160 comments

Exposed! The MMM Family’s 2011 Spending!

Once a year the rubber really meets the road for the Money Mustache Family, when we have to add up the entire amount we spent on everything, and reveal it to you the readers for comparison and scorn.

Last year’s  Exposé had us spending a fair amount, but with bold predictions of grand reductions in the spending. To quote the old article:

Total of Everything for 2010: $30,500
Total excluding Mortgage interest: $26,885
Estimate for next year (no mortgage, child in elementary school, no cruises!): $21,695

You see, 2010 was quite a while ago, so its numbers included monthly mortgage payments on our main house. In early 2011, we paid off the rest of that mortgage. Plus, Little MM graduated from preschool and we all started enjoying the benefits of public education.

But in my optimistic forecast above, I forgot to account for the mortgage interest costs from the first few months of 2011, the preschool bills from January to May, and the fact that even the full-day kindergarten class in our local school carries a tuition of $275/month. So those bloated the budget quite a bit.

As it turned out, 2011 was also a bumper year for holiday travel. We began the year by waking up in a tent on South Padre Island, and the vacations continued regularly from there. As a family, we took trips to Canada, Moab Utah, and Arizona. And as individuals, Mrs MM went on a decadent Ladies’ trip to Las Vegas, while I spent an extremely fun and irresponsible week around Park City, Utah snowboarding with the Boys.

Food costs went up voluntarily as well, as the Mrs. switched to a gluten-free diet (and I partially followed her lead) leading to more eggs, vegetables, and meats. We also started buying even more organic food, which costs about 50% more in my area. I justified this only with the fact that we could truly afford it – if we still had debts or were stuck working in unpleasant jobs, I could have easily kept the food costs below last year’s levels.

As a side benefit of adding the vegetables and cutting out bread (and some of the booze), however, I think we accidentally boosted our health quite a bit. Both of us seemed to reach record levels of fitness and non-flabbiness in 2011, even though we’re more than double the age of when either of us last set a record (sometime around age 18). I think this whole health boost thing could make a good article in the near future, to coincide with finishing the popular Tim Ferriss book I’m reading called “the 4-hour-body”. (Hint: my approach is drastically simpler and less exotic than his).

So by now, you’ve probably heard enough of my excuses and are sarcastically making the Tiny Violin symbol at your computer monitor as you read these justifications for an expensive lifestyle, so I will shut up and lay out the spreadsheet:

Category20102011DiffComments
Mortgage Interest3,6001,500(2,100)2011: paid off mortgage in June
Property Taxes2,2922,334420.6% of home value - Gotta love the low property tax rates of the Western US.

Groceries3,8555,0071,152This increase falls entirely on my shoulders as I'm the shopper. But I am now using Costco more, which should bring it back down in 2012.
Healthcare3661,087721Mrs. M. experimented with a frivolous health care practitioner, then determined that plain old barbells were more effective at fixing all problems.
Utilities (gas, electric, water/sewer, weekly trash, recycling)1,2601,35696Lower energy consumption than last year, but city and utility rates went up.
Wine/Beer269226(43)Brewing beer at home raised consumption due to deliciousness, while cutting costs.
Restaurants, Coffee Shop565149(416)In this department, having a child who is a picky eater really pays off - no point going out to eat until he is a teenager.
Home Renovations/Maintenance1,8192,105286Renovated master bathroom this year.
Gas777316(461)2011 non-trip gas
Insurance (House+Vehicles)707648(59)House + Car
Donations/Charity3741,8861,512More donations due to feeling more relaxed about income.
Crossfit1,0801,11030Damn that is expensive. But I believe Mrs. M. still makes a "profit" on it due to improved health. She looks like Jillian Michaels now, but without the annoying facial expressions ;-)
School Tuition6,6652,630(4,035)May 2012, baby, then we're off the hook.
Cell Phone (MMM)1201200Mrs. MM still gets free phone from part-time work - smart lady.

Misc2,5822,843261
  Shoes & Clothing444Umm.. I don't think any of these clothes went to me, 'cause I have exactly one non-ripped pair of pants.
  Entertainment262232011: Netflix, books, movies
  Lessons for boy1562011: Swim + Soccer
  Target5007652011: May include some grocery
  Amazon500584Gifts, clothes, household items, school supplies
  Car Maintenance3296car battery, oil changes for two cars
  Manly Items245Video Card, Stereo amp for Construction Van
  Other1,5243302011: Passports, checkbooks, crackpots DIY pottery shop, iTunes, Bike, Staples, Annual Haircut for Mrs., car registrations
2010: Clothing, lessons, car registrations
Travel (including gas for roadtrips)4,1515,0368852011 includes gas + food for trips
  Denver Bachelorette146
  Pre-book summer 2012 trip airfare for 2315
  Winter 2011 Arizona Trip1,265gas, hotel, zoo admission, etc.
  Family Summer 2011 Trip1,008
  Las Vegas Girls Trip673airfare, hotel, food/drink
  Spring 2011 Moab Camping Trip122
  Safety Pirates March 2011 Snowboarding Trip647gas, lift tickets, accomodation, beer, whiskey, food
  Late Summer 2011 Men's Camping Trip21Gas+campsite. The trip where we invented the future hit business called "Wilderness Cauldron".
  2nd half of Mega Winter Roadtrip to TX839gas, hotels, etc.

TOTAL30,48228,453(2,029)
TOTAL Without Mortgage26,88226,95371
Subtracting Tuition, Donations19,84322,437
Subtracting travel, crossfit14,61216,291
Subtracting organic/luxury food13,34014,639
Subtracting home renovation expense11,52112,534This is what our "no frills" living cost would be, (we'd have to move to a smaller house to go below this)

So what have we learned from this year’s figures?

First of all, I was amazed at how close 2011 was to 2010. Things tend to average out over a large period of time like that and become fairly predictable.

But secondly, I was pleased to note just how much of our expenses I consider to be optional luxury spending. If you take the “total without mortgage”, it looks like we’re living on about $27,000 per year. But if you back out things like the $2600 of tuition that we are now done with, the $5000 of travel, the $1800 of  charitable donations, and all the other things mentioned at the end, our basic life could be sustained comfortably at just over $12,000 per year. Even after we start paying private health insurance premiums in the near future ($240/month for the family as quoted in this earlier article), the bottom line could still be under $15,000.

For a 3-person household, that’s well below the US definition of poverty, yet it would still let us pay for everything including property taxes and utilities on a large house, plus vehicle ownership costs on a car and a van, keeping the fleet of six bicycles in good running order, unlimited netflix movie streaming to the basement home theater.. and even my beer brewing habit!

So our lifestyle still has quite a toasty jacket of decadent fat around it, and this is important to note because we’re often accused of living some sort of bare bones lifestyle that people aren’t even sure if they could handle. This is just plain wrong: thirty grand plus a paid-off house is more than enough to raise a family.

So life goes on… and we’re now re-motivated to try to beat these figures for next year!

  • Pablo January 16, 2012, 11:03 pm

    Great post! I like how it shatters misconceptions about how much one really needs to spend to live a comfortable life.

    Reply
  • Lex_Rex January 16, 2012, 11:55 pm

    Excellent post. Shows once again that it’s fairly well possible to live on less, and what’s more important, it shows that the amount of expenses are not in relation to quality of life.

    On a sidenote: I’m always curious how some of the financial stuff you do would work out in my country in Western Europe. Probably not as well, since we are taxed to death and considering the financial crisis, there’s probably more to come… (mental note: bury my euros in the back garden)

    Reply
    • Nuno André January 17, 2012, 1:01 am

      It really depends on which country of Western Europe we are talking about and what kind of job you can get before your retirement years. But in my opinion it is perfectly doable, especially in the vacations section, where here without that much traveling you can see such a plethora of different cultures!

      Reply
    • Chrissy January 17, 2012, 3:00 am

      Yes, it can 100% be done in Western Europe. My husband and I live in central London on less than £30k per year. While this is nominally similar to MMM’s spending, it’s obviously about 50% more at current FX rates, but we also have a *lot* of luxury non-Mustachian spending like:

      - More ‘typical female’ related spending, including pricey hair cuts, hair products and makeup
      - Because we are too lazy and anxious to cycle to work every day (cyclists getting hit by buses and dying is not an uncommon occurrence…) and don’t have a car (which would be a horrendous waste of money and time here), but do pay £100 each per month for public transport
      - Because we both work in offices, we waste £20-40/month getting our nicer work items dry cleaned (other stuff is, of course, cleaned and air dried at home)
      - Being kid-free and gainfully employed, we are doing a lot of travel, which last year included a long weekend in Edinburgh for a wedding, a weekend in Brussels for fun, a fancy 2 week trans-Atlantic trip to the Pacific Northwest, and a super luxury 3 week trip to Australia and New Zealand, complete with a business class (!) upgrade one direction. Nearly £10k of last year’s £30k was on travel alone
      - Because we live in a flat block, we pay a hefty management charge (£2,300/yr) to maintain the communal areas (including our in block gym, obfuscating the need for gym memberships) and keep a porter (to look after the building and collect packages) and gardener throughout the year.
      - We each buy lunch about once per week, and go out to restaurants for dinner once every week or two. We love cooking, so this is really unnecessary.
      - We also waste money buying coffee most days during the week. (it encourages us each to leave our desk and get out of the office for an hour, which we otherwise might not do since we usually bring our lunches to work)
      - We’re techie geeks, and with most of the latest gadgets. We look after our stuff, so we can sell it on when we want to upgrade (which both recoups 50-80% of the cost of the new item as well as avoiding fulling our house with a bunch of excess crap).

      Honestly, our lifestyle is so luxurious, it makes me genuinely confused how people spend any more than we do. I especially have no idea how some of the people we know who are earning 100k/yr (both in the US and UK) seem to be leading a less flashy lifestyle and still complain about being broke and having no savings!

      Reply
      • MMM January 17, 2012, 9:32 am

        Nice one, Chrissy!

        I’d say you are displaying a core principle of Mustachianism: constantly reminding ourselves that we in fact have it easy and are living big gluttonous lives, instead of the usual habit of complaining about all the ways that life is expensive or difficult. There’s a little bit of wise Stoicism in this mindset.

        It also has several practical benefits:
        - it lets you realize how much you still have, even while noticing places that could be optimized further
        - it builds a mental safety margin since you see that you could easily cut way back if trouble were ever to strike
        - it involves making fun of yourself, which is always good for a laugh.

