Case Study: What really happened in 2014 -> 2015 (Update added 3/18/2016)

[neo von retorch]

I'm doing this mostly because I know I "cheat" a lot. My "budget" and what really happens are two different things. What's worse, I've lumped most of my bad spending into "discretionary" so it might be harder to see which habits are the worst (especially when all I know is it's discretionary and I spent it at Amazon.)

Income
Paychecks: $54,350.26
Retirement Contributions: $8449.62
Employer Matches: $2130.31
Freelance: $2300
Selling Stuff: $2175
Selling Car: $5950
Rent: $9450
Other Deposits: $1500
Net Taxes/Refund: $1029

Expenses
Allowance: $1590 (this was "discretionary" earlier in the year and I think I need to resume using this and stop chasing credit card rewards)
ATM/Cash: $2480 (kind of extra allowance, ugh)
Car Insurance: $422.22
Car Payments: $7174.89
Credit Card Payments: $25,188.14 (will break this down below)
Healthcare: $576.25
Mortgage/Rent: $16,580.49 (own a house but moved into an apartment in September)
Utilities (Electric/sewer/trash): $2371.45
Misc: $1055.63

Credit Card spending
Right now I lump credit card expenses into just a few categories.
Monthly Entertainment: $1526.77 - Internet, TV and Netflix
Recurring Services: $2762.42 - cell phone, insurance, auto expenses
Regular Purchases: $5772.65 - groceries, gas, household
Discretionary: $13,192.15 - eating out, alcohol/drinking, electronics, gifts, etc

My problem is obvious. I've been putting this off, but seeing how much unnecessary spending I've had just this year is shocking!

Categorized Discretionary
Alcohol: $665.36
Car Wash: $8
Cell Phone: $793.77
Eating Out: $3032.15
Fitness: $521.19
Gifts: $691.62
Haircut: $71.78
Household: $11.63
Magazines: $19.99
Movies / Events: $158.66
Online Shopping: $5551.83
 - Amazon.com $2010.4
 - BuyDig.com $1,599
 - Newegg.com $668.83
Shopping: $779.03
Travel: $242.49

Some good...
Investments/Savings
Deposits: $30,732.98
Dividends/Interest: $686.76
Investment Gains: $6,023.98
Fees/Charges: $576.01 (mostly from playing with stocks earlier in the year)

Total Income: $87,334.19
Total Expenses: $57,439.07
(Income, expenses and savings don't quite add up. A few oddball other transactions/categories that didn't quite fit neatly into this mess.)

So I don't really have any questions. I am merely illustrating what happens when you make more than you need and you let your spending go unchecked.

EDIT: Let's be more specific with...

Questions

• What has worked for you in controlling your wants spending? I spend all day on the computer at work and sometimes I'm focused on work, but other times I'm distracted. I think this is when a lot of online spending occurs for me. I've tried to limit myself to an allowance, and I try to auto-save all my money, but I put money on the credit cards and always find a way to pay them off each month. I'm not very good at tricking myself into thinking I do not have money.
• How rigorous are you with meal planning and grocery spending? Right now I'm dating a girl - it's very serious. We have plans laid out for the future. We live about 40 minutes apart, and the good part of dating is seeing each other. So we tend to alternate weekends together and sometimes we even get in a clown car and drive to see each other during the week. This is mostly related to meal planning because we don't have a rigid schedule, and we don't know when we'll be eating at my place or hers. She's also only kind of sort of mustachian. She's not wasteful, but I don't want to push her into a rigid meal plan. How can I plan out my own?

[sheepstache]

Sympathies. This happens to me when I make freelance income on top of my salary. I focus on the savings rate and don't notice how or why spending went up.

[skunkfunk]

You may not have questions, but I do! Mostly because I want to pile on here, add to the shame and whatnot. What can I say, I'm a jerk.

Can you separate out that "online shopping"? Regarding shopping - I mean, shit, that cash allowance alone should be enough for "random uncategorized shopping" to your heart's content. Can I facepunch you for your food expenses? You spend as much eating out as you do on groceries.

