Slowly Sipping Coffee

2016 Spending: Where did it all go?

I’ve finally gotten motivated to pull our 2016 numbers together and put them out there for your voyeuristic perusal. That’s not true, Mrs. SSC did that about a month ago, but I’ve been feeling a bit unmotivated, so there’s been a delay. For those of you that don’t care to see charts or hit the nitty gritty, the summary is that 2016 was no 2015 in terms of savings. The overall outside 401k investing sums were down, however, I am happy in the fact that it wasn’t from lack of saving, rather we essentially piled it into cash in the event we suffered double layoffs. That didn’t happen, thank goodness, and instead Mrs. SSC took a teaching job with a huge paycut and we’re all happier as a result. That’s pretty much 2016 in a nutshell. Below I’ve put together more details on where our money went and a chart on how it compares to 2015, and what we plan to change for 2017.

2016 Spending: Investments

First things first. Oour Vanguard savings only amounted to $24k this past year. But wait, how was it that low? We’ve essentially been auto investing, what gives?! These were literal questions I also asked Mrs. SSC when I heard that low number. She reminded me about the $26/barrel oil prices this time last year, massive layoffs at her company and many others, fears of layoffs at mine, and that these occurrences scared us into ratcheting up our cash on hand. This along with the fact that I didn’t get a cash bonus last year (hey, I’m happy I am still getting a paycheck, and it is called a bonus) also helped contribute to that low number as ~90% of the take home from that goes straight into Vanguard. Then factor in Mrs. SSC taking a job with a 6 figure paycut and no paycheck for 3 months, and yep, that’s how those sorts of things happen. Because – life.

2016 Spending vs. 2015 Spending

2016 Spending vs. 2015 Spending

I won’t disclose cash saved sums, but we’re good for covering expenses for a solid year or more at this point. So, at least we were still saving even if it wasn’t getting invested. However, I don’t like having that much cash sitting around just losing value, so now we get to decide what to do with it. More to come on that in a later post. I also changed my 401k and almost maxed it out, along with the 7.5% contribution from work. I’d cut it down the past 2.5 yrs anticipating putting that money towards Vanguard style savings, and while that’s happened, I realize that having it automatically go into savings works better, and we can access that prior to 60 if things hit the skids anyway, so that was upped. I have it set so I should just max it out next year or get really close , so there’s that bump to be gained. I didn’t calculate my 2016 total 401k savings, and neither did Mrs. SSC, but I estimated mine was ~$30k with match, and Mrs. SSC’s was close to $20k with match since she quit halfway thru the year.

2016 Spending: Big Hits, FIRE Calc’s, and 2015 Comparison

Our spending for the year was ~$102740, compared to ~$113k in 2015. Not too bad, that’s quite a drop, except that a good chunk of the 2015 spending was related to home repairs that we weren’t hit with nearly as hard in 2016. Remember that $7k A/C unit? I do… Ugh… The silver lining is that based on our FIRE calculations, and removing all the drivel like daycare and mortgage, cleaning help, etc… we would spend about $3950/month or around $47,400/yr. That still falls within our target of $55k/yr so, woohoo for small wins.

Other areas that were big spenders this year, $9600 into the college funds for the kids, $12,100 into allowances for us to split, $24340 in mortgage, and $19737 in daycare. Yes, daycare is falling and is finally not always neck and neck with the mortgage! Our plan is working, woohoo!

Groceries were in the gray area at $7,100 which is around $590 per month. Not bad for a family of 4 but we feel like we could probably do better, so that’s a short term focus goal.

2016 Spending: Changes in 2017

What’s coming up for 2017 for the SSC family? Probably big spending in travel, as we have a 2 week vacation to MT/ID later this summer as a recon trip for a potential landing spot when we enact our Fully Funded Lifestyle Change (FFLC). Also Mrs. SSC’s brother is getting married in North Carolina, so we’ll travel for that, and it seems like there is some other big travel somewhere lurking about. Maybe a Florida trip for the family? I don’t know.

