Exposed! The MMM Family’s 2013 Spending!

Mr. Money Mustache carries the first wall of the new roof structure into place. A great start to 2014.

Mr. Money Mustache carries the first wall of the new roof structure into place. A great start to 2014.

Luxury, luxury, luxury. What a strange and grand country this is, where the necessities are virtually free, so we end up spending most of our income on optional luxuries in the quest for ever-fancier pants. The Money Mustache family is no exception, and 2013 was another tight navigation along the border between “Enough” and “Too Much”.

Imagine that Bill and Melinda Gates had come over to your house for dinner yesterday evening, and just before leaving they slipped you a little envelope containing a credit card with your name on it. It came with a $100,000 monthly limit, and the understanding that you’d never see the bill – it would be covered in perpetuity by the generosity of the Gates family. How would your spending change?

Even with much lower income than that, I have been forced to consider this scenario, because for practical purposes we’re finding ourselves in the same boat. Our surplus in savings and income grew again this year, and the gap between this and our spending became embarrassingly large. This gave me a chance to re-evaluate all of my frugal roots. Was I really doing all this stuff because it makes me happier, or was some of it just because of the money?

So we cut loose a bit. Never thought twice about buying a pack of beer to bring over to a friend’s house, browsing the gourmet cheese section at the hip new grocery store that opened up in town, taking a trip, or inviting crowds of people over for elaborate meals. We hosted a steady stream of out-of-town visitors, providing food and entertainment and hospitality. Upgraded work boots and worn clothing with abandon, and gave gifts and donated time and money whenever it seemed appropriate. I even upgraded my kitchen sink.

On the other hand, many things did not change. I didn’t abandon my trusty commuter bike and become a Car Clown, because cycling is genuinely a much happier thing to do than driving. Kept building things, because carpentry makes me happy. Didn’t buy a bunch of new gadgets and furniture, because simplicity is a better daily habit than cluttering up one’s living room with a Hedonic Treadmill. And we took fewer trips this year, because we love where we live and now have many close friends here. While vacations and tropical beaches are fun, it is always worth considering what you are leaving behind. A better home life creates the desire for fewer vacations.

I don’t do any budgeting or track spending through the year – we just let the cash fly and add it all up at the end. So I was sure we’d blow our reputation this year and I would have to report back to you with an embarrassingly middle-class exploding-volcano-of-wastefulness figure.


Our spending, broken down graphically in Mint (click for larger)

The net result of all this? Our total spending for the year increased by $140, to a grand total of $25,142*

Mortgage Interest00
Property Taxes2,3582,517Looking forward to a drop next year in the new, smaller house!
Food and Dining6,2387,739This is where our flashy spending really showed up.
   Groceries   5,733   6,984For this we can blame the new Lucky's Supermarket, and loads of houseguests and parties.
   Wine/Beer   280   466Although the category has increased, $150 of this was a gift to a friend. Getting your good wine in boxes really helps in this department.
   Restaurants, Coffee Shop   225   288
   Doctor Visits   1,034   425
   Health Insurance   710   2,855First full year of fully unsubsidized health insurance (see article).
   Dentist   172   366
   CPR Class   65   n/a
   Pharmacy   67   143
Auto and Transport1,5372,231
   Gasoline   684   1,022A bit more roadtripping this year, including destinations in Canada and Utah/Nevada.
   Insurance   313   330
   Registration & Testing   217   294
   Express Tolls   79   80
   Speeding Ticket!   75   n/a
   Service & Parts   169   422I enjoyed my first mechanical problem this year on the 1999 minivan, but managed to fix it. See article How to Fix a Car
   Public Transportation   n/a   81While I'm in favor of public transport in principle, I find I never use it in practice, because bikes are faster, cheaper, and better for you for typical intra-city distances.
Utilities1,4631,649This includes natural gas, electricity, water, sewer, trash, recycling, and some other city services. Our usage dropped slightly, but rates rose a bit and some of this was startup fees for the new house.
Cell Phone240300These days I get free phones, but this is the annual cost of a single unlimited smartphone from Republic Wireless. Or two phones with unlimited talk/text but wi-fi data only.
Internet Access360360(not included in mint charts)

