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November 2015: Kaboom went the budget, again!!!

How did our budget go Kaboom again you ask? A brand new air conditioner to the tune of $7010.35.  Need I say more?  And that was just ONE of our air-conditioners.  The other AC in our house is also 10 years old, but the repairman said it looks pretty good, so it may last a few more years. Same with the furnaces, but then they don’t get used nearly as heavily.  Still, that is another $7000+ that could need to be spent in the next few years. Maybe more if we want to install a more efficient model since it is the main AC in the house.  I realized, having a 10 year old house, that we are getting near the end-of-life for several big house systems… We need to start keeping an eye on the hot water heaters also – and of course we also have two of them!  That makes me realize how important it is to downsize once we ‘retire’ and move for our fully-funded lifestyle change – a smaller house will result in much lower home maintenance costs.

Can't survive long in Houston with a broken AC

Beyond the home repairs, this is one of those months I wish we didn’t share our budget online. Why is that? Well, after just doing a detailed grocery review a month ago because our spending in groceries was a bit high, we ended up doubling our grocery bill this month. Yep, doubled… Groceries – $1234.77.  Ouch. Just ouch.  Looking back on it we have it pinned down to a few atypical behaviors this month.  First, we realized we went to different grocery stores, and actually bought more because different stores have different varieties of everything. Second, we nickel and dimed ourselves with multiple “little” trips to the grocery. It adds up quickly especially when you discount the quick trip as a “little spend”.  Third, we stocked up our liquor cabinet. So just under $300 of this is on an alcohol re-stocking spree for the holidays, “justified” by the fact we’ll be hosting Thanksgiving, Christmas, and having a New Years Day party.

However, that still leaves over $900 on food – and unless Mr. SSC bought me a diamond bracelet at our grocery. Mr. SSC sidenote: I didn’t buy a diamond bracelet at the grocery… Seriously,  I don’t even know WTF it all was.  I mean sure Thanksgiving, but that wasn’t very much or it didn’t seem like it at the time.  Our pantries do seem to be overflowing so hopefully we can keep the spending down until right before Christmas when we have to prep for the next go round of guests. However, we’ll meal plan better this time. Maybe it was those brussel sprouts that were $4.97/stalk which Mr. SSC thought were only $0.82/lb.  Yeah – $10 on brussel sprouts that we forgot to even cook on Thanksgiving. Mr. SSC prepped them, but forgot to put “Start brussel sprouts” on his timeline checklist. Oops… Mr. SSC sidenote: I had everything on the list so this wouldn’t happen and reviewed it 3x with the family, and no one else caught it either. It’s tough keeping track when you cook almost everything. 

So here are the detailed categories – compared to last month and our yearly average:

15-Oct 15-Nov 2015 AVG
mortgage -1900.34 -1900.34 -1901
house utilities -321.84 -255.2 -332.704
phone, tv, internet -212.8 -212.79 -214.755
daycare -1828 -2285 -2040.38
car note & ins -1061.42 -323.45 -524.715
health -28 -25 -57.457
groceries -548.67 -1234.77 -775.901
house, misc shopping -362.14 -7540.63 -2224.91
car repair, gas, toll -1003.55 -186.75 -480.337
gifts/entertain -141.33 -286.75 -143.563
pets -16.22 -87.96 -128.507
maids -264.14 -264.14 -262.797
cash -70 -60 -55.1136
gym -87.12 -87.12 -87.12
travel 0 0 -25.3253
total -7845.57 -14749.9 -9254.58

It was a 5 Monday month – which means an extra week of daycare costs this month. Bummer.  Everything else was generally just fine – $286.75 on gifts – but I am pretty much done with holiday gift buying, a few items were on back order, so I will have another $130 hit the gift budget in December. (Yeah, I caved in and bought the $35 Amazon Fire
tablet, but it’s on back-order until just a few days before Christma)

Gasoline and toll costs were down because we both took a week off work, and the electric bill was less since fall has finally come to Houston – but those pluses don’t make enough of a dent in the grocery budget. Sigh.  Man, I am really, really ashamed of that grocery bill.  Maybe I need to do a fraud check… Mr. SSC sidenote: I have already looked and didn’t get any alerts or see anything suspicious. Just ridiculous justification of overspending.

There was $40 spent on a babysitter so we could attend a concert that Mr. SSC bought tickets for many, many months ago.  It was fun – but man, babysitters are pricey. But totally worth it!!!