        Reply
      • Dave January 17, 2012, 11:35 am

        Chrissy,

        There are over half a million bike journeys made in London each *day*, and the number of cyclists killed by large vehicles is “only” one a month (give or take). That’s enormously good odds, especially when you factor in the extra decade of life you’ll enjoy as a result of the exercise :)

        Perhaps a Moustachian possibility to cut down on your £2.5k public transport habit might be to consider investing in some cycle training instead?

        D.

        Reply
        • Chrissy January 17, 2012, 12:15 pm

          Thanks, Dave. I know the odds aren’t that bad, and we both know how to cycle. In spite of that, I’m still somewhat anxious about it… and also disinterested for various other reasons (‘excuses’, but I’m fully aware I’m wasting money and being non-Mustachian). Thankfully we’re able to get our exercise for free in other ways, too :)

          Reply
          • Dave January 18, 2012, 3:03 am

            Hey Chrissy,

            Just to be clear, I didn’t mean training in the “how to ride in a straight line and which brake does what” sort of thing (sorry!). A lot of outfits offer proper training, like road positioning, knowing when to be assertive and when to yield, the outcome of which is much less worrying about being squashed by a bus.

            I ride to work daily, and I don’t really worry about it any more, although I understand why people do. Just thought I’d offer it as a suggestion, since a lot of fear is really just ignorance (in the nicest possible way).

            There are all sorts of other good excuses, sorry, reasons! why people don’t ride to work, but I think it’s probably about the most positive change anyone can make in their life. You save a fortune, you add years to your life expectancy, and you gain time in your day to do what you’d rather be doing (the one thing money can’t buy).

            I’ll stop preaching now! :-)

            Reply
            • Frank C. Modica January 21, 2012, 6:40 am

              And biking isn’t just about commuting to and from work. I use my bike trailer with a 30 gallon container for taking my clothes to the laundromat and for serious grocery shopping. Over Christmas break I used the trailer to tote a bread machine and small food processor from Goodwill to my condo. When I meet people for dinner around Champaign-Urbana I always ride my bike. There are plenty of safe routes that avoid heavily travelled streets.

              Reply
        • Bakari January 17, 2012, 12:57 pm

          I don’t know if it is true in Europe too, but in the US the majority of bike-car collisions are the cyclists fault, due to them breaking basic traffic laws. By the very simple act of riding responsibly, you can cut your risk down much lower than the averages would indicate

          Reply
          • MMM January 17, 2012, 2:01 pm

            Interestingly enough, I have been hit by a car once on my bike too – in 1997.

            It was totally my fault, due to trying to ride across a one-way street and thinking it was two-way. At night on a Friday. Without lights. After at least two drinks. It broke my ankle, but I was lucky to avoid serious injury.

            That taught me a lot about bike safety and there hasn’t been so much as even a close call since, after tens of thousands of miles of riding, although I remain cautious and respectful of those millions of zooming chunks of metal.

            Reply
          • Sergey January 17, 2012, 4:49 pm

            Watch this video on youtube – a3Xf3wXRfbc
            No way I would ever consider biking in NYC…

            Reply
          • jlcollinsnh January 17, 2012, 6:42 pm

            I’ve also given up bicycling and I used to do 150 miles or so a week and long distance tours.

            The problem is that on any given stretch of road there will be a certain number of psychopaths, in addition to the simply careless and stupid. On a bike, every single one of these will have the chance to interact with you.

            I remember one beautiful early morning ride on a two lane road. No traffic. Except the oncoming pick ‘em up truck. He crossed both lanes trying to hit me, fortunately I ran off the road before he got to me.

            One of my riding buddies used to say if no one had tried to kill us so far we hadn’t been riding long enough.

            Now on the motorbike I don’t have these problems. I keep up with traffic and so only have to deal with those right around me. And they for the most part behave themselves better. Possibly because they know if they fail to kill me the first time I can catch up to them.

            Reply
            • Dave January 18, 2012, 3:10 am

              Can’t really speak for the US, but life for cyclists is a lot more rosy elsewhere.

              If you think about it, since taking up cycling increases life expectancy, that must mean that it’s a smart thing to do, health-wise, whatever fears people may have. If it was actually all that dangerous, then the average cyclist wouldn’t live longer, which we now know (as a result of long-term studies) that they do.

              Also, I can’t help feeling that there’s not much point being all moustachian and living with badassity if your BMI’s off the scale and you’re heading for an early grave…

              Reply
              • Chrissy January 18, 2012, 2:56 pm

                …but think of how much less money you’d need to save for retirement if you plan to die early :p

              • Gerard January 18, 2012, 5:58 pm

                Yeah, Dave I was thinking the same thing… very few scary things have happened to me in all my years of biking, but that may vary by country or region. I was amazed last time I was back in Montreal at how much cyclists “owned” the roads. And Quebec actually has a province-wide system of bike roads, kind of like bike-only interstates.
                (Slightly off topic: according to the actuarial tables I’ve seen, being overweight (hig BMI) only shaves a few months off your life expectancy, as long as you actually get some exercise.)

  • elai January 17, 2012, 12:04 am

    I know it’s somewhat self evident, but you guys already have a lot of stuff that you’ve already paid for that reduce your costs. From your expense list, you don’t list any major purchases like a motor vehicles (you have a scion and a work van?), bicycles (x6), beds (x??), furniture, televisions, appliances, the house, etc. It seems like you spend almost all of your money on services and consumables already and your mortgages are for investment properties. For a young guy just starting out, he has to make a lot of big purchases to get up to your level.

    Maybe to reflect your large capital costs you can put in depreciation to reflect that.

    Reply
    • Chrissy January 17, 2012, 2:38 am

      I think the idea is that a family can *retire* (or become ‘financially independent’) on that amount of money per year. Presumably one would be retiring at the point they had already acquired things like housing, furniture and cars. I think it’s alluded to, if not explicitly stated, that while one is still working and not in a position to retire, they could/should avoid the luxury items while acquiring the basics in life, saving and investing.

      Also, previous posts infer the primary Mustachian target audience are people earning a solid salary, showing them how to cut expenses, waste less, and become both badass and financially independent sooner.

      Reply
    • Jimbo January 17, 2012, 7:35 am

      I remember Mr MM writing something to the effect that you do need to buy furniture and appliances, like everybody, but that A) this can be done cheaply via Craigslist B) you only need to buy one fridge and then you use it until it dies in your hands. Then you try to fix it. THEN you consider buying another one (used, of course). So there really isnt any need to keep buying appliances once you have them all…

      Reply
    • Bakari January 17, 2012, 12:59 pm

      Craigslist my good man.

      As a single person, you obviously don’t need all that up front.
      One car: $2000
      One bike: $300 http://biodieselhauling.blogspot.com/2012/01/buying-bikes-from-craigslist.html
      One bed: $50
      TV: $20
      Appliances: comes with your apartment

      aside from the house, that should all be a pretty small part of an annual budget

      Reply
    • Ed January 17, 2012, 4:34 pm

      Agree with Elai. Most probably not everybody will agree on how to do this: how deal with the major purchase of a car, even if you buy a good second hand one, you’ll still have to add say an extra $6.000 to that year’s expenses. You probably will sell what’s left of your rusty previous loved one, but let’s assume $6.000 is needed to get what you want. So, will you have one year of excessive spending? Or is it better to depreciate it over the years so that this spending is included in your annual figures? I hear you MMM, it won’t change a thing to your overall needs, but i think it can help get a more realistic picture of your future needs if you don’t forget about the car… (unless one can do without in the future: car-sharing scheme fi)
      Because also: what about a major roof replacement in 10 years time? Or your house needs new paint in and/or out? A new washing machine etc
      I don’t think these things have to make the goal impossible, but it could be a good idea to plan for them in advance somehow…
      Personally I do add a monthly theoretical figure which represents my car depreciation, and it’s about $1,000/year… (10 year old second hand car i bought last year) and it’s supposed to include any repair costs due to the age of the car.

      Back to the car (more fitting to a “the real cost of car post”): it’s indeed so expensive, I made a spreadsheet to add all possible costs, interests lost (you lose interests for the rest of your life not just when you own that car! accumulated that’s a big LOAD of $), etc. Over a lifetime, if you buy 5 new cars of about $20,000 (medium size) in Europe it can cost you actually about $700,000 depending on your situation. It is staggering…. I suppose it would be “cheaper” in the US though. If people only knew…

      Reply
      • Steve January 18, 2012, 8:14 am

        It’s expensive in the US as well. I calculate around $1500 per year between depreciation, repairs, insurance etc. $3000 if you add fuel. Christ, I need to buy a horse and wagon.

        Reply
        • Diane January 18, 2012, 10:49 am

          Are you kidding? Do you have any idea how much it costs to feed and maintain a horse? Neither my bike nor my car do anything I have to clean with a shovel!

          Reply
    • Emmers February 24, 2012, 8:55 am

      Agreed, Elai. I like to reference the “Sam Vimes Boots Theory of Economic Injustice” when talking about this. You can Google it for the exact explanation, but basically, it’s the idea that it is *expensive* to be poor, because you can only afford poor-quality items, which wear out more quickly.

      Extended to the modern US system, it also includes only being able to afford to rent, not buy, because you can’t save up for a down payment; or having to pay for expensive medical conditions out of pocket, because you can’t afford health insurance; or spending lots of quarters on a Laundromat because you can’t afford the “nice” apartment that comes with its own washer/dryer. (That last one also addresses the opportunity costs of having to spend more *time* doing things.)

      Now, with all that said — as another commenter pointed out, that’s not the target audience for the MMM blog. But I think we all (e.g. the very first commenter on this post) need to remember that just because MMM can do this *now*, it doesn’t mean that *everyone* is able to do this *now.* It’s something you have to build up to over time. In other words, a “goal.” ;-) (And a great goal it is!)

      Reply
  • Dave January 17, 2012, 5:53 am

    Great article – this month I’m doing a secret Moustache Month while I try to figure out how to break the news to my lady wife – I’ve paid the same into our joint account as I usually do (25% of take-home) but I’ve taken all my non-moustachian expenses by the scruff of the neck.

    It’s amazing how little you spend just purely by stopping and recording/ thinking about what you’re spending (with a little help from the Moustachian attitude!).

    It looks like I’ll finish the month with 60% of my take-home intact, which means I’ve been wasting a hell of a lot of cash! Hopefully I’ll be able to produce a report like this one at the end of the year :)

    Reply
  • Bullseye January 17, 2012, 5:55 am

    Great to see a detailed breakout, so us junior disciples have something to aspire to! We’re more like $40k after mortgage, but things like groceries, gas, property taxes are more expensive here. Of course, health care is ‘free’.

