Exposed! The MMM Family’s 2016 Spending!

Well, I might as well come clean on our spending for last year.  It either went up, or way up, depending on how you want to account for things.

Every year, this annual report seems to come out a little bit later – mostly because I’m no longer all that interested in how much money we spend. And Mrs. Money Mustache, my faithful assistant in creating these reports in past years, has disappeared completely from the blog – justifiably more interested in her Etsy Shop than family finances. Such is the nature of retirement.

If you are early on in your journey to financial freedom, you should not do what we are doing. Until you have your finances on auto-pilot so that you are saving 50-75% of your income, you should absolutely be reviewing every piece of spending and adding up all the categories.

(Related Article: How Rich are You? How to find your Net Worth and Savings Rate)

But we’re all done saving for retirement. Our cash outflows feel both luxurious and reasonable, and they are well below the retirement income budget, so it seems less and less necessary to measure them.

After all, if you are happy with your body composition, do you still need to keep measuring every calorie you eat? If your breathing is clear and uninterrupted, do you track your annual number of breaths?

But our Supposedly Low Spending has kind of become my brand. And because of that, there are even conspiracy theories that form around this spending:

“There’s no way he’s making that much money and only spending $25k.”

“Oh, looky there.. Mustache bought an electric car as an “experiment”. I wonder if that will show up on their annual spending!”

“How much of his [travel/entertainment/home renovation/marijuana] expenses is he hiding from us as business expenses?”

So I thought I could do things a little differently this year. I can share the normal family expenditures as well what our businesses spent, and everything in between.

The Basic Expenses

Here’s the familiar chart, updated for 2016, complete with last year’s numbers for comparison.

Mortgage Interest00If we had a $400,000 loan at 4%, we would have paid $16,000 in interest (!)
Property Taxes14111895Massive house price increases in my neighborhood come at a cost (prices have doubled in 4 years).
Food and Dining7,4006,807
   Groceries   6,232   5,980A warehouse store opened up in town, within biking distance of home. This reduced grocery costs a little as I shifted more purchases there. See article: Killing your $1000 Grocery Bill
   Wine/Beer   627   321Fewer large parties this year (boo), plus we cut down our glass-of-wine-or-beer-with-dinner habit (yay!). But many people have been giving me free boxes of beer in exchange for helping them with stuff, which probably makes this cost artificially low.
   Restaurants, Coffee Shop   541   506Mrs. and Little MM started ordering fancy pizza deliveries every time I'm out on a trip.
Medical3,73310,868Here's where the costs went way up this year.
   Doctor Visits   0   3807My poor little lad broke his arm on December 30th (fell from a play structure while playing with me!)
   Health Insurance   3,000   6720A new Kaiser health insurance plan. (A downside of the ACA for those with higher incomes)
   Dentist   256   256
   Pharmacy   42   0Aspirins, bandages, toothbrushes, and such included under "groceries". Thankfully no prescriptions for any of us this year.
   Physical Therapy   435   0
Auto and Transport945490
   Gasoline   332   1051 snowboarding trip, plus assorted errands in the van.
   Insurance   357   449Cost increased in September due to newer car (Nissan Leaf).

Still fantastically cheap thanks to Geico
   Registration & Testing   169   75
   Express Tolls and Uber/Lyft   0   70Still taking Uber/Lyft to the airport instead of driving. Much cheaper than driving/parking, especially if you have some referral credits.
   Service & Parts   88   0Both vehicles in top shape this year, no scheduled maintenance intervals reached. I'll definitely be buying some windshield wiper blades in 2017 though.
   Public Transportation   0   0Nothing against the bus, Bikes are just faster
Utilities16521,575Electricity, Gas (heating, cooking), trash/recycling, city park fees, etc.
Cell Phone5396002 smartphones with data on Google Fi and Republic Wireless
Internet Access692540I negotiated a lower rate for part of the year, then ditched Comcast for Longmont's amazing Gigabit Fiber service ($50/month for 1000 Mbit/S access! - Nerdvana!)
   Home Renovations120   1696Finish materials for my house and the homes of some friends/family. Does not include the $30k detached Studio I built.
   Home Insurance0   0Still self-insured for the primary house. Please don't complain about this in the comments section ;-)
Gifts/Donations1,7472000Does not include donations made by the business.
School Tuition00Little MMM was back to 100% public school this year, due to increased confidence/toughness in getting over anxiety. Go little man! But we also do a shitload of learning at home, because it's fun.
   Shoes & Clothing   754   622Lots more fancy stuff for the gang from Gap, Old Navy, etc.