We adopted a greyhound in April, and now that the weather has finally turned cold – we had to buy her a jacket since the breed has essentially no body fat.  I succumbed to Etsy and bought a cute one for $50.

Needless to say, with the $7000 AC bill, I did not invest any money this month.  I am hoping to make a bigger than normal investment in December once all the finances even out, but I think we will be a few grand short of our $150,000 savings goal for the year (also includes 401k, 529 college).

I like to try and use our current spending as a baseline for what our FIRE expenses may be and this $7000 AC bill drastically changes it.  I am unsure of how to handle it.  I mean, we won’t expect a major house system to break every year, so it seems silly to just add $7000 to our yearly needed income.  I’ve heard that house upkeep costs about 2% of the house value per year when averaged,  so that may be a starting point.  I did find a great blog post by Money Smart Blog regarding different ways to estimate and budget for those pesky house repairs.  I like how he went through and estimated the approximate remaining life of his systems – definitely something to look at when we price out and pick a new, smaller house in a few years.  Although he estimated his AC to only be $3500 to replace – lucky guy!!!

In summary – I’m not sure yet if this whole AC debacle is going to raise our FFLC goal of $55k to closer to $60k/year… Mr. SSC sidenote: No.. no it will not, but we will work something out to account for it better. It definitely opens my eyes to realizing that it is way easier to spend more money than to spend less than planned!!!!  It also probably isn’t good that this is the second time this year that our budget went KA-BOOM!!!  Could that be a sign that we aren’t doing something right? I don’t know, but it does show how easy it is to justify some overspending. Even with the tracking and being financially aware, it’s really easy to slip into some bad financial traps.

I hope y’all had a much, much better November than we did!  Oh – and check it out – the November summary came out on December 1st – I am mighty proud of myself! 😉


31 thoughts on “November 2015: Kaboom went the budget, again!!!

  1. Steve @ Think Save Retire

    Hey guys! I admire your honesty in these budget posts; if you go over, you go over. You don’t try to hide it or talk around it. Good on you for being honest – honesty is the mark of those who WILL achieve their goals because they do the uncomfortable things to make them successful!

    And you’ve highlighted very well in your first paragraph why I may never be a home owner again. I teased myself earlier in life that I wanted to build some equity, and that rationalized my home purchase. But unless the home appreciates fairly substantially, or you sink a lot of time and money into fixing the place up, you’ll rarely recover your costs (including smaller hidden costs of home maintenance). I’ve lost a LOT of money on my current home.

    Keep fighting the good fight! 🙂

    1. Mrs SSC Post author

      Thanks, there really are some months we think about skipping a summary, just because we are a bit embarrassed that we fell far from perfect. But, I guess it is good to keep it real! I think when we get ready to move, I am going ot have a hard look at owning vs renting…. of course we have kids and big dogs, and would love to have acreage. But I would love to build a nice, compact house that doesn’t waste too much space…

        1. Mrs SSC Post author

          That was a great post! It was timely for us too. It is something we want to think about – but I think I worry that the owner would decide to sell, and we would have to move. Plus – when we move next, we want to have a bit of land… not always easy to find a renting situation there. But, yeah, it is a convention we will have to rethink when we move next!

  2. Steve

    You guys are doing better then you think! You have your eye on the ball, you’re paying attention and you guys are making corrections to make the next month better than the last. Take a look at where you started from and see how far you’ve come since the beginning or even this year! There are bound to be up and down months! Remember, this is a marathon, not a sprint.

    1. Mrs SSC Post author

      Yeah, I am still WAY proud of us. Tracking all these expenses gives me some confidence I know whats going on. I still lament all the years we just spent, spent, spent… heck $1000 grocery months may have been the norm for us a few years back!!!

  3. Maggie @ Northern Expenditure

    YIKES! This post makes me nervous because we have decided not to replace our 12-year old furnace now, when we could get $1000 back on it because it would still cost us around $3000. But if it dies on us in the next year, I’m definitely going to be mad about that decision. And I hear you on the food budget. After Thanksgiving, we had so much food, but once the leftovers were gone, we had so much food but were missing key ingredients to actually make anything!

    1. Mrs SSC Post author

      I hope your furnace lasts 15 years! There is always a trade off of replacing immediately or hoping for the best. I think when we FIRE, we may end up doing more of the hoping for the best and trying to stretch stuff out a few more years… always a tough call

  4. Hannah

    You shouldn’t bank on a $7K repair every year, but the 2% rule is a good one to follow, and that’s upkeep beyond cosmetic maintenance (such as lawncare, or replacing old furniture). Appliances, heating, gas, are expensive systems. It’s nice to have a big chunk of change lying around to have these repairs at the ready, which is why I’m personally a big fan of sinking accounts.