    I do think you should have some other items in there to get a true full cost accounting. The glaring one is an allocation for vehicle cost/depreciation. for example, if I bought a $12k car and kept it for 10 years with no salvage value, I’d put a $1,200 annual cost on that in my budget. Then another allocation for maintenance/repairs over that period. Surely your vehicles will still need tires/brakes, some repairs over that period, even with your low mileage.

    The other one is deferred/allocated home repairs and maintenance. Even if you can do it yourself, you’ll still need to eventually pay for things like shingles, flooring, HVAC, etc. And what about appliances? I put $2k/year in my budget for these kinds of things.

    Even if I don’t spend these amounts in a year, having them in the budget gives me a more true accounting of what I need to live on long term.

    Yes, if you haven’t guessed, I am indeed an accountant!

    Reply
    • Jimbo January 17, 2012, 7:38 am

      Why would you need to spend 2k/year on appliances once you have everything you need? You’ll get a second fridge? You’ll do a kitchen makeover? I dont understand…

      Reply
      • Bullseye January 17, 2012, 7:46 am

        Not $2k for appliances, $2k for all home repairs and maintenance, and appliances.

        My view is that if I retire at 45, as I plan to, and stay in the same house for the next 50 years, it’s going to need to have some money put into it! If I leave this allocation/accrual out and then say I need $30k/year to retire, and then I retire when I hit $30k of passive income, I am making an error. I will sooner or later need to spend more than that when these costs come up, and will not have the income to cover it.

        What I plan to do when I retire is start a savings account for these costs, and put money there every year. As the costs come, I use that savings to cover them.

        Reply
        • MMM January 17, 2012, 9:44 am

          You’re right – there are occasional maintenance costs even for a Mustachian. In the case of this budget, you could leave the $2000+ I spent on tiles and fancy vessel sinks when rebuilding my master bath in the budget for future years. This would more than cover any house maintenance and additional projects.

          Car costs are a almost too random to account for in my case. I suppose you could figure on me vaporizing a $5000 car every ten years at the most (or similarly buying a $7,000 one and selling it for $2,000). I could of course drive much less if we had a cash shortage and we could easily live totally car-free as well as a fun challenge.

          But check out this counter-example that wipes all of these little details out: We’re currently living in a $400,000 house, which we’ll surely downsize into the low $200s eventually (my tastes for size have been reduced since 2006 when we bought this place, plus we thought we were going to have two kids at the time, then changed our minds). So there’s $0.2 million dollars coming back into the ‘Stash for future income generation someday. Many other Mustachians with kids will probably take the same step once the kids move out.

          Reply
        • Jay January 17, 2012, 11:44 am

          If your going to live in the same house for 50 years you are probably going to eventually have to overhaul entire house over that time. In Texas at least, foundation problems are inevitable due to the composition of the soil, as are roof replacement and other unpredictable costs. While depreciation is a conservative means of keeping track of wear and tear also remember that it is an estimate.
          Capital gains are nontaxable in the US if you’ve lived in the house for 2 of the last 5 years. This capital gain will drive up your property taxes for sure. But you could use this capital gain to purchase new property or use it as an extra addition to your nest egg, depending on the area (and the level of speculation therein) of the original house. I just know that accountants are very good with historical data, but sometimes overlook future fluctuations and take estimates for granted. FYI I’m an accountant too and have been guilty of this as well :)

          Reply
          • Jay January 17, 2012, 12:12 pm

            I guess my main point is as long as your doing constant maintenance on your respective properties, depreciation estimates unnecessarily complicate personal finance for most people, and the additional benefit of information is marginal at best. I think an easier approach is to just have sufficient liquid cash for the emergencies. If you introduce depreciation into equation than you have decide whether you want to capitalize certain maintenance expenses, which opens another can of worms. Peace.

            Reply
    • Captian and Mrs Slow December 1, 2012, 3:02 pm

      @bullseye if you’re reading comments than Derek Night (freeat33.com) has a great spreadsheet for all his costs for one year living in Canada. He’s about the same as you 40 grand a year sans mortgage. I downloaded it as I like to compare numbers

      Reply
      • Bullseye December 2, 2012, 5:14 am

        Thanks!

        Reply
  • tjt January 17, 2012, 7:05 am

    Very nice, MMM. It looks like you’re exactly where I plan to be when I pay off my mortgage (3.25% interest is tough to turn down, but I’m itching to drop my monthly expenses to $2300/month).

    I’ve noticed a lot of comments about depreciation of existing assets, which I think is a fair critique. However, this brings up an important point – I suspect your costs of depreciation are far less than most since you have the time and skills to do the maintenance and repair yourself. When you can replace your own tires, change your own oil, replace your own brake pads, and add your own freon – combine that with very low mileage and you are talking about a greatly reduced total cost of ownership for a car.

    The same goes for most house repair items.

    It would be interesting to see your analysis on personal capital depreciation, and how the MMM self-sufficient lifestyle affects it.

    On a separate note: what about state/federal income taxes and social security taxes?

    Reply
    • Chrissy January 17, 2012, 7:19 am

      I actually disagree with the push to include depreciation and income tax information. Considering he’s including operating costs of both home and vehicle, and that at the rate he drives, he could easily maintain the same car and home indefinitely. Also, it becomes kind of ugly and overly complicated to work in variable figures, rather than using actual costs as above. Savings and other assets (like the existing home) would be utilised toward replacing a car or home, and because his ‘investment income’ calculations previously indicate they are using a safe withdrawal rate and not touching the principal, why does it need to be accounted for?

      Also, no income figures are shown, and therefore, why would one include the associated taxes? He includes property tax, which is a necessary cost of living, but income taxes are only a ‘cost of working’.

      Reply
      • tjt January 17, 2012, 7:27 am

        Chrissy – I wasn’t asking for MMM to include depreciation in his budget. Actually, I was more interested in his thoughts about how depreciation is greatly reduced because of his lifestyle. Maybe even to the point that it’s negligible(?). I guess I was thinking more philosophically than economically.

        As for income taxes, these still might apply. If Mrs. MM works part time, there is income. I believe MMM also has a pretty healthy rental property, which counts as income. And if you are living off other types of investments (capital gains and/or dividends) there are associated taxes for these. But with all that said, if you’re able to only show $28K in income (the money MMM needs) and start applying all the tax deductions – perhaps it’s at or close to $0. I’m not sure though, this is why I was curious – since I’ll be in this place in 16 months and trying to figure out my own future budget.

        Reply
        • Chrissy January 17, 2012, 9:37 am

          The premise of the blog, and especially this article, is “how to live on not very much money (irrespective of what you make)”, not “look how much money I can make by not going into an office”. Honestly, the amount of income tax is dependent upon income, and is therefore entirely irrelevant compared to annual spending. It doesn’t matter whether MMM is living on income from investments, carpentry or Mrs MM’s part-time work – what matters is the amount they spend sustaining their awesome lifestyle annually. Income taxes don’t affect that.

          Reply
      • tjt January 17, 2012, 7:29 am

        @MMM – I should add, I’m not trying to pry. I appreciate your transparency with this report, so if talking about income and those types of things is going over the line, feel free to ignore. :)

        Reply
        • MMM January 17, 2012, 9:54 am

          I agree with Chrissy on the taxes part of things. We do pay a fair amount of taxes right now, but if we stopped working and just kept the rental house and dividends as needed to exactly match this level of annual spending, the tax burden would be almost zero after child deductions, etc. (Although I’m not sure exactly how close to zero, that would be interesting to calculate).

          As for income – I am curious about that myself, so I just added it up:
          - Looks like I only got paid for about $4000 of carpentry work in 2010 (I did much more than this, but much of it was for free for various causes).
          - The blogging habit is to blame for part of that reduction (although this blog actually did earn over $1000 last year to offset it a bit thanks to those Adsense ads on the side).
          - I also did about $7,000 of work on the Foreclosure project, but this will be realized later when I get paid for it
          - Mrs M. earned more than me with her gig, but she’s engineering a massive scale-back for herself right now, so I might beat her again someday :-)

          Reply
          • jlcollinsnh January 17, 2012, 7:04 pm

            actually your tax bill could go below 0. That is the government refunds to you all the tax you paid and then gives you more money if you meet certain income guidelines.

            basically there are two kinds of tax credits. Refundable and non-refundable.

            The child tax credit is an example of a non-refundable credit. It can lower your taxes by up to $1000 dollars or take them to zero if your taxes are less than $1000.

            Refundable tax credits not only can take your tax to zero, you get paid anything that is left over. The Additional Child Tax Credit and the Earned Income Credit are two examples.

            With the EIC your income, married and filing jointly with one child, must be under $41,132 and you must have less than $3150 in investment income.

            These are credit designed to help the working poor. I volunteer with VITA helping fill out tax returns for poor folks around here. Many walk away with more in refunds than they have had withheld during the year.

            Reply
          • tjt January 20, 2012, 9:56 am

            @jlcollins – Thanks for that info.

            @MMM -

            “We do pay a fair amount of taxes right now, but if we stopped working and just kept the rental house and dividends as needed to exactly match this level of annual spending, the tax burden would be almost zero after child deductions, etc. (Although I’m not sure exactly how close to zero, that would be interesting to calculate).”

            Yeah, that’s what I was getting at. My plan is to try to take taxes to 0 by matching my realized income with only what we need for spending, which is why I was curious. Sounds like you aren’t doing that.

            Reply
  • wizardpc January 17, 2012, 7:06 am

    Great work MMM! I preach a lot about getting out of debt, and I have families with six figure incomes tell me it’s impossible to live on less than they make. I think I’ll just point them here in the future.

    Reply
  • Chris January 17, 2012, 7:35 am

    Pretty cool MMM. Reading that just motivated me to jump on Quicken and finish my New Year’s resolution-which is to track all my expenses and figure out where I’m really spending my money. The real gem of this article is that it shows you how well one can live on very little money. I’m embarassed to say we spend about 60K per year right now, however, after some mustachian motivation, that will hopefully be changing in the next year. I’m amazed you took that many trips and still came in under 30K. Also, I don’t blame you on the increase in food budget. My wife and I recently started spending a little more as well on food in order to buy more organic products. I see it as an investment in our health. Nice work MMM family!

    Reply
  • Kevin M January 17, 2012, 8:16 am

    Very impressive, especially the “Safety Pirates” snowboarding trip. That sounds fun. This motivates me to sit down and finish our 2011 budget/actual reconciliation.

