Hello everyone! Thanks for visiting The Green Swan. Better late than never, but today I have a review of my 2018 budget and actual expense overview through the first six months. I can’t believe we are already passed the half way mark this year!!
While I feel like Lucy and I have been splurging quite a bit in 2018, we actually aren’t too far off our budget so far. I’m a little surprised, but I guess it is a pleasant surprise. So let’s jump right in…
Frugality is a Means to an End
Recall that not long ago I detailed out my philosophy on frugality. Frugality has definitely helped get me to where I am today, financially, but I’m not against spending money. Especially now that we have more of it and are comfortable with our path toward early retirement, we’ve chosen to let loose and are much more willing to spend money on certain creature comforts and things that will bring happiness and convenience to our lives.
To that end, I wouldn’t have been surprised if we were quite a bit over budget as throughout the year we continue to loosen up the purse strings and practically look for things to buy that we think our lives would benefit from. By no means are we scrutinizing or optimizing every expense like we’ve been prone to in the past.
I guess this goes to show the benefit of having lived a fairly frugal lifestyle, loosening up just a little bit can actually feel like we’ve loosened up a lot.
Our frugality philosophy goes against the grain a little compared to many of the folks in the FIRE blogosphere (financial independence, retire early). And we’re fine with that. We squarely fall into the “fat” FIRE category…retiring early but with higher, more comfortable budget and higher cost of living. That’s what suits us and our life ambitions, but by no means do I prescribe this lifestyle to others. We all need to find our own balance.
The Budget Busters
With that said, we don’t necessarily have many budget busters so far this year. However, there are a few distinct places where we haven’t been shy to drop some coin. The chart below outlines our initial 2018 budget heading into the year, how much we’ve spent through the first six months, and the percent our current level of spend is for the full year budget. Given we are at the halfway point in the year, it is very easy to see which categories we are tracking above or below budget!
As can you see, the comments on the right hand side provides some high level context to each category. Below I go into a little more detail as necessary:
- Utilities: The longer and colder winter this year drove some of the increase as did our internet bill jumping from $35 to $45. Due to a lack of other internet providers in the area, there really isn’t much we can do on that front. Otherwise, much of our electricity is provided by our solar panels.
- Gas / Transportation: Lucy switched jobs in May. She still works just a couple blocks away from me so we continue to benefit by driving in together. Her free parking benefit has now gone by the wayside, however, her parking is still relatively cheap at $50 per month (most parking uptown is about 3x that expensive!).
- Groceries: Groceries are up and this is one category we’ve been ok spending more on. We haven’t gone organic necessarily, but as we transitioned to being on a more whole-food plant based diet, we’ve come to appreciate the type of foods we’re buying more. We’re still conscious shoppers, but we’ve traded up here a bit. On top of all that, our food budget continues to expand as both the kiddos are eating more!
- Kids Activities: This is another category we’ve been more lenient on. We had our boys in swim lessons an extra month or two this winter/spring and our oldest has started soccer lessons for the first time this summer. We don’t have any issue throwing an extra couple hundred here or there on activities for the kiddos.
- Car Pmts / Capital Expenditures: I build in a little cushion into this category in case we buy something big. Not the case so far this year, but I did impress myself with the DIY home office desk I built! Not factored into the expenses though is the ~$1K spent on AC repairs and maintenance in July! Ouch that hurt, but I guess that is what happens when I have not gotten routine check-ups. They are still pretty new (~7-8 years old) and working pretty sharp again so it was worth it. But no doubt it will dent the budget a bit.
- Housewares: A few things to talk about with this category…first we splurged and bought two Nest Smart Thermostats. We actually got quite a deal on them with Memorial Day sales, our local energy company gave a rebate, and they each came with a free Google Home Mini! So we splurged, but you couldn’t beat the deal! The other large expense item was a new electric power washer. I was tired of having to pay someone every couple years to wash my house and driveway so I took it upon myself this year and the power washer has already paid for itself…
All in all, not bad so far this year. The “cost of living” is creeping up, but we’re ok with that and actually surprised it isn’t even higher. We’ve reached an inflection point in our lives where we are ok with lifestyle inflation as we near early retirement. Even it if means working another year to afford an elevated cost of living, so long as we find our right balance in life and we are comfortable, might as well live and let live!
On top of all that, we are going for health and happiness. Look were our cost of living has been inflating…more expensive groceries for health, kids activities bring happiness to the whole family, houseware items have brought convenience into the home, etc. Our cost of living may increase by 5% or 10%, but it’ll be worth it if our happiness and quality of life goes up by 25%+. That’s how we’re looking at it anyway and that’s the phase of life we are in right now. We’re focusing more on the big picture!
Thanks for taking a look!
The Green Swan