 seems low for gasoline. I drive a Prius and put way under 10K miles/year (I haven't hit 800 miles in any month in years) and my gasoline is right around $50/month.
« Last Edit: March 03, 2020, 11:56:40 PM by Monerexia »

APowers

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Re: Family of 4, $26k/yr expenses
« Reply #2 on: March 04, 2020, 06:22:05 AM »
I'm branching this off from my other thread, at @waltworks request. Not sure exactly what I'm doing here, but I guess....treat this like a reddit AMA?

General background: two adults (ages 31, 29), two kids (ages 7, 8). We live in Colorado (the Springs, not Denver). I run my own handyman business; I own a single-fam rental, and rent the basement of our current house on airbnb.

I took Walt's admonition to review my spending more accurately, so I did. I reviewed my spending records, and here's what I found (with notes):

*"accurate" means I have actual tracking to back it up, and I'm within a dollar
"good" means I have actual tracking, but it's incomplete, and I'm within 5-10 dollars
"guesstimate" means I have some tracking, but am basing this on past year averages, I'm reasonably close-- not off by more than $15 for sure.
"HIGH" means the actual could be lower, but I erred on the high side.
"LOW" means the actual could be higher, but I think I'm accurate.

mortgage                 1,138   accurate | PITI + HELOC
utilities                     262      accurate | gas/water/sewer/electric
internet                    40      accurate | comcast
phone                      36      accurate | 2 lines, MintMobile
trash                        22.5   accurate
work expenses        192      accurate | work truck/gas/insurance/maint/tools/supplies
         
food                         240      good | groceries/restaurants total
household misc       100      guesstimate
clothing                    15      accurate | mostly shoes/clothes for the kids
toiletries/medicine   15      HIGHguesstimate

↓↓↓ two drivers/two cars ↓↓↓      
license/registration  16      accurate
auto insurance         66      accurate
auto maint                45      good
gasoline                   50      accurate
         
life ins                       17      accurate
         
fun stuff/birthdays    20      LOWguesstimate
school supplies         15      HIGHguesstimate

Total                        $2,289.50 ($1,151.50 without the mortgage)


With regard to FIRE expenses-- since we're not married and finances are separate, I actually only pay half the vehicle expenses, half the school/children's expenses, and half the shared expenses (food/utilities/phone/household/etc.), while I pay the full amount of the mortgage (I own the house) and all work expenses (obv). I'm sure SO has expenses of her own (e.g., going out w/friends), but they don't really change the bottom line, and this current budget/expense iteration is full of luxury and extra in almost every category.

No health insurance? Also $50 seems low for gasoline. I drive a Prius and put way under 10K miles/year (I haven't hit 800 miles in any month in years) and my gasoline is right around $50/month.

Health insurance is medicaid-- due to low income, we don't even qualify to be on the ACA subsidy exchange.

And yes, that figure for gasoline is really close. I fill up my Civic slightly less than once/month (~$22 each fillup) and the Accord gets fueled about once/month (~$30). Gas is super-cheap right now, at only a little over $2/gallon.

waltworks

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Re: Family of 4, $26k/yr expenses
« Reply #3 on: March 04, 2020, 07:02:55 AM »
Ah, so those are your side of the shared expenses with your SO?

-W

APowers

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Re: Family of 4, $26k/yr expenses
« Reply #4 on: March 04, 2020, 07:26:46 AM »
Ah, so those are your side of the shared expenses with your SO?

-W

No, not really. These are combined expense numbers, leaving out some discretionary spending that I have no tracking for. My half (essentially one adult/one kid) is this:

mortgage                 1,138   accurate | PITI + HELOC
utilities                     131      accurate | gas/water/sewer/electric
internet                    20      accurate | comcast
phone                      18      accurate | 1 line, MintMobile
trash                        12   accurate
work expenses        192      accurate | work truck/gas/insurance/maint/tools/supplies
         
food                         120      good | groceries/restaurants total
household misc        50      guesstimate
clothing                    10      accurate | mostly shoes/clothes for the kids
toiletries/medicine   7      HIGHguesstimate

