The saga that is 2020 has reached the mid-point. In a year where nothing is what we thought it would be at the start of the year, we take a look back to autopsy the first half. So let’s crack this corpse open and see what’s inside.
This is the second year I’ve compiled this summary primarily by exporting transactions from Personal Capital (PC). Save for one credit card that wasn’t updating (an occasional issue I run into with PC) the process was very simple and straightforward.
The Usual Disclaimers:
I’ve tabulated our spending by category and broken everything down into per month spending. Comparing half a year to a full year of data is not exactly apples to apples. Some costs are seasonal like utilities, personal property taxes and #PrimeDay, but overall this comparison represents the best data we have on how things are going so far.
Where “one time” expenses pop up (such as a remodeling project, new car, replacement water heater, etc.) the monthly data gets crazily skewed.
The Numbers
***scubs in***
***washes hands (with soap… for at least 20 seconds)***
“Nurse, scalpel please.”
“Ok, starting the first incision.”
| Category | Year to Date | Monthly |
| Alarm | $149.94 | $24.99 |
| ATM/Cash | $120.00 | $20.00 |
| Automotive | $90.22 | $15.04 |
| Booze | $464.70 | $77.45 |
| Cleaner | $480.00 | $80.00 |
| Clothing/Shoes | $223.58 | $37.26 |
| Daycare | $4,824.25 | $804.04 |
| Dining Out | $2,050.21 | $341.70 |
| Donation | $115.00 | $19.17 |
| Dues & Subscriptions | $255.00 | $42.50 |
| Entertainment | $420.52 | $70.09 |
| Gasoline/Fuel | $671.16 | $111.86 |
| General Merchandise | $5,593.87 | $932.31 |
| Gift | $200.96 | $33.49 |
| Groceries | $5,267.77 | $877.96 |
| Healthcare/Medical | $344.20 | $57.37 |
| Home Improvement | $5,531.35 | $921.89 |
| Insurance | $1,327.34 | $221.22 |
| Internet | $359.94 | $59.99 |
| Kid Activities | $1,195.11 | $199.19 |
| Mortgages | $11,982.12 | $1,997.02 |
| Personal Care | $52.00 | $8.67 |
| Phone | $747.39 | $124.57 |
| Rental | $18,436.82 | $3,072.80 |
| TV | $394.81 | $65.80 |
| Utilities | $1,980.69 | $330.12 |
| Vacation | -$465.50 | -$77.58 |
| Grand Total | $62,813.45 | $10,468.91 |
Now that we’ve got the organs out, let’s see if we can make sense of anything.
Worth Noting
- Hey! We got paid to go on vacation! Wait, no… we haven’t gone on vacation. This is a true anomaly, where we paid in 2019 for a 2020 cruise… A cruise! Ha! Needless to say, the cruise was canceled and we received the refund this year.
- Notice there is no category for taxes. This is because we filed our own this year and it hasn’t been processed yet. Based on what we filed, we expect to get a small return, so it’s inconsequential here.
- There is a gray area between general merchandise and groceries as we primarily buy groceries from Walmart… where we also purchase a fair amount of general merchandise category. I try to separate these charges based on cost as our grocery bills are typically in a certain range.
- This year I’ve included only our primary resident in the Mortgages category. Our rental property mortgage is included in the rental costs. The rental home mortgage ($768 a month) was covered by the tenant’s rent for January through March. Since they left in March and we are trying to sell it, we’ve been paying without rent coverage since April.
- There is a big number lurking in that rental category. This includes the renovation costs as we attempt to repair and “flip” the house.
- We had our kitchen floor replaced with hardwoods right before the COVID pandemic hit. This was about $4,000, which is definitely skews the monthly breakdown.
Key Takeaways
Our monthly spending year to date is $10,469 which is up from $9,642 in 2019. If I pull out the rental costs (renovation only – to compare to last year), our monthly spending drops to $8,347… Much better!
I was interested in what categories changed with the COVID pandemic. It looks like clothing/shoes and daycare costs dropped significantly. The drop in daycare is due to keeping our oldest at home this summer as opposed to summer care. We’ve been paying for our youngest’s daycare even though she wasn’t going up until June (to hold her spot… and because we wanted to).
Gasoline is also down about $73 per month. We’ve generally traveled less this year (although there have been a ton of trips back and forth to the rental house and Home Depot). Gas prices have also been lower.
Conversely, we’ve seen a rise in general merchandise. A lot of this was for stuff to keep the kids occupied during their quarantine. I mean, our kids have a pretty sweet setup now. A bounce house, a nice inflatable pool, a razor scooter, a lego table, bunk beds. We also got a tent for the family, so we can enjoy some camping (a socially distant vacation).
Dining is just slightly down (a drop of $70 per month). We’ve certainly dined out less… far less. But we’ve hit up the drive through more often. I attribute the increase in fast food to having zero free time while we were renovating the rental house. This is a category I am interested to see play out over the full year, now that the house is done.
In a surprise, our booze costs are down about $38 a month. I thought I was hitting it harder than normal during the quarantine and rental renovation. I’m think some of the costs are buried in other categories, so I don’t totally by this drop.
FI Number Estimate
If I back out a few expenses that we don’t anticipate having in “retirement” I can gauge what our spending would be when we are financially independent (FI). I would cut out daycare, kid activities (I assume they will be grown) and rental house costs (we are selling it currently) then our spending is:
- $6,392 monthly or $76,704 annually.
- Using the 4% rule of thumb (or 25X your spending) would give us a FI number of $1,917,600
If our mortgage is paid off:
- $4,396 monthly or $52,570 annually
- Based on the 4% rule our FI number would be $1,318,757
I’ve been targeting $2 million as our FI number, so this looks like it is still inline.
Conclusion
You know, it wasn’t as bad as I thought it would be. During the height of the COVID shutdowns and quarantine, our focus was everywhere but on savings dollars. So, it is nice to see that our spending didn’t balloon up out of control. Who knows what the rest of the year will bring? I won’t even try to guess.
Thanks for reading!
Our spending has gone down during shelter-in-place b/c so much of the variability was eating out, entertainment like shows, and especially travel. However, our grocery bill is up a lot, and I helped out two family members on their groceries which essentially doubled our spend in that category. We also replaced several major appliances, which is not an ongoing expense obviously, but a big hit at one time. Net-net, our variable spending went down by about 25% from last year’s average, but I was hoping for more. 2nd half of year should be better b/c the appliance hit will be done.