There’s always the potential to have to replace the other A/C unit, as they were the same age, so that could be a big expense in 2017. Which begs the question, is a home warranty worth it, and should we get one, please weigh in and let me know your experience with them. I would appreciate it. We got a new dishwasher recently (already in 2017 spending) that led to some hilarious Money  Pit style expenditures, keep an eye out for those in the January spending report.

LIke our house, who knew gators love to eat cash too?!

LIke our house, who knew gators love to eat cash too?!

Speaking of our spending reports, I’m done calling it a budget, we’re making some new categories there as well. These include family adventure, blog costs (separate from general shopping and this came about from FINCon’s high cost, and other little costs here and there that have been adding up at least in Mrs. SSC’s eyes), Mrs. SSC’s work costs (I think of it as an expensive hobby that also pays decently, but there are a lot of things she’s paid for out of pocket like books, seismic data, and other things that should be covered, but just aren’t), and charity. We have been tithing more at church and other places and will have that column in there as well.

2017 Spending

Beyond all that stuff above, there aren’t too many changes to be made in our household this year. We’re planning to up our Vanguard contributions to $4k per month which puts us back on track there and it’s upped from ~$3500 that we were originally going to target. Yep, already moving the goal posts. Also, as I mentioned we have a chunk of cash that we are going to invest so that will be a nice boost. I’ll outline what our options are in a later post and get your opinions about what we should invest it in. Exciting! Yeah, that’s about it. Just keep on monitoring spending so it doesn’t get frittered away and we say, WTF?! Where did our money go?!

 

Hope you have a great 2017! Let me know if you have any thoughts good or bad towards home warranties. I think we may get one, especially after the dishwasher boondoggle, I mean adventure!

40 thoughts on “2016 Spending: Where did it all go?

  1. Mrs. Picky Pincher

    It’s scary taking a lower-paying job, but I really think more happiness is better for everyone. :)

    Agh, I’m jealous with that 401k match, too! I have a Roth IRA through my bank since I’m a contractor without benefits, but it’s still good to put away what we can. :)

    Okay, so here’s the scoop on home warranties. Our sellers were required to buy us one for the house we purchased in September. It was through American Homeshield, which has the most horrible, awful reviews in the world. It’s a supremely hated company. Anyway, we’ve used our warranty to repair our A/C and plumbing. It was $75 each time they came out, and that covered all parts and labor. Other than some weird/bad customer service, I haven’t had any signficant issues with them, but I know other people have.

    Just know that these companies are out to make money on you, so they’ll look for any excuse whatsoever not to cover you.

    1. Mr. SSC

      The 401k match is pretty nice especially since it’s a % of my salary rather than a dollar to dollar match. Yea work!

      We’ve received one of those when we got this house, but have been debating getting a new one to offset the cost of the A/C replacement that may or may not happen this year. One of my friends had one when his A/C went down and it got replaced for about half what we paid, but there was a LOT of hassle, delay, and replacement was part by part, visit by vist.

      It does seem the devil is in the details for sure as to whether it would be worth it or not.

  2. Full Time Finance

    We received a Home Warranty when we bought our current home. I’d say it would not be worth the money. I read a lot of the fine print and it really didn’t cover most things. Heater and air conditioner for example only covered about 1K apiece. It also did not include install. I figured calling someone approved by the home warranty would lead to a higher price by 1K purely because its harder to negotiate on price when forced into specific suppliers. It seemed like it only covered things under about 1K, so at about 500 dollars a year it really wasn’t worth it.

    We ultimately did not use the warranty in the 1 year, and did not renew.

    1. Mr. SSC

      Thanks for the info. That’s been our take on it, and we’ve never run into an issue that we needed to use the home warranty for in the first year anyway. Our experience through friends is similar to what you described, depending on the contract terms one worked fine for an A/C replacement even though it was still close to $4k, and the other was nickel and dimed until it was finally replaced, but it took most of a summer, and multiple visits to piece meal replace everything, and was about $300 per visit. Still spendy, but a little under $4k and a LOT of hassle.

