Home > Thoughts on Last Year's Expenditure

Thoughts on Last Year's Expenditure

January 6th, 2021 at 05:27 pm

I decided to take a look at my expenditure for 2020. Interestingly, though I have been keeping accounts of every purchase I make for the past 15 years, I have never done this before. While I was in debt, this might have been more a depressing experience than an uplifting one - I imagine I was putting away far far more towards debt than I was to living expenses. But, doing this today has been quite an eye opening and pleasant experience, and makes me feel even more confident that I will be able to achieve financial independence by my 2034 birthday if not sooner.

My total expenses for 2020 were: $52173.23. That alone is pretty impressive to me. But, this includes my regular and extra mortgage payments. This year, I paid $17,916.99 in mortgage payments (principal, interest, PMI and escrow) and an extra $9,083.01 towards the principal. This means that if my mortgage were to be paid off, my total living expenses would be $25,173.23. To me, that is a pretty low amount considering that I don't really deprive myself of anything - I am frugal, but I end up buying everything that I want and doing everything that I want to.

Of course, this has been a pretty unusual year. However, apart from travel costs, the above numbers are similar to a typical year.

The $25,173.23 above includes some pre-pandemic 2020 travel: expenses while I went on a cruise in February, and visited NYC in early March. The cruise had been paid for in 2019 - only the expenses on board and at ports are included in the 2020 expenses.

The total also does not include my health insurance expenses - about $400/mo for health insurance comes out of my business account. I am diabetic, but this is managed entirely through diet and exercise, and I am not on any medicine or insulin. So, healthcare expenses are also negligible for now. All being well, my hope is that this continues for as long as possible.

My grocery bills are pretty low, as are my restaurant expenses. I grow most of my vegetables and some berries in my garden, and freeze or process enough for them to last me all year long. I am vegetarian, so I don't have any meat/fish/poultry costs. I purchase dairy and non-perishables at the grocery stores. I get my eggs for most of the year from local folks who keep backyard chickens - some of this is purchased, and some I get from bartering my excess produce. I also am part of a local food rescue group that goes to organic farms/orchards/backyards and harvests produce that would otherwise have rotted on the plant. The farmers/homeowners get a tax break for donating to our non-profit group, and for a few hours of labor, we get plenty of fruits and veggies. I only went on one harvest this year (about 3 hours of time), and got a wheelbarrowful of delicious Shiro plums that I dehydrated. But, there often is so much produce and fruit, that we share with the group. And over the year, I picked up apples, pears, winter squashes, cauliflower, kale, and zucchini that others harvested. We end up rescuing thousands upon thousands of pounds of perfectly good food that would otherwise have been wasted. I also forage the delicious, but extremely invasive blackberries that are taking over the PNW. For the price of scratching up my hands on the brambles, I can have an unlimited supply of berries for the year. I enjoy going out to restaurants, but it is almost impossible to find vegetarian low carb food at most restaurants. So, my restaurant costs end up being pretty low even in non-pandemic years.

I have about $7600 in atypical expenses this year - refinancing the house, a new couch, a new small freezer, a tree removal, etc. But, there probably will be other things each year that probably will cost around that much - painting the house, a new appliance, a new fence, or other expenses.

So, I guess this means that I have been living on about $2000/month (not including mortgage). If I were to add in more travel expenses, it might mean about $2500 each month post-pandemic but before retirement. And adding in health insurance and more travel post retirement, I might expect to spend about $3500 monthly in today's money.

Provided I keep saving the way I do, if I retired at 55, I think I shall have more than enough money to safely draw this much monthly, and still have enough for periodic larger expenses. If I stick to my plan of paying off my house, this becomes all the more realistic.

All in all, this was a wonderful exercise to do. Having some tentative numbers makes me feel more at ease, and more prepared.

2 Responses to “Thoughts on Last Year's Expenditure”

  1. Carol Says:

    Knowing your own real numbers is always a good plan.

  2. Rachael777 Says:

    Late start this is such a good idea! I am going to add up all my costs and categorize then for last year.. I have a lot off costs that will not go forward but still a great exercise. Thanks for posting this. Sometimes it is the simple stuff that is the most helpful!

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