    Reply
  • CG January 17, 2012, 8:33 am

    Thank you! Not many people are brave enough to report what they actually spent, especially those in the financial advice realm. I allude to our own spending very rarely because it’s usually met with a chorus of “I could never do that” or “But I live in an expensive area” and other similar excuses. Sometimes it makes me wonder if they think I’m lying about our finances.
    I totally agree that actual living expenses, no matter where you are, are extremely low. I feel very rich on our single low income. We also make beer and eat well. We have a lot of extras and never feel deprived.
    I haven’t actually ran our spending figures for 2011 through the gauntlet of optional expenses to see what our basic living costs were. I usually do that right away but haven’t gotten to it yet this year. I will say that our overall spending for 2011, for a family of 5 in NJ, including mortgage but not health insurance, was $28.5K. I’m estimating that 11K of that was optional stuff since a few years ago I determined that our 1 year EF needed to be $17.5K.
    It’s not easy at this spending level but it’s not torture by any means.

    Reply
  • Virginia January 17, 2012, 8:47 am

    I’d also be interested in hearing how much you made this year…

    Reply
  • Jessie January 17, 2012, 9:24 am

    How the heck do you only pay $120 for a cell phone? And $648 for house AND car insurance??

    Reply
    • MMM January 17, 2012, 10:05 am

      For the cell phone, I tag along as the extra line on a family plan for now, but another option to get the figure even lower is simply a pre-paid mobile phone where you pay only for minutes. I’ll be making that switch myself someday. To maintain a regular guilt-free chatty lifestyle, you can still make unlimited free calls over the internet when at home, using something like Google Voice (see article on this blog).

      Low insurance is accomplished with high deductibles ($5k on the house, no collision and comprehensive on the car) and a good driving record.. and not living in an area with expensive car insurance helps too.

      Reply
      • Marcia @Frugal Healthy Simple January 17, 2012, 12:02 pm

        We have pre-paid cell phones. They are $100/year per phone, and we have two. For that, we get 400 minutes per year.

        So when people ask “how do you pay only X for a cell phone?” … most of them are thinking: smart phones, internet, facebook, camera phones, texting…you know, what all the kids like to do these days, and some people insist they cannot live without.

        My cell phone just isn’t that. If you want to call me, call me at home (I live in a cell phone dead zone). If I want to go on the internet, I do it with the computer (so what I don’t pay in cell phone charges, I pay for in high speed internet). Cell phones are for travel.

        I really enjoyed reading about your travel expenses. I was pricing a trip to Hawaii and it’s $4000 to 5000. So I think instead our “big trip” is going to be 1/2 week in Palm Springs and 1/2 week in San Diego. That makes the total trip cost more like $1000 or less. Our Arizona trip last summer (half camping, half hotels) was similar.

        Reply
      • JD January 17, 2012, 3:29 pm

        Could you write a post on home insurance? I just bought a house and found it kind of confusing, and I’m paying about $1k a year now, with what I thought was a high deductible (I think $2500). This is for a house I bought for $195k (no mortgage!) and a replacement value of $250k. I felt like I might have been screwing up on the replacement value thing especially.

        This is through Liberty Mutual, they have a relationship with Geico, my car insurer.

        Reply
        • No Name Guy January 18, 2012, 9:44 am

          You’re getting shafted, BIG TIME, or you’re in a high cost state.

          In Washington, my home owners insurance is on the order of 1/2 of what you are paying, for a smaller deductible. Yes, my replacement value is less, but not 1/2 yours.

          Shop around.

          Reply
      • John January 17, 2012, 7:36 pm

        For cell phone, try this….get an iPod, if you don’t have one already…get the free talkatone app, and wherever you have wifi (libraries, cafes, schools, stores, etc) you have free phone with google voice (also free). I talked to a friend in Mexico for 30 minutes the other day….and it was free!!

        Reply
    • abitha January 18, 2012, 8:32 am

      I’m pretty jealous of that insurance cost, too! I think car insurance especially is more expensive in the UK than in the US. My car insurance alone came to more than your combined house&car insurance!

      My car insurance was £588 ($905) for the year (and this was after shopping around and haggling). It’s hard to see how I can get this any lower at the moment, as I drive a small car (Toyota Yaris) and only drive about 5000 miles/year. The only way it’ll come down is by me getting older (I’m currently 27) and having more years of no-claims bonus!

      And my house insurance this year was £286 ($440). This is no-frills basic buildings insurance with a high excess and no contents cover, and my house is pretty small (2 bedrooms, 50 square metres of floor space).

      This isn’t meant to be a complainypants comment (my New Year’s Resolution is to spend less than £10000 ($15000) in 2012, and I thoroughly agree with most of what you write on here), I just wish I could get insurance that cheap in the UK!

      Reply
      • abitha January 18, 2012, 8:44 am

        Also, don’t you have to pay any car tax or get an MOT in the US?

        (MOT = ministry of transport test. Any car older than 3 years in the UK has to be checked yearly by an authorised garage to check it’s still in good working order. This isn’t the same as annual servicing – you can do all your own maintenance etc, but it still has to be checked yearly by a professional, which costs about £55 ($85). And car tax varies by size of vehicle and CO2 emissions, but mine is still £115 ($177)).

        Reply
        • Kathy P. January 18, 2012, 4:45 pm

          This sounds like what we call an annual safety inspection. On the yearly anniversary of the car purchase everybody has to get their car inspected. Pretty basic: light, brakes, wipers, check some emissions codes in the computer, and a few more things. Here in NY it cost $10 for years but garages complained and a few years ago they increased it to $20, at least for a passenger car. Trucks may be more, I don’t know. Other states probably have their own rules on this.

          Reply
  • Anaya January 17, 2012, 10:24 am

    wow nice work! my husband and i are doing crossfit in the front range and thought we went to the most affordable gym, but we are definitely paying more than your wife! what’s her money saving secret for that one?

    Reply
    • Mrs. Money Mustache January 17, 2012, 10:51 am

      Hi Anaya! I think we go to the same gym… I recognize your name. ;) How weird is that??!! Real world is colliding with blog world.

      I was paying $135/mo for 3 days per week and just switched to $120/mo for 2 days a week. Plus, since we go on so many vacations, I suspend my membership during that time to save money. I didn’t pay for January and for 2 months over the summer in 2011, for example.

      Reply
      • Anaya January 17, 2012, 11:04 am

        ah, that makes more sense. crossfit is pricey but so worth it! i didnt know you could suspend your membership, we’ll have to do that next time!
        see you at the gym!

        Reply
        • Mrs. Money Mustache January 17, 2012, 11:09 am

          Definitely worth it. Yeah, you can suspend your membership if it’s for 1 month or longer…

          Reply
  • rjack January 17, 2012, 10:26 am

    “Food costs went up voluntarily as well, as the Mrs. switched to a gluten-free diet (and I partially followed her lead) leading to more eggs, vegetables, and meats.”

    You are most of the way to a Paleo Diet/Lifestyle. You may want to go further by doing things like buying grassfed beef. There is a big difference between industrial and grassfed beef.

    Reply
    • Doug G January 17, 2012, 10:37 am

      We just picked up our 1st 1/4 of a grass-fed cow this weekend and i cannot agree more. It is fabulous and has a taste that needs to be experienced.

      Keep up the good work with the blog.

      Reply
      • jump January 17, 2012, 10:48 am

        +1

        We’ve been buying local beef for about 6 years now and there is no comparison. We’ll pick up either a 1/4 or 1/2 in the Spring and it’ll last all year. This cuts down our trips to the grocery store as well.

        Reply
        • MacGyverIt January 17, 2012, 6:22 pm

          How much (.25, .5) can be stored in a standard freezer (top of the fridge-type) and what advice can you offer on storage, how long does it last you/how is it wrapped to last as long as possible?

          I found a place nearby that sells grass fed beef but not sure how much I can store vs biding my time with sales at the local grocery (BOGO steaks, turkey burgers, etc.). I can’t do the high carb foods (rice, bread, potatoes) so meat, veggies and low carb protein bars are best. Very doable when purchasing sales items but I’m sure grass fed beef is the healthier/greener (pardon the pun…) way to go.

          Reply
          • rjack January 18, 2012, 6:00 am

            1/4 of a Cow took about 5 cubic feet a freezer space for me.

            Reply
            • Doug G January 18, 2012, 9:07 am

              5-6 cubic feet total. Cost per pound in Arizona was $7 and included the standard cuts, steaks, etc.

              Reply
              • MacGyverIt January 18, 2012, 4:29 pm

                Thanks to you both!

          • jump January 18, 2012, 8:32 am

            I don’t remember the size of our freezer. We originally bought a small chest style, but I hated it because you have to mess up the organization to find what you want. So after a few years, we sold that to a friend and bought a small, used stand-up style freezer with shelves.

            The processor that we use shrink-wraps everything, so it lasts much, much longer. We have hamburger packaged in 1lb and steaks cut to 3/4. We go through spurts on eating meat vs other types of dishes so it easily lasts us 12+ months and we’ll probably buy a bit less this Spring as we still have a decent amount left in our stash :)

            One other note, we calculate the actual cost per pound every year and it is actually cheaper than buying from the local big box store.

            Reply
    • Mrs. Money Mustache January 17, 2012, 10:58 am

      Yes, agreed. As a crossfitter, I’m well aware of the paleo diet and try to eat paleo as much as I can, but I still drink a latte in the morning and I find it hard to cut out beans and rice. I mostly just follow my body and what it tells me, which I’m much more aware of now that I don’t eat gluten.

      We do try to buy grassfed beef and all that good stuff, but we’re limited by the fact that we don’t have a freezer to buy huge amounts at once. We used to eat very little meat, so it’s been a bit of a transition. Buying a 1/4 grass-fed cow seems a bit daunting right now since we don’t eat much beef. But, I agree that it is a great idea!

      Reply
  • rjack January 17, 2012, 10:36 am

    MMM – Where is your expense for high-speed internet access?

    Reply
    • Bella January 17, 2012, 11:39 am

      I like the transparency, in general I’m impressed (I’ll be honest – I would rather work a day job than have to keep to a restaurant budget of $50 a month!) – although I’m finding it a little difficult to get past the utilities – we pay significantly more than that (like 6times) in a similar area of the country. I’m wondering what you do to get it so low – I imagine that you have no grass to water to start with, but still. Also, there is no mention of internet services. I also think that listing your phone expenses at $10 a month is a little disengenuous. I have a suspicion that some or all of these expenses (you’re cell phone coverage for $10 a month isn’t available without tagging onto someone else’s $70+ plan) are hidden by your personal business. I guess we’re supposed to assume that those ‘hidden’ expenses that are deductable against business income are negligable – but I think it would interesting information to have as well. Maybe you feel that muddies the message but I think it would add a little more credibility.