      I’d have to review all of the fine print it seems, but maybe not worth it, especially to only cover $1k of the costs or things under $1k.

  3. TJ

    I’ll definitely be curious to hear your thoughts on MT and ID. Have you visited in winter too?
    I know they are beautiful in summer, but the brutal winters and shortage of jobs might keep me looking elsewhere. I was in Florida last weekend and in January the weather was amazing, but I also worry about the lack of jobs there.

    I remember visiting Phoenix in March and loved it, but when I went in August I convinced myself I couldn’t do it. Maybe you adapt though. :D.

    1. Mr. SSC

      When we compared their winter weather to Denver and Chicago, it wasn’t too much different. Sometimes more snow, but averages were similar and since we both spent close to a decade in those other towns we figured it may be an adjustment the first year, but nothing we haven’t experienced before. :) Maybe we’re just optimistic. I still think going from over a decade in the Gulf Coast to essentially Southern Canda is going to be a harsh transition, but Mrs. SSC hasn’t quite gotten the reality of that yet.

      Visiting New Orleans in the summer wouldn’t make you want to move there, of course then neither would the winter (cold, and rainy) but I loved the 5 yrs or so I spent there. We’ll see.

  4. Tawcan

    Happiness should rank way higher than how well your job is paying. A lower paying job is scary but more happiness is well worth it.

    1. Mr. SSC

      I totally agree, it’s hard to put a price on happiness, but awesome that we had the freedom to be able to make that decision. Id say it’s been more than well worth it in a LOT of ways.

  5. Maggie @ Northern Expenditure

    We had a home warranty when we first bought our house… then a small part on our dishwasher broke and they came out to fix it and it still cost like $250. So… maybe for a 7k AC unit, it might have been a better deal, but that’s the only time we used it and I was like: “I could buy another dishwasher for this price!”

    1. Mr. SSC

      That’s been our experience with reviewing the contracts. Our alst house, it was cheaper to just handle it on our own rather than use the warranty. It’s been a mixed bag for other friends of ours that have them. Our dishwasher boondoggle would have been covered under a home warranty (according to the plumber) so whether it would ahve saved us money or not would depnd on the contract details. Would it be a $75 copay for the repair or a $250 bill? Doing it privately was about $280 so then would saving $30 be worth paying $500? Not in my book, but like you said, for an air conditioner… Probably even if it is a lot of hassle, unless it’s like others describe and they only coevr up to $1k in replacement/repair.

      Time to research home warranties I guess. There goes another 2 hrs of my life, lol.

  6. Brian @ Debt Discipline

    I took a lower paying job in 2016 with a better work/life balance and couldn’t be happier. I’m realizing my time is worth more to me now.

    Nice chuck of money put away for college. Is it in a 529 or are you using something else? We have college on the brain with two kids heading to school next fall.

    I never considered a home warranty, but have to figure the devil is in the details of what is covered and what is not to see if its really worth it. Good luck!

    1. Mr. SSC

      It’s interesting how putting ourselves into a “I’m happier” position even making less money makes you realize how much you value your time. At a dinner party Mrs. SSC said, “Well, I realized I make more per hr than I did at my alst job” which is true, there are just SO many fewer hrs. It’s worked out great for us so far and I wouldn’t change it.

      We’ve got that college money going into 529’s one for each kid. We’ve been throwing a lot of money into them planning to get them to a good point before we stop contributing to them in the next couple of years. Our estimates are that they should grow enough to cover 4 yrs at a state school, which would be enough of a help out from us. I’ve found that if the kids are invested to some degree, they take it more serious, but if it’s a free ride the whole way, it tends to get squandered more than appreciated. Good luck with your kids, 2 at the same time has to be quite a shift.

      Yep, I’m dreading researching home warranty details. Blech…

  7. Mrs. COD

    I love that you guys are saving big, but not so focused on that as to miss Mrs. SSC’s chance to be happier teaching! It’s great to be able to strike a balance between planning for the future and enjoying the present.
    We’re shocked by how much we are still saving, even down to one income this year! It’ll be good for us to be more frugal for a few years; then, when I’m back at work, we’ll be ready to save like crazy! FFLC by age 50ish ounds pretty awesome!