We keep this cost down by sharing a high-end connection with a friend: (see article)
   Home Renovations   2,147   383My only house expenses this year were a new kitchen sink and a bath faucet.
   Home Insurance   353   392
   Landscaping/Plants   56   85
Donations/Charity1,734615Personal donations only (business including this blog donates separately).
Crossfit1,175650We managed to chop this down by setting our own garage up as a gym, and inviting friends over for free workouts.
School Tuition1,1100
   Shoes & Clothing   327   606Several pairs of fancypants, new sandals, new workboots. Excessive!
   Sporting Goods   426   566
   Shopping Misc   738   965
   Books   71   46
   Other   789   440Netflix, kids activities, swim lessons, school supplies, local plays, apps, CC annual fee, cash withdrawals, foreign transaction fees
Travel1,8761,934Really you could subtract $1200 from this, which is the statement credit we got from various rewards credit cards. This figure also includes the experiment where I tried to Waste $1000.
   Subtracting Tuition, Donations   22,202   24,567
   Subtracting travel, crossfit   19,151   21,983
   Subtracting organic/luxury food   17,259   19,678Assuming a 33% increase on groceries due to organic + meat.
   Subtracting home renovation expense15,11219,295This is what our "no frills" living cost would be, unless we moved to a smaller house (Note: Misc category could be cut down a lot as well)

As it seems to happen every year, things changed, but we spent about the same amount. And life went on just fine. I think it’s because spending is more of a habit than a conscious effort – if you just develop the habit of spending the right amount for your own needs and savings goals, everything else takes care of itself.

Here’s to a prosperous 2014!

How to track your spending: We do almost all spending using a good cash-back credit card, and let the Personal Capital and Mint apps automatically categorize everything and display it in pretty pie charts and percentages for us. As a non-budget person, I find this method of tracking to be revolutionary, as it happens even when you are busy living life and forgetting about money.

Other exposing annual spending articles:

Exposed! The MMM Family’s Actual Spending! (2010)

Exposed! The MMM Family’s 2011 Spending!

Exposed! The MMM Family’s 2012 Spending!

*Note: I did not include any costs related to rebuilding our new house in this total, which so far have added to about $25,000 including things like engineering, permit fees, steel, lumber, electrical and plumbing parts, kitchen cabinets, and all new windows and doors. This is because the end result will be selling our current house and ending up with $100k to spare from the transaction. It’s more of an investment than a spending spree, although it sure feels otherwise when all these cardboard boxes keep arriving on the job site.

  • phred January 19, 2014, 9:04 am

    Is the reason many, here, are still poor is that they value things more than they value time and effort? There have been many really snarky comments here concerning how much cash someone gives or doesn’t give. Obviously, these rather distasteful people are still wrapped up in the materialistic culture with all the status trips embedded in it.
    If cash donations were the answer, the cumulative giving of all donations would have long ago solved the world’s problems. Yet, these problems seem to still be with us. Discounting the suspicion that most donations are used for staff wages, I suggest we need a better paradigm.
    A good teacher, appearing at the proper time, is more rare than you would believe. Instead of throwing a fish at us, and expecting us to be oh so grateful, some put themselves at emotional risk by trying to teach us how to fish.
    This country has almost always esteemed things that cost money Yet, at the same time, hard-learned expertise is usually discounted by others who expect learned advice to be given to them at no charge, and who then feel they have a right to criticize it.
    I see this in my own charity work. We could have a plumber show up and solve a problem that could have quickly become worse. He doesn’t charge us because he believes in our mission. A second person drives up and donates $100 cash. Both made a charitable contribution. So, why was the second person valued more?

  • Charlie January 19, 2014, 1:47 pm

    I definitely like how you our comparing your spending in 2012 vs. 2013 in Mint. I have been using Mint for a few years now but can’t really compare those timeframes because I always gave us using Mint even though it’s been active. In other words, it’s not accurate.