      Reply
      • MMM January 17, 2012, 12:38 pm

        Haha.. note that I don’t have an actual budget for restaurants or anything else. We spend whatever we want due to a surplus of retirement income, and this is just what it happens to add up to.

        Cell phone: If I didn’t get the family plan discount from the wife, I’d either use a prepaid plan or find another trick to keep it under $20/month. My town has wireless internet available for $25/month as one option, or I could share a landline cable connection with a friend as well using long-range antennas if needed. I will admit that I am a retired software engineer, so complicated high-tech ways to save money on phones and internet access might be more readily available to me than to some others.

        I do recommend small business ownership to all retired people, as a way of allowing your phone and internet expenses as well as some of your travel to be tax-deductible. And it’s not at all dishonest, either: carpentry and computer work both bring in income. I’d say virtually 100% of my phone calls and internet use are related in some way to carpentry or Mustachianism, since that’s my whole life when I’m away from my day job as a Dad :-)

        Reply
      • Bakari January 17, 2012, 1:10 pm

        My high speed DSL is $15 a month (not introductory) and as soon as my contract is up I will be switching to the $12 a month PagePlus cellular plan.

        So even if MMM is cheating a little on his numbers, they aren’t at all unrealistic

        Reply
  • Heidi January 17, 2012, 10:41 am

    I’m confused. Why does Crossfit cost money?

    Reply
    • Mrs. Money Mustache January 17, 2012, 11:01 am

      I go to a crossfit gym and pay to go there. You can also do crossfit in your home/garage with the right equipment. It doesn’t need to cost money, but I love my gym and the sense of community there. It’s worth it for me, but only because we have the money to go. If we were in debt, it would be the first thing to cut!

      Reply
      • Heidi January 18, 2012, 7:39 am

        I see. My husband just began crossfit in the garage and I know he would avoid that gym community. But, I like getting together with others from time to time so I pay for Zumba and skip every other session to keep balance.
        Since that is a major expense in your budget and you are scaling back on your other work, have you considered doing work for the gym to lower that cost?

        Reply
  • Marcia @Frugal Healthy Simple January 17, 2012, 11:54 am

    I really enjoyed this post, for several reasons.

    Often when I read your blog, I feel somewhat guilty about my gym membership (which is about the same as your Crossfit gym membership). I know I live in the land of milk and honey (So. Cal) – and can walk, run, and bike outdoors almost year round. I enjoy all of this.

    But. I’m a joiner. And I like variety. So while I enjoy being outdoors, there is something about swimming laps in a pool, or taking a spin or weight-training or yoga class. That sense of “community” and group fitness…can’t help it, I’ve loved it since college. So, going on 24 years now. Plus we’re at the Y and it means my son is learning to swim too, and we take him to the pool 2x a week.

    I also liked seeing your grocery bill. We eat a lot of local and organic, and our annual bill (for two adults and a kindergartener/boy) has been around $4800 – 5200 for awhile now. I know I could go lower if I had to by eliminating the organics (and especially the free range meat and eggs), but I don’t have to and really don’t want to.

    Now that clothing expense…that just cracked me up, with the “exactly one pair of non-ripped pants”. Because that’s when my husband decides it’s time to shop – when he only has one non-ripped pair of pants.

    Reply
  • pachipres January 17, 2012, 12:15 pm

    H MMM,

    Thanks for posting. I love looking at other people’s expenses and comparing.

    My goal for 2012 is to lower our expenses(four and a half(support my 23 year old with some food/expenses) children, two adults and a large dog) to 4K per month Canadian or $48K per year- this includes setting aside 200/month for a future car replacement and $500 per month for a cabin mortgage-have land but may want to rebuild. We will see if I can do this or not. Food is expensive here as we too try to buy organic as much as possible.

    Reply
  • Andria January 17, 2012, 12:27 pm

    I wanted to say thank you for posting all of this. It has made me change my lifestyle dramatically. I also started reading Your Money or Your Life. My husband and I are going through all of the steps now and we have stopped paying for cable after your last post. We bought an antena and watch free TV when we can. I am looking forward to getting the house paid off faster now!!!! THANKS AGAIN My life wil never be the same in a GOOD WAY. :)

    Reply
  • The Fleetwood Project January 17, 2012, 12:34 pm

    Loved the post, MMM. I am an aspiring young mustachian and have. Even enjoying your posts for the last four months or so. A few things jumped out at me in the post.

    1. Mint is fantastic for budgets and rundowns like this. Kudos for introducing me to it!

    2. I cannot believe that preschool tuition was as much as it was. I go to a state university, and our in state tuition costs are close to that figure. If it is available, I went to preschool at the nearest high school, where they had a working with young children class. This basically amounted to a half day of free day care, plus a good selection of baby sitters.

    3. I really like the idea of buying better food. I feel that the cost to benefit ratio here really makes the extra money spent worth it. In the end, it really isn’t a huge increase in cost when compared to other luxuries.

    Keep the articles coming! It would be really neat to maybe in the future see an article geared towards those of us who are young and just starting out, however few of is there may be. It seems that par for the course is to need an enormous house and multiple thirty thousand dollar car loan.

    Reply
    • MMM January 17, 2012, 12:42 pm

      Thanks Fleetwood.. You’d be surprised at how many young people are here just starting out. I’ve met with a few groups of Mustachians during various trips and in my home town now, and most of them make me feel OLD! I do have some ideas for a future article on that subject. Meanwhile, have you read this guest posting I did long ago for Frugal Dad? http://frugaldad.com/2011/07/01/first-retire-then-have-kids/

      Reply
      • Marcia @Frugal Healthy Simple January 17, 2012, 2:08 pm

        That was a great trip down memory lane.

        Reply
      • The Fleetwood Project January 17, 2012, 4:07 pm

        I did not see that article, exactly what I had in mind! I have been fortunate enough to live in a state that pays for all of my tuition (New Mexico), even though I wasn’t the greatest student in high school. It is really too bad to see my peers and their families struggle under the weight of student loans (which, if I remember correctly, recently surpassed credit card debt in amount owned by Americans).

        What was you and your wife’s story regarding education? That would be another good read.

        Going back to being in a state that pays for education: after a year of hard work my freshman year, I now get a check for about $1000 each semester from the school. Couple that with working in a lab on campus, and I am in a decent situation. Too bad most of that money goes to my ultra un-mustachian apartment. Oh well, lease is up in may!

        Thanks for the reply

        -Fleetwood

        Reply
      • JaneMD January 22, 2012, 7:05 am

        While it worked for you, that generally isn’t practical many professionals, particularly women. The older you get, the harder it is to have kids. 35 years old for many women is the zero barrier. Fertility treatments easily cost 20k to 30k or more depending on your age.

        Reply
        • JaneMD January 22, 2012, 7:09 am

          I know that was extensively discussed on that post, so I just wanted to bring that up again.

          Reply
  • The Money Monk January 17, 2012, 1:43 pm

    Awesome, Thanks for posting this MMM!

    The fact that you guys are able to have and do so much cool stuff makes you wonder just how the hell people can spend so much money!

    I am down to $15,500 yearly spending, and I have an even more expensive crossfit habit.

    Reply
  • Naomi January 17, 2012, 1:57 pm

    $149 for restaurants for an entire year? $149? $149. Holy smokes, we have some work to do.

    Reply
    • MMM January 17, 2012, 2:29 pm

      Yeah – as I said, it would be higher if I didn’t live with a non-gluten-eater and a non-anything-other-than-stuff-mom-and-dad-make eater. Probably $600/year as an upper limit – one $50 night out per month.

      On the other hand, for people with really serious debts like credit cards, couches and cars, I would indeed recommend a restaurant budget even lower than this: $0 until the situation is stabilized ;-)

      Reply
      • Teri November 15, 2012, 12:07 pm

        “On the other hand, for people with really serious debts like credit cards, couches and cars, I would indeed recommend a restaurant budget even lower than this: $0 until the situation is stabilized ;-)”

        Okay, I just started reading your blog and have been catching up on older posts and I feel like you are speaking directly to me. My only three debts are a credit card, couch (and recliner) and a car…and I still go out to eat at least twice a week. I had not really considered it all that serious until finding your blog. I’ve cut back quite a bit in the past three months and am planning to move to a smaller apartment when my lease is up in March. In fact, I’m trying to find one within walking distance to work so maybe I’ll be able to get rid of the car at that time too.

        Your blog is really inspiring and while I don’t think I’ll ever quite reach your mustachian levels…I’d like to at least try. Thanks!

        Reply
  • John January 17, 2012, 5:54 pm

    OK MMM…my newest, most interesting tightwad bon vivant…I compared your annual spending to my (outrageous compared to yours) annual spending, and I note some large items for me that don’t even show up on yours. Answer if you will…what about gifts given to other people. This is a large expense for me, $3,700. Lawn care/gardening and pest control also show up on my list but not on yours. I spend 10 times the amount you do on beer and wine..hehe. And finally house cleaning (wife insists on a maid) and pet/veterinary bills are necessary for Tom the cat. How do you handle all those items maestro?

    Reply
    • John January 17, 2012, 7:38 pm

      OK, I see gifts in your annual spending now. Guess I just need to cut some people off the teet.

      Reply
    • MMM January 17, 2012, 9:20 pm

      You’ll have to read around the blog a bit, John. Lawncare? How does it cost anything to push a manual mower around on your lawn? A maid? Sorry, this is not allowed.. the idea is ridiculous. And $3700 in gifts? Unless these gifts are water pumps for African villagers or school assistance for kids, I’d say you are being Far too generous! And as for pets – I already have my son who is much cuter than a cat.. No need to drain resources from him to maintain non-edible domestic animals as well! ;-)

      Reply
      • Jimbo January 18, 2012, 2:47 pm

        speaking of non-edible domestic animals…

        When are you going to start raising free-range chickens in your yard?

        All you need is a shed, an infrared light for winter, some wood chippings, and you get free organic eggs in the morning.

        It’s the only ‘get rich with…’ that I expected you to post and that you haven’t…

        Oh, and for the complainypants, they are not noisy (no roosters allowed!) or smelly… And they make great fertilizer for the garden. Yes, you need to change those wood chippings every once in a while.

        Reply
        • MMM January 18, 2012, 3:48 pm

          This is a great idea! Two of my sisters and several friends have already done this, my city bylaws allow it, I already have two sheds, and I love eggs. Let’s see what the mrs. says.

