Friday, January 3, 2014

The cost of living our life in 2013

INCOME/EXPENSES: I retired during 2013, but am not collecting social security yet, so our total income dropped slightly. I was only doing occasional consulting work so it wasn't a very big hit. We will have a slight increase in 2014 as Federal employees are getting a 1% raise after years of no raises. Our expenses did drop compared to 2012 and hopefully will drop even more in 2014 with no wedding expenses and (cross your fingers) no major medical or home repair expenses.

So what were our 2013 savings and expenses? (All %s are of pre-tax income.)

SAVINGS - 36.0% - Our savings including retirement accounts increased from 23.2% in 2012. I am aiming for an overall savings increase to about 45% in 2014.


Cars - 2.1% - I'm sure that our car insurance will go up in 2014, but won't know how much until the 6 month policy bills are due in April and October respectively. We have done everything we can to minimize insurance costs with the latest being taking safe drive courses and moving my driving status to non-working to lower car insurance costs. I am buying discount gasoline debit cards when offered at the grocery store. Of course we have no control over the licensing cost and will just have to see what that is.

Clothing/Personal Care - 1.9% - This includes haircuts and clothes purchases/maintenance for the 2 of us. We had higher than usual clothing costs as we bought our wedding finery. In 2014 I am going to track toiletries and laundry supplies in this category as well rather than in food in an effort to really see what food costs us.

Communications - 3.1% - Cable TV, internet, landline, cell phone, computer supplies and equipment, Kindle, tablet, stamps, cards, newspaper subscription - I think that is all that is in this category! In 2013 we bought a new computer after the very old one failed, a Nexus 7 tablet and a cheap Tracfone. 2014 will bring lower costs in this category as we shouldn't be buying any electronic equipment.

Food - 5.0% - I have been lumping together food from stores, household supplies, toiletries, etc. in this category - anything I buy at the grocery or drugstore except medicine. I try to shop on senior discount day and watch for specials/coupons. In 2014 I will also buy discounted gift cards for Whole Foods and CVS so there will be savings there. I am going to be buying more variety of fruits and vegetables though so it may balance out.

Healthcare - 7.6% - Extra costs for final payments for braces and cataract surgery drove this up. Good news for 2014 - health insurance is only going up 2.4% for slightly better benefits and late in the year I can add Medicare Part A at no cost.

Housing - 8.4% - This category includes maintenance, furnishings, utilities, homeowner's insurance and property taxes. We don't have a mortgage anymore, but have a relatively expensive house to operate despite doing as much maintenance as we can ourselves and watching our expenditures on utilities, etc. We definitely had a cooler summer in 2013 resulting in lower electric utility costs, but last winter was cold so gas costs for heating were up. We managed to not have too many home maintenance costs though. We used exactly the same amount of water as the previous year but rates went up and will do so again this year to help pay for county wide sewer work. 2014 will also see a big, but unknown, increase in property tax as home values have increased and the freeze on our tax (due to a successful appeal of value 2 years ago) will expire. I'm sure that our homeowner's insurance will also go up, but won't know how much until the next bill in August. We haven't decided what optional maintenance to do as part of making our lives easier and more comfortable as  preparing the property to sell in a few years. I am hoping we do all outdoor projects that need work. I have my fingers crossed on non-optional maintenance.

Optional Insurance - 2.2% - We also pay for excess liability insurance and the good news is that it didn't increase at all for 2014! That was a surprise as insurance rates always seem to rise way more than inflation.  We both also both have term life insurance and it will go up too - next bills in February and March. We keep debating whether or not to drop the life insurance, but it does have the benefit of paying in advance of death if you are terminally ill and as we don't have long term care insurance we are using it as that right now.

Recreation/Travel - 9.3% - This includes boarding the dog as we consider that a travel expense rather than a pet expense. It also includes purchase of reading material and hobby related items or classes, movies, plays, etc. as well as all travel expenses. In 2014 I am moving eating out and any alcohol purchases back into this category as they really are recreation and not a necessity.

Taxes - 22.5% - This includes all wage related taxes.

And the smallest expense with the most value?

Poodle Princess - 1.0% - That prize goes to the Poodle Princess! Of course she also increases our travel costs but that is OK. We do order her Greenies dental treats from Amazon's subscription service to save on cost. I also diligently claim the free bag of dog food as the 13th bag, but that takes a year or more given her size and the size of the food bags LOL. The groomer also eventually provides a free session after we pay for quite a few. We do pay a premium to board her with her former foster family as she just loves them to pieces and they adore her. Even their cat is happy to see her and their dogs do cartwheels, as does she ,when she arrives. She is little, but loads of companionship and fun.


  1. This is a great analysis, Juhli! I like your category changes (toiletries with personal care, eating out with recreation, and so on). I agree that unless they have major vet bills, pets are excellent value for money :) Your savings rate is amazing.

    1. Thanks. Our savings rate is a result of having paid off our mortgage and being 64 and 61 respectively. The idea of having to live the rest of you life off of what you have saved is a huge motivator especially when your Mom is 93 and going strong! Otherwise I'd spend it all on travel.

  2. It's very sweet how much you love and enjoy your Poodle Princess. :-)

    Congratulations as well on your terrific savings rate!

    1. Thanks. I'm sure if we had grandchildren the dog would get demoted quickly LOL. We realized our nest was too empty and we enjoyed nurturing - lucky dog/lucky us.

  3. The cost of living just keeps creeping up, no matter how fast we try to run. Ha! Once you get that budget nailed down, there is not much room for error, extras, or emergencies. Plus you want to retire, but keep on eating and sleeping in a warm comfortable roofed dwelling. Good luck on that, it takes careful planning.

    Lachelle Muse @ Ernstam


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