↓↓↓ 1 driver/1 cars ↓↓↓     
license/registration  8      accurate
auto insurance         33      accurate
auto maint                25      good
gasoline                   25      accurate
         
life ins                       17      accurate
         
fun stuff/birthdays    10      LOWguesstimate
school supplies         7      HIGHguesstimate

Total                        $1,823 ($685 without the mortgage)
« Last Edit: March 04, 2020, 07:35:42 AM by APowers »

ontheway2

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Re: Family of 4, $26k/yr expenses
« Reply #5 on: March 04, 2020, 09:08:30 AM »


No health insurance? Also $50 seems low for gasoline. I drive a Prius and put way under 10K miles/year (I haven't hit 800 miles in any month in years) and my gasoline is right around $50/month.

The work truck line includes gas, so I'm guessing one vehicle's gas is primarily weekend use

APowers

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Re: Family of 4, $26k/yr expenses
« Reply #6 on: March 04, 2020, 09:21:30 AM »


No health insurance? Also $50 seems low for gasoline. I drive a Prius and put way under 10K miles/year (I haven't hit 800 miles in any month in years) and my gasoline is right around $50/month.

The work truck line includes gas, so I'm guessing one vehicle's gas is primarily weekend use

Yes, work truck gas is included in the "work expense" line; gas for the work truck is $48/month (almost exactly one tank/month). The other car is the "grocery getter", used for errands and family transport; again average driving is 350-400 miles/month-- one ~9.5gal fillup (<$25).
« Last Edit: March 04, 2020, 10:37:56 AM by APowers »

Car Jack

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Re: Family of 4, $26k/yr expenses
« Reply #7 on: March 04, 2020, 11:34:26 AM »
Taxes?


RWD

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Re: Family of 4, $26k/yr expenses
« Reply #8 on: March 04, 2020, 11:39:33 AM »
Impressively low expenses! Do you not travel?


Also $50 seems low for gasoline. I drive a Prius and put way under 10K miles/year (I haven't hit 800 miles in any month in years) and my gasoline is right around $50/month.
We spent $32.83/month on gas last year for our two sports cars combined (3,300 miles total).

APowers

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Re: Family of 4, $26k/yr expenses
« Reply #9 on: March 04, 2020, 02:08:26 PM »
Taxes?
I doubt he has any taxable income so probably zero taxes. I'm also a low expenses person who lives on very little but am single with no kids so I know it is doable for most people with normal situations.  And no taxes either. My "taxable" income this year was under $12k and so no fed or state taxes. I do have a higher non-taxable income of approx $8k -$10k/year  but if I don't spend it on fun stuff it gets saved.

That's correct. In fact, on average, my taxes are net negative (i.e., I get more than I pay).

APowers

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Re: Family of 4, $26k/yr expenses
« Reply #10 on: March 04, 2020, 02:13:18 PM »
Impressively low expenses! Do you not travel?

We don't (yet, at least) "travel" In the sense that most people think (planes/hotels/etc), but we do occasionally road trip to visit friends and/or family. Any travel expenses more than the budget will afford are paid for with "found" money (mainly CC rewards).

ChpBstrd

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Re: Family of 4, $26k/yr expenses
« Reply #11 on: March 04, 2020, 02:33:29 PM »
Nice job. I’m intrigued by $200/mo groceries for 1.5 people (a weak area of my budget). Care to share any recipes?

APowers

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Re: Family of 4, $26k/yr expenses
« Reply #12 on: March 04, 2020, 03:46:06 PM »
Nice job. I’m intrigued by $200/mo groceries for 1.5 people (a weak area of my budget). Care to share any recipes?

Wellllll.....there was this one time I documented a whole year of food spending....

IMO, "recipes" aren't what make or break a food budget. You can make bland, boring food that's expensive about as easily as intense, flavourful food that's cheap. What actually makes a difference-- shopping with a clear price objective and guidelines, contentment with eating "poor people" food (i.e., rice/beans, carrots/onions/celery/potatoes, chicken vs steak, etc.), a willingness to cook for yourself instead of eating/ordering out, and self-control to avoid impulse purchases.

ontheway2

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Re: Family of 4, $26k/yr expenses
« Reply #13 on: March 04, 2020, 05:00:59 PM »
Taxes?
I doubt he has any taxable income so probably zero taxes. I'm also a low expenses person who lives on very little but am single with no kids so I know it is doable for most people with normal situations.  And no taxes either. My "taxable" income this year was under $12k and so no fed or state taxes. I do have a higher non-taxable income of approx $8k -$10k/year  but if I don't spend it on fun stuff it gets saved.

