Report Card: Our Annual Expenses Year to Year

I have been pretty impressed over the past few years by the many people that post their financial information and performance against their budgets as a way for all of us to see exactly how their goals and budget plans are doing. It’s always challenging, but it’s a great way to learn by comparing how you are doing versus others. Since I have always been a very private person, when it comes to my own income and expenses, I haven’t made my numbers very public despite the questions I get asked each month about my own spending habits and results of my budgeting.  Today I’m breaking that silence to give you my annual expenses for the past 5 years, so alert the media!!

I think everyone's a little curious about how others manage their expenses. Here is our report card: how we spent our money for the past 5 years.

Where the Money Goes

Seriously, I have been tracking my numbers and budgeting very carefully for over 10 years now, long before I began to write this blog. If you have followed me a little bit you probably know that the biggest part of our expenses every year has been for medical care and insurance coverage. That’s because both my wife Suzanne and I are unfortunately ill and have some chronic conditions that make those expenses around 25-30% of our annual expenditures every year. The latest numbers on healthcare spending for the average American is about 8% of their total budget, and that’s up from the 6%, the number just 2 years ago.

So you can easily see how that expense, plus the expenses for owning our condo and its related costs like mortgage interest and taxes, make medical and housing easily the biggest numbers and biggest concerns in our budget. Those two categories combined represent about 70% of what we have spent on average over the past 5 years.

Our Annual Expenses

So today, as I usually do each year at this time (it being the end of the 3rd quarter of 2016), I thought I would look at how this year is going and compare it to the previous 4 years. I’m going to share my totals with you with some explanations so you can see if what I preach regularly has any reality attached to it.  I hope it shows that it does.

Category 2012 2013 2014 2015 Projected 2016
Condo $21.9k $20.5k $23.1k $22.5k $22.0k
– Includes mortgage, taxes, utilities, maintenance, have been voluntarily increasing mortgage principal payments
Medical Expenses and Coverage $19.8k $17.4k $18.6k $15.2k $14.5k
– Became eligible for Medicare in mid-2014, health improving
Groceries & Dining Out $8.3k $6.8k $8.1k $8.4k $7.6k
– Includes cleaning and paper supplies, frugal shopping to offset rising costs
Car $7.1k $8.4k $6.8k $4.5k $4.5k
– Downsized to 1 car in late 2013, includes car insurance and gas
Entertainment & Travel $4.1k $2.9k $2.9k $2.6k $2.7k
– Includes costs and savings of timeshare
Life Insurance $2.0k $2.0k $2.3k $2.5k $2.7k
– Costs rising as I age
Beauty, Grooming & Health $1.6k $2.6k $2.3k $1.8k $2.9k
– Includes a lot of vitamins and supplements, plus Suzanne’s salon visits
Business & Computer Expenses $1.3k $0.8k $0.3k $2.8k $0.6k
– Included FinCon in 2015, but sadly not this year
Gifts & Charity $1.1k $0.8k $0.8k $0.6k $0.6k
Clothing & Shoes $1.0k $0.6k $0.8k $0.6k $0.6k
– Do I need more t-shirts?
Miscellaneous $0.8k $0.7k $1.0k $0.5k $0.6k
TOTAL $69.0k $63.5k $66.0k $60.0k $57.5k

How We’ve Done

As you can see, our expenses have actually come down in some areas and from the 2012 total it’s come down almost 18%. When you consider that the cost of living has been rising over those years by about 10% cumulatively, it really does prove that careful planning and spending can result in saving money. And for us, it is a necessity not just a good idea.

Some of that is due to careful spending habits that I practice and try and pass on to you. Almost everything I write about from seeking out a better deal on your car insurance to using coupons and stacking them with loyalty card deals for groceries and retail shopping is something that we practice every day. It definitely helps and it will work for you, too.

In some areas, it’s not possible to see any more dramatic savings, like the cost of our mortgage being already refinanced and the utilities that have been budgeted and reduced with careful maintenance and use. But real estate taxes go up almost every year (we have the highest real estate taxes in the country here in New Jersey), so that’s a good performance to have had even though it is an expense that is close to being even.

Our Report Card

Overall, I’m actually pretty proud that we are able to maintain our standard of living and have done so despite the fact that our income has declined dramatically since we both stopped working full-time in 2013 and are now both basically on a “fixed income”. So while there’s certainly more areas we could cut back, we’re doing pretty well and I give us a B+.