Also wth is with your cell phone plan, did you buy a cell this year or are you on a high-dollar facepunch plan?

/questions

[neo von retorch]

Well with enough digging through my online account history, I could probably assemble some sort of "online shopping" explanation. I know that just in the past few weeks I've bought some presents for my girlfriend. Sometimes I buy books and movies. I bought a new TV in January and some computer parts throughout the year. I was not following MMM this spring while I was adding unnecessary electronics to my "man cave" (which has now been reverted to a bedroom being rented out.) So I built a media PC basically so it could play music on my old TV when I had people over to party. Eating out includes a lot of drinking, at bars, at tap houses, at breweries. Too much. I bought multiple cell phones and will be selling the extras on ebay. The first was a Republic Wireless Moto G but I couldn't stand using RW and can't re-use the phone on the AT&T MVNOs. Another was free after rebate while I tried out Cricket Wireless. It's not as thrifty as some of the $10 plans but it's hassle free. I tried a few and having the phone simply not work as often as it did just wasn't worth it to me. When I moved to my apartment, I bought a shelving unit for $20 and a kitchen table/chair set for about $160. That doesn't account for much of it! Oh and a $70 microwave. At some point this year, I bought a $50 blender.

[skunkfunk]

Well with enough digging through my online account history, I could probably assemble some sort of "online shopping" explanation. I know that just in the past few weeks I've bought some presents for my girlfriend. Sometimes I buy books and movies. I bought a new TV in January and some computer parts throughout the year. I was not following MMM this spring while I was adding unnecessary electronics to my "man cave" (which has now been reverted to a bedroom being rented out.) So I built a media PC basically so it could play music on my old TV when I had people over to party. Eating out includes a lot of drinking, at bars, at tap houses, at breweries. Too much. I bought multiple cell phones and will be selling the extras on ebay. The first was a Republic Wireless Moto G but I couldn't stand using RW and can't re-use the phone on the AT&T MVNOs. Another was free after rebate while I tried out Cricket Wireless. It's not as thrifty as some of the $10 plans but it's hassle free. I tried a few and having the phone simply not work as often as it did just wasn't worth it to me. When I moved to my apartment, I bought a shelving unit for $20 and a kitchen table/chair set for about $160. That doesn't account for much of it! Oh and a $70 microwave. At some point this year, I bought a $50 blender.

I can't say much about the breweries and such, I love beer. I have been getting pretty good at homebrewing, though. Made a disgustingly tasty saison most recently. But anyway, we're still missing thousands of dollars here unless you built the most impressive gaming PC I've ever seen.

[neo von retorch]

Expenses and savings are only $837.96 over income. My gf bought a mattress but I used my credit card and she paid me. Otherwise it just about adds up. Right?

Oh you just mean all the online/shopping totals. Hard to account for... oh also a $180 birthday present for a friend (cell phone to get her started using MVNOs). Drill. K-cups for a job that I was reimbursed for. Board games. Various food/grocery items through subscribe 'n save. Other presents for nieces and nephews. A few programming books ($30-40 each.)

Still not at all justified or a wise way to manage my money. My hope is that this exercise sets me up for a much more practical 2015!

[yoga mama]

Good job on the savings, and also on bringing in a roommate and putting your #s out here for all to see!

A couple of face punches-
Entertainment: You spend over $100/month on internet/TV/netflix.  Is that cable?  Can you drop the cable?  Also, buying books and movies is not really necessary.  Hit the library for both. 

Fitness: Ride your bike!  Buy a used set of weights!  Drop the gym membership!  That's all :)

You can easily review your amazon purchases, from the "your account" menu, select "your orders".  Its not categorized but you can look over your purchases from the year and berate yourself as needed. 

I'm with you on the breweries - that's our largest non-mustachian line item.  Can't turn down local beer.  You sound like you've made some great changes in 2014 and can set a goal of a much higher net worth in 2015!