    But as my wife and I try to become debt-free, I will be on top of Mint every step of the way and would love to see my spending in 2014 vs. 2015. I know I have a ways to go, but I’m confident I can accept this challenge.

    Another thing I need to worry about is that as our income goes up (raises and bonuses), I need to make a conscious effort to not let my spending go up.

    Look forward to following this blog.

    • Stacey January 19, 2014, 6:39 pm

      Charlie, you hit the nail on the head. It’s very easy to let spending creep occur with higher incomes. As long as you’re consciously keeping it in check and “paying yourself first” w/automatic savings/investing, I bet you’ll do great!

  • MetaDC January 19, 2014, 2:47 pm

    I discovered MMM about six months ago and it has been life changing. I am tracking expenses and constantly looking for things to cut. Thanks for sharing this inspirational expense sheet from the past year. My biggest challenge is utilities (~600/month) and insurance cost. With so much recent equity loss and not sure how long we’ll keep the house, I am hesitant to spend on extra insulation and other ideas MMM has suggested to save on energy cost. Is this being penny wise and dollar folish?

    From one that have benefitted immensely from your excessive “charitable donations”, I say thank you. I hope to be a card carrying member of the “FI” movement in five years.

  • Tallgirl1204 January 19, 2014, 9:06 pm

    Thanks for this article. I kept track of our family spending last year for an identical demographic to MMM– two adults and 8-year old kid. We spent around $40k on living expenses in a similar community, about half of our income. I thought we were doing well– but I appreciate the kick in the butt to look at how we could put ourselves closer to retirement by needing less.

    The escaping $$$ is in two primary categories, food (both groceries and eating out) and travel. There are other lesser leaks as well.

    This year, I decided to challenge myself in the following ways:
    — riding my bicycle to work twice as many days as last year
    — taking my lunch to work every day– not just “sometimes.”
    — improving my core strength (this isn’t monetary but MMM has sold me on the concept of good healthy underpinning one’s total net happiness)
    — traveling a little less this year, and choosing to go to one place and “base camp” out of there rather than doing long meandering road trips (which tend to lead to more hotels and restaurants than home-cooked meals in the camper).
    — asking myself, when confronted with a spending opportunity: “do I want this now, or do I want my freedom more?”

    Last, I would point out to complainy pants that you don’t have to do everything MMM suggests, and you don’t have to justify yourself to him or anyone else in the matter– this is the Internet, not the spending police. You join the blog, you set yourself up for the virtual manly face punch if MMM deems it appropriate.

    I am not, at this point for example, prepared to quit seeing my hair lady who has tamed my locks for ten years now. But my eyes are opened that I have choices in the matter (what an interesting video on cutting one’s own hair) and I am making this choice with full information now– and perhaps someday I’ll take the plunge. That is the value of this blog to me.

  • Just me January 20, 2014, 4:28 am

    I like your view, still, I dont understand how can you spend bellow 50 dollars per year for books?

  • Steven January 20, 2014, 5:37 am

    Great article, and great blog, Mr. and Mrs. MMM, thanks for sharing all these. Since I’ve started reading you, I’ve been through serious thinking about my money situation, and where I finally settled was 1) deciding that I will be much more conscious about what I’m spending money on, and 2) the fact that our countries (I’m from the small Central-Eastern European country of Hungary) are really different in the possibilities given for early retirement.

    Please allow me to share a bit of this story, so everyone’s perspective broadens a bit. First, about the economy here.

    As you write, the US is “a strange and grand country […], where the necessities are virtually free” – unfortunately, this is not true for Hungary. The average net income per person in 2013 was around 650 dollars per month. The minimum income threshold (published by the statistics bureau) for two adults with one kid is around 890 dollars a month. A kilogram of bread costs 1.5 dollars, and – to jump to the other extreme end of the scale – a new Retina iPad Mini costs 521 dollars (I think this is under 400 in the US). A gallon of gasoline costs around 6.5 dollars. You would need some experienced economists to provide detailed in-depth reasons for these symptoms – you know, the economy is not in cheetah mode nowadays, we have serious taxes, etc. I must add that we have state healthcare, so if someone needs basic medical attention that is free to some extents (of course this results in additional taxes, reducing the income side).