(my clothes are mostly free stuff, thrift shop or included in grocery receipts from Costco)
   Sporting Goods   0   98Sweet Compound Bow and arrows!
   Shopping Misc   1,274   1000Mostly at Amazon - household/kitchen goods and computer parts
   Books, games, gifts   488   383
   Other   580   422Stuff I am too lazy to sort out. If something is not listed, assume it is here.
Travel2,3762,335Flights to Florida in January, Canada in July and December,
TOTAL$23,941$30,193Adding in our artificially high medical costs is what did this budget in.
   Subtracting Tuition, Donations22,194   28,196
   Subtracting travel, crossfit19,588   25,861
   Subtracting organic/luxury food17,531   23,614Assuming a 33% increase on groceries due to organic + meat.
   Subtracting home renovation expense17,411About $22,000This is what our "no frills" living cost would be (although you could subtract another $6,000 if we had a lower income and qualified for the health insurance subsidy)

So What is Mr. Money Mustache Hiding From Us?

In a word: Nothing – this is my best guess at what our true expenses would be, if we lived a normal, retired life.

But here are the exceptions and special situations, which you can account for however you like:

  • Higher Income is forcing me to pay full-price for health insurance. Health insurance pricing comes on a sliding scale from “nearly free” below $25,000 in family income, up to full price for incomes over $80,000 (see subsidy calculator)
  • But then again, our family business (of which we are employees) pays these premiums on our behalf, so they are pretty painless
  • I built this nifty studio, spending about $30,000 in the process. Is it spending, or investment? Since it increases the value of the house by much more than that amount, and I will be selling this house and moving somewhere else eventually, I chose to treat it as investment. On the other hand, spending money on repairs, changing paint colors, gardens, or swimming pools would count as spending to me, since these items are more likely to be recurring and/or not recouped at the time of sale.
  • I bought a Nissan Leaf for roughly $14,000 after all costs. This was $9,000 more than I got for selling the old Scion xA. Is this spending? Well, I definitely would not have bought it if it weren’t for the blog (it served as a strong form of advocacy) and I think it may have actually made a noticeable difference in US Leaf sales numbers – which was my main purpose. Sure is a nice car, but we barely use cars for personal purposes (I had to become an Uber driver in order to even get enough drive time to properly test the car!)
  • In late 2016, I gave away $100,000 of this blog’s income to various charities, with much more to come. Having a business that makes and gives away money probably reduces the need to give away my real retirement savings.
  • Travel as Mr. Money Mustache (trips to Ecuador, Los Angeles, Portland, Seattle, and a couple of other places) added up to about $4,000 between flights, hotels and food. None of this is stuff I would have done for personal fun, but it may have burned me out enough that I skipped or missed other personal trips (camping, etc) that would have increased my travel spending.
  • Mrs. Money Mustache’s Etsy shop spent more than $20,000 on materials, shipping, tools, etc. Most of this went right back out the door and earned a profit, but you could argue that both of our business expense accounts satisfied our “spending desire”, displacing personal spending in some way. In fact, writing for you consumes so much of my limited free time, that it may prevent me from expanding into other, more expensive hobbies (like upgrading my mountain bike or snowboard gear).

Overall, it looks like another fairly reasonable year. The biggest lesson that I try to emphasize is that spending does not have to scale with income. We spent less than 10% of our taxable income this year, and still cannot see any reason to inflate the lifestyle any further than it is already.

It’s a beautiful life!


Unrelated but Special Thanks to a Reader: Over the last few months, a lot of technical stuff has gone on behind the scenes here. If it weren’t for some serious help from skilled tech people,  this blog’s heavily used forum would no longer be functioning.

 I wanted to thank Kevin Clack – aka Clack Consulting for stepping in to upgrade the forum and continuing to help me with necessary fixes to this day. And if you have a well-established business with technical and web presence needs, you may even be able to become one of his clients as well.

  • Natasha June 1, 2017, 6:01 am

    Thank you to anyone helping with the forum. Please don’t ever stop – your work matters.

    It keeps me sane, motivated and informed in a world of noise!!!!

  • Jane June 1, 2017, 4:51 pm

    I would love to see a version of this that lists not only the expenses, but the money set aside for the unexpected that goes into a budget like this. For example, you list yourself as “self-insured” for your home insurance. Now we all know that *you* have a large enough net worth that you don’t need to set aside extra money every year in case your house burns down, etc. But what about someone who is still heading towards financial independence? If I were self-insuring my house, I would be funneling money every month into a special account (even if it was just designated in a spreadsheet somewhere) that was the “home insurance” account. Because if you accidentally spent that money or more likely were counting on it for your 4% withdrawals and your house burns down, then you’re in trouble.