    1. Mr. SSC

      We had looked at the scenario of her not teaching and just staying in the megacorp job until this summer, and then we would’ve been able to hit a weak FI number this year. I think at that point she would be so burned out, she’d quit whether there was teaching or not. It’s been nice to be flexible and not so goal focused that we can both agree that she should teach. Like, “Go, be happy, we can make it work. No biggie.”

      That’s awesome you guys are saving so much even on one income. I was talking to someone at work about that same scenario and said, “Look, when your husband gets work again, don’t treat it like you have more money to spend, just put his whole salary into savings and keep living like you are now.” It’s amazing thinking about being able to bank a whole salary and not have to make deep cuts or anything crazy, just keep living like you have and save even more. That’s pretty awesome indeed!

  8. Go Finance Yourself!

    Good work SSC. I don’t think I’ve heard of anyone getting a home warranty outside of providing it to the buyer of their old home. The biggest thing is to know what is covered. A former coworker of mine had to jump through all kinds of hoops getting replacement appliances under their home warranty in a house they had recently bought. It was a nice house with nice appliances, and the insurance company offered up only basic appliances that were nowhere near the original ones. I would think you’re probably better off putting the money you would pay for a home warranty into your rainy day fund in case you need a major repair.

    1. Mr. SSC

      I think you’re right. I’ll research some plans and see what the details are, because it’s been a mixed bag with regards to a few friends we’ve known that got them after their initial one ran out. That’s a great point to look out for in the details. So much to consider. We’re low hassle people so part of us is like, “Screw it, we’ll just deal with it when it happens and avoid the hassle of dealing with a company and all the hoops that are associated with it.” Then the other side says, “But if we could save money, wouldn’t it be worth it?” So much conflict, lol.

  9. The Green Swan

    Oh I’m dreading the double daycare bill! That’ll be right up there with the mortgage for us too.

    $7k for groceries doesn’t seem too high for a family of four. We are around $6k for the three of us, granted the kiddo is just about 3. I’m preparing for that to continue climbing for us!

    1. Mr. SSC

      That’s a tough bill to swallow for sure, but fortunately, it’s only for a little while and not a “there until they’re out of college” kind of commitment. Other friends of ours are running into that with private kindergarten and elementary school bills – also about $1k-$1.2k per kid per month… Eeesh!

      Mrs. SSC “knows” we can do better on the groceries, so that’s the main driver fr wanting it a bit lower. I’d agree with her in that we probably could get it a bit lower just by being a little more mindful.

  10. Mr. PIE

    Yes, indeed. Where did it all go?!

    I can relate. We spent $77K more than our projected FIRE budget last year. Mortgage on primary home ($25K), taxes on primary home ($6.5K), major maintenance on mountain home ($21K) and childcare costs for before/after school and summer camp ($14K) amongst other things. Incinerated in a flash! Those pesky kids continue to eat dough! Our projected FIRE expenses are running at ~$78K pa. Boy, we have gone over everything six times over. It feels like that at least.

    Savings wise, we are ploughing ahead full steam this year. 401K (x2), deferred compensation (x1), bonuses (x 2 we hope) and restricted stock vesting (x2) as well as Vanguard taxable, dependent care saving account, HSA and kids college savings plans (x2). Phew! Rice and beans for us….LOL.

    On the 401K front, Mrs PIE company adds another $9K beyond the $11K match which is just amazing. Just for her lengthy service / age combination. We’ll take that.

    Wish we could get our groceries (inc. wine and beer) below $1,000 per month but we can’t. We eat lots of meat, chicken, fish, fresh veg, all at MA silly prices. Good job on your grocery budget, though!

    Hope 2017 is treating you well. Only back at work three weeks and feels like 3 months!

    1. Mr. SSC

      Not looking forward to when the kids turn into human garbage machines and start to eat us out of house and home. :)

      Nice job on the savings, and holy cow that’s an amazing 401k match! Nice job Mrs. PIE!