          Reply
          • Erik Y January 21, 2012, 10:26 am

            We got four chickens and two ducks last spring and have more eggs than we can handle at times (our family is me, my wife and six kids). The eggs are soooo good. Chickens are pretty easy to maintain. The ducks are loud and messy, but their eggs are big and delicious and they lay as much as the chickens. I built our coop out of some lumber I had from a shed I tore down. Another side benefit from the chickens is pest control and lawn maintenance. They eat the bugs and trim the grass nicely.

            Reply
        • James January 18, 2012, 4:03 pm

          We don’t like buying eggs from the grocery store, but instead of getting our own chickens we get our eggs from a friend at work. We pay them $1.50 a dozen for beautiful brown eggs, and don’t have to build a coop, buy feed, etc. But if that weren’t an option we would have to get chickens, going back to store eggs with their pale yokes just isn’t an option.

          Reply
    • Dancedancekj January 17, 2012, 10:09 pm

      Why not setup the lawn and garden to be as low maintenance as possible? Invest in a slower growing lawn that requires less upkeep, like a buffalograss lawn (which works fabulously where I live, may be different in your area). The initial investment is spendier than a fescue or bluegrass lawn, but the payoff is much greater since you don’t have to mow it as often and you don’t have to water it. Shrink your lawn and add some non-fussy perennials with mulch to decrease the expanse you have to mow as well.
      If you have a garden and you don’t like to garden, then either get rid of it, or set it up in a way to make it as low maintenance as possible as well! A combination of sedums, catmints, daylilies, and evergreen shrubs are what I have in my garden, and they require very little maintenance, but look fantastic when massed together (i.e. 50x individual plants). They don’t need irrigation, only need to be cut back once or twice a year, and grow thickly as to deter weeding. The only gardener is myself and I do it for free – nothing quite like going outside to walk in the garden during a summer evening, picking a few stray weeds here and there.
      A lawn and gardening doesn’t have to be expensive, or even extremely labor intensive. I find it just needs a bit of planning to make it Mustachian…

      Reply
      • John January 19, 2012, 3:15 am

        That’s a great idea to cut back on yard maintenance. I do have a somewhat slower growing variety of zoyzia and have dug up a three 4×6 plots to grow food in the front yard and have a food vegetable and herb garden in the back yard. The motto for my yard now is “Mow less, eat more.” My wife is a little more into appearances and not yet sold on growing crops in the front yard, but I am working on that.

        Reply
  • Teresa January 17, 2012, 6:01 pm

    Awesome! I have been waiting for this post. I went through our budget line-by-line and compared our 2011 numbers to your first post with 2010 numbers. We have been whacking expenses left and right using a side-by-side comparison to your expenditures. Now, it will be so exciting to compare our 2011 expenses to the 2011 MMM expenditures.

    BTW, you were kind enough to reply via e-mail regarding your utility costs (when the blog was a little younger) and we have cut our electricity by 400kwh per month and hope to cut further. We did this by putting a water heater timer on our water heater and we air dry most of our clothes inside (which is really helpful living in the frigid northeast in the winter – yea! free humidity!). Also, we only have lights on in the rooms we are in – what a novel idea (sometimes the most obvious money saving ideas escape me).

    Also, we have cut our gasoline expenditure from $280 per month to $130 since I started reading this blog.

    Can barely wait to start the nerdy spreadsheet number-crunching craziness…

    Thanks MMM family!

    Reply
    • MacGyverIt January 17, 2012, 6:25 pm

      “Can barely wait to start the nerdy spreadsheet number-crunching craziness…”

      LOL! I have three – strike that – FOUR speadsheets open and just updated mint.com…. it’s a healthy (and free!!) obsession :-D

      Reply
      • Teresa January 18, 2012, 1:11 pm

        Ha! Love that. The more spreadsheets the merrier. Would love to hear more on what you do with four spreadsheets and mint. I feel unsophisticated with two workbooks and PearBudget!

        Reply
  • jlcollinsnh January 17, 2012, 6:29 pm

    “So our lifestyle still has quite a toasty jacket of decadent fat around it,”

    this wonderful phrase sums up the too often neglected advantage of living a fiscally responsible life: You wind up wealthy and able to easily afford what is of importance to you.

    I once dated a girl who was deeply in credit card debt. She had come from a very poor family and was now making an excellent salary.

    As we went thru her expenses with each item she’d say:

    “I make X dollars a year, I can afford a new car.”
    “I make X dollars a year, I can afford a new wardrobe.”
    “I make X dollars a year, I can afford this luxury apartment.”

    and on.

    Finally I said, “You’re absolutely right. You can afford the car. The apartment. The clothes. The trips. You just can’t afford them all.”

    To her great credit, she got it and adjusted. Now she can afford whatever she chooses.

    Reply
  • Pissed at self January 17, 2012, 7:22 pm

    Wow, my high-spending lifestyle pisses me off after reading this. I make so much money, that then flies away in hundreds of expenses. Ugh. Time for changes – paying off car, shopping for insurance, eating less processed food, trimming utility bills. My fixed and variable costs each month make me realize I’d have to have zillions earning 8% a year (in my favorite MLPs) to survive. Time to step up the wife and my game….

    Reply
  • C40 January 17, 2012, 7:42 pm

    As someone who’s still working and building up capital to retire on, I’m wondering about health insurance. Does your healthcare total include it? Do you get insurance trough Mrs’ work?

    Reply
  • nd January 17, 2012, 7:58 pm

    Thanks for the update!

    One small quibble: If you’re comparing with the poverty level (or the expenses of anyone else, for that matter), you absolutely CANNOT subtract mortgage expenses. You need to add back in a reasonable amount (even if you’re not paying now.) If you’re trying to figure out your necessary cash flows going forward, it’s fine, but not if you’re comparing with others. You simply took all your future housing expenditures and paid them in one lump sum (discounted for time value of money), so that you’re currently living off your past payments.

    Think about it this way: what if I took all my future housing, food, medical, entertainment and travel expenses and paid $1.2 million today in one lump sum, then bragged to everyone that I was living off of $0 a year? People would say I’m fudging. And they’d be right.

    Reply
    • MacGyverIt January 17, 2012, 8:21 pm

      Actually, I wouldn’t say you were fudging. I’d say you paid (past tense) off major expenses so now your (present tense) current, real time, up to date, fiscal year 2011 outgoing expenses was $0. I’d say you made some solid, smart decisions in the past and that outcome is your present $0 outgoing; it’s the pay off of years of hard work and discipline.

      Reply
    • MMM January 17, 2012, 9:01 pm

      True, and I don’t mean to play with the sensitive subject of poverty, eleven in the US. But you might note that my property taxes, insurance, and utilities add up to enough to rent a room or basement apartment, which would probably be my first living arrangement if I were starting from scratch on a poverty-level income right now. So my housing is far from free, even while it is paid off.

      Reply
    • Heidi January 18, 2012, 7:19 am

      Well, good decisions are ones that continue to pay off. For example, on a smaller scale, shopping around for a pair of shoes that will support your body and last several years means that your shoe budget will be smaller in the following years.
      That’s not fudging.
      The details of how much money was spent by the Money Mustache’s is pretty clear and don’t change based on how or when the money was earned.

      Reply
      • Emmers February 24, 2012, 9:25 am

        Your shoe budget *and* your health budget will be less, I should add. Shoes (and other things, like mattresses) can affect your health indirectly.

        Reply
  • Brian January 17, 2012, 9:08 pm

    Kudos on opening up your books like this. I’m currently working on a Net Worth update from 2011, and this year I’m starting to feel a little self conscious. I’m not sure why, as we’re still not talking about a serious amount of money, but it’s very personal information. However, I think more people openly talk about the actual amount of money, so thanks.

    Reply
  • Melanie Rabie January 18, 2012, 1:06 am

    Thanks a lot for this! This is very helpful.
    Greetings from Cape Town!

    Melanie & Family

    Reply
  • Melanie Rabie January 18, 2012, 1:11 am

    Hahaha, I like that – non-edible domestic animals! Hahaha :o) (looking at my pets right now)

    Reply
  • frugalscot January 18, 2012, 3:31 am

    Regarding expenses in Europe, I’m sure this can be done. I’ve never been disciplined enough to maintain long term records of my spending. This is one of my resolutions for this year having discovered ERE (and hence MMM) 2 days before Jacob unretired.

    Back to my point, I started estimating my annual spending last evening. I’m sure I’ve forgotten some categories and underestimated others, but the total was approximately £6000 pa. This is my own spending – so for us as a couple it would be closer to £12,000 pa.

    I live with my partner and we want for nothing, and spend excessively on many things. For example, we own 3 cars (2 person household).

    My philosophy has never been to budget, but to instead determine if I really want something, if it is good value and if it close to the best price it can be obtained (legally) for. If it really meets all those criteria then I buy it.

    Likewise, I don’t consciously save, instead just transferring what ever is left into a savings account periodically.

    I’m trying to not get too excited by how near retirement could be (even on my very low income) until I have better established our spending. However, even if I’m out by 50%, retirement from the 9 to 5 is tantalising close.

    Despite never really planning for retirement, since the age of 35 I had built up enough cash savings that I could quit the job I was begining to hate. This was because I had over 2 years net salary in the bank and had no pressure to find work immediately. I now do something where my renumeration is less than 50% of what I earned a decade ago, but that gives me more satisfaction.

    Reply
    • frugalscot January 18, 2012, 4:22 am

      I should have pointed out that I live in Scotland, UK – the land of rain and yet more rain.

      Reply
  • Nd January 18, 2012, 9:25 am

    It’s fine for calculating your own personal cash flows as I said, but when you’re comparing with other people to see who’s more frugal I still say you need an apples-to-apples comparison. I could inherit $10 million, prepay for a lavish lifestyle of caviar and new cars every other year, and claim I was living off of $0 a year, then go to someone living below the poverty level and say, “I don’t know what the big deal is, I’m living off $0. Why can’t you?”

    I don’t at all want to diminish what MMM has done. He’s gotten to this point by making wise, frugal choices. I’m just saying that if you want to compare your cost of living with someone else, you can’t leave out things that you’re currently consuming simply because you already paid for them.

    Reply
    • James January 18, 2012, 9:47 am

      “thirty grand plus a paid-off house is more than enough to raise a family.”

      You can’t get more clear than that.

      If you want to compare yourself to MMM then simply make the adjustment to your own situation to make it “apples-to-apples”.

      Reply
  • Gipsy queen January 18, 2012, 9:41 am

    Have I spotted a leak in your philosophy?
    (Probably not, but this still needs an explanation:)
    If most of your “non-perishables” come either as “hand-me-down” from friends or bought used at Craigslist, somebody, at some time, must have bought it new. So either your friends are very “non ‘stashians” (why?), or this lifestyle is only sustainable as a minority.
    I probably missed something. When do YOU buy something new?