    My point is that your spending is part of a larger picture of money allocations, and it would be interesting to see where and how much you would choose to allocate your income to be saved if you hadn’t already achieved FI. My budget includes several “savings” categories for things like home renovation (expected and unexpected), so that money is set aside monthly for expenses that come very irregularly.

  • FIRECracker June 3, 2017, 12:29 pm

    Despite your earnings increasing year over year and Mrs.MMM’s business growth, your spending is still only 30K/year! I love how you live what you preach.

    We spent around the same amount ($30,879 USD/year) to travel the world, but it’s just the 2 of us, no kids. We discovered that travelling the world costs WAY less than staying home! People think you need to spent a ton of money for a high quality of life, but it’s so not true. Thanks for showing us how it’s done!

  • Phil June 4, 2017, 9:54 pm

    How do you categorize business use of home and business expenses that you may have otherwise paid for personally eg a computer? If I followed this way of tallying then our house of 3 would be under 30k with two gas cars. But without running 2 businesses the number would increase. Her in CAN free health and we have benefits with work so makes our spending seem lavish.

  • Me,myself,andI June 4, 2017, 10:30 pm

    Inspired to do my math. In 2016 I spent 23% of taxable income (not including investments, charity, side business income/expenses), spent 36.8% in taxes between federal, state, and all the various entitlement programs (except for my business I have no deductions), and saved 40% of taxable income (my goal is to reach 60% savings which will take moving from SF). I’m inspired by this blog and community to do better and part of the inspiration is driving a move from my ridiculously high cost of living city. I actually looked at Longmont but realize I probably need to be paired off to be happy there. Otherwise unless you’re a dude and working on a project or working out, it’s like you’re competing for “couple” time.

  • JohnBoy June 5, 2017, 8:36 pm

    Hey MMM,
    I was wondering if you would consider seeking out a few post-FIRE MMM readers and writing articles on their annual budgets, for future episodes of this post. It would be interesting to see real case studies of people who have actually remained on a super low budget for 10 years, as well as other examples of people who spending has inflated since FIRE has given them the opportunity to do thing they enjoy that happen to make them money.

    • Liesbet June 9, 2017, 8:23 am

      That would make for an interesting series. One of the benefits of needing less money to live a full-filled and happy life is that you do not need an average 9-5 job and big income! My husband and I have been able to live in total freedom, on the road and on the water, internationally for over a decade. We work remotely via the internet, see the world and live off less than 15K a year. It’s all abut priorities. :-)

    • snowcanyon June 9, 2017, 3:41 pm

      That sounds awesome!

  • Liesbet June 9, 2017, 8:18 am

    I sometimes wonder, as frugal people who prefer memories and travel over personal goods and gadgets, whether we would spend more money and what we would do with more money, if we were “rich”. I have a feeling that we would just do like you guys and not change too much, except maybe treat ourselves with dinner out more often, or fly to a more exotic, far-away destination. In general, we would keep up the common sense, buy what we need, and enjoy an alternative lifestyle, where free stuff like hikes in nature give the necessary high. :-) Well done once again on only spending 30K for a family of three . That is amazing. Our yearly average is between 13K-18K for two adults. It was more (up to 20K) when we were cruising full-time on our sailboat for eight years. Without our own house/property now (yes, we are technically homeless, taking care of other people’s houses and pets in return for free rent), we save on maintenance and parts! It is a good life, indeed. :-)

  • snowcanyon June 9, 2017, 10:21 am

    MMM has amazing talents that he has parlayed into a lucrative business providing, as he states, more money than he will ever need or use. It seems like so many ER folk are entrepreneurial and start lucrative blogs or businesses post-retirement, and then their spending (understandably) creeps up.

    I have no desire to run a business, or to start a blog. I just want to quit, and I wonder- how long can you really be frugal for? Does it get old? Do you run into annual 10k health issues like the MMMs? After ten years, it’s getting old living on 1-2k a month, and without similar talents or interests as the MMMs, what happens in five years if I quit? Will I hate my life? Have to go back to work at a worse job? Go broke? Get sick of endless frugality?

    Without these remunerative interests and skills, can one really make ER happen? And enjoy it?

  • Maria Z June 19, 2017, 9:29 pm

    Hi ! I love your blog and it has inspired me and husband to make some important changes in our decision making process. We still have a lot to learn! But thank you for opening our eyes!
    I just wanted to say hi and share that I would love to hear Mrs. Money Mustache’s side of the story. I think a great way of spreading your baddasity further would be to also share her point of view. Learning from her doing amazing things while raising a family will motivate more young women to follow your lifestyle… just a thought… thank you for sharing your wisdom with the world.