[neo von retorch]

While it's a little unconventional, I started out renting out extra rooms while living there, and to keep things simple and conflict-free, I've paid all utilities including TV/internet while charging a reasonable fixed price to the tenants. I've moved out and have continued with this arrangement. So I am paying for FIOS TV/internet at the rental house, and cannot drop it unless there was an issue. At my apartment, I pay $40 for internet, with no TV, and sometimes I have Netflix.

If I can get comfortable with it, I may get the gear needed to ride bike to work. The roads a little scary - narrow and windy but very busy, but I am weighing the possibility.

I bought weights at the house and dropped the gym membership, but a combination relationship/job-offer has moved me to this apartment where having the weights here isn't an option. The fitness included some sports leagues I was in this year (bowling, volleyball) as well as some of those weights purchases. (There's another thread where I talk about this. I profited a few hundred dollars in the process and have a big chunk of weights that I may sell next spring.) So I do now have a gym membership, but my employer will reimburse me $100 each quarter as long as I go 25 times, which is not an issue as I almost always go three times a week (36 times per quarter.)

My drinking costs were a lot worse before I moved. Now I'm much more likely to get a more reasonably priced case which will last me several weeks, rather than frequent taphouse/brewery visits!

Definitely a lot of messy, unnecessary Amazon/online purchases. I plan on resuming the allowance option as 4alpacas describes. I just need to be disciplined because I can't resist having the Amex on hand for 6% grocery/3% gas rewards - but I need to avoid using it for anything else, period! I find it hard to stick to my allowance system and want to find ways to improve that habit going forward.

[Spondulix]

What's your freelance gig? Anything you can itemize on taxes to balance? (Just wondering if you can make lemonade from this year's lemons in spending)

[neo von retorch]

Web applications/software. Nothing that I can think of purchased in relation to that this year. I do need to figure out rental income / property depreciation though.

[neo von retorch]

Amazon actually lets you export orders to a CSV and then do magic things in Excel. I'm not sure why this shows $2725.39 when my records show much closer to $2000 at Amazon in 2014, but... here's the category breakdown for the whole world to see:

Apparel $43.46
Audio CD $8.89
Blu-ray $58.97
DVD $20.05
Electronics $102.67
Grocery $376.66
Hardcover $7.96
Health and Beauty $227.9
Kitchen $67.28
Mass Market Paperback $6.26
Misc. $257.68
Office Product $37.37
Paperback $222.05
Personal Computers $173.92
Software $89
Sports $88.92
Tools & Home Improvement $148.95
Toy $135.17
Wireless Phone Accessory $492.32
(blank) $159.91
Grand Total $2725.39

My impulse control needs an extreme makeover!

[Spondulix]

Web applications/software. Nothing that I can think of purchased in relation to that this year. I do need to figure out rental income / property depreciation though.

Nothing would constitute "research"? Even your computer or software purchases? DH is in software QA so we can write off any itunes purchases, software, etc as research.

Do you write off any of your home expenses for working from home? I think my accountant even writes off my cell phone, internet etc at whatever percentage of work/personal.

[Calvawt]

I like the recommendation of automating your savings.  It will help you resist spending money because it is sitting in your checking account.

I think you have made some really good strides so far.  Analyzing the data is the first (and sometimes hardest) step in making big changes.  Good luck.

[neo von retorch]

I've added some questions to hopefully make this thread more useful and productive.

[Rezdent]

Hi neogodless

I'll chime in on what's worked for me..
Question 1:
Eek, I used to have an Amazon problem!  Two things that helped immediately:
1.  Turn off one click. Forces everything into a cart.
2.  Never, never check the cart out on the same day you put something in it.  I have a mandatory waiting period of 24 hours before checkout.  When checking out, I don't buy anything that I won't use as soon as it arrives.  If I need 1 thing in that cart that meets this rule, move all else to the wishlist and buy that one thing.  Periodically remove shit from the wishlist if it's been there 30+ days. Obviously if I lived 30 days without I didn't need it that bad.