    Reply
    • James January 18, 2012, 9:54 am

      Reminds me of one of my favorite comments, “that’s not a bug, it’s a feature.” The “leak” you mention is actually a faucet pouring money into the Mustachonian’s stash.

      If we cease to become a minority then we will celebrate the situation as MMM adapts his advice to the new circumstances. But I don’t see that happening real soon.

      Reply
      • James January 18, 2012, 10:06 am

        Forgot to add that “When do YOU buy something new?” is a good question I’ve had myself.

        Reply
        • Jimbo January 18, 2012, 10:22 am

          Go read the article “Get Rich with…. Craigslist”…

          MMM explains the buying process of things in the mustachian way…

          Reply
      • MMM January 18, 2012, 10:26 am

        Yeah, I’d say the situation is fairly sustainable either way:
        Right now, there is a huge irrational preference for new items, which leads to lots of turnover, and plenty of it ending up in the landfills while still new.

        If the majority of people became Mustachians, the preference would shift to USED over new, due to lower cost. This would drive up the cost of used goods until they were a reasonably high percentage of the cost of new ones. At this point, even rational people would start deciding occasionally that a new product was better for their needs, creating a new equilibrium. The new generation of Mustachians would also prioritize quality and longevity when buying new items, since the goal would always be many years or even a lifetime of service. But when they grew out of the products, they could still sell them for a good percentage of the new cost. (Note that this situation already exists with houses).

        The net result would be an increase in the cost of used products, and a large increase in their lifespan, combined with a huge decrease in the number of things that get thrown out. It might raise my overall cost of living slightly since nobody would sell me a 26 cubic foot stainless steel fridge for $400 any more, but overall it would still be a big win for all of us, because the real wealth of our society is measured by the health of our planet.

        And given the fact that durable manufactured items are such a small part of our lifestyle costs, even increasing them a fairly large percentage would barely affect the cost of living anyway.

        Reply
        • Gerard January 18, 2012, 6:18 pm

          …and presumably any great increase in societal Mustachianism would be in multiple areas, mostly to our benefit. A reliance on used items would create more (self-) employment for people who can fix and recondition things, and encourage more manufacturers to make durable shit. More cycle commuting would lead to more, safer, better-maintained bike paths (and probably lower bike costs). More people eating “real” food would improve the price and availability of things like grains and dried stuff. The change I’d most like to see would come when developers realized people will pay for well-built but very small houses and apartments (and I don’t mean Tumbleweed homes).

          Reply
          • Gipsy queen January 19, 2012, 3:40 am

            I actually like that thought – a healthier equilibrium. Also good news for my shoemaker and my seamstress, who keep laughing at me when I think they charge too little (about 10% of the item price when it was new, to restore it to “nearly new” state).

            Reply
  • anne January 18, 2012, 12:09 pm

    As many others have said, thanks for posting this. I enjoy the frankness of your blog!

    And forgive me if you’ve already answered this…but does healthcare include health insurance? Or do you get health insurance from Mrs. MMM’s job?

    We’re self employed. And self-paid health insurance with high deductibles for my healthy family of four costs us 1/4 of your total annual spending! Whew….that’s difficult to type, but true and doesn’t even include the self-paid dental costs for all of us.

    Reply
    • MacGyverIt January 18, 2012, 4:41 pm

      Anne, would a health spending account cover your dental needs? At least that is pre-tax and invested monies that could then go towards your dental/deductible. Vanguard has some good HSA/investment options.

      Reply
  • Monique Rio January 18, 2012, 12:47 pm

    Any chance you could post what your actual utilities usage was for 2011? Water alone for us was $600 and no, we do not water our lawn. I’d be curious to see how many gallons and kilowatts you used so we could have something to shoot for.

    Reply
    • MMM January 18, 2012, 1:36 pm

      Sure – as a quick answer: on average about 260 kWh of electricity per month, 2400 gallons of water, and natural gas ranging from 110 therms in the coldest month of January, to 5 therms in the non-heating months. Heating season is roughly November through March at an average of 60 therms/month. Adding this up, the gas, electric and water should really be well under $800 per year, but the fixed monthly fees and trash collection make up the rest of the bill.

      Reply
  • Jeff January 18, 2012, 1:40 pm

    That’s fantastic! My only qualm is that I would not call vacations a luxury. Vacationing is the reason I want to retire! Tim Ferriss is great!

    Reply
  • PF January 18, 2012, 4:25 pm

    Car inspections in the USA vary state by state. I live in Pennsylvania which requires yearly safety and emissions testing. The safety inspection portion is terrible as all of the requirements were created with mechanics association and trade group input and include many things that do not really make the car any less safe. In Pennsylvania we also have yearly automobile registration fees that are around $35.

    On the other hand some states in the USA do not require inspections at all but the police in those states can write citations requiring people to fix unsafe equipment.

    Reply
  • M.S. January 20, 2012, 7:00 pm

    One thing that I noticed right away that was not on here is business insurance,? contractor liability, inland marine(tool insurance)?, or other related business expenses? registered agent fee? contractor registration, licence?….
    And no tool purchase’s last year?
    I’ve been in business for 6 years and still spend a few grand on tools every year.

    Reply
    • MMM January 20, 2012, 9:45 pm

      I don’t put costs related to my carpentry business on here, because they are costs of working, not costs of living. Just like how an office worker would not put commuting costs or dry cleaning in his retirement spending estimate. The work pays for itself and provides profit above these costs, which I get to keep. If I stop working, the costs stop too.

      That’s interesting that your tool costs are so high! I probably spend an average of $200/year on new tools (not counting nails and other supplies), and my entire tool collection is worth maybe $5k. I have good stuff and I have everything, so I rarely need to add more or replace anything.

      Reply
      • M.S. January 20, 2012, 10:32 pm

        Yes I agree on the carpentry, side but what about the rental income/business side?
        I guess that would depend on the business structure you have set up with your rentals.
        Depending on that- untill you sell the rental housing and disolve the business, you would still have the business expenses and always would due to the rental income?

        Reply
        • M.S. January 23, 2012, 8:47 pm

          That got me thinking…
          I would like to know more about how you set up the business side of things with your rentals. And I’m sure many readers would to.
          Post idea!

          - As I grow the business and get bigger jobs the tools and equipment grows also. My siding brake and accessories I bought last year was around 2,400 alone. … And the dump truck, etc……
          The more carpentry work you do you’ll just want/need better/bigger equipment. Cabinet saw, stationary planer, jointer, rounter/table, drill press, etc., etc………

          Reply
  • Mortgage Free Mike January 21, 2012, 8:06 am

    I think the most shocking is your low restaurant spending! I wish I could get mine down that low.
    You and Mrs. MMM must be great cooks…

    Reply
  • SimpleIslandLiving January 22, 2012, 8:34 pm

    This is amazing to me. Here in Hawaii a half gallon of organic milk for our toddler costs $4.99 on a great sale. I try to keep my groceries to $500 per month! Super awesome to not eat out so much too…that’s hard for us too. How do you spend so little on health insurance? It costs $1200 to cover a family of 3 here.

    Reply
  • Bakari January 23, 2012, 12:44 pm

    Just stumbled across this:
    http://motherjones.com/environment/2012/01/calculator-food-spending-budget-frugal

    Which compares your spending to the national average, and average for your age, income, and location.

    Thought MMM and his readers might enjoy it

    Reply
  • lifeoverwork January 25, 2012, 5:21 am

    Really impressive! I definitely don’t have the restaurant spending down anywhere close to yours, but my overall spending is around the same (albeit only for one person!)

    It’s always nice to read that I’m not the only one that thinks you can live quite comfortably on this amount.

    Reply
  • Jungle January 30, 2012, 6:05 pm

    Last year we spent $20,225. Two people living in Toronto. This includes maintenance/condo fees, one vehicle, transit pass. VIP Cable TV, internet, phone.

    Our strengths in savings game from grocery, which we both ate at around $8/day.

    Our worst spending IMO was $1000 in gifts. (includes Christmas and birthdays)

    It does not include mortgage interest.

    My Question for MMM, I did not see any spending for gifts, do you include that somewhere in your spending?

    Reply
  • The Money Monk February 3, 2012, 5:59 am

    hey MMM,

    You have talked about ‘insourcing’ often, so what is your justification for outsourcing something as important as your kid’s education, instead of homeschooling? Public school is garbage.

    Is it simply because it’s ‘free’ ?

    Reply
    • Jimbo February 3, 2012, 6:40 am

      In what universe is public school garbage?

      And in which part of homeschooling can you teach socialization and social skills development?

      Reply
      • MMM February 3, 2012, 7:48 am

        Wow, looks like the normally quite rational-sounding Money Monk has a wild streak in him when it comes to schooling!

        First of all, I should note that school is only a little slice of my son’s education. I am with that guy every second he can benefit from my presence, whether it is day or night. That’s why I retired in the first place, so I could stay at home with him while he is young. And when he and I are hanging out together, we are learning like mad scientists.

        Secondly, I LOVE public school. I went to one, my wife and all of our families did, and so did all of our friends, both Canadian and American. All of us are prosperous and happy, and glad about how our educations went.

        My son’s new public school, while only recently coming off the local district’s “needs improvement” list, is fantastic – WAY better than my own elementary school was run back in the 1970s/80s. The kids are adorable, the teachers and the (new) principal are articulate and energetic. Hell, everyone is even good-looking! Visiting that place is like walking into a movie set about small-city prosperity.

        And I’m not taking this for granted – my wife and I volunteer there for several hours, several times per month, and we donated a large chunk of cash to the school early in the year because we were pleased with the Parent-teacher organization’s budget and what they spent money on. I figured even though it is publicly funded at a minimal level, we will help both ourselves and the less wealthy families who use this school by giving it a bit more funding.

        Supporting a kickass PUBLIC school system – from preschool right up through university and even Post-doctoral researchers – that is accessible to all citizens is the best thing you can do for your country.

        The key to understanding this is not just thinking about your own family’s immediate comfort – you think about multiple generations born after you and imagine the positive changes that will take place in the future society.

        Thinking about the country (and the planet) as a whole, rather than yourself, is how you make decisions on what is best, and THAT’S how you vote when the election comes.

        Reply
        • jlcollinsnh February 3, 2012, 8:19 am

          we had the same experience with our daughter’s public education. It was far better than my own schooling back in the day.

          Her teachers were smart, dedicated and committed to the kids.

