by Kate and Alex
It's time for our annual 2016 expense review! Below you will find the nitty-gritty details of every penny we spent in 2016. (Okay, it's possible that some cash expenditures got lost in the shuffle, but we can just categorize all those in shopping and fun...because they were probably me buying a much-needed $1.50 treasure at a thrift store...) If you are interested in how our 2016 spending compares to our 2015 spending, check out last year's expense report.
We think it's important to share our spending for two reasons:
- It helps to eliminate an unhealthy and unhelpful stigma around discussing personal finances.
- It creates opportunities for everyone to share ideas on how to optimize saving and spending habits.
We also think it is super important to have an annual expense review in general, as a way to track spending and expenses over time. This helps us understand where our money is going, plan for the upcoming year, and check whether we are actually spending money on the things we value or are spending too much on "this is just convenient" or "this is only okay" stuff. We primarily use credit cards to buy everything (in order to get more points for travel), which makes it relatively easy to track our spending through Mint and Personal Capital (free online finance tracking tools). Mint is fairly good at estimating what category each transaction should be in and Alex spends a couple hours at the end of the year going through the transactions and checking for accuracy. These tools help us keep things organized and provide impressive end of the year trend reports for our perusal.
Without further ado, our total spending in 2016 was....$55,687.64!
Our total personal expenses for the year (not including charity) were $47,638.64.
Like 2015, our largest personal expense this year was rent, however our other highest expense categories were fairly different compared to 2015. Our rent, travel, and pet categories went up and our transportation went way down. In an encouraging finding, our groceries were approximately the same and our shopping went down, although restaurants went up. Check out our breakdown of spending below to find out what prompted these changes.
Breakdown of Spending Categories
Rent ($22,986.20/yr; $1,915.52/month): Our housemates went off and bought themselves a house of their own, so we decided to fix our unpleasant commutes and move to Virginia near Alex's office. We rented a one-bedroom apartment in a nice complex with pool and gym that costs a bit more than our shared house did ($1,645 vs. $1,450). We spent extra on indoor parking ($75/month) and a pet fee ($40/month). While it would be nice to get this cost down, we are really happy with our new housing choice and love the ease of apartment living, the amenities, and the low-key interesting neighborhood. Income taxes are also lower in Virginia so we save a bit on that, which isn't included in our expense round-up as final tax numbers aren't available until later in the year.
Charity ($8,049/yr; $670.75/month): Our charity giving went way up in 2016 (which unlike other categories, is a good thing!). After paying off all our debt in 2015, we aimed to up our charitable giving to 15% of our personal spending (not our total income, but our total spending), but ended up exceeding it at 16.9%. We have a few different categories of giving that we are committed to, including our local church and community, national organizations for issues we care about (like biking), and international anti-poverty organizations.
Travel ($6,284.95/yr; $523.75/month): We spread our wings a bit more in 2016, also due to the great debt payoff of 2015. We traveled to see family, went to Alex's family crawfish boil, had a weekend getaway in rural Virginia, and took a two-week vacation to China. While it felt weird to up our spending in this category we really value visiting family and friends and had a lot of fun doing a bit more adventuring. This will likely continue at the same rate in 2017.
Groceries ($3,161/yr; $263.42/month): All non-restaurant food. We feel pretty good about our current spending and are still completely obsessed with Aldi (not even kidding...completely obsessed).
Transportation ($2,900/yr; $241.67/month): Our wildest success for 2016, our transportation spending went down by almost 48% this year! We spent $761 on gas, $678 on insurance, and $258 on car repairs and upkeep. These numbers went down pretty significantly this year but not nearly as much as our commuting expenses. In 2015 we spent almost $2,800 on public transit, but in 2016 we spent less than $1,000 (and our total transportation was $2,900!). Turns out moving close to work is a great deal! After moving to our new apartment, Alex's commute went from a 40 minute train ride to a five minute walk. My commute stayed the same (45 minute train ride), but I started working from home a lot more and continued to bike to work regularly.
Shopping ($2,113.30/yr; $176.11/month): This line item includes random trips to CVS and the thrift store, as well as gifts we give each other and two new phones. This went down a good bit from 2015, which means my (Kate's) determination to be more intentional about my thrift store spending may have worked (although this is still the category I struggle with the most)!
Restaurants ($2,023.68/yr; $168.64/month): This category went up a good bit from 2015 ($1,133.88 to $2,023.68), mostly due to our increased amount of travel. At $168.64 per month this feels a little high, but we're doing better about packing food for boring meals (breakfast and train snacks) and finding yummier restaurant options for fun meals (lunch and dinner) so hopefully we enjoyed this category to its fullest!
Pets ($1,792.87/yr; $149.41/month): Our spending in this category went up this year because T-dog had to have a minor surgery this summer. But he recovered nicely (cone of shame week not withstanding) and is back to his normal expenses (food and heartworm pills).
Medical Premiums ($1,168.64/yr; $97.39/month): Our typical health care costs and health insurance. Thankfully, nothing too exciting here.
Utilities ($1,630.86/yr; $135.91/month): This includes heat, electric, internet, and water. This went up a bit as we live on our own now. However, our apartment is pretty small so we are able to conserve on heat and electric.
Gifts ($526.12/yr; $43.84/month): I (Kate) love giving gifts, so even with thrift shopping and hand-making gifts I feel pretty good about keeping our gift expenses at this level.
Cell Phone ($498/yr; $41.50/month): We used Republic Wireless for most of 2016, but switched to Google Fi in October, both to take advantage of a huge new phone discount and gain access to Google Fi's excellent international plan prior to our trip to China. We have had a great experience with Google Fi and like that they still pay you back each month for the data you don't use (Republic Wireless used to do this but switched to more standard plans, but is still comparably inexpensive).
Uncategorized ($115/yr; $9.58/month): There are always things that slip through the cracks or are too random to categorize. This also includes some cash expenditures.
Fees & Charges ($934/yr; $77.91/month): We managed to stay away from parking tickets this year (yay!), but instead opened some travel credit cards with hefty annual fees (that were still extremely worth it for all the free travel points).
Entertainment ($385.97/yr; $32.16/month): This category mostly included visits to museums and tourist sites. Alex is skeptical, but I still think the $20 to see Dinosaur Kingdom II was totally worth it.
What do you all think? What did we miss? How can we improve or optimize our spending? Which category do you find the most problematic in your spending?