363 comments

You’ll Never Believe How Much the MMM Family Spent This Year…

Hiking near home, fall 2014

Hiking near home, fall 2014

Here we go again!

As we do once every year, Mrs. MM and I have spent the day nervously tallying the sinful blizzard of excessive spending that we have been committing over the past twelve months.

If you aren’t familiar with my budgeting style, it is “I Don’t Have a Budget“. Since we know there’s no chance of running out of money at this point, we make spending decisions based on our values rather than splitting up a fixed stream of income into categories every month.

While this is a hazardous approach for beginners*, it works very well once you have trained yourself with my alternative point-of-purchase approach. In short, whenever you feel like buying something, ask yourself the following questions:

  • Will buying this really improve my overall lifetime happiness?
  • Is there another, more efficient way to meet this same need?
  • Can the same benefit be had if I delay the purchase?

While I still follow these rules because they have become a habit, the application can be sloppy at times due to the fact that we are still just ordinary flawed humans.

Highlights of 2014 in the Mustache Household

first_wall

First day of framing the new roof, January 2014

Even retired life seems to be full of change and adventure, and this suits me just fine. This year our boy grew up another notch, and we found his need for creative freedom really started to clash with the formal structure of school. This led us to full-time homeschooling. That required much more time from both of us parents, curtailing some of our other activities but also teaching all three of us a lot more about life and learning. Although the transition amounted to a couple months of emotional face punches, it was worthwhile as such punches generally are in retrospect.

We Moved

2014 will also go down in history as the year of the new house. Although we actually bought the place in late 2013, I started the project in earnest by tearing off the roof last January, framed and welded and sheathed the new structure through February and March, then stepped inside to do the electrical, plumbing, insulation and other trades before outsourcing the drywall. We moved in to the barebones residence in June and I’ve been working since then on more carpentry and details. All in all, we’ve spent about $80,000 on the complete rebuild so far, which I have kept separate from the regular spending budget. This is because the net spending on the new house (after selling the old one) is still a large negative number.

Details of the new house project, where the money went, and before and after pictures will get their own separate post. It is taking a while because work progress has slowed dramatically due to the aforementioned homeschooling

Business and Pleasure Endeavors

The 9-year-old Little MM seems to be following in his father’s path – finding machines, space and science fiction, and creating electronic music (under the stage name Killbone7) to be more interesting than any organized activity we try to coax him into. Luckily he has a growing club of other junior nerds that have banded together for these activities, so he will have company when he starts the next Microsoft or Google from our garage in another six years or so.

This detail is relevant in a spending article because although stuff like this is amazingly educational, it costs the parents very little. We would fully support him if he were into more expensive things like sports leagues, and I do remind him that that is a better way to meet girls once he gets to high school.

Mrs. Money Mustache took the lead on homeschooling, burning through stacks of books and websites and distilling it down once she realized the practice is incredibly unregulated here in the US. As long as you can get your kid to pass a very basic test at the end of each year, you can do whatever you like. We are using this as an opportunity to speed up the educational pace considerably and do fun stuff instead of boring stuff. She also started a secret crafting business on Etsy which I won’t dare mention here lest she lose all her free time to an increase in sales.

And of course old MMM continued to build stuff out of wood and occasionally type some shit into the computer, juggling the demands and opportunities of the Internet against the pleasure of real world physical work. I indulged in a couple of these opportunities for some blog-related travel including Ecuador II and Camp Mustache, both of which will happen again in 2015.

But enough of this blathering on, for it is time for the final number. In the wealthy and spendy year of 2014, the MMM family managed to blow the following incredible of money on ourselves:

$25, 330

And here is where it all went:

Category20132014Comments
Mortgage Interest00
Property Taxes2,5172,120New house has $1000/year cheaper taxes. This figure pro-rated based on months lived in each
Food and Dining7,7397,109
   Groceries   6,984   6,593
   Wine/Beer   466   322
   Restaurants, Coffee Shop   288   194
Healthcare3,7894,268
   Doctor Visits   425   484Includes some personal therapy surrounding our boy's school issues.
   Health Insurance   2,855   3,272$273 / month
   Dentist   366   512Mostly for kid dentist preventative work
   Pharmacy   143   n/a
Auto and Transport2,231490
   Gasoline   1,022   71Excellent!
   Insurance   330   347
   Registration & Testing   294   72
   Express Tolls   80   
   Service & Parts   422   n/a
   Public Transportation   81   n/a
Utilities1,6491,614
Cell Phone300300
Internet Access360360
Home775429
   Home Renovations   383   19
   Home Insurance   392   410
   Landscaping/Plants   85   n/a
Donations/Charity6151,155
Crossfit650330
School Tuition00
Misc2,6232,098
   Shoes & Clothing   606   492
   Sporting Goods   566   76
   Shopping Misc   965   654
   Books   46   61mostly used books
   Other   440   815Netflix, kids activities, homeschooling school supplies, local plays, apps, CC annual fee, cash withdrawals, foreign transaction fees
Travel1,9345,057Wow!! $1908 for xmas trip to Canada, $382 passport renewals, $216 flight home from SFO, $552 vrbo in San Fran, $880 safety pirate trip, $245 train travel, $727 flights for summer trip to Canada, $51 Super Shuttle, $96 Mrs. MM 40th Birthday Trip
TOTAL25,18225,330
   Subtracting Tuition, Donations   24,567   24,175
   Subtracting travel, crossfit   21,983   18,788
   Subtracting organic/luxury food   19,678   16,442Assuming a 33% increase on groceries due to organic + meat.
   Subtracting home renovation expense19,29516,423This 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)