    1. Mrs SSC Post author

      I think 2% seems reasonable – and it does jive with what we spend now on home maintenance, roughly.

      Oh – and congrats! you were our 1000th comment!!! Whoo hooo! I wish I had a cool prize for you 🙂

  5. Even Steven

    Maybe it was those brussel sprouts that were $4.97/stalk, wait brussel sprouts come on a stalk, I thought they were just little balls of nutrition that I got from my grocery store, I’m sheltered.

    I was looking at the budget and this and that and then I tossed it all aside when I saw you guys saved 150K, $1000 groceries, whatever:)

    1. Mrs SSC Post author

      Mr SSC prefers brussel sprouts on a stalk – he’s fancy pants with his nutrition. Actually, he planted some Brussel sprouts in our garden hoping to have them grown in time for Thanksgiving… but, alas, they are just giant bug eaten leaves. Yeah – we are saving a lot – pretty much my salary and some, but I’m hoping to quit next year, so this was our one year of crazy savings.

  6. Freedom 40 Guy

    Blech on the AC unit repair! I feel your pain on that one. Six months after buying our current place we had to replace the entire HVAC system at a cost of around $10k. Ouch! One year later, we had to repair the entire HVAC system at our rental. Double ouch! It definitely sucks when things like this happen – but fortunately you have savings and emergency funds to put into play. Many others don’t. Moving forward, I’d advise regular maintenance checks on your new system. Just like you would for your car. It’s a pain to spend money on them when it sometimes seems unnecessary, but it can prevent big problems later on.

  7. D

    Several thoughts come to mind: (I am a new reader so sorry if I duplicate)

    You overspend because you have it to spend.;) I almost tossed the blog aside as well when I read you wanted to save 150k this year. That is

    If you “pay yourself first” and use automatic payroll deduction/checking withdrawal for your savings, you wouldn’t have to wait until everything is paid before putting into savings. This may include a separate account for that 2% pesky housing repairs. And another for those even peskier car repairs.

    1. D

      Also, my wise 97 year old aunt said that before she and my uncle retired, they lived for one year on the retirement income they expected to have. She didn’t like it that year, she said it was tough, but it worked! We will plan to do that, too, in a few years.

      Question: $25/month for travel? Really? Does that include vacations?

      You may want to call your insurance agent to find out how much it costs to insure a 16 year old so you don’t get sticker shock when that time comes…..and budget it now! 😉

      1. Mrs SSC Post author

        We plan on doing a test year also – your aunt is very wise! We figure its better to test and out and see if its even doable… before quitting a job and being stuck.

        That $25 of travel is wrong – I did some spreadsheet copying and pasting – so I’ll have to check out what went wrong there. It is about 10 times more! Good catch!

        I budget for an extra $200/month/teenage child. I am hoping that will help offset some of the extra costs!

    2. Mrs SSC Post author

      That is true – we do have it to overspend. I have tried suggesting to Mr SSC that when we overspend we attempt to underspend the next few months to even things out, but he has mostly balked at that… the whole FIRE and budgeting thing is still too new to him, I think. This is our first year of truly tracking spending, so we shall see how it goes next year. My husband hates the word ‘budget’ so its a bit of a balancing game trying to keep costs down while letting him feel like we aren’t frugal. I think he hates the word frugal too…

  8. Ditching The Grind

    We’ve been fortunate to have avoided a large home maintenance expense so far, but I know it’ll catch up to us one of these days.

    As far as your other numbers, they’re very similar to ours. Childcare is a beast. And although we really like our current house, I can’t wait to downsize a bit once we move. Those two things alone are huge monthly expenses.

    1. Mrs SSC Post author

      Our oldest goes to kindergarten next year – so I will only have to pay before and after-school costs (if I keep working). I can’t wait! That is $100/week less!

  9. Matt @ The Resume Gap

    Oof, I hate those budget-blowup months! I’ve had a few this year, including a $2,500 car repair.

    Back before I was focused on FIRE, I didn’t let these types of expenses bring me down at all — with a high savings rate, it’s easy to roll with the punches. But now that I’m getting ready to cut off my major income stream, a few thousand dollars of expenses represents a meaningful change in withdrawal rate for the year. For my planning, I’m trying to balance optimism with my spending track record over the last 5 or 6 years. Better to be realistic about these miscellaneous expenses and have a chance to underspend the budget.

