DFG 2017 Year End Summary

June Camping
In this post we are going to take a peak into how the DFG family spending went for 2017.  The main points of interest are:

  • How did spending compare to last year
  • Were we frugal or cheap
  • Was savings on track for achieving financial independence

Last year we switched to using Mint to aggregate all of our data.  It also has a decent budgeting tool which I setup just to see how it works and how we do against it.  As events changed over the course of the year the budget was adjusted.  It has some nice features like adding your various savings goals  to it.  For example I added Travel and Retirement goals to the budget.  This allows me to save first for my goals and then budget the remainder.  The other feature I like is the ability to put in sporadic items like my insurance (every six months).  It will create a budget item and split the estimated cost over the time period you specify.  This ensures I am setting aside enough cash each month for the bill.



Car insurance budget in Mint
Spending vs. Last Year

Unfortunately since this was the first year of data it is unable to show a comparison of the previous year.  Below is my best match up of the categories.

Category
% Change
Notes
Mortgage
+29%
Reduced principal by an additional $6300
Insurance
-14%
Switched in second half to lower insurance
Utilities
+1%
Costs rising but saw decrease in water bill
Automobile
+52%
Long distance commute for 1/2 the year and maintenance for the 11 year old minivan (last year no unwarranted repairs)
Food
+13%
Spent more on dining out and junk food than would have liked
Everything Else
+13%
Since I didn’t split healthcare and travel out until 2017 I have just lumped everything together including miscellaneous.

With regard to Everything Else there are a few things that caused this large change.  First was my back issues which caused our near non existence out of pocket health care costs to jump significantly.  Second was home maintenance.  We replaced several windows in bad shape and remodeled the kids bathroom after finding water damage and rot.  While unplanned, it should add value to the home.  Last my wife and I purchased bikes.  I look at this as a long-term investment for health and family happiness.

Frugal or Cheap?

In the end our expenses were 25% higher than last year.  Considering the investments in the house and paying down the mortgage it puts my mind at ease.  Again I advise those wishing to buy a house, that it costs money to maintain it.  That, utilities and a mortgage will consume a large portion of your income.  Best to buy the smallest house you need and pay it off as soon as you can.

Looking back over the year I would say we were neither frugal or cheap.  We lived a grand year in an over sized house and took several vacations.  Food was plenty and we shared a decent portion of our income with those less fortunate.  We are not up to the 10% of giving I would like to be at but I hope to get closer to that this year.

Financial Independence

The IRA's were maxed out and the HSA was as well while under my old employer.  The HSA money is sitting part in investments and part in cash (to avoid fees).   I was only eligible for a 401k for half of the year.  Regardless I was shy by $850 to maxing it out.  The goal was to maximize contributions to take advantage of tax free investment growth.  The remaining cash saved was moved to my brokerage and I maintain a 3 month emergency fund.

So does all of this get me closer to financial independence?  Unfortunately it does not if I wish to quit the rat race by age 55.  Plugging the numbers into various calculators out there I am likely to get there by age 65.  So if saving 37% of your income isn't enough what is?  Well if I stay in my current home I need to save 60% of my current income.  This is because I will be relying on dividend income and not drawing down my portfolio.  Given my current housing expenses and the fact I will have children in the house until I am in my sixties, that will be a hard goal to achieve.  I am working with the rest of the DFG family (mostly my lovely wife) to figure out a game plan.  More to come on that in 2018.

In Summary


Life was good in 2017 but could be grander by living with less and giving more.  As always one should continue to learn and grow and become a better person.  The more who care the better this world gets so lets keep going strong in 2018.  I hope your year was good too.

Peace,

Dividend Family Guy

Comments

  1. Hi DFG,

    Even though your expenses are higher than last year, I think you're doing a fantastic job at tracking / managing your spending and accommodating external events as they occur. Congrats! And pretty much maxing out your 401(k) along the way too. No battle plan survives contact with the enemy, so being aware of your spending and keeping options open is critical.

    I hope that 2018 is a great year for you and your family, and that as doors shut in one area, other possibilities open up for you.

    Best wishes,
    -DL

    ReplyDelete
    Replies
    1. Hey DL,

      Yep plans do always get altered when you least expect it don't they :) I think that is probably one of the best lessons for my kids to learn. Maintain a buffer (emergency fund) for when your plan doesn't work out the way you thought it would. And stay positive!

      Later,
      DFG

      Delete

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