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A review of my past year’s expenses

Update: In case you guys didn’t realize, this is referring to THIS year’s expenses. I made a big boo boo.

Overall Annual Groceries Spending!

I took a one year experiment, where I got my parents to keep the receipts they got from grocery shopping, to see whether there is anything startling about the grocery spending. This is the end result.

What makes this much easier is that, once these receipts are put into Quicken, I can filter by all sorts of views to get the aggregation that I want.

In case you think there are no value add to doing this, let me tell you. There are really not much value add for you to do this.  I only do this to see how hard it is to do this form of data entry. The first 2 months was hard. Then after that, it became a habit. Wasn’t that difficult anymore.

As the last month is still in progress of being collected, I cannot furnish the result. So we can only average 11 month’s data.

(Click to view larger chart)

Groceries total $5477 for 11 months.  On an average basis, that comes up to $497. The potential leakage is some of the dry stuff that wasn’t purchase through my credit card. This will be the almond and walnut purchase. They could possibly come up to another $50 per month.

What is unique about my family is that, the only working adult in the family (me) happens to pack food from home. Next to Groceries Total, you can see my Dining out amount. It totals up $117 for the past 11 months. What this means is that, it gives rather good data of what happens if you prepared all your meals at home. (well except for the gas part. Our gas is actually higher than the nation average)

There are usually three people eating most of the three meals. That is my parents and myself. My grandma joins us for weekday lunch and dinner.

There aren’t any kids around, so perhaps there are no extravagant food, or mandatory baby stuff that severely jacks up the food costs. We don’t save on food really. We eat like kings. Its just that we, don’t eat a lot (considering 2 of them is in the late 60s and 1 of them are in her late 80s)

One thing I realize is that when you have a routine what to buy on a weekly basis, and you have fixed meal plans that alternate, the costs looks rather predictable. Sine we each have our preferences, the average meal costs for each of us comes up to different amounts. I don’t take the drinks, processed stuff, pork or baking stuff.

Turns out my daily meal cost comes up to $4.98.

Cooking from home does help lower the cost since I am lucky my parents know what they are doing. If I were to do it alone, things will look rather different. Preparing for 1 person might be more or less than this amount.  I felt that if I were to prepare for 1 person a more accurate amount could be $7 per day ($210 per month).

Overall Annual Expenses

I also decided to tabulate my other spending throughout the year. They can be view below.

(Click to view larger chart)

I spent roughly $24k this year. This includes family expenses for 3.5 people, as well as mortgage, conservancy under Family Contribution. Those in total took up $1k per month. The family expenses tend to be shared between me and my brother, since he covers a fair share of that. The rest of the spending is all by me.

The most extravagant is perhaps the medical cost. I doubt many 30++ year olds have that high of a monthly medical cost. It goes to show that, healthy body compounds wealth. Every time I look at this category, it pains me.

There are folks who don’t believe in budgeting, or for the matter, tracking their expenses. Doing this is figuring out to a close degree what is your spending pattern is like. But its rather useless going forward.

What is important is what you decide to do with this knowledge of your past spending pattern, and plan them going forward.

If I were a 65 year old, and am retiring next year, how differently would my expenses look? (This is somewhat how they justify the CPF Life annuity in CPF Focus group discussion. )

I came up with a figure of $1110 per capita. Of course this is with the expectation that the Medisave grows to such an extend it takes care of much of the insurance premiums and health care costs. Else this will be an underestimation.

What about the goal of a minimum subsistence living? I came up with $1305 per month. In any case, this is not a dream that is close, since there are dependants that I need to take care of. My cost is closer to $2000 per month as of now.

The fortunate thing is that, the dividend income have come up to $900 per month. To generate another $400 per month at 5% dividend rate would require another $100,000. I do have that amount in un-deployed cash reserve, so its not really a pipe dream. It will be much easier if the business in my portfolio grows more to distribute more dividends.

Knowing that I am on the right track, and that I covered a sizable part of my family’s annual expenses in cash flow other than from work gives me some form of optionality in life.

To get started with dividend investing, start by bookmarking my Dividend Stock Tracker which shows the prevailing yields of blue chip dividend stocks, utilities, REITs updated nightly.

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dowz

Friday 26th of December 2014

Good job Kyith at managing your expenses, and having the option to work or not to work. Options and financial freedom is a dream for many and you have achieved it. I'm still working towards it, and i have a new year resolution to track my costs. I set aside monthly sums, but i decided to track my expenses to increase the amount i stash away.

Kyith

Friday 26th of December 2014

Hi dowz, its nice to have you back in my life. Forgot about how great past interactions are. I think there are 2 far ends to budgeting. one is to set aside a monthly sum. The other extreme is tracking to a granular level. Tracking to granular level is more of a discovery. It is awareness.

What trumps all is to budget FORWARD. Some software that i recommend is KMyMoney (free, opensource and very flexible, no smartphone though), YNAB and Quicken.

i think you are doing better than me with 3 different streams of income (4 if you include work!)

Regis

Monday 22nd of December 2014

Well done Kyith! You are amazing at controlling your costs. You're good at controlling your groceries :)

Merry Xmas! Regis

Kyith

Monday 22nd of December 2014

Hey Regis,

Thanks though i beg to differ a bit. I don't control the groceries too much cause i cannot control my parents! Regarding the others, its just a more concious decision which ones are more important, good to have and totally out of the question.

melting_starz

Monday 22nd of December 2014

You are amazing and really inspiring! I tried to keep track of my spending but it just went haywire. With a baby in the house unexpected expenditure are just too many. I find it so hard to track what I spend on. And you are not alone! I am one of the 30+ people with high medical cost as well.. Mine is maybe about 300-350 monthly.. lol Maybe you can consider seeing TCM (which I am doing) to hopefully achieve "better" health in the yrs to come!

Kyith

Monday 22nd of December 2014

Hi melting_starz,

Thanks for the support. after some time i realize that what i thought was wasteful spending on my end (medical) my friends spend it all in other areas. I have seen TCM in the past with not good results. It's a difficult proposition really. sometimes it gets me down.

Regarding tracking or budgeting, the advice that i can give is: acceptance and commitment. Accept that you are not going to be successful everytime, but continue and improve anyway. Its a very psychological ting to accept you are not perfect.

At the first cut, you don't have to budget if you can set aside X amount annually that will build wealth. then u can spend the rest knowing you have done what is adequate. the rule of budgeting is this: you will fail, so be comfortable with failing but adjust along with it. and the trick is to have an emergency fund. if there are more baby hospistal trip, tap the emergeny fund. next month pay back the emergency fund and enlarge the baby medical fund.

Winston Wisdom Koh

Sunday 21st of December 2014

Kudos on keeping such detailed records!

Based on your yearly income tax of S$735, I have a rough idea of how much you earn by working backwards haha...

Find ways to increase your income. I think you have already optimised your spending.

Kyith

Sunday 21st of December 2014

Thanks. But you don't really know how much deductions i have haha. There are some stuff that you can't increase within a short span of time!

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