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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