It’s time for… the 2015 Expense Review! Every penny we spent allll year.
We like to share our spending for two reasons:
- Helps eliminate an unhealthy and unhelpful stigma around discussing personal finances (which we will discuss more in another post)
- Creates opportunities for everyone to share ideas on how to optimize expenses
Note from Kate: And what is the point of having a yearly expense review in the first-place? It gives us a benchmark to know exactly what we spent our money on all year. Knowing what we spent is the first step to knowing if we spent money on what we Actually Value or money on stuff we-just-felt-like-at-the-time, or stuff we-only-kind-of-like, or stuff that could-have-been-unnecessary-had-we-planned-ahead-a-bit-more. Knowledge is power and all that. As we'll discuss in later posts, the first step to spending your values is knowing what you spend (and then knowing what your values are).
And without further ado, our total spending in 2015 was...$96,893!
Our total personal expenses (everything we spent other than debt repayment and charity) was...$40,067.
Breakdown of the Spending Categories
Student Loans ($53,224): We had a lot of student loans to pay off, but we finally did it on December 1st, 2015 (15 months after I graduated)! We’ll talk about our decision to focus on paying off those loans in another post.
Rent ($17,370): This is rent for our townhouse in DC, which we share with another couple. It is a 3-bed 2-bath in a relatively average part of the city. Unfortunately, average in DC is still quite expensive: our half of the rent clocks in at nearly $1,450 a month.
Transportation ($6,104): This can be broken down further into several subcategories (figures are rounded to the nearest hundred). As you see below, cars are expensive – ours cost nearly $3,000 this year despite being paid off and not used for daily commuting!
- $2,800 for public transit expenses, which is probably 95% used for commuting to and from work at nearly $8 a day each. If you work out the math it quickly becomes obvious we either don’t have to go to work that often (sadly false) or we have other ways to get there (true). In order of frequency, we bike, telecommute, drive, and run to our offices as well. Driving to work is definitely the most expensive, as parking alone costs more than public transit.
- $1,000 in gasoline, which was probably mostly for travel out of state. We only drive about once or twice a week while in DC – it is usually faster, cheaper, and easier to bike.
- $1,000 in repairs because our car happened to need new tires, a new battery, and a repair for a cracked doohickey (you can tell I know a lot about car repair), and a couple oil changes this year. Hopefully next year the car is less needy.
- $400 for auto insurance, which should probably be lower because we have more coverage than I think is necessary. Despite our high levels of coverage our insurance costs aren’t that high because we thankfully have an older, boring car and good driving records.
- $400 for some bicycle parts/accessories/services ($150) and a $250 new bicycle (new to us, it was made in 1980).
- $335 for parking, including a street parking sticker for $35 or so. As I said, parking is pretty expensive in DC. We should try to do it less often in 2016.
- The remainder is likely tolls. Boo, no one likes those. I do generally support increasing taxes/fees on driving to reflect the total cost of driving – I just think tolls are inefficient because they make people sit in lines.
Charity ($3,602): A plurality (the largest portion, but not the majority) of this went to our church, and the rest to various causes and organizations. We aimed to give 10% of our personal spending, but narrowly fell short because I initially forgot to include some of our pre-tax expenses when calculating our 2015 personal spending amounts. We’ll write more posts about giving to charity – this is a tough topic and I’m not at all confident we’re giving the right amounts in the right ways to the right people/organizations.
Groceries ($3,215.81): This figure includes all groceries as well as typical household supplies (toilet paper, paper towels, soap, shampoo) and some pet food that I forgot to separate out. At $267.98, our average monthly expense was narrowly lower than the $275 I projected we would spend when planning for 2015. Some of our compatriots in DC are impressed with how low our grocery spending totals are, but actually we pretty much just buy whatever we want. Our keys to success here are shopping at Aldi and not buying much meat, seafood, cheese, or alcohol, which we limit for health reasons (except seafood, sadly Kate just plain doesn’t like it). After those categories are excluded, there isn’t much left at Aldi that is expensive to buy! So we get to go crazy and buy whatever we want, and still come in with a pretty low total.
Shopping ($2,938): This is all other shopping and gifts for each other (and some gifts for other people are likely accidentally included). Slightly over a third of the expense was a fancy new laptop for Kate, and a fancy adjustable dumbbell set for me that clocked in at $300. The rest went mostly to thrift stores, Amazon, and Target/Walmart/Aldi for various items. To be honest, our spending in this category is a little blurry; a good goal for this year will be to figure what we are getting out of our shopping money.
Travel ($2,761): This travel was mostly for family, but we took a couple small trips to see friends. We drove for most of the trips but took a few flights for Thanksgiving, Christmas, and Kate’s PhD defense. This sum is missing some of the expenses for gas for traveling.
Medical Premiums ($1,409): This is thankfully subsidized by our employers. This includes medical and vision insurance. Kate’s dental is paid for completely by her employer, while I don’t have dental since my cost/benefit analysis found that paying out of pocket is cheaper (Note from Kate (Queen of Braces): Ugh, I hate Alex's perfect teeth).