What the heck is going on here? With completely reckless spending and all of life’s variation, we are still within $150 (0.6%) of the previous year’s spending. There were a few notable things, however:

Groceries were still Ridiculous:

The place our sloppy nonbudgeting manifests itself most strongly is in groceries: high-end local organic stuff from the deli counter, ridiculous little triangles of cheese from the gourmet section, dark 85% chocolate chunks with my espresso, coconut and almond breakfast every morning, and an overflowing salad bowl alongside the dinner every night. And some sort of entertaining almost every week, where we actually prepare and give away large quantities of this fancy food to friends and visitors. It is hard not to feel rich and spendy when this is part of your life.

Driving Performance was Good:

Somehow, we went the whole year on only two tanks of gas for the car. In the past, I have talked up our impressive driving avoidance skills and called everyone else Car Clowns because we don’t use the car for local errands.. but then hypocritically embarked on long cross-country trips that burned hundreds of dollars of gas.  This year it seems I actually walked the talk, and the car was fired up mostly for shuttling people to the airport and to occasional hikes in the nearby foothills. I’ve even started biking for my occasional nights out in Boulder, thanks to the added speed of my Electric Bike. It also helps that the car is a Scion xA, a 5-passenger hatchback that easily exceeds 40MPG. Not on the budget is one tank of gas for my construction minivan – because it was used only for my construction business this year (except a few short trips carrying materials for the house).

Travel Spending was Way Up: 

The flip side of less driving is sometimes more spending on other forms of travel. In spring, we took an adventure on the Amtrak sleeper train to San Francisco and went North to explore the amazing coast and Redwood forests. And we closed out the year with a set of three overpriced plane tickets ($600 each!) to Canada to visit family for the holidays, something we haven’t done in winter for many years (usually we just spend every summer in Canada). Plus a great train ride to get the three of us from Toronto to Ottawa for phase two of this trip. This trip is an example of spending I would have avoided if money were tight, but it was nice to be able to afford it.

On the positive side, our out-of-pocket spending for this travel was really much lower than shown in this budget, because much of it was paid for with points from various rewards credit cards. But I decided to list the sticker price in the annual spending just to keep reporting simpler. In other words, we thought of the credit cards rewards as a form of income rather than a reduction in spending.

Health Insurance Held Steady:

We use a basic plan from Golden Rule that costs about $275 per month for the family. If this pre-ACA healthcare plan eventually expires, we’ll switch to a Bronze level plan under the new health insurance setup that will  offer more coverage in exchange for more money. You can read more about that in this 2013 post on our health insurance situation. None of us had any health issues besides checkups this year.

So that’s it for 2014. Although these updates are starting to look awfully consistent from a numbers perspective, I still find it quite revealing how powerful habits can be in dictating your spending, regardless of income.

And as I go through each year knowing that I’ll have to justify each expenditure to YOU the reader at the end of it all, I find my own life being guided gently away from the temptation to stray into bullshit spending as well.

Luckily for you, you will get exactly the same benefit this year. Because I’ll be right there watching over your shoulder every time you take out your wallet in 2015.

 

Quick answers to questions that seem to be coming up:

Why is your car insurance so cheap? Living in a city of only 90,000 people, age 40, cheap car with liability insurance only, nothing on driving record. I still use Geico insurance.

Why is your mobile phone bill so low? Republic Wireless – $25/month unlimited everything including data, or $10/month unlimited voice+text. Hint: Get the $150 Motorola G unless you are a serious techie – it is almost as good as the higher end $300 and $400 phones they offer.

 

* If you are going to train your fiscal discipline muscle with some budgeting, I am still a fan of YNAB software (You Need A Budget), which you can try out for free for a month to see if it fits your own style. Disclosure: I am a friend of the founder Jesse Mecham and think he tells excellent stories.

  • Hunniebun January 17, 2015, 4:14 pm

    WOW. This is why you are Mr. Money Moustache and we all come here for your wisdom and guidance. 71$ for gas is beyond amazing. That is what it costs to keep my mini bus commuting for 10 sorry days (Gross). I love that you share these numbers and show that you can live a fulfilling, abundant, enjoyable ‘rich’ life – without the massive price tag. Good on ya :)

    Reply
  • Tron January 17, 2015, 6:41 pm

    How do you spend only $360 / year on Internet? Where I live the cable companies force you go buy a bundle for $90 / year even if you don’t want or use cable. Also, my T-mobile cell bill is $90. Advice on bringing both those down?

    Reply
    • Mr. Money Mustache January 18, 2015, 11:47 am

      In my area, the internet companies have started offering $30 introductory specials that last 1-2 years, to compete with the an amazing 1 Gbit/sec fiber network the city has started rolling out at $40/month. So we’re on one of those plans at the moment, until the city’s fiber gets to my door.

