MMM 2015 Spending

[randymarsh]

^ If you're writing a blog about how you get to travel everywhere while on a budget of X dollars due to your financial acumen,

I don't think that's what the blog is saying at all.

[tobitonic]

^ If you're writing a blog about how you get to travel everywhere while on a budget of X dollars due to your financial acumen,

I don't think that's what the blog is saying at all.

I didn't say it was; I was talking about your scenario. That's why I referred to the $12,000 you had referenecd in the parts of my post you cut off.

^ If you're writing a blog about how you get to travel everywhere while on a budget of X dollars due to your financial acumen, yes, I'd see it as only honest to include that 12k in your expenses. Similarly, if I had a blog about sustainability and financial sensibility and also happened to get a free Model S or 3 from my best bro Elon, it would be intellectually dishonest for me to brag about how little I spent on transportation.

[ender]

He never went to Ecuador or did those other things until the blog took off and those opportunities presented themselves.

If I work for Fancy Corp and they fly me first class to Manhattan once a month, do I have to include the expense in my personal spending? That ticket is probably $1000+. Now my "spending" is $12,000 more???

It's intellectually dishonest when a insignificant portion of your budget is "business" to report a budget triumphantly saying:

Our total 2015 Actual Spending was $23,941.44 according to the spreadsheet

and then:

• So all told, we consume at an equivalent rate to a fairly financially irresponsible family with an  income of $62,000 per year
• a lifestyle no more noticeably fancy than my own would consume an entire $100,000 salary very easily

Without acknowledging that there were things you wanted to do for your life that were you not writing them off under business expenses you would have to pay for. There are certainly things in that category, for example presumably they are putting the $1200/year worth of accountant costs into the business. We see the $10k worth of Travel related costs. Hobbies that might cost money.

I don't particularly care that he does spend more under the guise of business spending (whether travel or home renovations). I care about the hand-waving it away and putting it into a business category and simultaneously patting himself on the back for spending so little. That seems as contrary to the point of MMM as it would for me to say that my business pays for my 30 mile round trip commute in my huge F350 truck and then saying "yeah I only spend $X per year! I'm awesome."

[The Happy Philosopher]

Doesn't arguing about how much he spends each year kind of miss the point? I doubt he would travel like he does without the blog, but I also doubt he would be any less happy. Including travel business expenses in his personal spending doesn't make much sense to me.

He is simply saying he has optimized his spending so that around 25k +15k housing feels ridiculously rich to him.

His costs are so low because he has optimized everything, and he has a very aggressive (crazy) approach to risk management (minimal insurance, no dentist, etc.) He is living a lifestyle of someone spending much more simply by being efficient. That is how message.

Personally I would not do it, and cannot do it. I would not feel comfortable with so little insurance, and I simply have more things in my life that cost money, but he shows me what is possible.

[forummm]

For his overall $25k, if we had no mortgage, that's about what we've been spending the past few years. And we have a pretty nice life. I have detailed the expenses in my journal a number of months. I think I'll do a 2015 summary for comparison.

I finally got a chance to put the baby down and do this summary:

2015 annual summary:

$2,373.79 Utilities (water, power, gas, cable, internet, phones)
$2,732.58 Groceries
$1,356.94 Dining Out
$13,007.48 Misc
$4,370 Insurance and property tax
$3,783 Interest (mortgage)
$27,623.79 Total Expenses

Includes (in misc) an international trip, replacing one of the A/C's, copays for maternity/prenatal care, dental care (we don't have dental insurance), and everything else we paid for.

This does not include health insurance which is covered through work.

If we had paid off the mortgage it would have been $23,840.79, or about what MMM spends for the 3 of them in his official tally (although he excludes a ton of expenses as business expenses).

How are you only spending $250/month on groceries?

It's actually pretty easy. I also only cook about once per week. Here are some examples:

http://forum.mrmoneymustache.com/journals/forummm's-journal/msg704138/#msg704138
http://forum.mrmoneymustache.com/journals/forummm's-journal/msg704139/#msg704139

[forummm]

^ If you're writing a blog about how you get to travel everywhere while on a budget of X dollars due to your financial acumen, yes, I'd see it as only honest to include that 12k in your expenses. Similarly, if I had a blog about sustainability and financial sensibility and also happened to get a free Model S or 3 from my best bro Elon, it would be intellectually dishonest for me to brag about how little I spent on transportation.