      Thanks for the grocery budget, but Mrs. SSC says “TX has some cheap costs on food, we should be able to do better” so we’ll see about being more mindful there this year.

      Hope you have a great 2017 as well!

  11. Mustard Seed Money

    What an awesome company match. That is no joke. Looks like you all have a great 2016 and on top of that being able to reduce your expenses by almost 10% in amazing.

    I wish I had something insightful when it comes to home warranties but I don’t have one and haven’t had to use it. So I honestly don’t know.

    1. Mr. SSC

      Thanks, but not buying an AC unit every year sure helps drop expenses, lol.

      I like my current company match, % wise it’s a shade below my old company, but the salary difference more than makes up for it and they have an extra compensation built in for my pay grade, so woohoo for my current company. :) Any free money is great in my book.

  12. Mrs. BITA

    That is kick-ass 401k, very nice. Cheers to Mrs. SSC for having the guts to up and leave her high paying job for a job that makes her happy. That isn’t an easy thing to do, so good for her.

    I’m afraid I have nothing useful to add about the home warranty – we had one from our seller and we never used it.

    How exciting to be exploring various places in search of your new home base. I hope you find something you love.

    1. Mr. SSC

      Taking her new job has been great for all involved, but yep, it was a difficult decision especially considering the paycut. Fortunately, we’re setup that it didn’t hurt as badly as if it was 5 years ago. That would’ve really hurt.

      We’ve never used the ones with our homes and never renewed after they expired either. It sounds worth investing time into researching, especially if it could defray even half the cost of a replacement AC.

      Exploring different places to move is fun, and aggravating at the same time. Looking online only goes so far, and finding the “perfect” house still 2 years out gets old, lol. It is nice knowing what to expect as far as the type of house, and in what kind of condition, and what reno’s we made need to do in the different areas we are looking. Some areas everyone has a workshop and others basements are uncommon, so we can at least get a little peek into what our next situation may be.

  13. Mr. Groovy

    Great 401(k) match. Mrs. G had an 8% match at her last job. Matches in the 7%-8% are as rare as bigfoot sightings. Also, great job on the food budget. Less than $600 a month for a family of four is pretty impressive. Finally, very jealous of your MT/ID trip. Montana is the most beautiful state we’ve seen so far. Are you going to Glacier while you’re in Big Sky country?

    1. Mr. SSC

      Our last megacorp had an 8% match too, and you’re right, those are fairly rare. They’ve changed since then, but my current company is really close to that match.

      I think we’ll hit Glacier at least once, if not a couple of times. To be so close and not go would be a travesty, but we’re limited in what we can do by my Father in Law and our kids. I can’t wait though, I haven’t been near real mtns in ages. :)

  14. Ellie @ The Chedda

    Oof! Daycare expenses always make me cringe. I can’t believe they’re that high and you say they’re actually lower than they were!

    We didn’t track spending for all of 2016 so we can’t do a cool outline like this, but I have high hopes for 2017 financially and happiness-ly(?)

    1. Mr. SSC

      Yeah, when they were bouncing around the same cost or a bit higher than our mortgage, it made me cringe too. Our plan of living near good public schools is paying off, and Mrs. SSC’s new job will cut out summer daycare this year as well. With only 1 full time the rest of the year, and a WAY lower aftercare cost for our oldest, our plans are finally coming to fruition. :)

      Daycare or stay at home parent opportunity is definitely something to consider if you’re thinking about kids. We didn’t know how much it would cost or how easy it would be to be like, “Well, it is what it is” and just pay it. There are cheaper ones and more expensive ones, but we thought ours was a good middle of the road finance wise.

      Good luck with your 2017 finance and happiness!

  15. Fruclassity (Ruth)

    Those numbers are very impressive. And I can’t help but think it will be fun to decide where all of your excess cash will go. About your “maids” category . . . It’s lower this year than it was last year. Is that because you scaled back once your wife took the pay cut? How is that working out (I mean the house cleaning)? I detest house work, and when I saw that you budgeted in house cleaning way back when, it actually helped me to give myself permission to go for it (and I have no plans to scale back).