Longer term: I started noticing that I went to Amazon when I was bored.  I started asking myself before I went there why I was going. If the answer was "just cuz", I started going somewhere else - like here or the ERE site.  Or I would play Solitaire instead.  Now I only go there when I have a specific item that I am purchasing.   Still - no one click and still mandatory waiting.  I've dropped my spending by more than half and I don't even miss it.

Question 2:  Cooking is a great hobby for a couple.  Instead of being rigorous, can you stock both places with a few versatile staples that you can use; rice, beans, maybe canned chicken?  Use these as the springboard for impromptu meals. 

We aren't really big meal planners.  We like Asian food, so I keep soy sauce, garlic, ginger, rice, eggs, frozen stir fry veggies.  We make a lot of variety out of these and we have fun cooking together. It's a game to see what we can create.

DH and I have been doing this for years now and we've gotten so good at it that we might eat out maybe 3X/year.  We don't want to go out to eat anymore.   We just prefer our own fun in the kitchen. Occasionally one of us will surprise the other with an amazing splurge meal (like his birthday when I surprised him with "all you can eat steak and lobster").

[lizzigee]

Hi tech method for stopping mindless credit card spending. Seriously, I did this, I'm not joking! Worked for me.

Step 1. Find a rubber bank and a small piece of paper/cardboard
Step 2.Write "WHAT THE FUCK ARE YOU DOING?" on the paper
Step 3. Wrap it to your card with the rubber band. Around it both ways as many times as you can, so you cannot just slide the card out
Step 4. Most important step. Stop.Read what you have written as you pull the card out of your wallet. Put the card back in the wallet.

Works best when you don't have your card details saved to any sites, so that you need to enter them each and every time. If you have them saved anywhere, DELETE THEM NOW. Also works well at a store counter when you are about to make an impulse buy

[wwweb]

If you're making impulse online purchases at work...

Delete any saved credit cards and don't bring your credit cards to work.  If you worry about not having money for emergencies, put a $100 bill in your shoe - that should be enough money to get you home to your credit cards, but would require taking off your shoes to spend.

In general try to make spending a real pain and you'll do less of it.

[MrsPete]

2.  Never, never check the cart out on the same day you put something in it.  I have a mandatory waiting period of 24 hours before checkout.  When checking out, I don't buy anything that I won't use as soon as it arrives.  If I need 1 thing in that cart that meets this rule, move all else to the wishlist and buy that one thing.  Periodically remove shit from the wishlist if it's been there 30+ days. Obviously if I lived 30 days without I didn't need it that bad.

I was going to suggest something kind of similar: 

Past me used to have a problem buying clothes or other items that seemed like a good choice at the time -- but then were never used.  Sometimes they didn't even come out of the bag.  Now I have a two-week rule:  When I see something I want, I go ahead and buy it -- and I'm mostly talking about clothes here -- but it can't come out of the bag for two weeks.  At that point, I try it on again.  OFTEN I say, "What was I thinking?" and I return it.  Or I look at the item in conjunction with my closet, and I say, "Yeah, I like it, but I already have two red shirts -- do I really need a third?"  You might ask, "Why not come back and buy it later?"  Simple:  More than once I've returned to buy it, only to find that my size was gone.  That creates a greater desire to own the item!  By having it, the desire-to-aquire disappears, and I don't mind returning things.

Since your problem is online, you can do something similar:  You can put things into your cart and make a "can't buy 'til payday" rule.  Hopefully you're paid only once a month.  This'll force you to wait and think about whether you really want the item.

Another idea:  Pick up one of those small $1 calendars that you see at the cash register . . . and write down every time you buy something other than groceries.  If you're forced to look at a hand-written line-up of what you've already spent this month, it'll serve as a reminder that you need to JUST SAY NO.