      For phones, the MAXIMUM you would ever need to pay in the US market is $25/month, for unlimited everything with Republic Wireless: http://www.mrmoneymustache.com/2014/05/13/moto-x-vs-moto-g/

      I’ll add a bit about that in the footnotes of this article, since there are STILL people inexplicably paying more with the big phone companies.

      Reply
    • Greg January 19, 2015, 8:32 pm

      I have T-Mobile and used to use their pay as you go plan to turn on Internet for only days I needed it … With wifi phone calls and texts, that totaled $60/yr.

      I was bad and switched to a monthly plan, but the pre-pay ones can offer some good deals depending on your usage.

      Reply
  • Jillian January 17, 2015, 7:08 pm

    Hi MMM! Your blog is awesome and as a 26 year old, I’m hoping to implement a similar lifestyle to yours and retire early, as well. One question about this post similar to what someone else asked previously, but was not yet answered: how do you keep track of all these expenses? Do you have an app for it or do you just keep a spreadsheet and type in everything? I’m asking because I’ve tried this before, but I just always end up letting it go as I forget or get lazy with it.

    Thanks!

    Reply
  • Tawcan January 17, 2015, 8:55 pm

    Looking at your spending for 2014 has made me even more inspired. Very impressive. Do you expect to spend just as much on traveling this year, considering you have a couple big trips planned already?

    Reply
  • Adam January 17, 2015, 10:54 pm

    That’s an amazing year, especially on the car front. It’s amazing to me your ability to not spend on incidentals (wedding gifts, birthday dinners, miscellaneous home stuff).

    Reply
    • Greg January 19, 2015, 8:28 pm

      Many of those things you list seem to come by association… I found that choosing friends that are ok with my naturally frugal tendencies has lowered these sorts of costs

      Reply
  • Vickie January 18, 2015, 12:18 pm

    I’m not a big fan of budgeting either except on our no spend January. Then it makes me realize we need to start having a budget for groceries …because we too seem to pick up things we don’t really need.

    Glad you cut back on your beer/wine.

    Have a great Sunday!

    Reply
  • Ann January 18, 2015, 2:35 pm

    My DH spends your alcohol budget for a year every month. Crazy but true, he is building his cellar :( Same with the restaurant category…the problems with being married to a foodie!

    I know you showed what your “minimalist” budget would be without the luxuries. Have you considered doing one that builds in typical expenses for most families, housing in particular?

    Reply
  • Dave Grant January 18, 2015, 5:46 pm

    Since you are using the car so little..and car insurance is costing you more than gasoline…I presume you have/are considering getting rid of the car completely: comments?

    You’d still have the “works van” in case of emergencies.

    Reply
  • Eldred January 18, 2015, 6:32 pm

    I just looked at my spending for 2014. I spent about 39,000.
    At the risk of being subjected to a few face punches, here are some of the big categories
    Mortgage was the biggest(not surprising): 9480
    Utilities:5253 total(1530-cableTV/internet, 2478 gas&electric, 790-telephone, 455-water/sewerage)
    Auto: 4218 total(fuel-2605, insurance, 1203, service-304, registration – 106)
    Groceries:1779(including all paper/cleaning products)
    Fast food:1396 (ooh, gotta work on THAT…)
    Junk food:333 (probably more, because I don’t track vending machine purchases)
    Household:1288 (includes the washer & dryer I had to replace due to a flood, and any repairs/improvements
    I shouldn’t have to put as much into the house this year(hopefully), and I’ll be able to drop some of the
    fuel cost if I can find a good cycling route to work when it gets warmer. Add to that cutting back on
    the junk food/fast food, and I can probably slash about $3000 or so from 2015 spending. I also had about $4000 in one-time investments for my music instruments. So I’ll set my goal at $31,000 or lower for the year, which would be a 20% reduction in spending overall. If I can DO that, and put that money into savings, it will be much more than in previous years.

    Reply
  • SavvyFinancialLatina January 18, 2015, 7:54 pm

    Food expenses always kills us! We are trying to eat out less this year! Somehow we have to cut our monthly credit card bill by 50%. It’s going to be huge. Somehow expenses always add up. I admire your family’s lifestyle choices. Definitely a path we are moving towards.Hopefully we will get to FI by the time we’re 40! That is the goal!

    Reply
  • Ana January 18, 2015, 9:02 pm

    MMM thank you for such great content! I love your blog! About the groceries, I decided, some months ago, to increase my investment in food. That is, to buy more healthy, fresh, organic and delicious stuff. I said investment, because the side effect is my restaurant bill decreases enormously (in some months, we spend nothing in restaurants). Before I go out to eat, I always think, why should I go to somewhere else if I have delicious food at home? And now, with a lot of inspiring ingredients, I have learned more recipes! It became a very nice hobby!

    Reply
  • JKL January 19, 2015, 12:34 am

    Just wondering what the Mustachian approach would be budget-wise if it turned out your son were seriously interested in more costly activities. Ice skating, violin, gymnastics, soccer etc can all cost thousands of dollars a year. You achieved FI with a goal of withdrawing 4% of 625k annually, and it has worked beautifully thus far. If you had no other income, how would such activities be funded? Or would you guide your son in a different direction?

    Reply
  • Bob W January 19, 2015, 9:21 am

    Thanks again for showing us all how simple this really is!

    I’m impressed with the booze category. Please tell us how you nearly cut that in half? Is it through the homebrew? Or did you simply decide that drinking is less a priority now?

