Posted by Tim Stobbs on October 10, 2013
A reader had requested a more detailed look at our spending a little while back but I decided to push that off slightly to show what it looks like after we have been mortgage free for the last 12 months. So here is a breakdown of our total spending of $35,558 for the trailing 12 months.
- Spending Cash 17%
- Taxes (Income and property) 14%
- Gifts and Donations 11%
- Food and Dining (the vast majority is groceries) 11%
- Bills and Utilities 10%
- Auto & Transport 9%
- Entertainment (mainly my wife’s football tickets and Netflix) 6%
- Home (mainly home insurance and the rest improvements) 6%
- Pets (one dog and fish tank) 3%
- Other 12%
I should point out the “other” is really just a summary of several minor categories like fees and charges (including interest on the line of credit which bought our car last year), education, shopping, and the kids. All of which were around $1000 or less.
As you can see our spending cash is by far the largest amount of money, so while people tend to think of those little daily purchases as minor they in fact the biggest driver of our annual spending put together. Our current system is both my wife and I get $200 each per month, while the boys get another $140 per month. Yet that covers a huge range of spending which you can read more about in this post. The leftover amount would be the odd misc cheque for varies services.
Next up is our tax bill, which while the income tax owing should go down in retirement, my property will not. In fact my property tax bill is 9% of our total spending…a fact that is seriously making me want to relocate to a city with lower property taxes when the kids are done school.
For gifts and donations I would say the split is roughly 1/3 donations and 2/3 gifts. It is interesting that we give away just about the same amount of money that we eat/drink in a year. I didn’t realize that was the case.
I will point out that vacation spending is excluded from the above totals, since they vary so much from year to year that they massively mess up the numbers. For example, they can range from less than $1000 to about $7500 in a year. Besides I plan to have a separate fund (or work part time) to pay for vacations once I hit financial independence.
Feel free to ask questions, I’ll try to answer what I can, but keep in mind my wife can veto any answers. So asking what she spends on her hair likely won’t get answered, but what I spend on movies likely will.