I would feel more comfortable about his expense summary if he did include a pretty clear disclaimer that he actually gets far more enjoyment out of things he's getting for "free" but benefits from through business. He gets "free" Uber rides, "free" electric bicycles, "free" trips to Ecuador/Hawaii/CA/wherever, "free" cameras, etc. I only know about these things because MMM has mentioned getting them. But they should also be included on a summary of his spending for the year as a benefit received in kind. He has earned those things through working and creating something great and useful, but they were not free to him.

[BeanCounter]

He answered someone in the comments that he hasn't been to the dentist since 2005. That's one way to save on dental expenses I suppose.

I think MMM's 25k/yr spending comes to down "creative accounting".

Creative accounting and a high threshold for risk.

[ender]

^ If you're writing a blog about how you get to travel everywhere while on a budget of X dollars due to your financial acumen, yes, I'd see it as only honest to include that 12k in your expenses. Similarly, if I had a blog about sustainability and financial sensibility and also happened to get a free Model S or 3 from my best bro Elon, it would be intellectually dishonest for me to brag about how little I spent on transportation.

I would feel more comfortable about his expense summary if he did include a pretty clear disclaimer that he actually gets far more enjoyment out of things he's getting for "free" but benefits from through business. He gets "free" Uber rides, "free" electric bicycles, "free" trips to Ecuador/Hawaii/CA/wherever, "free" cameras, etc. I only know about these things because MMM has mentioned getting them. But they should also be included on a summary of his spending for the year as a benefit received in kind. He has earned those things through working and creating something great and useful, but they were not free to him.

+1

[BeanCounter]

^ If you're writing a blog about how you get to travel everywhere while on a budget of X dollars due to your financial acumen, yes, I'd see it as only honest to include that 12k in your expenses. Similarly, if I had a blog about sustainability and financial sensibility and also happened to get a free Model S or 3 from my best bro Elon, it would be intellectually dishonest for me to brag about how little I spent on transportation.

I would feel more comfortable about his expense summary if he did include a pretty clear disclaimer that he actually gets far more enjoyment out of things he's getting for "free" but benefits from through business. He gets "free" Uber rides, "free" electric bicycles, "free" trips to Ecuador/Hawaii/CA/wherever, "free" cameras, etc. I only know about these things because MMM has mentioned getting them. But they should also be included on a summary of his spending for the year as a benefit received in kind. He has earned those things through working and creating something great and useful, but they were not free to him.

+1
If I took out my mortgage insurance and tuition, our spending would get pretty close. But if we weren't working we'd have a ton of time on our hands to do things. I bet for a year or two we could do free/cheap but then the four of us would want to start spending money on some trips and experiences. MMM family gets to do this as part of work. Without that I think things for their family would be different. I could be wrong though.

[Dee18]

I love that MMM shows every year how a family can live well on $25,000.  Even though his family could afford to buy all the books they wasn't to read and eat out frequently at high end restaurants they don't.  And they seem to be very happy and healthy (okay, with my teeth I would not skip dental visits but I do skip X-ray's most years because an xray has never detected a problem I didn't already notice myself).

Every year I find MMM's annual expense report motivates me to avoid lifestyle inflation.  Thanks MMM!

[tobitonic]

^ If you're writing a blog about how you get to travel everywhere while on a budget of X dollars due to your financial acumen, yes, I'd see it as only honest to include that 12k in your expenses. Similarly, if I had a blog about sustainability and financial sensibility and also happened to get a free Model S or 3 from my best bro Elon, it would be intellectually dishonest for me to brag about how little I spent on transportation.

I would feel more comfortable about his expense summary if he did include a pretty clear disclaimer that he actually gets far more enjoyment out of things he's getting for "free" but benefits from through business. He gets "free" Uber rides, "free" electric bicycles, "free" trips to Ecuador/Hawaii/CA/wherever, "free" cameras, etc. I only know about these things because MMM has mentioned getting them. But they should also be included on a summary of his spending for the year as a benefit received in kind. He has earned those things through working and creating something great and useful, but they were not free to him.

Nailed it.

[EnjoyIt]

Wondering when tooqk4u22, Ricky, EnjoyIt and Metric Mouse will show up and admit they were wrong in the MMM Scold thread....

You called me out.
Although I still think he should add some of his blog related expenses to that number such as some of his trips, electric bike and so forth. Either way even with that added in, his spending is still under $30-35K/yr which is amazing. I assume and hope he is honest about those figures. I am amazed and applaud his fortitude to stick to his principles.

If I wanted to, I could FIRE today and live a more modest lifestyle. But I enjoy spending money on more travel, shows, concerts and other experiences. I believe they increase my happiness. I would think they would increase MMM's happiness as well, but maybe those things are not worth it to him.