    In that same vein, I’m assuming that your recreationals are part of you misc. category?

    Reply
  • dave houston January 19, 2015, 10:54 am

    $347 a year for car insurance? Wow are we ever getting ripped off for car insurance in Ontario Canada. I am of the same age as MMM, clean driving record an even older car and I am paying three times that and I live in an even smaller town.

    Reply
    • Patrick January 21, 2015, 5:16 am

      Yup that’s the way of the road, and the main reason I sold my car and started biking everywhere. Since I’m under 25 with “no driving experience” (although riding a bike on city streets requires much more alertness than driving if I want to stay alive), I was quoted over $200/month. I refuse to participate in such a system.

      Reply
  • Pat January 19, 2015, 12:24 pm

    I don’t mean to come off as a hater but I think including opportunity cost of renting out your home would be a more honest assesment of your yearly expenses. I realize you own your home but I suspect you could rent if for say 2000$/month so it “costs” you that to live in it. That tacks 24K onto your really spending. …..suddenly not that small or impressive really.
    Pat

    Reply
    • Mr. Money Mustache January 21, 2015, 9:50 am

      Hi Pat, I do mention that in other articles, but it is a fine line: should I also include the cost of renting two cars? Renting my computers and furniture? What about my carpentry tools and my clothes? Is an accurate life cost only expressed by owning nothing and renting everything?

      There are different ways to account for these things, but I feel this is the most accurate way to do it: own everything you use, and measure everything you buy, as you buy it.

      Reply
      • Mark Schreiner October 27, 2021, 8:44 am

        If we are going to own everything we use, and measure [the expense/cash outlay] of everything we buy as we buy it, then a better measure of spending is the sum total over time (divided by the number of person-years of life that spending supported). It would also be important to note how old the people were when you started counting, and what assets they had at that point, and how long you have been counting.

        MMM’s current spending is lower because of spending he did in the past to obtain his education, house, cars, tools, and other durable items that provide services over time.

        Someone who will eventually reach similar spending levels of MMM in terms of pure consumption items (which is the largest share of the spending that MMM is reporting here) will likely spend more in their early years to acquire the assets that later provide services but no longer require a cash outlay.

        Of course, this is much more complex and data-hungry, and I am not advocating for it here nor am I saying that the way MMM reports it here is wrong or misleading (because he does explain how he counts things, and that is what matters).

        What I am saying is that someone who is still accumulating durable assets will have larger cash outlays than MMM does now, when he is essentially post-accumulation.

        Since MMM would have had to count the expenditures for his cars, computers, and furniture in the past, his total lifetime outlays per year are higher that what his current outlays (mostly covering consumption) are now.

        Of course, MMM managed to accumulate those durable assets very inexpensively and wisely too, managing to spend much less on them than most other people would (and then imparting the knowledge of how to do it on us, his grateful readers).

        Reply
  • Isaac January 19, 2015, 3:41 pm

    Try growing your own vegetables….. Lots of places you can go with this, lasagna gardening and square foot gardening should be easy to get started and keep “tidy”, or just smother a patch of grass (letting it go for a couple months and get “weedy” (become populated with pioneer plants) isn’t a bad idea) with composted cow manure and and then you can sow small seeds directly and encapsulate larger seeds in muddy manure until they’ve roughly doubled in diameter and just throw them at the ground…. Anyway, there are tons of books at your library I am sure, two I would recommend are “Permaculture” by Sepp Holtzer and if you are feeling daring “Humanure Handbook” Joseph Jenkins (“humanure” is human manure, and the handbook is a how to)….. But anyway try to be nice to the wildlife, esp your pollinators and most esp the honey bees.

    As to organic food being a luxury, organic farming practices are much more likely to be bee friendly than “traditional” farming practices, so besides being an investment in your health eating organic produce is also possibly an investment in lower long term food prices…… That being said, “certified” organic is no guarantee of being organic beyond technicalities and small local farms practicing sustainable (bee friendly) agriculture might not be able to afford certification…..

    Reply
  • Marie January 19, 2015, 4:38 pm

    Yay Mr MMM! Very inspiring to read your annual expenses!

    I feel so happy that you honored your son’s desire to skip government run school. I hope Little M continues his music education. And art creativity, while soaking up technical instruction from you and your wife. There is a art method called Reggio, mainly for younger children but possibly there are elements for elementary aged children. Soon he will turn adolēscent and desire lots of independence from his parents. Childhood passes quickly. I am so inspired that your family chose two parents to stay home and raise the child, your choice is the model for my future. Via Mustachian my dream is a possibility. I feel like the memories you create by teaching him yourself will forever be apart of his childhood.

    Thanks you ~
    Marie

    Reply
  • Marcia January 19, 2015, 5:41 pm

    So someone made a comment on my blog that reminded me of the USDA average cost of food at home. I used to look at these a lot and compare to my own spending. Haven’t done that in awhile (we used to be “thrifty”, and now are midway between low-cost and moderate).

    Anyway, I plugged in MMM and am suitably impressed. You are between Thrifty and low-cost. Excellent.

