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January 2, 2018

2017 Spending Report

Now that we've all had our champagne and welcomed the new year, it's time for the best part of the previous year ending--tallying up our spending from that year and analyzing it to death. Our year-end post was pretty weak last year because we were ridiculously busy with a variety of things, but this one will be much better. Read on to see how much we spent in 2017.

Although it may not seem like it when you look at the numbers, we did pretty well with our spending over the past year. We were significantly over budget, but there's a good reason for most of the overrun, and it is unlikely to be repeated going forward.

Enough foreplay, here's the numbers:
Item
2017 Retirement Budget
2017 Spending
2017 Spending (Corrected)*
Cash Withdrawals
 $         3,000
 $              640
 $             640
Cars
 $         3,000
 $          5,260
 $         5,260
Property Tax
 $         5,000
 $          6,190
 $          5304
Home Insurance
 $             700
 $              664
 $             664
Home Improvement
 $         1,000
 $          3,255
 $         3,255
Dining Out
 $         2,400
 $          1,932
 $         1,932
Travel
 $         4,000
 $          8,080
 $         4,423
Clothing
 $         1,100
 $              787
 $             787
Bills/Utilities
 $         2,700
 $          4,717
 $         4,112
Charity
 $             300
 $                 -  
 $                -  
Household
 $         3,000
 $          3,766
 $         2,769
Entertainment
 $         1,500
 $          1,138
 $         1,138
Fees
 $             250
 $              488
 $             195
Gifts
 $         1,700
 $          1,369
 $         1,369
Groceries
 $         4,500
 $          6,450
 $         6,450
Healthcare
 $             400
 $          3,887
 $             407
Personal Care
 $             450
 $              425
 $             425
Total
 $       35,000
 $        49,049
 $       39,131
*Corrected spending removes one time large items like the camper and
braces as well as moving expenses.

As I said, we went over budget, but I will now go through each category and explain what happened and how we will change going forward.

Cars - $2,260 Over Budget
The budget for this category was set artificially low mostly due to my naivete. I didn't realize just how much insurance and registration cost for our three cars. However, we did have slightly higher expenses than normal because we had to catch up on some maintenance on the truck (which will also be the case in 2018, but hopefully not after), and we spent more on fuel than normal due to moving. Going forward, the budget for this category will be increased, but we will need to work to meet it.

Property Tax - $1,190 Over Budget
This is an easy one. We had to pay property tax on two houses this year, which inflated this category. The expected property tax going forward is a little higher than we originally budgeted, but we can handle it.

Home Improvement - $2,255 Over Budget
The budget for this category was pretty arbitrary, but I have to admit we blew right by it. However, some of it went to the old house and the rest went to getting our new house up to speed. Most of the big projects we wanted to tackle are done, so we should be able to reduce spending significantly going forward. That being said, we will be slightly increasing the budget for this category going forward, because expenses always pop up when you own a home.

Travel - $4,080 Over Budget
The vast majority of the overage in this category is due to the camper we bought, and we obviously don't plan on buying more of those going forward. We also had a ton of weddings and associated events that we traveled to in the past year, which cost quite a bit and won't be repeated in the future. For next year, we are actually going to reduce the travel budget a bit. Something's gotta give...

Bills/Utilities - $2,017 Over Budget
This is a tricky one. Some of the overage is due to paying utilities on two houses for a couple months, but we still need to bring this down. Water is approximately three times more expensive at our new house, which really hurt us this year, however, we made some serious landscaping changes that should reduce our future usage significantly, so we'll see what happens. The budget for this category will be going up next year.

Household - $766 Over Budget
We actually did better in this category than expected. We had to buy a lot of random things for the new house, which cost quite a bit. Now that we're settled, expenses should drop significantly. This also included some big moving expenses, which won't be repeated.

Fees - $238 Over Budget
This one isn't as bad as it looks. Most of this is from credit card annual fees, but we more than made up for them in rewards (see below).

Groceries - $1,950 Over Budget
This is the most concerning category. We were quite a bit over budget and there aren't any good reasons. We were under budget in the Dining Out category, so we ate in more, but that doesn't explain the big overage. As far as I can tell, our shopping habits haven't really changed. It seems like some of the overage is from feeding another mouth and there also seems to be higher prices in our small town. Going forward, we are increasing the budget for groceries, but we are going to try to bring down spending as well.

Healthcare - $3,487 Over Budget
This one was very much expected. The overage is solely due to Chrissy and me both getting braces this year. There will be a few more payments next year, but then we're done, so this is under control.

Cash Withdrawals  - $2,360 UNDER Budget
This was the big bright spot in this report. We barely used any cash this year, which means we really maxed out our credit card rewards. I think this was mostly due to not eating out at work and having to pay cash to split the bills.