    Summing that up, costs for necessities are not any lower (on the contrary), but incomes are way under US numbers. Now let’s see some options for saving.

    I started working when I was 18, as a freelancer, going to university at the same time. I got my first full time job in 2004, still studying at the university. My first income was amazing for me at that time, it was around a net 750 dollars a month. Unfortunately, as I just had a life to start building, living in a rented apartment with others in a city far from my parents, I did not manage to save too much of that (I must add that if I read your blog back then, I may have done some things differently, not compensating that much for my low-budget early years).

    Now, ten years later, I’m a father of two, work as an engineer with an MSc degree in informatics and get a salary that is way above the average income in the country. In my views we are living in absolute luxury, provided that we are never cold, we have lots of food, we have a car, and we are likely to be able to dodge any common financial emergencies regarding our home repairs or our health. Still, with all our spending as a family of four, the most we could spare each month, watching our spending closely, is around 250 dollars. And, from what I hear from others and the news, that is way above the amount that people around here can save nowadays (which is much closer to zero, or less, if we are talking about mortgages and car loans as well – options that you definitely need if you start from scratch and want to buy your own home or car, because with these incomes you would need around 15 strict-budgeted years to accumulate enough for these).

    I calculated that even if I could start saving 500 dollars a month now, doing this for the next 25 years, calculating with the 4% interest (which is achievable here with some agile banking, although not automatic), increasing my monthly savings 10% each year, I could get to around 450K dollars, which, looking at only the yearly interests, could provide a not-too-luxurious-but-more-than-modest retirement at the age 60. I remember from your early posts that when you’ve started to work you were able to save 4K, not too much later 7K a month – well, that is definitely not an option here as with two incomes in the family our total income is not even near the half of that.

    The bottom line of these figures is that my retirement will definitely not happen before I’m 65-70, and that point still mean a decrease in my lifestyle. And with this, I should feel really lucky that I could have earned a degree and have a job that I love, with a really compelling wage. Also, although in the paragraphs above I only mentioned finances, I found that over a certain minimum income my finances only affected my life when I was worrying about them.

    So OK, with all this said – I will try to make a point, if there is any.

    1. If you are planning an early retirement, choose your place to live carefully (that is actually a MMM advice as well, I believe). And choose in your teenage years, so you have time to build your savings.
    2. Do not worry too much when you find out early retirement is not an option for you where you want to live, or based on the job you have. Finances are important, but there are many bigger players in your quality of life, focus on finding these. Worrying about finances and lack of options can seriously screw that quality.

    Looking forward to many more great posts from you! :)

  • Kathleen January 20, 2014, 6:43 am

    Nice article! And by the way…great Market Watch article! After reading the comments from that, I have come to the conclusion that there is still a lot of work to do with educating people out there (and some just don’t want to consider anything different then being slave to the rat race). This article on your 2013 spending shows is really can be done, I can’t do too much right now about this states utility costs and property taxes, and I need a car for work travel, but the concept still works. I have been able to pay off all debt, except 35k on a mortgage, and save quite a bit of money. What has helped the most was buying a duplex and living in one half and renting out the other. The rent pays the mortgage and insurance and I live there paying the taxes. Yes I live in 1k sq ft and have some noise, but the sacrifice has been worth it. Looking forward to an early retirement and the freedom of choice that goes with it. I’ve been reading your blog since 2012 and just got my brother hooked on it.

  • Tim McAleenan January 20, 2014, 1:59 pm

    Hey MMM.

