You’ll Never Believe How Much the MMM Family Spent This Year…

Hiking near home, fall 2014

Here we go again!

As we do once every year, Mrs. MM and I have spent the day nervously tallying the sinful blizzard of excessive spending that we have been committing over the past twelve months.

If you aren't familiar with my budgeting style, it is "I Don't Have a Budget". Since we know there's no chance of running out of money at this point, we make spending decisions based on our values rather than splitting up a fixed stream of income into categories every month.

While this is a hazardous approach for beginners*, it works very well once you have trained yourself with my alternative point-of-purchase approach. In short, whenever you feel like buying something, ask yourself the following questions:

• Will buying this really improve my overall lifetime happiness?
• Is there another, more efficient way to meet this same need?
• Can the same benefit be had if I delay the purchase?

While I still follow these rules because they have become a habit, the application can be sloppy at times due to the fact that we are still just ordinary flawed humans.

Highlights of 2014 in the Mustache Household

First day of framing the new roof, January 2014

Even retired life seems to be full of change and adventure, and this suits me just fine. This year our boy grew up another notch, and we found his need for creative freedom really started to clash with the formal structure of school. This led us to full-time homeschooling. That required much more time from both of us parents, curtailing some of our other activities but also teaching all three of us a lot more about life and learning. Although the transition amounted to a couple months of emotional face punches, it was worthwhile as such punches generally are in retrospect.
We Moved

2014 will also go down in history as the year of the new house. Although we actually bought the place in late 2013, I started the project in earnest by tearing off the roof last January, framed and welded and sheathed the new structure through February and March, then stepped inside to do the electrical, plumbing, insulation and other trades before outsourcing the drywall. We moved in to the barebones residence in June and I've been working since then on more carpentry and details. All in all, we've spent about $80,000 on the complete rebuild so far, which I have kept separate from the regular spending budget. This is because the net spending on the new house (after selling the old one) is still a large negative number.

Details of the new house project, where the money went, and before and after pictures will get their own separate post. It is taking a while because work progress has slowed dramatically due to the aforementioned homeschooling

Business and Pleasure Endeavors

Little MM seems to be following in his father's path - finding machines, space and science fiction, and creating electronic music (under the stage name Killbone7) to be more interesting than any organized activity we try to coax him into. Luckily he has a growing club of other junior nerds that have banded together for these activities, so he will have company when he starts the next Microsoft or Google from our garage in another six years or so.

This detail is relevant in a spending article because although stuff like this is amazingly educational, it costs the parents very little. We would fully support him if he were into more expensive things like sports leagues, and I do remind him that that is a better way to meet girls once he gets to high school.

Mrs. Money Mustache took the lead on homeschooling, burning through stacks of books and websites and distilling it down once she realized the practice is incredibly unregulated here in the US. As long as you can get your kid to pass a very basic test at the end of each year, you can do whatever you like. We are using this as an opportunity to speed up the educational pace considerably and do fun stuff instead of boring stuff. She also started a secret crafting business on Etsy which I won't dare mention here lest she lose all her free time to an increase in sales.

And of course old MMM continued to build stuff out of wood and occasionally type some shit into the computer, juggling the demands and opportunities of the Internet against the pleasure of real world physical work. I indulged in a couple of these opportunities for some blog-related travel including Ecuador II and Camp Mustache, both of which will happen again in 2015.

But enough of this blathering on, for it is time for the final number. In the wealthy and spendy year of 2014, the MMM family managed to blow the following incredible of money on ourselves:

And here is where it all went:

What the heck is going on here? With completely reckless spending and all of life's variation, we are still within $150 (0.6%) of the previous year's spending. There were a few notable things, however:

Groceries were still Ridiculous:

The place our sloppy nonbudgeting manifests itself most strongly is in groceries: high-end local organic stuff from the deli counter, ridiculous little triangles of cheese from the gourmet section, dark 85% chocolate chunks with my espresso, coconut and almond breakfast every morning, and an overflowing salad bowl alongside the dinner every night. And some sort of entertaining almost every week, where we actually prepare and give away large quantities of this fancy food to friends and visitors. It is hard not to feel rich and spendy when this is part of your life.

Driving Performance was Good:

Somehow, we went the whole year on only two tanks of gas for the car. In the past, I have talked up our impressive driving avoidance skills and called everyone else Car Clowns because we don't use the car for local errands.. but then hypocritically embarked on long cross-country trips that burned hundreds of dollars of gas. This year it seems I actually walked the talk, and the car was fired up mostly for shuttling people to the airport and to occasional hikes in the nearby foothills. I've even started biking for my occasional nights out in Boulder, thanks to the added speed of my Electric Bike. It also helps that the car is a Scion xA, a 5-passenger hatchback that easily exceeds 40MPG. Not on the budget is one tank of gas for my construction minivan - because it incurred no personal use this year other than carrying materials for the house.

Travel Spending was Way Up:

The flip side of less driving is sometimes more spending on other forms of travel. In spring, we took an adventure on the Amtrak sleeper train to San Francisco and went North to explore the amazing coast and Redwood forests. And we closed out the year with a set of three overpriced plane tickets ($600 each!) to Canada to visit family for the holidays, something we haven't done in winter for many years (usually we just spend every summer in Canada). Plus a great train ride to get the three of us from Toronto to Ottawa for phase two of this trip. This trip is an example of spending I would have avoided if money were tight, but it was nice to be able to afford it.

On the positive side, our out-of-pocket spending for this travel was really much lower than shown in this budget, because much of it was paid for with points from various rewards credit cards. But I decided to list the sticker price in the annual spending just to keep reporting simpler. In other words, we thought of the credit cards rewards as a form of income rather than a reduction in spending.

Health Insurance Held Steady:

We use a basic plan from Golden Rule that costs about $275 per month for the family. If this pre-ACA healthcare plan eventually expires, we'll switch to a Bronze level plan under the new health insurance setup that will offer more coverage in exchange for more money. You can read more about that in this 2013 post on our health insurance situation. None of us had any health issues besides checkups this year.

So that's it for 2014. Although these updates are starting to look awfully consistent from a numbers perspective, I still find it quite revealing how powerful habits can be in dictating your spending, regardless of income.

And as I go through each year knowing that I'll have to justify each expenditure to YOU the reader at the end of it all, I find my own life being guided gently away from the temptation to stray into bullshit spending as well.

Luckily for you, you will get exactly the same benefit this year. Because I'll be right there watching over your shoulder every time you take out your wallet in 2015.

Quick answers to questions that seem to be coming up:

Why is your car insurance so cheap? Living in a city of only 90,000 people, age 40, cheap car with liability insurance only, nothing on driving record. I still use Geico insurance.

Why is your mobile phone bill so low? Republic Wireless - $25/month unlimited everything including data, or $10/month unlimited voice+text. Hint: Get the $150 Motorola G unless you are a serious techie - it is almost as good as the higher end $300 and $400 phones they offer.

* If you are going to train your fiscal discipline muscle with some budgeting, I am still a fan of YNAB software (You Need A Budget), which you can try out for free for a month to see if it fits your own style. Disclosure: I am a friend of the founder Jesse Mecham and think he tells excellent stories.