I have been tracking my spending since about 2011.  Knowing where your money goes is a great way to make improvements in your spending and direct saved money in a manner that maximizes your savings and investing potential, so you can become financially independent.

One thing I don’t do is live on a budget.  Living within a budget provides limitations on what you allow yourself to buy.  I have hit financial independence, so if I want to buy something for myself, I allow for the purchase, but I still don’t allow myself to waste my money on stupid things.

For 2019, I had total expenses of $14,728.03. There are some frivolous things I didn’t bother tracking, like everytime I would go and swim laps at the public pool at $2 a pop, or cash tips when getting my hair cut.  I don’t want to be an ass about this stuff and I have better things to do and get super detailed with dozens of catagories like some of the weird blogs out there.  Keep the shit simple.

Here is a view of my spending, broken down by the different generic catagories and by month.  My catagories are pretty basic: housing, food, car, health, and discretionary.  Discretionary is my catch all.  It can be money used for dating, travel, going out to eat with friends, things I purchased for myself but don’t really need (i.e. camera equipment, a new TV etc).

For 2019, my overall spending increased 11.18% for the year as compared to 2018.  For someone who is an early retiree (currently age 40) that would be a big increase.  But I have no concerns, really.

When looking at my expenses, we see that my essential living expenses (housing, food, car, health) have actually overall decreased by -7.10% compared to 2018.  It was my discretionary spending that jumped 29.08% from last year.  I went on a spending spree for myself, because I felt like it.  I didn’t date a whole lot this year.  I met one girl who we clicked really well, early on in the year.  But she brought up wanting kids and the family life, so I unfortunately had to end it.  Only went out on a couple first dates after that.  Mostly I spent money on me this year for a change.  I bought more camera lenses, a new TV, some tools for the shop, set up solar system for the shop which is totally off grid, and other home projects that I felt like doing.

Here is a pretty chart showing the break down of my spending and the percentage each catagory sucks up.

Discretionary Spending- $8,641.88, 59%

This is my dating, travel, eating out, buying things I don’t absolutely need but are related to hobbies and interest, and unnecessary home projects.  For most people, discretionary spending is a much smaller percentage of their spending.  For me, I have no mortgage or any debt at all, so my discretionary spending is much larger.  I splurged and spent a couple grand on camera lenses, bought a new flat panel TV and hung it on the wall, and other fun stuff.

Home Expenses (taxes, insurance, utilities, internet, cell phone) $3,456.54, 23%

I’ve been mortgage free since about 2011, so this makes up my second biggest category.  I’ve always lived in less house than I could ever really afford.

Food- $1184.32, 8%

This is one of the few essential expenses to go up from 2018, by 2%.  I really just prefer eating at home and making food versus picking up food at a restaurant.  I’m learning to cook new things and experiment.  I’ve recently started making pizza at home and it only cost about $5 to make 2 large pizzas.  I can control the ingredients and pick up fresh ingredients as well.  Eating the same amount of pizza at a restaurant can easily hit $20.  So cooking at home is a great way to reduce spending.  Have your friends come over and grill steaks versus going out.  Chirizzo and Mussels, yep, I can make that for $3 versus $15 eating out.  Plus, I’m starting to enjoy cooking.

Car- $1,200.04, 8%

I left work in June and that really was the difference in my car expense from 2018.  I’ve been fortunate to not really have repairs either.  But when a problem comes up, youtube and searching the internet is your friend for trying to do the repair yourself and save big bucks.  I’ve literally done a few repairs for $10-20, and looked at estimates of shops charing $200 for a 10 minute job.  I’ll probably look at getting a new car in 3-4 years, as my car is now 17 years old.

Health Cost- $245.25, 2%

Knock on wood, I’m healthy.  This year I got back in shape to complete a full ironman.  That’s 140.6 miles of swim, bike, run (technically further because of the transition distances).  What I did have for expenses were dental cleanings.

So there’s a peak into a millionaires expenses.  Wanna know a couple interesting things.  Look at the spreadsheet.  It shows my monthly dividend income.  Basically my dividend income for the year was $29,500.  That means I lived off my dividends and had a on extra.  I’m planning on saving up some excess dividends in the next 3-4 years to purchase that new car.  Also look at the change year over year.  My expenses increased by 11%, but my dividend income also increase by 12%.

You will after hear about withdrawal rates and the 4% rule.  For fun, I calculated that withdrawal rate for me and it comes out to 1.17%, very conservative.

So, how was your spending for 2019?

 

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