    Loved your post, very candid. The people criticizing your charitable contributions are only looking at the part of the iceberg that is above water, and mistakenly believing that they see the whole thing. Even if you wrote nothing, did nothing, and donated nothing, I still would have far too many of my own character flaws to worry about before I started criticizing others.

    I saw your recent interview on Marketwatch. The comments were obscene, and completely ignorant of what you and your website have and do accomplish.

    It agitated me enough to write a rebuttal article to all of those comments:


    Sorry you’ve had to deal with “The Weirdness of the Internet.”


    • Mr. Money Mustache January 20, 2014, 6:28 pm

      Yeah, I saw your rebuttal article, Tim – very well done!

      In fact, I would have left a comment on your blog, but there was no option for name/URL commenting. It was asking me to install a plugin with permissions to see my twitter feed and a bunch of other nonsense. If you ever want more comments from tech-savvy readers who value privacy, that might be something to change.

      But thanks again for your great post.

  • Pete January 23, 2014, 3:04 am

    I’m new to Mr Money Mustache, and as a fellow pre-tiree – two years in, pretired at 39 – like your blog immensely. It’s a thoughtfully-written, practical antidote to many blogs which promote the shininess of urban consumerism.

    From a European perspective (I share time between Portugal and Brittany) a number of these annual expenses would work out significantly cheaper ths side of the pond, in particular property taxes (80% cheaper), utility costs (50% cheaper) and groceries (perhaps 75% cheaper). I also tend to follow Toby Ord’s ‘Giving What We Can’ focus on living more frugally and give away at least 10% of income (after two years, the current figure is running at 22% of income).

    For groceries,the key I’ve found is to buy seasonal food at farmers’ markets, bake all bread (with a good bread machine), source quality providers (esp. cheese, local meats), and grow food/exchange with friends and neighbours. Plus good wine in France and Portugal is cheaper than soda. On the other hand, restaurants are what Europe, particularly rural France and Spain, is about. So that cost for me would be at least 200% higher (though the main tip is to research the high-end restaurants well, and to eat out at lunchtimes on the ménu du jour)..

    As regard cars, fuel/tolls/maintenance costs are a little higher, but registration and insurance about 50% lower here. I’ve found that keeping a small dirt-cheap ‘runabout’ second car actually saves money: if things go wrong on the big car, this gives me more time to source parts on Ebay, and self-maintain without sacrificing a transport option. The spare car has also been useful for visiting friends and lending to the neighbours if they need one (i.e. reducing their costs).

    As to travel, the main thing I’ve learned in Europe is to take more time: use long-term AirBnB stays, visit friends/family, and explore new regions en route to the main destination. And most of all, avoid plane travel: after a life of travelling a lot for business and short-term expensive holidays, it is refreshing not to spend so much time in airports.

    Generally, I’d like to know whether you factor in property value accrual into your long-term planning? This seems to be the main advantage of owning a property over renting. In rural Portugal or France, a nice house can be rented for about 3000-4000 dollars a year: from a downshifting perspective, a far better option than buying.

  • Carrie January 23, 2014, 9:24 pm

    Getting back to the eating out spending. I do not thnk $150/ month is unreasonable. I live in Chicago and most months keep ours to $200.00 or less. One meal for two can easily cost $60-75. It is all about choices. If we keep our spending down to a very small portion of our income and stay out of debt there should be no guilt. Thanks for sharing.

  • Joe (yolfer) January 23, 2014, 11:05 pm

    How are you going to categorize your marijuana spending? Just asking as a citizen of one state where it’s legal to a citizen of the other!

  • Chantelle January 24, 2014, 12:50 am

    I’m curious. How do you and everyone else track your spending so precisely? We don’t keep a daily budget. We have RBC credit cards and I could make a spreadsheet. Do you create a spreadsheet with all those categories, then review your credit card and bank statements from the entire year?

    • Mr. Money Mustache January 24, 2014, 7:26 am

      Hi Chantelle – it’s all done automatically with Mint and Personal Capital. I should update the article to mention this.