Utilities ($1,150): This includes water, electricity, gas, and internet. I don’t know many other peoples’ figures for comparison but I think we are getting a pretty good deal at averaging all of these for under $100 a month. Sharing a house also means splitting all utilities in half, and our townhouse neighbors probably keep their heat set higher than ours and end up heating our house for us.
Restaurants ($1,138): We ate out 3 times a month or so on this amount. Too bad restaurants in DC are expensive! I think that number would take us much farther in other cities. Overall I feel conflicted about spending this much on eating out. We enjoy it and I excuse it through the fact that nearly all our meals out are with friends or family, and cutting back would mean rejecting invitations and somewhat limiting our relationships. I believe relationships are worth investing in (even with less frugal people who like to eat out), but I still am cognizant of the fact that this would be an easy way to save money and put it towards a better cause.
Health ($939): This is mostly typical health-related expenses: doctors, dentists, medicines, and a couple hundred on acupressure to see if it would magically solve my migraines. (It didn’t solve them completely, but was surprisingly successful at reducing their frequency!)
Gifts ($706): This includes most gifts and the cost of mailing them. This figure seems pretty high to me, but we have a lot of family and since we buy many of our gifts at thrift stores, I suppose that it could actually be much higher.
Cell Phones ($558): We averaged $23.23 per month per person for unlimited calling, texting, and some data from Republic Wireless. Our plans don’t include the cost of our phones, which we bought in 2014. The first 8 months of the year we had unlimited data but then we switched to the plan that essentially charges per megabyte, which was a good bit cheaper. As a result, these expenses should be a bit lower in 2016 unless a phone breaks and we have to get a new one.
Pets ($549): This doesn't include all pet food (averaging $10 a month), which sometimes was accidentally included in the grocery expenses. It does however include heartworm pills (also $10 a month) and a minor emergency surgery to get rid of an infected cyst. (Yuck!)
Uncategorized ($467): I strongly support tracking one’s expenses, but there is a practical limit; I didn’t find it worth the time to track the 1% of our personal expenses that were in cash. My best guess is some went to panhandlers, restaurants, tolls while traveling, and a single dry-cleaning. After the dry-cleaning incident I decided none of my clothes deserve that kind of treatment – I don’t pay anyone to wash me, so why would I pay someone to wash my clothes?!? The supposedly ‘dry-clean only’ pants have been doing just fine in the washer and dryer with the common-folk clothes since then, so I guess its false claims for special treatment are officially dropped.
Education ($267): Kate had just a few more school fees to pay before she graduated.
Fees & Charges ($252): Sadly we got hit by two parking tickets ($200) and a single late fee on a credit card. The parking tickets were two days in a row for not putting up our DC parking sticker in time (which we had already paid for). It is sad when your own mistakes cost you that much money.
Entertainment ($243): About half of this is my marathon entrance fee (sadly a failed investment). There are a couple movie tickets and $48 of a shared Netflix account in there as well. We expected to spend quite a bit more on entertainment, but it turns out most of the things we like to do are free! That is a pleasant surprise.
Our list of spending doesn’t include anything for income taxes. Don’t get excited – we don’t know of a way to get out of paying them. They just aren’t included because we have no choice in paying them and I haven’t done our 2015 taxes yet.
We’re shocked both at our level of income (although it is actually below average for full-time workers in DC) AND how high our expenses are (although everything is expensive in DC, especially rent). I’m sure those factors are related – large expensive cities like DC tend to both offer higher salaries and require a higher cost of living. If you moved to the DC area or another similar city, your incomes and expenses would probably go up too.
That being said, we know we could have spent a good bit less if that was more of a focus for us. We could have saved over $1000 (and a lot of time) by living close to one of our jobs and eliminating the commuting expenses. We could have saved $500 by buying Kate a normal computer instead of a really nice one. We should have saved ourselves $252 in fees and fines if we had been smarter. We could have avoided owning a pet, eating out, and traveling, which would have saved us $5,000. I could go on, but I think you get my point – we are not a paragon of frugality.
Note from Kate: However, while we could have saved more (and have learned from our mistakes...looking at you, parking ticket), we also deliberately decided to spend most of our money on purchases that we truly value. We could save money on traveling, but we visit all the family we possibly can at Christmas (because its CHRISTMAS) and are happy to spend the gas money and the airline miles to get there (and we likely always will, because, after all....CHRISTMAS). We could save money on not owning a pet, but then our lives would be sad and lonely and we'd have no reason to go on walks (and no T-dog judging us silently from the corner). So while we could have saved more money, we chose not to in order to make our lives happy and more fulfilled. And that's the rub: spending your values is not about scrimping and saving every last penny but about drilling down your finances to make sure that your money is going to what you value and no where else. It's a process!
So what did we miss? What would have been a smart way to cut our expenses further? Or do you think we should be spending more on a certain category? Let us know your thoughts, suggestions, and questions in the comments.