I DO keep things in my Amazon cart . . . forever. Why?  Because I only give books, puzzles, and board games to my nieces and nephews, and often I hear of a really cool item . . . but before Christmas or birthdays roll around, I forget the title.  So I put these items into my cart, and then when it's gift-giving time, I have a selection of appropriate items waiting my selection.  I'm really using it as a gift-giving list. 

You say buying books is an issue for you?  Could you set up a book change box in your break room?   Encourage people to start trading books, and you'll save everyone a few dollars.

I agree with the poster who says that cooking is a great hobby for a couple.  Since you say you're getting serious with the woman you're seeing, I suggest that you use gift-giving occasions to stock your future-joint-kitchen with quality pots and pans, good knives, etc.  Nice equipment is an investment, and it makes cooking a joy.  It'll cut down on your eating out costs. 

[neo von retorch]

So interesting to see different phases along the way... a "case study" in June 2014, this "end of year" and now... I want to put forth my new budget based on what actually happened in 2015. Thought it would be a good time to once again get outside perspectives and see where I'm sticking my head in the sand. Some of this is based on where we'll be after we close on a house next month.

Income
Gross Combined Salary: $13,750
Taxes/deductions: $3454

Rental
*All Bills Paid model, 3 tenants renting bedrooms - barely breaking even currently (though building equity and depreciating which helps at tax time... for now).
Mortgage remaining $95,195 @ 3.375% so currently interest is $267, principal is $657. End date: 10/1/2026
Income: $1690
Mortgage: $925
Insurance: $32
Taxes: $291.5
Utilities: $375

Savings
401K: $1500 + $83 match
IRA: $433 (Wife currently able to qualify for this with no work-sponsored plan)
Investments: $3500

Assets
HSA: $6349
401K: (Just starting this at new company)
IRAs: $102,380
Taxable: $42,468
Savings: $5,000 (remainder after closing costs)

Expenses

Category	Budget	Monthly
Apparel	660	55
ATM/Cash	480	40
Cable TV / Internet	720	60
Car Insurance	1660	138.33
Car Payments	4997.2	416.43
Cell Phones (2)	960	80
Discretionary	240	20
Drinking	480	40
Eating Out	2400	200
Electronics	600	50
Entertainment / Shows	800	66.67
Fitness/Healthcare	600	50
Freelance / Web Services*	500	41.67
Gas	1800	150
Gifts	2500	208.33
Groceries	5400	450
Home Maintenance	1000	83.33
Homeowner's Insurance	757.3	63.11
Household	480	40
Mortgage P & I	18472.8	1539.4
Netflix	120	10
Pets	100	8.33
Student Loans	1611.72	134.31
Taxes	5928	494
Transportation	2000	166.67
Travel	5000	416.67
Utilities	2400	200
Total	$62,667.02	$5,222.25

* Freelance brings in additional money I do not budget for, but hosting and domain fees for my staging server are year round.

Liabilities
Mortgage: $332,400 @ 3.75% 30 years remaining - End Date: 5/1/2046
Student Loans: $5,763 @ 3.35% End Date: 2/12/2020
Auto Loan: $12,013 @ 1.49% End Date: 8/10/2018

[MrsDinero]

2.  Never, never check the cart out on the same day you put something in it.  I have a mandatory waiting period of 24 hours before checkout.  When checking out, I don't buy anything that I won't use as soon as it arrives.  If I need 1 thing in that cart that meets this rule, move all else to the wishlist and buy that one thing.  Periodically remove shit from the wishlist if it's been there 30+ days. Obviously if I lived 30 days without I didn't need it that bad.

I was going to suggest something kind of similar: 
[/quote]

To break my amazon habit (1 click shopping is SO EASY!) If it is not a necessity like food stuff, I don't even add it to my cart anymore, I add it to my wishlist.

[neo von retorch]

I think my wife has been a good influence on me in this area. About the only thing I buy on Amazon any more is board games, which we use A LOT. But we have more than enough already, so we're playing what we've got and being patient and selective about adding more. (My board game wish list is about 3 pages long, though...)