Every year I total up all the stuff we’ve spent. This is useful for getting at least to Tier 2 and thereby being at least kind of able to think smartly about money.
I just saw Jeff Kaufman’s spending update and this makes me want to make a public post of my own. Mostly as a public service: it’s so helpful for me to read the results of someone who I feel at least kinda similar to.
so what do we spend money on
thing | approx cost in $1000s |
---|---|
nanny | 63 |
mental and physical health | 20 |
groceries | 15 |
restaurants | 9 |
helping out friends | 9 |
kid supplies, babysitters, activities | 8 |
house (paid off) | 8 |
hobbies | 7 |
wills/trusts | 5 |
coworking space | 4 |
home decorations/furniture | 4 |
family travel | 3 |
vacation | 3 |
car (paid off) | 3 |
new bike | 3 |
new fence | 3 |
coffee shops | 3 |
life insurance | 2 |
pharmacy | 2 |
gym | 1 |
total | 196 |
(I know that doesn’t add up; I forgot a lot of “little things” here I’m sure. Don’t count this as a total pie chart, but as some anecdotes of “how much stuff costs for us.")
can I feel less bad
This also always makes me feel bad. I always think “I should be spending less” - either because I should be saving for the future, or I should just be less destructive to the earth or something.
This year I did an exercise: “what’s different from 2010 Dan?” 2010 Dan lived alone in an apartment in Seattle and spent $30k/year. That didn’t seem wasteful. Why am I not like that now? Have I lifestyle-inflated that much?
But, ok:
- 2010 Frugal Dan spent 30k/year. About 9k was rent.
- So, besides rent, 2010 Frugal Dan spent 21k/year
- in 2024, Frugal Dan + T should spend 42k/year + housing
- in 2024 dollars that’s 61k + housing
- housing costs are about 8k now, in a paid-off house: property tax, insurance, and maintenance. (Curious that that’s similar to my rent back then - though after inflation that rent would be like 13k - and we have a 4br house now vs a 1br apt then)
- So Frugal Dan + T would spend 69k/year
- But once we have a kid’s expenses, and we have accepted that we hired a nanny, that adds 71k - so we’re at 140k already
- Add in the following:
- car (~necessary)
- helping out friends (not necessary but we’re glad to be able to; what good is wealth if not for this)
- coworking space (~required by my job)
- wills/trusts/insurance (smart to do as we get older)
- new fence (smart for our house; we could bundle this with the house)
- new bike (ok, a luxury)
- and everything we’ve spent on our physical and mental health (all seems smart)
- and we’re at 190k.
- our actual total spending was 196k.
- So Frugal-Dan-and-T would have saved 6k, out of a budget of 60k.
Conclusion: we have lifestyle-inflated (all our groceries, coffee, travel, etc) about 11% since 2010. But mostly just, kids and other side effects of aging cost a lot of money!
This is reassuring. It’s still a ton of outgoing cash but I’m not worried that we’re leaking huge amounts in every area of our lives.
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