I have been feeling great lately! So great, actually, that I have been analyzing and re-analyzing and checking and double checking my spreadsheets. I’ve added columns, subtracted columns, created more charts, and so many more instant calculations. I enter something in on one page and that number gets used in a dozen other places. Part of this is because I have an engineering problem that I like numbers and I like data and I like lots of ways to see the same numbers and the same data. And, like I have been known to do in the past, I like to take certain things a little too far.
Total Monthly Spending
In true His Polish Princess Fashion, I went overboard on my spending analysis for the three years. Truthfully, I have never looked at my spending as a whole, rather, just the disjointed categories I break everything out into at the end of each month. I spend spending reduction or increase goals from there based on what I project they will be or I want to push myself to achieve. I never once calculated how much I spend every month, only how much I save (in percentage form). So I created a new column in my monthly list called “Total Spending” and I was shocked how much I spend some months (I am talking nearly $7,000!). Then I wondered how much is my non-housing cost, because, well, I hope to not have to spend on housing one day in the next dozen or so years. That number looks a little better, but why was my spending so high some months. The culprits were easy to find when I looked deeper into my numbers: education expenses for my Master’s, and remodelling. My house is a money pit, this I knew, but I didn’t realize how much it inflated my total monthly spending. As for education, I am well aware that when you have a tuition bill nearly $4,000, your monthly expenses will be greater than $4,000 that month.
I decided I want to take out the expenses I deemed anomalies (remodeling and education) because they are “one time expenses” won’t continue for much longer (I mean, I only have two more house projects left and then I’m good until I need a new roof in about 13 years). I also decided to remove the mortgage so I could easily see my discretionary spending (you can argue that things like groceries and electricity aren’t discretionary, but I certainly have some control over how much I spend in these areas). This lead to numbers that were truly surprising to me. The most I have ever spent in a month? Just under $4,000 and that includes $1,000 in medical bills. The least? $859. That one surprised me. So I wondered some more…
Total Yearly Spending
This is rinse and repeat my monthly spending, just on a yearly basis. I already had a little flag off to the side that told me I spent around $34,500, $36,500 in 2014 and significantly more in 2015 at $52,500, but I wondered what would happen if I take the big numbers that skew my spending and throw them out the window. So I removed remodelling expenses and education expenses to try to get an idea of what my discretionary expenses were. It turns out, I spend about $31,000 per year when I exclude remodelling and education. If I exclude all of my fun medical expenses, this drops to about $29,000. And, if I take out my mortgage payments, my total non-mortgage, education, remodel, and medical expenses clock in right around $17,300 per year. This means I am living on a lot less than I thought I was and I still feel like I am living like a princess.
Now, you can say I manipulated these numbers a lot, and that’s true, I did. But I will argue that the great majority of the $14,000 I spent in remodelling costs last year will be a one time expense. Siding your house and doing a significant amount of masonry work on it should be one time expenses over the life of the house. It was a big project and thus made my spending for 2015 an anomaly. Combine that with several thousand dollars worth of education and medical expenses, and it’s a crazy expensive year! But my true test in this was not to manipulate data until I felt good, it was to determine if I had lifestyle inflation from my salary increases over the last few years. You could say remodeling is in a way lifestyle inflation, and that’s fine, but I call it preventing my bee infestation from worsening and getting stung and incurring several thousands of dollars on epi-pens and hospital costs. I also call it better sealing my house which helped lower my heat bill. But definitely, many parts of it were wants, not necessities. The most important thing I learned is that in spite of pay raises, I spent less in 2015 than I did in 2014, and it’s only a slight uptick from 2013 where I spent half of the year living alone.
I guess this means I could be closer than I think towards retiring early.