    • Eldred January 24, 2014, 9:02 am

      Mint.com was mentioned here, but you could also use Quicken, MS Money, or any OTHER financial program. But you *would* have to enter every transaction.

  • ric January 31, 2014, 11:30 am

    Active reader of the blog… and a relative over-spender by a multiple.

    Yes, I can afford it…; yet on an absolute basis, it’s embarrassing relative to the frugality demonstrated here.

    Putting aside property tax and a full-time nanny/housekeeper, I spend your entire annual food budget every two months. Sheesh.

    MM, if it’s useful, send me an email and maybe I can write something up for illustrative purposes.

  • Mortgage Free Mike February 1, 2014, 10:25 pm

    I have always been amazed at your spending. Like many others who have commented, the eating out category is the most fascinating to me. Living in a big city, I find that so many social activities are centered around eating (and drinking) at restaurants. Great job at keeping it under control.

  • Justin February 8, 2014, 9:52 am

    I love reading these posts, but then get very sad when I check our spending, with no kids. We are both 25 and live in a pretty high cost area, but we spend probably $400 eating out a month. We both work hectic jobs (nurse/police officer) and it can be simply impossible to prepare a meal everyday.

    To counter our complete lack of a budget, we both sock 15% into retirement and then a further $300 every month into a taxable investment account. Since we automate our big savings, we know how much play money we have per month. Even after a $2000 mortgage payment and all the amenities in the house, we still have $2500 to do whatever with. Sure, we could save more, but what’s the fun in living in a metro area, being 25 with no kids, and not going out and having fun?

    To each his own though. Everyone has their happy way to live and i respect all lifestyles!

    • Eldred February 10, 2014, 3:36 pm

      Oh, MAN! I just ran a calculation on your numbers. If you could save that $2500 per month for just 5 years at 7% interest, in 20 years that investment would be worth mire than half a million! And that’s without adding ANYTHING after the 5 years… So at age 50(5 years investing, 20 years compound interest), you’d be set(retirement, travelling, whatever)! I’m 50 now, and will be working until I die, most likely.

      • Bob Werner May 14, 2014, 9:21 am

        Cops retire at age 45 or less with very nice pensions and then get another job to double dip. I have seen the numerous times.

        But your right, this couple doesn’t realize it at their age, but someday in the not too distant future they will be wishing they had saved half their income.

        They think their lives are hectic now, wait until baby comes along and mom decides to quit work or go part time.

        MMM was one of the lucky ones who realized very, very early on that saving is much easier with high incomes when young.

        This couple could easily be saving 60K per month and semi retire in 7 or 8 years in a nice Midwestern town, living an idyllic life.

        The $800 per month in eating out is obscene! Our entire family of 3 food budget is $300. We eat healthy home made meals. And yes our lives are hectic too! So they are spending at least 4 times as much on food. Their mortgage is 3 times ours as well.

        Any ideas on how to enlighten them?

  • Max Factor February 10, 2014, 6:52 pm

    Some items in my budget that I do not see here:

    utilities (heat, water, electric)
    life insurance
    gifts for others (in NYC a wedding gift is $250 to $300 per couple)
    dry cleaning/alterations

  • Isa May 4, 2014, 9:12 pm

    Nice job MMM, defenately encouraging!! Although I am disappointed on the high spending in miscellaneous shopping…specially since I’ve come to view this blog also as anti consumerism to an extent. Love your blog though!

  • Bob Werner May 14, 2014, 9:09 am

    I review this post often to assure myself that I am exceeding your frugality and basically pump up my frugal ego.

    A question arose in my superego today. You are of course doing a great service to the world with this blog but from a budget/numbers view it appears that there is little emphasis on charity.

    Could you explain or write a blog post on financial charity and your unique perspective on this? It would seem that with your investments and income that 10 – 15K per year would be a nice personal number to shoot for.

    Of course this would need to be a MMM supper efficient/effective charity.

    In that vein, I could easily imagine that if you established the MMM foundation with a focused, reader inputed design that there would be many readers willing to kick in.