    Reply
  • Michelle January 19, 2015, 7:30 pm

    Wow, impressive again. What I would like to know is for the utilities what is the breakdown (ie, how many kilowatt hours average per month , how much is waste disposal, what about heating? electricity or natural gas (and how much) is your water metered? how many gallons/liters are you using? In Canada, these are at a much higher cost it seems (and we do not have a really warm house, just comfortable, 1300 sq feet both main and downstairs developed?

    Thanks,

    Reply
  • Greg January 19, 2015, 8:16 pm

    Why continue to be so speedy on organic food when there is no actual science behind it?

    Reply
    • Egypt January 20, 2015, 9:24 am

      There is an array of evidence showing that organic foods are better for you. Now, a processed food is a processed food, organic or not, but there are increasing studies showing evidence of harmful effects of pesticide and herbicide residues, for one thing, and plenty of evidence showing that food grown in healthier soils, or older varieties of produce, are more nutrient dense. The last two aren’t absolutely tied to organic, but in general, organic farmers are more likely to use heirloom crop varieties and value soil health. There are also wider ecological issues, which are hard to deny. Yes, it’s a complicated subject, and you shouldn’t take my word for it, but to say there’s no science behind organic foods is false.

      Reply
      • Mr. Money Mustache January 21, 2015, 9:42 am

        Thanks Egypt – sounds like a valid argument and I’m inclined to agree.. but if you get a chance, please link to some actual studies or at least media reports of what they found. Science works better with actual science involved!

        (and I’m guilty of the same thing when I’m in a rush – this will serve as a reminder to me as well)

        Reply
  • Paul January 19, 2015, 9:37 pm

    Why do you even own 2 cars? Why not just rent when you need them. It would be a lot cheaper, and your quality of life would probably increase, as you no longer need to maintain your own cars.

    Reply
  • Julia January 20, 2015, 4:52 am

    I have come to look forward to this post every year. You and your family are truly an inspiration, even to those of us earning not much more than your annual expenditure. Thank you for all you do.

    Reply
  • Kim January 20, 2015, 5:25 am

    Two tanks of gas in a year – you are my role model! I’ll be thinking of you as I walk my child to school today :) Thanks for the inspiration!

    Reply
  • YourNeighborChristina January 20, 2015, 8:03 am

    Thanks for the inspiration to look at my insurance. I’m curious if you use Geico for home insurance too. I’ll check them out this week and see what they can offer me for a car and home package. Because I am human and can’t help but compare, my spending is only a little less than yours for a smaller household, but my no frills is about 17K. Gotta work on that gasoline usage, gotta keep up with the Money Mustaches. :)

    Reply
  • Rob January 20, 2015, 8:52 am

    Holy cow your car insurance is cheap! When I saw the decline in gas expenditure I also expected to see a decline in car insurance. Most large insurers offer usage based insurance now (GEICO is one of the only holdouts from what I remember). Basically, you stick a device in your car that monitors your driving for a couple of months. It keeps track of how much you drive, and how you drive (most of us don’t track where you drive).

    Anyway, someone who doesn’t drive their car that much should get a significant discount on top of all the normal ones.

    Reply
  • Ellen January 20, 2015, 12:12 pm

    We started budgeting for the first time two years ago. Saved a lot on groceries, dining out, and entertainment. Vacations are driving trips to beach communities within a few hours drive. Checked out tons of books on cooking from the library, and found good recipes on the Chow and Budget Bytes blogs. Starbucks is a once a month treat. We still feel tempted by electronic gizmos and have more than a follower of MMM should have. The cars get 48 mpg and we limit driving to a few miles away except for vacations.

    Reply
  • Michelle January 20, 2015, 2:36 pm

    Wow, it’s fascinating to hear about switching to homeschooling. I never would have considered it but depending on our circumstances when our little one reaches school age I think I won’t rule it out. Hope to hear more about adventures in homeschooling in the future.

    Reply
  • Mo January 20, 2015, 2:50 pm

    MMM, just curious, why are you and Mrs. MMM on the Republic Wireless $25 a month plan instead of the $10 plan? I am assuming most of your time is spent in places with wireless access.

    Reply
    • Mr. Money Mustache January 21, 2015, 9:26 am

      Good question, Mo. If I hadn’t stumbled into this side life of being Mr. Money Mustache, we would surely both have the $10 plans, for a total of $240/year for both plans combined. Republic allows you to switch plans TWICE per month, so I’d just activate unlimited data feature on one of our plans for family roadtrips and such.

      Now things are different, because I travel a bit more as part of the fun job of trying to grow this movement. Data access is insanely useful when traveling (maps, plane schedules, websites, emails, etc.), so I drop the frugality in exchange for a great boost in efficiency.

      Reply
      • Mo January 21, 2015, 9:51 am

        Thanks, for the reply MMM. I have been on the Republic $10 plan for over a year and love it. The ability to switch plans for a few days twice a month is a great, and perhaps overlooked, feature of Republic Wireless.

        Reply
  • Allistache January 20, 2015, 4:19 pm

    I have been reading MMM for several months and really appreciate your approach and your general mentality toward life, enjoyment, and productivity!

    I have an unusual situation where I am recently divorced from a man who spent every dime of income and then some, forcing us into foreclosure on our home, IRS tax liens, credit debt and the like. Fortunately, and with the help of a lawyer, I have been able to get free of most of it. So, at 31 I am starting from scratch with basically zero debt, a beat up old car as my only asset, and the small stache I’ve grown over the past year.

