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Wednesday, March 29, 2017

Our Spending After Being Mortgage Free

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. ;)

Comments

10 Responses to “Our Spending After Being Mortgage Free”
  1. Kevin says:

    What is the spending percentage (the 35,558) of your total take home amount? Is spending a much higher percentage than the saving percentage?

  2. Tim Stobbs says:

    @Kevin – I don’t have the exact numbers handy, but I did some estimates. That $35,558 would represent about 40% of take home pay during the same period. So savings is roughly 60% for the same timeframe.

  3. Jon_snow says:

    35k on a family is pretty impressive – though I wonder what you kids might think as they enter their teenage years. ;)

    As a childless couple we are spending just under 30k annually – we could pare this down if we ditched our premium cable and Internet service and clipped coupons, cut our wine intake, ate out less… But I’m not sure this is necessary at this time. Gotta have SOME fun!

  4. Canuckguy says:

    Did I miss something here? That is a breakdown of the spending. But I presume you have surplus cash going to savings. Most of the former mortgage payments I gather?

  5. Tim Stobbs says:

    @Canuckguy – This post was purely about spending. Everything else I make goes right to savings. Combination of pension at work, RRSP and the big part is the old mortgage payments that go to the TFSAs.

  6. Devin says:

    Wow Tim I have to figure out how you and your family live on $325 for groceries a month. I am completely blown away by this. Good for you by the way. Now how do I get there.
    Out total spending in the last 12 months for a family of 4 was $42,250. We are in Emdonton so different local and a little bit less tax. It breaks down into the following:

    -Food, Dining, Restaurants, Alcohol and Personal Care items 30%
    -Auto, gas & maintenance (2 sets of tires this last year) 14%
    -Shopping/ Individual Spending 13%
    -Bills and Utilities 10%
    -Taxes 6%
    -Health & Fitness (Curling, ball hockey other sports) 5%
    -Home (maintenance, furniture and other) 5%
    -Kids (activities and clothing) 4%
    -Other (All gifts, vacation, donations, hair cuts) 11%

    Hovering around the $1000 a month for food, dining, alcohol, personal care. Knowing this is an area of improvement but to get to $325 would be amazing.
    As always great blog.

  7. Jacq says:

    Devin – Tim includes meals out also in cash expenses so food expenses might not be an apples to apples comparison. Still not as high as the average family though I imagine.

    Jon – this is just my kids, but both of mine think other people’s kids are overly spoiled. I think it’s a good thing to not buy them a lot in terms of quantity/frequency, but what you do buy them is what they really want and gets used a lot.

    Without the mortgage payment, we were just under $30k for the last 12 mos in spending and $19,976 YTD.

  8. lester says:

    Tim
    Very impressive and thanks for sharing. Gives me a better idea of where we need some effort.
    Keep up the good work
    Lester

  9. deegee says:

    Tim, while I knew it was going to happen, I was still a bit stunned at how big the regressive nature of property taxes were. The were, of course, unaffected by how much I earned or how much I spent. So after I ERed I saw them more than triple as a percent of all taxes and double as a percent of all income. (I should point out that I am many years away from qualifying for a special, income based school tax rebate for seniors. This also annoys me because I am childfree; I have asked my state legislators all the time to extend this rebate to childfree, non-senior people because we pose no burden on the local schools.)

  10. This is how you spend your money but what percentage is this of your total income?

    I would be interested in seeing a breakdown of savings percentages broken in to RRSP, TFSA, RESP, home maintenance savings……

    Are you saving to buy a new car?

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