    The framework might be something like this.

    1. Readers are invited to contribute (Think of the PBS model)
    2. The funds are managed by a donor advised community foundation in perpetuity. They generally strive for a 10% avg annual return with a 5% annual payout. The Community Foundation of the Ozarks is a very nice and successful example of this. There is no set up charge.
    4. Suitable charitable investments might be — Community gardens, bike paths, electric cars, budget education, loan guarantees for home efficiency projects, ????

    You might consider throwing this up to the community for input and consideration. By having the funds managed by a community foundation there would be very little time and management involved. You could lead the pack by making the first and ongoing donations.

    I established a similar fund several years ago and within 3 days had $20,000 in donations.

    One could easily imagine a fund with over 5 million invested and paying out $250,000 per year in a 5 to 10 year time frame. (actually if you pushed it, it might be much more!)

  • JB May 20, 2014, 10:51 am

    have some fun. That is what the money is for. You don’t have to spend money on first class tickets to europe, but go to europe or whereever if that is what you want to do. Money = Freedom.

  • Darrell June 20, 2014, 1:10 pm

    I suck at this. I get subsidized family healthcare at work, and my portion is $320 per paycheck, or $7,680 per year, and I get the HMO! My groceries/dining out/household items is $19,600 per year. Yes, I know how ridiculous this is. My mortgage is $25,200 per year. I’ve already doubled your budget and I haven’t turned on a light switch or turned my ignition key, yet. This was just the kick in the face I needed…thanks for posting. My first focus will be on my groceries.

  • Andy August 29, 2014, 1:06 pm

    Love the annual budget review. Equally interesting would be an annual assets and income review. Show us how all those dollars are working and what they are making for you! Where did you bring in extra income that you weren’t expecting (blog, real-estate sales, commissions, house projects, etc). Where did you plop all that extra cash?

  • Scottt September 3, 2014, 6:24 pm

    If I don’t include my mortgage ($900) we (4 people) live on $29400 a year…I’m a mustachian by necessity.

    How is your home owners insurance so little, whats the deductible?

  • Kureen April 16, 2015, 7:51 pm

    I love reading your blog! I would love to see a case study on family with more than 3 kids. We have 4 kids and while I don’t consider that large is seems very large compared to most your readers. I would love to hear your advice and see the monthly bills for families of our size. I would also love to see your vehicles recommendations for a family of 6 or more. Thanks!

  • Nathanael September 22, 2015, 10:19 pm

    What kills me is that my household expenses are far higher than this pretty much *solely* due to health related expenses.

    Health insurance alone is $6000+/year here, and this is *after* Obamacare (it was $12000/year before!), and it’s necessary because the ‘list prices’ for hospitals, labs, most primary care physicians, and certain specialties (like gastroenterology) are outrageous, at levels which I consider fraud; you can’t get the real prices (which are typically 1/20 the ‘list prices’) without the insurance.

    And worse than that, the health insurance doesn’t even *cover* a bunch of key medical needs; it’s simply not worth my time, which I value at $100/hour, fighting with them trying to get coverage for a bunch of stuff like orthotics and wheelchairs — and physical therapists and psychiatrists. (The “in-network” options for specialists in those fields are routinely the incompetent ones only. Thankfully, in those specialties the competent specialists charge reasonable rather than obscene rates.) I used to fight that stuff, but it’s just not worth the time; I was spending 20 hours a week on the phone at one point, which was obviously not worth it.

    And then there’s dentistry. (Though I have never had a cavity, which helps.)

    I wouldn’t get the insurance at all except for the scam being run by the doctors and hospitals with ‘list prices’. I did run a complete actuarial model to pick the best insurance with the lowest maximum-cost-per-year possibility for any additional catastrophes. But there are only two private carriers who offer plans at all in my county (so we have monopoly pricing); the plans they offer were mostly deliberately designed to be junk where anyone with recurring prescription costs would quickly max out to the legally-allowed out-of-pocket maximum, so the high-premium plan actually had the lowest total cost per year. I can’t move because I made the decision to stay near my parents (which they appreciate, being in their 70s and 80s) but it wouldn’t be much better in many other parts of the US, and we’d have to find new medical specialists, which is a tremendous amount of unpaid work (I know, having done it about 10 times).