    My question has to do with health insurance/Obamacare. Last year I decided to go without, and pay myself the $160/month I used to spend on premiums, and pay whatever I needed to out of pocket (no health problems, so just one checkup plus some dental this year). My tax penalty for taking this approach will be somewhere around $400 this year. It feels like I am definitely coming out ahead. But next year the penalty will double, and the year after that will continue to rise. I also am sick of being so cautious with my activities due to being worried about getting hurt with no insurance.

    Since there is no longer a true “catastrophic” plan available, the lowest price in Washington state available for a monthly plan is $208. (I make too much for subsidies), with a 4K deduc/6450 out of pocket maximum, or the next choice up – $5250 deduc/oop max at $216.66/mo.

    If I encounter a $10K medical emergency, the second plan is the winner and will save me just about $1150 over the course of the year. But no medical emergency, put the $216.66/mo into my savings account (haven’t started investing yet) and I’ve put $2600 into my account for the year, less minor health expenses, which reduces to $1800 after the tax penalty.

    It isn’t likely to happen, but of course the concern is over a bigger medical emergency happening. What do you suggest MMM?

    Much thanks to MMM and YNAB for getting me much further down the path of progress!

    Reply
    • jestjack January 22, 2015, 2:56 pm

      Insurance is one of those things in life that you buy and hope you never have to use. I can assure you if you have an accident or need hospitalization of any sort you will meet you deductable quickly. Get the cheapest plan you dare …and read what it covers. You may be pleasantly surprised. My plan which is far from “Cadillac” provides routine physicals with $10 co-pay…free mamograms…$10 co-pay for the lady doctor…and significant discounts on drugs and after I meet my deductable I am reimbursed up to $500 for the cost of prescription drugs. Aaaand the insurance premiums are deductable….

      Reply
      • Kristine - CA January 22, 2015, 5:03 pm

        I agree that getting the cheapest plan you dare to buy makes sense. Dare, to me, means buying a low cost plan for which you can comfortably afford the deductible and out-of-pocket if something major happens. There’s some risk involved, which makes it a dare. :)

        The Affordable Care Act now requires the free/low cost annual physicals and other periodic diagnostics you’re seeing in your plan. It’s required for most plans, not just the subsidized plans. There’s been so much smack talk about the ACA that it seems that people are missing the easy bonuses. Even if you object to the ACA on principal and you didn’t vote for Obama, there are some pluses at the personal plan level. I agree: read the benefits of the plans you’re considering. There’s a lot there now that wasn’t there just a few years ago.

        Reply
  • chacha1 January 20, 2015, 6:05 pm

    Here is a completely unsolicited suggestion for MMM. :-) Since little MM is technically minded, you might consider giving him the option of studying partner dancing instead of traditional “team sports” aka injury factories. Ballroom dancing is an extremely technical sport with a severe gender imbalance, meaning male students tend to get a lot of extra attention from instructors and are welcome everywhere. And yes, there are college scholarships available.

    Other pluses: the only equipment needed are a pair of shoes and a music source, and the only “playing field” needed is a room with a wood floor. The injury risk is low and the sport has been documented as improving social skills in participants. You always compete at your own level (newcomers don’t get judged against champions) and age level.

    Finally, the boredom quotient tends to be very low once a student is involved. There are nineteen different competitive ballroom dances in four divisions, plus salsa, west coast swing, country two-step, nightclub two-step, hustle, and Argentine tango. There are competitive circuits in all.

    Reply
  • Lessismoore January 22, 2015, 5:43 am

    Does anyone use or can name the best free app for expense monitoring? I would prefer one that can snap a shot of a receipt and then you can choose the proper categories or divide it into multiple categories, if necessary. Would be nice to have a no reciept option also, available for cash purchases from informal Market vendors. I enjoy not spending, in fact my wife doesn’t like to shop with me because I never buy anything. However, I have never tracked my spending out of laziness. Hope that a convenient app might get me interested in wasting my time on something that feels like expense reporting for work. By the way this article made me decide to stop paying for a haircut… probably 100 USD/year.

    Reply
  • Nikki January 22, 2015, 12:36 pm

    Thanks for posting this! Inspired me to go through Mint and do my annual totals as well. I’m just starting out with this process so still have mortgage. Also had our one car break down this year so bought a whole new one, which then itself incurred some fairly large repairs. Hopefully we won’t have to spend that $6K again next year and that will get us back on track.

    Reply
  • karen January 24, 2015, 11:02 am

    I found your blog about a year ago, and read it daily. On the days there is no new article, I keep the momentum going, and re-read articles.

    Whereas I would never emulate your lifestyle and mimic your every word, I am truly inspired by your blog. All the criticisms I read in the comments here and on reddit are meaningless, and you should not get wrapped up in anonymous (or non-anonymous) criticism…. instead understand you are making a difference in the world, and some of us truly appreciate your inspiration.They are all focusing on the tree and I am focusing on the forest. I am not about to get caught up in details of whether your are including the price of your bike in your expenses. Instead, I look to your blog for a fresh perspective, tips, guidance, motivation, and inspiration.

    That all said, I am simply amazed by your 2014 expenses. $25,000! Incredible!