    1. Mr. SSC

      Thanks, I think I’ll have an upcoming post sort of 1500 days style of “Ask the Readers” about opinions on what to do with it. We’ve got a couple of ideas outside of the index fund route and are curious on others opinions on them.

      Woohoo, glad we could help with your house cleaning. :) We almost had the ONL’s in the same boat as you, but they ultimately couldn’t get over having someone in their home, so they didn’t go thru with it. They were close, again after seeing it in our budget, hahahaha. “The SSC’s: empowering people to employ cleaning services – one household at a time.” :)

      We did scale back to just once a month instead of every 2 weeks. The cost dropped some, but not dramatically. We’re trying out someone new as well, so hopefully that works out long term as well. I think we scaled back before Mrs. SSC took the job on the notion we could keep up with the light stuff fairly easily. The cost kept going up and we tried to cancel twice, and they offered discounts to keep us around since so many other clients had dropped them due to the downturn. It’s been a 50/50 sort of lesson learned in that yeah we can keep up with things easily, but it’s also real easy to realize, “Ummm, have you vacuumed lately, because I haven’t…”

      It was a little difficult at first getting those habits built back in, but now it’s not so bad. We figure we’ll cut it 100% out at some point, but until then, we’ll appreciate any help we get, even if it’s paid for. :)

  16. Mr. Need2save

    As others have mentioned, I’ve only heard of home warranties when selling/buying a home. We typically just put money aside each month in anticipation of upcoming home repairs and major replacements. Those HVAC systems sure are expensive! I think we dropped around $8.5k a few years ago, but we had the money saved up.

    It’s hard to imagine those daycare costs. We were able to swing having Mrs. Need2Save leave the workforce for a few years when we had our two sons. I certainly understand that’s not an option for every family.

    I’m a bit jealous of Mrs. SSC. I have this romantic notion of teaching math and computer science at community college once I’m done working. I’m glad to hear that she is enjoying the change from megacorp!

    1. Mr. SSC

      We only asked because one of our friends said their home warranty replaced their AC piece by piece over the course of 4 months, but it was about half the cost of our $7k replacement. That piqued our curiosity, but I also think they’re on a “Cadillac Plan” for home warranties which would make us stick to the same route as you and just have the money set aside for those things when they crop up. So far that seems the most popular route.

      That’s great you could swing the stay at home option for your kids, with Mrs. SSC’s new position, we can do a part time version of that, lol. I remember my brother went thru this and his wife went back to work, but it wasn’t covering the daycare costs, so she went back to SAHM mode until their kid got to kindergarten. It is a ridiculously high cost.

      I have a similar notion of teaching some type of earth science at a community college as well. Fingers crossed for both of us!

  17. ZJ Thorne

    I’m also on Team Happiness, especially since you were able to boost your cash on hand for any future issues with the higher salary job. I like that you are changing the goal posts on yourselves, too. Gotta keep striving.

    1. Mr. SSC

      It would get boring if everything stayed the same right? :) Changing the goal posts has sometimes felt like we’re even changing the whole game with what our original idea looked like 5 years ago to what we’re envisioning today. I’ll be curious to see how it morphs over the next 2 years.

  18. Amber tree

    Still a great job!

    Our savings are lower now as well due to my job change and lower pay (and less stress and more fun). Wd are similar: we keep cash at hand in case it goes wrong at the job.

    We have no home warranty (not sure it exists in Belgium). We contribute each month to our life happens fund. Last year, we took out 2 K more than that went in. I hope 2017 is the opposite

    All the best for 2017.

    1. Mr. SSC

      It’s amazing what changing jobs can do to lower stress, and attitude, and if it increases fun as well, that’s even better! Even with lower pay, I feel like a lot of those things are worth it.

      I’m glad it’s working out well for you and your family too! :)

      Life happens indeed, it’s a good thing you’ve got a fund for it. I hope your 2017 is the opposite for that fund too.