    (I have been running a “high capital gains this year, low capital gains next year” tax minimization strategy, which also works for maximizing the amount of tax credits I get for the health insurance — but that still means I have to pay for the insurance every other year. This is actually the best way to minimize premium costs if you can do it.)

    Health is such a crapshoot.

    Ridiculous (but sadly well-documented) allergies have substantially increased clothing and food costs. On top of that, the health problems for all my family members have made it frequently impossible to cook at home — we’re just too knocked out from illnesses to do all three meals each day, even with preparing bulk meals in advance — so this increases restaurant costs massively (though we have a lot of very reasonably-priced restaurants in town, and we don’t get drinks, and we don’t get dessert, which makes a huge difference). And worst of all, the medical problems necessitated living further out of town than I wanted to in order to get a wheelchair-accessible house.

    In other ways we actually spend *less* than you do. No recreational drugs; few ‘consumer’ purchases; very little in entertainment (mostly just my Internet bill); house running costs are minimal; and the house was bought in cash; electric car costs less than your entire transportation budget (it’s mostly insurance cost) and was bought in cash (I also expect it to last a very long time).

    Property taxes are twice yours on a much smaller house, but we do live in one of the highest property-tax areas in the entire country (they run around 3% of value). But apart from that the main excess over your costs is health-related — upwards of $12000/year in direct costs, and a difficult-to-measure but significiantly larger amount in indirect costs (food and transportation)

    I am still independently wealthy, spending less than the 4% of invested capital rule, and earning about 10% on my investments. (Mostly with time-shiftable realization like capital gains, which is how I do “high income one year, low income next year”.)

    But honestly, every dollar I spend on health, I wish I could be donating to charity or investing in socially useful businesses. So the health costs *bug* me. The problem with health care expenses is that they are the exact opposite of luxury in one key way: they’re *unpleasant*. You don’t want to even *do* it, and you have to spend money on it anyway.

    My point is that how much you need to spend to live a comfortable life is almost entirely determined by health needs. If you have your health, you can spend next to nothing. If you get seriously sick, or worse, sick with multiple chronic illnesses at once (I have 2… my girlfriend has 4), you are behind the curve to start with, and have a hole to dig out of, so it’s gonna cost you a lot more. Much easier in Canada or the UK, obviously, but it’s still true.

    Half of all bankruptcies in the United States are *still* caused by medical expenses. Post-Obamacare.

    You wrote: “What a strange and grand country this is, where the necessities are virtually free”
    But this is completely false, and I resent the claim. The crucial necessities of health care are not free at all; they’re outrageously, fraud-level expensive in the US. In every *other* respect the necessities are very cheap, so if you’re healthy, it looks like the necessities are free…

    I seriously looked into getting out of the country into a country with a sane healthcare system, but I’m really bad with languages, unfortunately, and what with the chronic illnesses many of the usual pathways into other countries (depending on full-time work or full-time study) are closed (even though I could do part-time). If I had twice as much money, I could safely get into the UK as an investor, but I can’t really do that either, and that door may be closed before I get to that point.

    I have been campaigning for single-payer health care like Canada has. Extra special note: the reason property taxes are so high where I live is that they’re used to pay for Medicaid in New York State, which is completely insane and is not done in any other state (Medicaid should be paid for from income tax). So my high property taxes are *also* due to this country’s crazy excuse for a healthcare system…

    Anyway, this is why I am still active in politics advocating for single-payer universal health care. It’ll make my life a lot better and cheaper… and it’ll make a lot of other people’s lives a lot better and cheaper too.

    Because this is the main source of unavoidable spending.

    • Aimee March 24, 2016, 12:52 pm

      How have allergies increased clothing costs?


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