    Inspired by your blog (and by reading all of Suze Orman and Dave Ramsey’s books too), I have been focused on making changes. We paid off our mortgage this year. Everyone made fun of us, saying it was foolish to lose the tax break. I just laugh at them (in their faces), and point out how much money we saved on interest…and now that DH may be losing his job, we sigh with relief knowing noone will take away our home.

    I have been frugal my whole life, coming from the most frugal parents you will ever meet. Even though I am frugal, and the mortgage is paid…we aren’t anywhere NEAR your level of badassity. Our expenses in 2014 come to about $68,000! And that is not including income tax. This post of yours really punched me in the face, and made me sit up. Here I was, thinking how awesome we were paying off our mortgage and having a nice retirement saved up…and then I read this post and hung my head in shame. I think I have a lot more reading to do, and a lot of re-evaluating to do as well. But even if I am no where in the same stratosphere as you….at least know you inspired us to better our situation immensely, and will continue to do so!

    Reply
  • Jodelino January 24, 2015, 2:15 pm

    Impressive, and certainly inspires me to scrutinize my own spending.

    One category that I don’t see here and is a relatively big one for me is live music performance–all the way from a few bucks to street musicians to cover charges at a bar to concert tix for rock, pop, classical, and opera. This is a splurge I feel good about: it makes for great date nights with my husband, and I’m supporting musicians, performing arts venues, and the local arts economy when I buy these tix.

    Rock on!

    Reply
  • Matthew M January 26, 2015, 11:24 am

    You should count some of your food bill as transportation because you are using food to fuel your body when you ride your bike. Or put another way, for example, your family might consume 10% fewer calories if you drove a car instead of riding a bike. In your case with $7,109 worth of food and dining this amounts to $711. $711 is enough to buy 355 gallons of $2 fuel which takes your 28 mpg car 9,952 miles.

    Not sure what my point is here other than some food cost could be associated with transportation. I did some math on my own; it costs $0.054/mile to fuel your body with potatoes while riding a bike. ($0.39/lb, 27 calories/oz., 58 calories/mile). Fancy organic food could easily cost ten times as much per calorie as potatoes. So, I think biking and driving could cost about $0.50 per mile.
    Btw, I love riding and all the health benefits of riding my bike to work.

    Reply
  • Cheryl January 26, 2015, 12:26 pm

    We are a family of 6, with 4 girls 7 and under. We are both engineers and have always used an au pair for childcare. We do aspire to become more Mustachian, but I’m not sure we can even claim it with 3 cars (1 for each of us for work and 1 for the au pair to drive to preschool, doctors, etc). We live in northern Virginia, about 45 minutes from DC, and with our jobs in construction project management and a regional sales engineer, eliminating our cars is not possible.

    But we did cut the cable cord a few years ago (before it was cool!) and only pay for one cell phone with Republic Wireless. We just switched to GEICO insurance (I know, sound like a commercial!!) and I was surprised at how much we saved. We buy our furniture from Craigslist, and my husband has become quite the whore… BRAG ALERT – he found an Amish dining set for $650, used it for 9 months and then resold it for a $950 profit!

    We have spent our $$ wisely since we first paid off college loans and all credit cards over 15 years ago. We have 2 rental houses, (ONE of which was a good investment, the other was in Florida in 2005 :-( ), and a significant chunk of $$ in our 401ks and IRAs.

    But…our household expenses are much different with a household of 7 (with our au pair). The girls (and us!) need their own space and bathrooms, so we do have a big house. We also can’t drive a 4-door sedan, we have 2 minivans and a truck (for my husband’s job in construction and all our DIY projects).

    For example – last year my oldest started kindergarten. But my younger 3 were in preschool for 2 to 4 days a week. Our monthly DISCOUNTED bill for 9 months was $731. Add in the $100 annual registration fee and we’re at $6700 just for preschool in a year, not counting childcare!

    I would love to to see some details or interviews on spending amounts with big families, especially with young kids. Please help me not feel so terrible about my spending rates, even on a per person basis. :-)

    Reply
  • Ivan January 27, 2015, 7:09 pm

    The total for Home in 2013 is wrong I believe – should be $860 instead of $775. You missed the landscaping/plants :)

    Reply
  • Swati January 30, 2015, 7:43 am

    Wow that’s really impressive and makes me look like a fool with nearly $150,000 in yearly spending. But then again, we spend $8k in property taxes alone. Still, lots to learn from you.

    Reply
  • Joe January 30, 2015, 12:18 pm

    I loved your budget spreadsheet and I wanted one for myself so I just copied and pasted it into Excel and made a new tab for my budget.

    If anyone wants a copy you can download here – https://www.dropbox.com/s/7ihgvuivsj8i15j/Mr%20Money%20Mustache%20Spending.xlsx?dl=0

    Reply
  • Patrick February 3, 2015, 6:45 am

    I remember from some time back that you have loads of free trips thanks to Uber vouchers. Did that play any part in your amazingly low car costs?

    Reply
    • Mr. Money Mustache February 3, 2015, 4:53 pm

      No, I have only used about 3 of those credits so far, and they were for airport transit in other cities. BIKES are what are saving me all the car money.

      Reply
  • Ally February 4, 2015, 3:21 pm

    Two thumbs up on the education decision. A family of your calibur has no place on the conveyor belt.