That's correct. In fact, on average, my taxes are net negative (i.e., I get more than I pay).

What about self employment taxes?

APowers

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Re: Family of 4, $26k/yr expenses
« Reply #14 on: March 04, 2020, 06:15:49 PM »
Taxes?
I doubt he has any taxable income so probably zero taxes. I'm also a low expenses person who lives on very little but am single with no kids so I know it is doable for most people with normal situations.  And no taxes either. My "taxable" income this year was under $12k and so no fed or state taxes. I do have a higher non-taxable income of approx $8k -$10k/year  but if I don't spend it on fun stuff it gets saved.

That's correct. In fact, on average, my taxes are net negative (i.e., I get more than I pay).

What about self employment taxes?

I "owe" them, but they've so far been more than compensated for by other refundable credits, resulting in a net benefit to me. One of the perks of a lower income, such as it is, lol!

Staunch Aim

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Re: Family of 4, $26k/yr expenses
« Reply #15 on: March 04, 2020, 07:41:56 PM »
Impressive, Apowers!

I spend $240 a month on food (all at home), but it's just me.  You've inspired me to take another look at how I buy groceries.


waltworks

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Re: Family of 4, $26k/yr expenses
« Reply #16 on: March 04, 2020, 08:02:04 PM »
I agree, this is awesome.

Now, what do you guys do with your free time/energy, since your total working time is very limited?

-W

ontheway2

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Re: Family of 4, $26k/yr expenses
« Reply #17 on: March 04, 2020, 09:05:11 PM »
Taxes?
I doubt he has any taxable income so probably zero taxes. I'm also a low expenses person who lives on very little but am single with no kids so I know it is doable for most people with normal situations.  And no taxes either. My "taxable" income this year was under $12k and so no fed or state taxes. I do have a higher non-taxable income of approx $8k -$10k/year  but if I don't spend it on fun stuff it gets saved.

That's correct. In fact, on average, my taxes are net negative (i.e., I get more than I pay).

What about self employment taxes?

I "owe" them, but they've so far been more than compensated for by other refundable credits, resulting in a net benefit to me. One of the perks of a lower income, such as it is, lol!

That's awesome! I honestly wouldn't have included them in my budget whether owed or not since I budget on net but was curious when you said you had no tax liability. My budget isn't quite as trim as yours, but I also have a net negative tax liability after deducting everything I can plus claiming head of household with 2.

APowers

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Re: Family of 4, $26k/yr expenses
« Reply #18 on: March 04, 2020, 10:16:16 PM »
I agree, this is awesome.

Now, what do you guys do with your free time/energy, since your total working time is very limited?

-W

SO is full-time university, plus work-study and a part-time job. Last year, (in addition to working part-time), I did a full remodel on our bathroom, kitchen, and razed about 20 trees in our yard, plus hosted a family reunion, went camping with the kids for the first time since moving to CO.

This year, I'm trying to add some actual down-time in my schedule, along with a few new personal development goals. I'm working on some overdue fitness goals, I have a whole yard and a deck to get started, I want to develop another stream of passive income, I want to do more camping this summer, more visiting family and friends....ha!...I don't know that I have time for all the stuff I want to do, even if I quit work altogether, lol!
« Last Edit: March 05, 2020, 08:17:31 PM by APowers »

Car Jack

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Re: Family of 4, $26k/yr expenses
« Reply #19 on: March 05, 2020, 07:01:35 AM »
I like your goals.  A friend who was laid off from work years ago and was the stereotypical engineer did things like decoding the cable box signal to see where they were blocking channels, then unblocking them and completely taking apart the fuel injection system in his car just to see how it worked.  He finally did get a new job and when I was getting lunch with him one day, he was concerned because he didn't know how he was going to fit the time to go to work.