Update: I've had a revelation that partially explains our higher grocery bill and lower cash withdrawals--the farmer's market. In Torrance, we went to the farmer's market almost every week and paid cash for produce, which we don't really do any more. This revelation is a pretty big relief, because my financial world makes a lot more sense now.

Total - $14,049 Over Budget
Being 40% over budget for the year definitely isn't good, but it really isn't too bad considering all the one-time expenses we had in 2017. If you look at the "Corrected" column, it looks a lot better. Our overspending is also pretty much completely offset by the income I earned working a couple extra months at the beginning of the year, so we should survive.


What We Bought
If you're wondering what we spent our money on specifically, here's a list of everything for which we paid more than about $100. These items accounted for a little over half our spending.
Item
Price
Date
AAA Membership
 $        125
1/18/2017
Baby Stuff
 $        112
8/13/2017
Bachelor Party Travel
 $    1,077
Barn Door Hardware
 $        100
1/17/2017
Buffet for Dining Room
 $        200
4/24/2017
Camper
 $    3,300
2/16/2017
Camper Tiedowns (Front)
 $        254
4/9/2017
Camper Tiedowns (Rear)
 $        103
4/12/2017
Car Insurance (6x)
 $    1,939
Car Registration (3x)
 $        664
Fans, Insulation, Door Knobs
 $        650
3/28/2017
Credit Card Fee (2x)
 $        190
Doors, Light Fixture
 $        136
4/25/2017
Gift (Earring)
 $          98
12/8/2017
Gifts (Wine)
 $        125
12/8/2017
Groceries (14x)
 $    1,633
Home Insurance
 $        194
6/6/2017
Hot Water Recirculating Pump
 $        160
3/20/2017
Interior House Paint
 $    1,000
5/17/2017
Kitchen Faucet, Door Knobs
 $        211
3/9/2017
Lamps, Oil Filter
 $        112
9/27/2017
Landscaping Materials (4x)
 $        817
Light Bulbs, Baby Stuff
 $        100
3/8/2017
Light Fixture, Bulbs
 $        222
4/17/2017
MLS Listing for House
 $        299
1/18/2017
Mommy and Me Class (2x)
 $        396
Moving Truck and Trailer
 $        697
3/4/2017
Patio Set
 $        300
4/24/2017
Picture Frames
 $          97
5/10/2017
Puerto Vallarta Flight
 $        607
2/19/2017
Puerto Vallarta Resort
 $    1,595
2/19/2017
Suit for Wedding
 $        164
4/10/2017
Truck Fluids
 $        134
4/2/2017
Truck Fuel (4x)
 $        391
Truck Oil (4 Gallons)
 $          95
8/11/2017
Truck Steering Parts
 $        307
8/3/2017
Water Bill (12x)
 $    1,986
Water Park Season Passes
 $        200
7/5/2017
Water Saving Toilet Valves
 $        117
1/26/2017
Zoo Membership
 $        100
8/6/2017
Total
 $  21,007


Credit Card Rewards
We put a lot more effort into maximizing rewards in the second half of 2017 and it started to pay off. Here's a summary of the rewards we earned:
Reward
Points
Cash Value*
United Miles
78,147
 $          1,172
Chase Points
54,258
 $          1,139
Cash Back
 $              735
Total
 $       3,047
*Cash Value based on values from The Points Guy
Based on these numbers, we earned over 6% back from credit cards in 2017. That is pretty spectacular, but I think we can do even better in 2018.

2018 Budget
The final section we will include in this post is our budget for the upcoming year. As mentioned above, we are going to tweak the budget again to make it more realistic, however, the total is only increasing ~1%, which is what I accounted for in our long-term plan.
Item
2017 Budget
2018 Budget
Change
Groceries
 $         4,500
 $         5,500
 + $1,000
Property Tax
 $         5,000
 $         5,400
 + $400
Car
 $         3,000
 $         4,000
 + $1,000
Travel
 $         4,000
 $         3,500
- $500
Bills/Utilities
 $         2,700
 $         3,500
 + $800
Household
 $         3,000
 $         3,000
Dining Out
 $         2,400
 $         2,200
 - $200
Home Improvement
 $         1,000
 $         1,500
 + $500
Gifts
 $         1,700
 $         1,500
 - $200
Entertainment
 $         1,500
 $         1,300
 - $200
Clothing
 $         1,100
 $         1,100
Cash Withdrawals
 $         3,000
 $         1,000
 - $2,000
Home Insurance
 $             700
 $             700
Personal Care
 $             450
 $             450
Healthcare
 $             400
 $             400
Charity
 $             300
 $             200
 - $100
Fees
 $             250
 $             150
 - $100
Total
 $    35,000
 $    35,400
 + $400

Hopefully we can stick to this budget. I'm optimistic, but you never know.

Did you stay on budget in 2017? Let us know in the comments.


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