    1. Mrs SSC Post author

      Yeah, these big costs don’t really bother me – I mean, I don’t lose sleep over them, because we do have income still coming in. But, you are right, it is key to track all the miscellaneous costs so we don’t get sticker shock at a time when we have minimal income.

  10. Stockbeard

    To me this confirms that once you go frugal, unplanned big expenses hurt much more because their represent proportionally much more and there’s not much you can do to offset the expense.
    Some one who spends $5’000 a month on entertainment could cut most of it on a given month just to buy that AC. But when you’re down to $10 a month on entertainment, saving on it is not going to help.

    I agree… we need to plan for that kind of stuff, but not in a “silly” way (e.g. we’ll need to replace our AC or some other piece of metal every year for $7000″

    And shame on your grocery bill 😛

    1. Mrs SSC Post author

      I am so embarrassed about the groceries… I wish I had saved the reciepts to do a tally to just rub more salt in the wound.

      Yes – the unplanned expenses are going to really, really hurt when we go frugal. I know that that is what emergency funds are for – perhaps we will have to mitigate these types of expenses with a larger emergency fund?

  11. Our Next Life

    I just gasped, out loud, on an airplane, when reading that AC number. OMG, you guys! I’m so sorry! What a kick in the gut that must feel like. We didn’t have to shell out $7K for anything, but did have to replace essentially every appliance in our house within a year and a half of buying it… I feel nauseous all over again just thinking about it. Now we’re just hoping our furnace can last a little longer! But you’re right — it makes the thought of downsizing awfully appealing!

    On the future budgeting Q, our thought is that some years, we’ll do fun things like take a trip to Asia, and some years we’ll need a new car or a new appliance. So other than a small home maintenance line item, we aren’t specifically budgeting for major expenses every few years, because we are already planning for a budget that has wiggle room in it (as it seems like yours does), and we’ll just adapt and tighten the belts sometimes if we have to.

    So, so sorry about that AC expense — and going into the winter! 🙁

    1. Mrs SSC Post author

      Downsizing sounds so good right now… I have been daydreaming looking at home plans for < 2000 sq-ft homes. That is a good point about the travel. We do want to go on fun trips and explore the world with our kids every few years. I suppose years nothing breaks - we go to Italy, years everything breaks - we go camping! At least that is some wiggle room. Plus our allowances and some part-time jobs that we aren't budgeting in will help. As long as we don't buy a money pit house!

  12. Taylor

    Oh no! I’m so sorry about the KABOOM 🙁 I’m totally the same with the multiple trips to the grocery story. They add up so fast but feel so harmless at the time, haha. I have no doubt that December will be infinitely better and I’ve got my fingers crossed that you’re not hit with any more crazy high house expenses.

    Not having any monthly “surprises” is hands down my favorite thing about renting an apartment and not owning a car. When I still had my 2001 VW, it felt like I was hit with a $500 repair every month. Not a fun feeling. Sending you lots of good vibes for December! Can’t wait to hear how you killed it with your budget 😉

  13. Jacq

    1- Do you have any contributions (like Roth) you can do in 2016 for 2015, to still meet your goal?
    2- In my credit card tracking tool I put alcohol in the “entertainment ” category to keep it separate. I usually buy a case of wine in the summer, so it looks like a big spend, but becomes hostess gifts & lasts a while.
    3- Very bummer on the expensive repair. 🙁 Figure you can add it to the listing on the house (AC system upgraded 2015!!). 🙂 Also with a smaller house in the future it will hopefully just have 1 ac unit, furnace, hot water heater, reducing repair / replacement costs. 🙂 Another plus of your possible move to the east coast / mid-Atlantic region is less need for AC use. 🙂 I don’t use it most of the summer. Heat for sure in the winter!!
    4 Have a great December!

    1. Mrs SSC Post author

      That is a good idea about alcohol as entertainment – because we definitely dont drink that much ourselves. Thanks for the tip!

  14. Fervent Finance

    Yikes – sorry for that big expense guys. Did you get a second opinion? But in the end, shit happens, and you’re in a place to absorb those bumps in the road. Some people would have to finance a transaction like that!

  15. Chris

    The next kaboom is sure to come – you need a reserve plan….inspect your house, write down everything that might need replacement or repair in say the next 10 years, figure out when you think you’ll need to tackle it and what the cost will be, then budget for it and monthly save money into a high interest account (not that they would currently exist) to pay repairs as necessary. Re-evaluate yearly.

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