Here’s the third installment in my 2017 project to document my actual spending habits. After returning home from my year-long RV adventure, I wanted to get a feel for how much I spend each month. It doesn’t feel like I spend a lot — but is that feeling correct? This project is an attempt to document how Kim and I actually live. Once we have some real numbers, then we can start to make changes for the better.
Because I’m a nerd, I’m tracking more than just my money this year. In fact, I have a total of six different spreadsheets to tabulate different aspects of my life. I can tell you, for instance, that I gained 1.2 pounds in March — and I’m okay with that. (Kim and I did a lot of entertaining, especially around my birthday.) But I won’t be okay with a 1.2 pound gain in April.
Here are my transportation numbers for March. In 2017, I’m tracking every mile I move in and around Portland. (I’m not logging mileage for out-of-state vacations or business trips; that’d be too complicated.) Here’s the spreadsheet:
While January and February had similar numbers, March looked very different.
I walked more total miles in March than either of the previous months, yet walking made up a lower percentage of my total transportation. That’s because Kim and I drove to the Oregon coast to spend a couple of nights evaluating a potential rental property. That trip accounted for 248.8 of the 410.6 miles in the Mini in March. Without that adventure, things look relatively normal. (We have a trip to central Oregon this month, so that’s going to throw off numbers even more!)
Because of our weekend vacation, I averaged 21.05 miles per day in March (up from 13-14 in January and February). In March, I walked 4.64 miles per day (versus 4.29 miles/day in February and 4.40 miles/day in January).
Meanwhile, my business continues to hum along. It’s earning about $500 per month. But, as you’ll see, my expenses were high in March:
I paid for three months of my new office space up-front, bought a new printer, and prepaid some upcoming business travel.
As I mentioned last month, blogging isn’t bringing in big bucks yet — and it may never do so — but it’s generating a few hundred dollars per month, which is a good start. As you can see, I haven’t exactly done much to make money around here. My goal at the moment is to produce a library of great material at Money Boss while also growing readership. Because I’m financially independent, I can worry about making money later.
My business goal for 2017 is to break even. There’ll be additional travel expenses later this year, and I’d like to build revenue to cover those costs. Then, in 2018, I can work toward actually being profitable. What a concept!
During 2017, I’m tracking every penny that enters and leaves my life. I have plenty saved. That’s the good news. The bad news is I have almost no income (although I’m taking steps to change that). I want my stash to last another 30 years or so, allowing me to live a modest lifestyle while resisting the slow, silent killer called inflation.
As I mentioned earlier this week, when I run my numbers through my favorite retirement calculators, most of them indicate that my current level of spending — about $5000 per month — is just on the edge of sustainable. It’s highly probably that I can maintain this standard of living for the rest of my life given the nest egg I have. But I’d love to spend less. My money tracking project is designed to show me where I can cut costs. I have lots of room for improvement.
Here’s the summary spreadsheet updated for March:
My net worth grew for the third consecutive month, although at not nearly the rate it did during January and February. Plus, most of that gain came from appreciation in the value of my home. If you subtract that, my net worth declined during March. Why? Because I spent a hell of a lot of money.
First, here’s the summary of my net worth for the year:
- My net worth on 31 Dec 2016 was $1,577,014.27
- My net worth on 31 Jan 2017 was $1,591,985.32
- My net worth on 28 Feb 2017 was $1,618,656.45 (revised)
- My net worth on 31 Mar 2017 was $1,623,087.29
My net worth increased by $4,430.84 (or about 0.27%) over February. For the year, my net worth has grown $46,073.02 (or about 2.92%). About $10,000 of that increase has come from hot Portland housing prices, but most of the gain is due to the roaring bull market. (I have no easy easy to calculate monthly market returns for my investments. Fidelity doesn’t provide a monthly performance report.)
But the real news in March was my spending. I shelled out $9637.18, double what I spent in January! What the hell, right? In January, I spent about $154.90 per day. In February, I spent about $179.06 per day. Last month, I spent a whopping $334.54 per day. Holy cats! Am I insane? Well, not really.
Yes, some of that spending was due to a continued high food budget ($773.95 on groceries in March and $726.45 on restaurants). I have all sorts of reasons for this — I threw a birthday party for myself, Kim’s family was in town, and so on — but they’re all just excuses. Plus, I spent more on fun (about $600) than is normal (about $300). So, I definitely have some problem areas.
Still, most of the jump in March’s spending came from what I hope are one-time expenses. I spent $526.41 for a repair on my 2004 Mini Cooper. I wrote a check for $1980.06 for two condo repairs (one of which was from last summer). Kim and I bought a new sofa, and my share came to $714. Plus, we had two shipments from wine clubs in March, costing me $546.70. That’s $3803.17 in big unexpected expenses. Without those, my spending was still high — $5564.01 — but within the realm of the “normal” I’ve discovered from this project.
(For the record, I immediately cancelled both wine club memberships when I realized how much they were costing me!)
The Bottom Line
I’ve tracked my spending for three months now — an entire quarter. I’m beginning to understand that I do spend more than I believed I did, especially on food and housing. I spend plenty in other areas (especially entertainment), but these are the two categories that concern me the most. The question now becomes: Is this spending level a cause for concern? And if it is a problem, what steps can I take to cut my costs?
One obvious move would be to eat out less often. Or to dine at cheaper places. I don’t mind the roughly 50/50 split between groceries and restaurants, but I do mind spending a fortune on food.
Digging through the numbers in Quicken, I see that I paid for fourteen restaurant meals last month — about one every other day. Sometimes I bought lunch, and sometimes I bought dinner. All of the meals were shared with at least one other person. I spent $726.45 for those fourteen restaurant visits, or about $51.89 per meal. There are several approaches I could take to cut back:
- I could dine out less frequently.
- I could choose cheaper places.
- I could purchase less alcohol.
- I could pay only for myself.
Meanwhile, I’m spending just as much on groceries every month. March was a special case in some ways — I bought a lot of special stuff to celebrate my birthday — but the high grocery bill remains an ongoing issue even without exceptional events. I haven’t dug down to discover the source of this problem, but I’m certain that the main factor is that I shop at the store closest to us, a high-end natural food store. It’s a half-mile walk from the house, and I like the quality. All the same, it’s probably time for me to explore other options. There’s a “regular” grocery store about 1.5 miles from our house. If I’d budget an extra 45 minutes to walk — or if I simply biked over — I’ll bet I could save a ton.
On the housing front, there’s no quick and easy way to cut costs. The big problem is our $570 per month HOA fee. Without that, I’d only have taxes (roughly $500 per month) and utilities (about $270 per month) to worry about. As you know, Kim and I have begun to hunt for a home that better fits our lifestyle and our goals. If we could reduce our housing and food costs by moving, that’d be awesome. (Yes, we’d miss the convenience of local restaurants, but we both love cooking, so that’d be something new to explore.) Just this morning, we visited five properties. The one we liked best has zero HOA fee and is taxed at less than half of our current place!
And again, maybe I’m worrying too much. My net worth is sufficient to support this level of spending, at least for a little while. All the same, as a money boss I want to be proactive and prevent problems before they happen.