    Reply
  • Knichols February 5, 2015, 10:45 am

    Wow! Just, wow! YNAB is amazing! It’s everything I wanted Mint to be! I am still in the budgeting phase, as my family grows their frugality muscles. Mint just wasn’t sophisticated enough to understand how to mange items like vacation savings. It just never quite covered all of my picky budgeting needs. (I like to have a death grip on every aspect of my money. Yes, I have control issues.) So I created this massive, elaborate multi-tab spreadsheet to manage my money. Then manually entered every single transaction. It was a thing of beauty when it worked, but soooo much time!
    YNAB manages my budget buckets exactly how I do, but I can import transactions and they automatically filter into my buckets. Woohoo! (No, they don’t connect directly to your accounts, but let’s face it, that never REALLY worked in Mint, did it?)
    I’m only 4 days into them 34 day trial period, but I am 99.9% sure I am going to shell out the one-time $60 fee that allows me to have access on multiple devices (hubby and I can both have the updated budget on the go), and also includes future upgrades. I love that the company seems to genuinely care more about people beating their money challenges than making a profit. This is the kind of business I am happy to support! I love it when smart, caring people find a way to run a successful business while making the world a better place. You go, YNAB!

    Reply
  • Hope February 7, 2015, 10:48 am

    The comment about your son creating electronic music popped out for me! Thats awesome! I am a professional (classical) musician with no programming background at all and I have also recently started getting into creating electronic music. Is he using MAXmsp? You probably already know about it, but if you don’t, its a pretty amazing platform with virtually limitless capabilities, especially for doing interactive electronic music (super awesome). If you and your son haven’t tried it I would recommend looking into it. You might be able to get educational pricing with the homeschooling and then its relatively cheap. I’m a super beginner at it, but I know people who are good at programming create marketable apps and plugins with it. There is a ton of crossover between pop and classical in the electronic world too which is cool.

    Reply
  • Rosemary February 7, 2015, 5:19 pm

    A suggestion to improve your breakdown – shouldn’t homeschooling expenses be part of “school tuition” rather than the “other” subset of “misc”? After all, homeschooling is the reason you have no school fees, and a common criticism of budget breakdowns is lumping too much into the “miscellaneous” group.

    Reply
  • Chad brick February 8, 2015, 7:16 am

    Imputed rent.

    Imputed rent.

    Imputed rent.

    Your spending appears a third lower than it really was because you keep hiding your biggest expense.

    Reply
  • Stefan Koehler February 22, 2015, 3:00 pm

    Thanks for this great blog. Referred by a good friend I’ve been following for a year. I find your blog inspiring and informative, and enjoy talking about the mustachian lifestyle.

    I’m impressed by your annual spending of about $25K for a family of three. A couple of questions related to this.

    You spent about $6.6K on groceries in 2014. I spent about $5.1K. I’m a single guy who does most of his shopping at Costco and Trader Joe’s (Costco since I eat the same healthy food almost every day). I typically don’t throw out any food, nor eat huge quantities, don’t have a huge house, i.e. no need large amounts of cleaning supplies, don’t buy much meat (I deer hunt and harvest my own), little organic food, cheap coffee ($5/lb at TJ), no craft beers or wine, mostly Kirland or Trader Joe’s brands.

    How can a family of three spend only about 30% more on groceries than a single guy especially when the family buys organic food and meat?

    Reply
  • Kristina March 4, 2015, 10:13 am

    Wow. I have to say it pains me to see how much cheaper it is to live south of the border. $600 for ‘expensive’ flights is standard fare here. Also shocking was how little you pay for healthcare. Our monthly healthcare premiums here in BC (where healthcare is ‘supposedly’ covered by our taxes) is $144 for a family.

    Good work on frugal spending!

    Reply
  • Kristina March 4, 2015, 10:32 am

    I re-read the numbers and am even more blown away.
    Car insurance: $350. We pay roughly $1000 for a 15 year old 4door car and a perfect driving record.
    Cell phone: $300. We pay $980, though in theory we could get an older non-smart phone and pay $600/year. $80/month is the going rate.
    Gas: $71. Don’t even get me started. BC currently has the highest gas prices in North America. Canadians typically pay 30% more.

    Suffice to say, I’m feeling screwed.

    Reply
  • McDuffy March 11, 2015, 7:39 pm

    Back out housing, and you’re about 90% of the MIT’s estimated living wage.
    http://livingwage.mit.edu/places/0801345970

    Reply
    • McDuffy March 11, 2015, 9:05 pm

      Haha. I meant ~15% over

      Reply
  • pmm July 3, 2015, 12:07 am

    MMM-
    i think you’re missing a cool opportunity to point out that your expenditures over the course of this blog have been going up at a rate slower than inflation. this is, i assume at least party, since not all prices go up at the same rate, so by switching what you buy you can outsmart inflation.
    if you can figure out a personal rate of inflation- how much your expenditures go up on the same amount of happiness- then you should use that number to calculate the real rate of return on your assets.

    Reply
    • Mr. Money Mustache July 3, 2015, 8:07 am

      Thanks PMM, good idea! And this is even when I feel I have been inflating the lifestyle with the fancy groceries and whatnot.

      I have an old unpublished post called “Mr. Money Mustache vs. Inflation” that I should dust off and get finished.

      Reply

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