  • Carolyn July 19, 2017, 2:28 pm

    Hello – I love your blog. It inspires me to be better …not only financially but to evaluate a variety of areas in my life.

    I am curious – what is your take on future college expenses for your son? I wonder if you have given it any thought?

  • Dor August 11, 2017, 12:10 pm

    I bought a Nissan Leaf for roughly $14,000 after all costs. This was $9,000 more than I got for selling the old Scion xA. Is this spending? Well, I definitely would not have bought it if it weren’t for the blog (it served as a strong form of advocacy) and I think it may have actually made a noticeable difference in US Leaf sales numbers – which was my main purpose. Sure is a nice car, but we barely use cars for personal purposes (I had to become an Uber driver in order to even get enough drive time to properly test the car!)

    would you still consider it a success if this is true:

  • Carolyn September 6, 2017, 4:38 pm

    Just for comparison purposes for you and your readers here are my insurance numbers:

    I pay $80 per pay period. I get a $25 discount because I participate in the Wellness Program. My company pays $395 per pay period. (80+395) x 26 pay periods = $12,350 a year. This is for my son and me.

    Deductible is $2,600. After deductible, the co-pay is %20 and the out-of-pocket max is $5,000 per person.

    My son has a condition which causes us to hit the out-of-pocket each year.

    I enjoy your blog. I may not agree with everything you write but you inspire me! :-)

  • Zimmo November 14, 2017, 12:57 pm

    I have just been turned on to your blog. I love this exposing of the numbers… its really helpful. Also, its really interesting how many things are affected by being able to be retired. Like if you own your home flat out, you don’t pay mortgage interest. If you don’t have to work, you don’t have to send your kid to daycare. Both are our two top expenses. You don’t need life insurance if you have a lot of money to pass on to your kid in case of unexpected death. You can afford to self-insure your home.

    Couple of questions:
    – How do you keep your utilities so low? Do you pay for water?
    – Do you ever pay for a sitter to go out / get alone time with your wife? (Or do you have enough alone time with kiddo in school and not working. Do you trade?)
    – Do you have a pet? If so, how do you consider its expenses and what do you pay for?

  • DLcygnet December 4, 2017, 10:37 am

    Just for a little perspective: The U.S. poverty threshold within the 48 contiguous states for a family of 3 is $20,090 (as of 2015). https://en.wikipedia.org/wiki/Poverty_in_the_United_States#Recent_poverty_rate_and_guidelines
    This is very sobering and makes me wonder where they get their numbers. It sounds like your no frills budget with healthcare subsidy (~$16K) more than fits within that figure. Also, keep in mind that you would probably be eligible for food stamps and tax credits at that level, reducing your out of pocket expenses even more. Is there any chance the 40 Million people “in poverty” is half filled with responsible retirees?

    • Mr. Money Mustache December 4, 2017, 1:55 pm

      There are definitely *some* people below the poverty threshold who are living well and even by choice. But remember that my numbers don’t include housing, and I have closer to a $60k life by traditional measures.

      Regardless of current situation, I believe almost everyone can benefit by understanding where their money goes, and dropping assumptions about common expensive stuff like [personal car transportation and restaurants.

  • EJ July 19, 2018, 2:51 pm

    Hi MMM,

    Just nudging/hoping/wondering about a 2017 expense report. You have admittedly already answered the big expense question with your post on rising health insurance costs. But I still find the annual budget to be a great motivator and terribly interesting. I love the blog either way. But in case you were wondering, even when the numbers are remarkably similar to last year, they provide fresh motivation to bike more and take the lead in planning events at places that aren’t restaurants and bars.

    Thanks for all the content from you, the comments, and the forum; it has helped keep the almost decade long journey to FI and maybe FIRE exciting and engaging.

  • Jason August 8, 2018, 10:11 pm

    Still waiting for 2017 expense report! Its aug already:)

    • Mr. Money Mustache August 9, 2018, 7:33 pm

      Yeah, I have decided to stop doing these things for now. Spending is probably right around the same level as it always is, but I haven’t had the motivation to keep tracking for now – precisely because there were no changes to track!

      The only exception is the health insurance premium as noted in a separate article (search for “shitty health insurance”) – those premiums are through the roof, but you only pay them if you have a very high income, so it would be close to zero if I were really drawing just enough from investments to cover this lifestyle.

  • Mckala Moore April 30, 2019, 2:28 pm

    I love reading your articles, it excites me more and more about the path that i am going down. I LOVE the itemization that you do, do you have any advice for people that have significant others that are not quite on the same page about money and materialism? I’m 23 and really want to have that kind of freedom and am well on my way to achieving it, but my partner is really struggling to comprehend why they should be cutting back.


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