2017 Mid Year Financial Results

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I’m going to start with the cliched “it’s hard to believe 2017 is halfway over.” Yes, yes it is. In fact, it’s hard to believe I registered lifevsmoney.com over a year ago! See this post for why it’s taken me so long to get in gear and start writing.

There’s nothing extraordinary about how much we spend – there are plenty of examples of people who spend much less. But there are also a lot of people I know and people I’m sure you know who assume you can’t live a rich life with a large family and only spend ~40K per year. Hopefully these posts will be a peek behind the curtain to show how one family goes about doing that.

Also, I want to highlight that we still are spending a lot more than what we need to spend, sometimes for good reasons and sometimes not. Our spending habits are far from perfect, but we are constantly trying to evaluate and learn what spending makes us happy / helps us achieve our goals vs. what spending we can cut without impact. The goal is definitely not to make you feel bad about what you spend. What’s most important is knowing what you are spending so you can make a conscious decision to continue or to change based on what you value.

Overall Spending

Spent 95.7% ($21,464.27) of $22,500 six-month budget 2017 1st Half Spending

This is exciting to see after what has felt like an expensive six months (for full spoiler, skip down to the core expenses section). Despite $3,000 in unbudgeted, and definitely unexpected, healthcare costs, we have actually come in ~4% under our budget for the first six months of the year.

If you remember my budgeting philosophy, this is not because I am constantly looking at how much we spend and cutting back to hit a number. Our “budget” is more of a guardrail I set for our family to keep tabs on where the money is going. The highlight of the first half of 2017 is that the money is going where I expected, and not going there as much as I expected.

Housing

Spent 80.2% of budget. No major outliers either way here. In the first six months I spent very little on the pool and lawn care, which is helping keep these numbers down. They will probably rebound and be closer to 100% when I factor in the summer months.

Probably the biggest reason that we can keep housing expenses so low is because of our home mortgage. It’s currently at 2.44% (it’s a 5/1 ARM from Third Federal), and monthly interest payments around only around $400. In a future post I’ll explain why the adjustable rate mortgage is often the best deal and something you should consider instead of getting a fixed rate mortgage.

Transportation

Spent 90.1% of budget. So far we’re averaging only $126/month for fuel and maintenance for our two cars (a 2010 Toyota Camry and and a 2005 Toyota Sienna). We’ve been blessed to have no major car repairs in the past six months, and both cars continue to be reliable purchases. While some of that is in our control, some of it is just being fortunate. We try to increase the odds of having no car issues by buying reliable brands, like Toyota, used.

Another way we’ve saved money this past six months is by using Kroger Fuel Points. Whenever Kroger runs a 4x fuel point promotion, we stock up on gift cards to Amazon, the gas station, and other stores where we are already going to spend money. For example, during the 4x promotion, a $250 Amazon gift card generates 1,000 fuel points. When we have a large amount like that, we make sure to fill up both cars at the same time to get the maximum value – 35 gallons. We usually end up getting 32-33 gallons, and this saves $1/gallon, so each trip like this saves us $32-$35 in gas! It gets better – I buy these gift cards with the Amex Blue Cash card, which has a 6% rebate on grocery store purchases, including gift cards bought at Kroger. So we save another $15 in the 6% rebate. This is an easy way to save $40 filling up both cars with gas.

Food

Spent 100.8% budget. Food has been a challenging area for us in the past. With three kids under six, it’s often hard to plan out our meals and shop to a plan, which we’ve found to be the best way to keep to our food budget. We’ve done well the past six months – sticking pretty close to our $500/month aspirational food budget. We also had some amazing friends who brought us meals while my wife was recovering from her thumb surgery.

Core Expenses

Spent 123.4% of budget. Healthcare came in at a whopping $3,011.96! How is this possible? It’s simple: we have a high deductible health plan (which I generally love, and which will definitely be the subject of posts in the future), and we had the following unplanned health “events”:

My wife severed a tendon in her thumb cutting a piece of cheese. Ironically, she did this using the amazingly cheap and shart $6.95 Victorinox paring knife that she got me as a present (we had lost our prior version of this knife). I think it may have been the first time she used it. True to the Amazon reviews, it is incredibly sharp. Sharp enough to sever a tendon just like that!

I had my fourth (yes, fourth) kidney stone While this was painful and not at all fun, since it was my fourth it’s kind of (sadly) gotten to be somewhat routine. It still knocked me out of work for a day and put more pressure on my wife to take the kids a few times when it flared up and I had to drug myself to sleep. Not cool. Note to self: drink much more water!

We found out that we are having a suprise baby (#4!) In fact, all three of these things happened ON THE SAME DAY. That is a story for another post.

Needless to say, we have been living in the “high” area of our HDHP in the last few months. The silver lining is that the baby alone easily maxes out my wife’s deductible, so the incredibly extensive (and expensive) hand surgery / casts / physical therapy are going to be “free.” Thanks surprise baby #4! (Clarification: Baby #4 is a suprise, we haven’t had 4 surprise babies. That would be silly.)

Discretionary Expenses

Spent 82.5% of budget. Spending over our budget in household (furniture, non-grocery items like toilet paper, etc) balanced out with spending under in our recreation/vacation category. We’ll spend most of that money during our big family vacation at the end of August, so we always track below budget until that happens.

That’s our six month update. I hope it shows that you can life a rich life without sacrifices on ~40K year, even with a family of five. How was your past six months? Let me know in the comments.

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