          Granted, we sought out this community and its superior school system. But having the option to do so is one of the many benefits of having your money structered serve you.

          Reply
        • The Money Monk February 4, 2012, 3:22 pm

          hey thanks for the reply. I wasn’t trying to be ‘wild’ or accusory, it just seemed to me that the only reason an intelligent person would put their kids under someone else’s care and tutelage for 6-8 hours a day is because they had to. They didn’t have the time because of work, etc.

          This fits with the whole insourcing/outsourcing theme you have wrote about a lot before.

          I get that your school is good, but there is no way a public school up (at least up through middle school) can offer a better education than an intelligent parent can deliver in one on one teaching tailored to your child’s unique abilities, learning styles, and interests.

          You also just get to be a bigger presence in the life of your child during their most formative years.

          Jimbo’s comment about inferring a lack of social development for home schoolers is simply bogus. You don’t have to sit in a room full of kids for 8 hours a day to learn how to socialize. Homeschooling isn’t just sitting in a basement reading scripture by candle light. They will likely get more legitimate social interactions hanging out with you for a day while you go about your business. The kids can still participate in the school’s sports teams, etc.

          As for your building the school for future generations argument, you can still do that. you can still donate or volunteer and “support” the kickass school in the exact same ways even if your kids aren’t actually attending classes there, so that is sort of an irrelevant argument.

          Your homeschooling would either be better than the public school, or it wouldn’t be. If you don’t think it would be, then don’t do it. But I have a hard time thinking the illustrious Mr Mustache wouldn’t be able to do a better job of it himself.

          Don’t get me wrong, my comment wasn’t an indictment of your choice, and I don’t think sending kids to public school is ‘wrong’ per se, I just think an intelligent competent person (especially one who isn’t bound by a day job) can always do a better job teaching their own kids than a given school. And since you seemed dedicated to the idea of insourcing I was just wondering what your thoughts on the subject were.

          So once again, thanks for the reply.

          Reply
          • CH12 August 26, 2012, 7:54 pm

            There is a charter school that actually individualizes or personalizes education: http://www.davidsonacademy.unr.edu/ It’s for profoundly gifted children. The average SAT score is 2210 and the average ACT score is 32.3. The average AP score is 4.7. http://www.thedailybeast.com/newsweek/2012/05/20/america-s-best-high-schools.html

            My parents thought about sending me there when it opened. However, it was initially only open to Nevada residents. I’m from Indiana, so that didn’t work out, even though my SAT scores and grades made me eligible. It’s worth living in Reno, Nevada for my kids to get secondary education once I’m retired and able to move to there for their high school careers. They would be educated by experts, not just a concerned mom/parents who wanted the best for them.

            I went to the best high school in my metropolitan area. I’m young enough that I can remember how awful it was, despite the careful quality control and the fact that my school was private and unbound by the expectations or rules of a public school. My high school’s community is unusually strong and very connected. Even with that, I wouldn’t send my kids there. The only public school that I’m considering right now is Davidson, but that could change in the next few decades.

            Reply
  • Liz February 11, 2012, 5:35 pm

    Keep in mind that for someone in poverty (and who has always made the poverty level income), they do not have some of the essential things that make living below $13k per year doable: (a paid off mortgage or a low one that you put a large down payment on; 6 bicycles; free phones from work; free healthcare (one medical emergency could set them back years) and so on.

    However, you are doing incredible things for someone with a good foundation and who had a great education at a low cost. You are someone who is saying no to all the silly consumer trappings that many people “need.”

    I just don’t know if comparing yourself to the poverty-level people is a great thing. Everything else is fine though.

    Reply
    • Mr. Money Mustache February 12, 2012, 3:37 pm

      You’re right – I am lucky in many ways, as are many MMM readers. The biggest bit of luck was winning the ovarian lottery, as Warren Buffet puts it – being born in a country that provides good public education, as well as having great parents and an analytical mind that can figure out how to spend less money.

      I could figure out how to live on under $13k/year even without the existing paid-off house or any of the other advantages we currently have. But I don’t naively shout out that anyone can do it just by pulling up their own bootstraps. We live in a complicated system with lots of tricks and rules that need to be gamed. There are many traps that the smart set out to ensnare the less smart (such as payday loans, luxury pickup trucks, and credit cards). Most people aren’t able to see through the system and beat it on their own. My goal is just to try my best to help a few more people get there.

      Reply
  • jlcollinsnh February 12, 2012, 6:58 pm

    Hi Liz….

    I’ve been debating with myself over whether to respond to this. Please don’t take this as meaning any personal disrespect and it is possible I am reading into your comments more than you intended.

    What I find troubling is the implication that poor people are mired in their situations without recourse.

    Each year I volunteer with VITA (Volunteer Income Tax Assistance) where we prepare tax returns free of charge for low income people. One of the things you learn quickly is that poor doesn’t equal helpless or stupid or a lack of motivation to improve.

    Of course, for some it does but no greater percentage than I see in the more prosperous population.

    Preparing taxes gives us un close insight into their finances and working with them provides insight into their thinking. It is not hard to predict who will remain poor and who is on their way out of poverty. It’s not found in their AGI (adjusted gross income.)

    Saturday I had two families, both with adult children in their early twenties.

    The first were Russian immigrants who struggled with their English. Both kids were in college and both worked. The son held two full time minimum wage jobs and was going to school full time. The daughter held only (ha) one full-time job while going to school.

    The other family had two working parents and two adult sons they were cleaning as dependents. One son 21 the other 23. Since they are both over 19 and not full-time students to be claimed they each had to have less than $3700 in annual income.

    The second family had the higher AGI, but I’d be willing to bet I know which will still be low income a few years from now.

    What Mr MM talks about here is applicable to anyone looking to improve their life. Income is not carved in stone. Neither is living in poverty.

    Reply
    • Emmers February 24, 2012, 9:49 am

      Did anyone in either of those families have a chronic health condition, like diabetes or epilepsy? Circumstances get complicated fast.

      Once again: *long term goals.* No judging for people who aren’t there *yet.*

      Reply
  • Ed March 11, 2012, 11:28 pm

    I am impressed by your spending or lack there of, heck I took the extended family out last night for the youngest’s birthday dinner. For 8 people at TX Roadhouse it was $200 with tip. That one night would have blown last years restaurant line item.
    While we don’t use our utilities extravagantly, we would be hard pressed to keep electric, gas and water/sewer/garbage under $7k/yr. Time to build a windmill?!?

    Since you mentioned your household of 3 living below the US defined level of poverty, I was curious if you took advantage of any of the poverty programs available to families? i.e. food-stamps, wic, medicaid?

    Reply
  • Susan @ Afford Your Passions April 12, 2012, 6:49 pm

    Hi, I just discovered your blog a couple of days ago, and have been getting myself acquainted with your posts.

    It looks like I will need to move if I want to live more cheaply. On my under $200k house, the property taxes are $6500 a year; my utility bills (gas, electricity water/sewer/trash) come in at a minimum of $200 a month – in summer they go through the roof (joys of living in north Texas in summer!)

    Still, I think put all expenditures down on a spreadsheet might be a good start to getting myself disciplined.

    Reply
  • RichUncle EL April 27, 2012, 2:03 pm

    This budget is very low and I applaud you for having everything in such great order. Tracking all your expenses is a task not many can do. If the average person can pay off their home mortgage then I agree with the 15K – 20K lifestyle spending. As rent and mortgage make up the bulk of peoples expenses.

    Reply
  • Brad June 1, 2012, 12:38 pm

    I read through most of the comments….do you guys have health insurance? Where does that cost go, if so?

    Reply
  • Sauce June 2, 2012, 9:45 pm

    you mention “mortgage interest” but where are the mortgage payments? are you excluding them?

    Reply
  • Shilpan June 10, 2012, 3:46 pm

    You’ve done amazingly well. I only wonder about health insurance premium and cell phone bill. Both are way lower than average American household would pay. How do you manage to save so much?

    Reply
  • Mark December 31, 2012, 1:56 pm

    Good stuff, MMM! I’ve been reading through all the articles for the last few days, and was inspired enough to make few additional frugal choices!

    I noticed that your insurance premiums are super low, and you mentioned 5K homeowner’s deductible. Could you give examples on how you decide to raise your deductibles to save on ins premiums?

    My example:
    200K house,
    current 1% or 2K deductible, 678 annual premium
    I called my insurance agent today and got these quotes:
    a) 2.5% or 5K deductible for 514
    b) 5.0% or 10K deductible for 371

    So using simple arithmetic if I wanted to save 164/year in premiums by raising my deductible from 2 to 5K, I better not file a claim more often than every 18 years ($3000/$164).
    With option b, my breakeven point is 26 years.

    Reply
  • Heath January 14, 2013, 12:49 pm

    I really want to see another one of these for this year! I always look back at this article whenever I hear a complainypants say that it’s impossible or ridiculously restrictive to live on only 30K per year. Great stuff!

    Reply
    • Rob aka Captain and Mrs Slow January 16, 2013, 11:58 am

      In Canada the cost of living for a family of five EXCLUDING rent/mortgage/car/CC debt is $31,181.32 a year, I calculated that you would need to earn pre tax 40,000 or two min wage jobs ($10 an hour in Ont) add in mortgage rent, car, CC debt and you need a ton more money.This are the actual numbers that Derek over at free33.com provided

      Reply
  • Lee December 17, 2013, 3:47 pm

    Any chance you’ll be doing one for 2013 soon?? This is the fist year we’ve used Mint and it is so fun to be able to look back at a year’s data. Can’t wait until I have multiple years to look at!

    Reply
  • Ronda April 30, 2014, 10:06 am

    This is so encouraging to me! So often when I read money blogs, I get kind of discouraged because they generally start with an “average income” of $50,000 or so. Since we have never come close to that income level in all our 30 years of marriage, it tends to make me feel like we are failures and doomed to second-class lives. We aren’t really able to save a lot, but we manage, and I am always looking for ways to stretch the money. We do still have three teens (well, one twenty-two-year-old and two teens) who live here, so we can’t get by on the amount you mentioned, but it does give me something a little more realistic to go by. Sometimes I am quite daunted by the expectations of these blogs. We can’t really just put a certain amount in savings as a general rule, because my husband’s business as a contractor makes for a sporadic income, but I feel validated to know that we CAN make it on a pretty small amount. Makes me want to go total ours up and see how we compare! I also appreciate the fact that you mention being mortgage-free as a possibility! :) We have been debt-free for years, and I can’t imagine how we would have made it otherwise. it is so much cheaper to pay for things up front!

    Reply

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