So there it is, our expense report card currently compared to the previous 4 years. Have you examined your expenses this way? Do you wonder why you have difficulty controlling your money? Do you track everything carefully, look at and revise your spending plans when necessary?

If you are having difficulties, then budgeting properly is your first line of defense. I promise that if you keep your eye every day on your spending, you’ll quickly determine where you need to adjust and what you can do to improve. Many people have already done so and you can take advantage of their good advice. If you do, you might just be able to move forward on the road to financial health.

18 Comments

  1. Thanks for sharing Gary. Looks like the number are moving in the right direction and good to hear you’ve maintain your standard of living while saving money. I know you mentioned life insurance, do you carry long term care insurance? We do track our net worth but have not tracked yearly expenses. Its an exercise I will implement.

    1. Thank you, Brian. I have not purchased long term care insurance primarily because it became most popular when I was already past the age where it made financial sense (it just became too expensive). If I were twenty years younger I might consider it, although I have read mixed opinions about whether or not it is really as valuable as it sounds. I’d have to do more research.

  2. Emily @ JohnJaneDoe

    We just got to the end of our first year of expense tracking, and I’m debating on whether to write a post or not and what to include. I don’t think it will be all the numbers, though I applaud you on the “Big Share.” Jon likes us to maintain privacy even while we blog, and there’s a definite tension between privacy and connection with readers.

    Congrats on adjusting and keeping up your standard of living.Those numbers obviously represent a great deal of work, discipline and successful strategizing.

    1. Thanks, Emily, for your comments. I really understand the reluctance to share very specific numbers, but there is a way to post some information without revealing everything. If you do so, a) it will help reinforce your success or b) highlight where you have to make some adjustments for yourself. In any event, it’s good to examine it, even if it’s just for your own edification. I’m sure your first year of tracking will provide some great information, especially if you’re comparing it to a budget goal.

  3. Right there with you, Gary.

    I’ve been tracking my income, expenses, and net worth in Quicken over 20 years now, if I cared to share. But being a private person, there are some things I’ll share, and some I won’t. And details about my finances are one of those “won’ts”

    Given how rapidly the cost of healthcare has been growing the past decade, that’s my biggest concern with retirement, early or otherwise. It makes the idea of retiring abroad to a country with a lower cost of living yet comparable healthcare quality at much lower cost, e.g. Thailand, much more attractive.

    Scary times, for more reasons than one.

    1. Congratulations for being so diligent for over 20 years in tracking your finances! That’s a testimony to the serious consideration you’re giving the matter.

      Healthcare costs in this country are a huge concern and knowing where you’ll be in the future means you’ll have to plan for the worst and hope for the best. As far as relocating goes, I have flirted with the idea, but it’s just such a big decision leaving friends and family behind, which is also a big part of our lives. Costa Rica does look good however. 🙂

    1. Thank you for your comments. One of the things I’ve learned since I’ve been planning and tracking my finances is that you cannot “rest on your laurels” and assume that you’ve mastered it. Each year is a new challenge and sometimes it requires big changes. That’s the reason that we have to review every month to make sure that we’re hitting our goals.

  4. TJ

    Gary, it is impressive to see the trend of your spend going down, as we often hear people yelling about how everything gets more expensive every year. You seem to be going in the right direction to reach your goals.

    Also very glad to hear you say that your health is improving!

    1. Thank you, TJ. My wife and I are constantly, and I mean constantly, reviewing our expenses to see what we’re willing to do to reduce them. Having said that, some of the expenses we consciously make the decision to maintain because in the long run, they are preventative expenses that save us money (like home repair and health maintenance). I do admit that this is getting tougher both as we age and as the years go by. Thanks for reading.

  5. I understand your feelings about privacy. It feels creepy sometimes when you share. And then when you over share you risk boring your audience. This is just right, Gary, and it’s a good lesson about how the numbers fluctuate. I’m glad to see your medical and car expenses are declining.

  6. I like reading other people’s expense reports, it looks very good, nice job Gary! It looks like your expenses have been on a downward trajectory and it might even go down even further. I love watching expense numbers go down and as income numbers go up, the further that spread between income and expenses becomes, the better it is.

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