Happily Disengaged’s 2021 Expenses
It’s January, so now’s a good time to look back over the year 2021 and post about our total expenditures. There was a time when I did monthly expense blogs, but alas I’ve fallen off these types of posts as my blog bandwidth has narrowed and my blog posts have slowed down.
Pursuing FIRE isn’t the easiest in an ultra high cost of living area like San Francisco, but it’s not impossible. This is the land of the $8 dollar bridge toll (two bridges I need to cross to work) and the $4.80 gallon of gas. With a family of four things just tend to cost more. My youngest daughter is now reaching the age where she doesn’t get in for free anymore.
To start, I have to give credit to Personal Capital for doing the hard work of expense tracking and keeping my net worth calculating easily within reach. At one point I did this on excel sheets, and I still do, to a degree, but having an app/website that crunches that data and keeps things handy is an important tool on my FIRE journey. I don’t pay for any of their ‘services’, I just use the free stuff. Here’s an affiliate link to Personal Capital to see if it’s for you.
So with a bit of cringing and blaming inflation, I’ll begin.
Happily Disengaged’s Total Spending in 2021: $96,382
On average we spent $8,000 a month in 2021.
A few outliers this year propelled our spending to one of its highest ever. Lots of bells and whistles with no regrets. Our savings rate took a hit on a few of the more expensive months like tax day, and the few months leading up to our November trip to Europe. But for the majority of the year, we were able to stay on track and hoover about halfway to our FI “range” number.
| Expense 2021 | Cost | % of Total |
| Mortage (P&I only) | $ 17,935.00 | 18% |
| Groceries | $ 13,144.00 | 13% |
| Travel | $ 9,048.00 | 9% |
| Taxes | $ 7,801.00 | 8% |
| Childcare | $ 6,800.00 | 7% |
| Restaurants | $ 4,821.00 | 5% |
| Gas/Fuel | $ 4,510.00 | 5% |
| General Merchandise | $ 4,767.00 | 5% |
| Insurance (home/car) | $ 3,928.00 | 4% |
| Utilities | $ 3,451.00 | 3.50% |
| Medical Dental Expenses/Co Pays | $ 2,618.00 | 3% |
| Sailing School x2 | $ 2,240.00 | 2% |
| New Couches | $ 2,131.00 | 2% |
| Student Loan | $ 1,960.00 | 2% |
| Union Dues/Subscription Services (TV/Music etc.) | $ 1,900.00 | 2% |
| Gym/Spartan Races | $ 1,788.00 | 1.50% |
| Car Maintenance/DMV/Tires | $ 1,531.00 | 1.50% |
| Home Improvement/Material | $ 1,288.00 | 1% |
| Comcast Internet | $ 1,237.00 | 1% |
| Christmas Gifts | $ 1,200.00 | 1.25% |
| Road Bike | $ 868.00 | 0.90% |
| Marijuana | $ 734.00 | 0.75% |
| SF Giants Playoff Game Tickets/Date Night | $ 300.00 | 0.30% |
| 49er Game Ticket (guy’s night)+Tailgate Food | $ 250.00 | 0.25% |
| Pet/Dog Care/Vet etc. | $ 132.00 | 0% |
| Total | $96,382.00 | 100% |
Hard Expenses Vs Soft Expenses
When Mrs. Disengaged and I first decided to pursue early financial independence, we knew we needed to get our spending sorted out and decipher how we spent and why. We used a method of hard and soft expenses.
Hard being necessity costs and soft being fluctuating (controllable) costs. There’s a bit of grey area here, like groceries for example, definitely a necessity, but fluctuating month to month. So we err on the side of necessity for groceries and file this is the hard category.
Hard Expenses: $65K or ~70% of annual spending
This is what we need to spend to survive…kinda.
I guess this would be considered a Lean FIRE case?
My wife and I both lose our jobs. We need to hunker down and minimize as much as possible. This is what we are probably going to be spending. Basic necessities. We could probably reduce down even further and go spartan and shave 10k-15k off the hard expenses and entirely cut the soft, I mean, if we both lose our jobs I can probably chop the childcare 100% and skip the dentist for ourselves and pay off the student loan in one swoop (we owe $3k). Gas would be reduced, as that’s more a work-related expense. I’d drive an extra 10 miles to shop at the Mexican meat market for food, you know, that kind of stuff.
Basically, this is an inflated version of bare-bones living in the Bay Area metropolis.
Our biggest expense is our mortgage. And the one I’m proudest of. We refinanced twice in two years to get this down to a monthly payment of $1630 from an original $2700. As you might be aware, this did send us spinning our wheels as far as mortgage debt paydown. Our balance has remained unchanged for two years due to closing costs. But I’m not concerned with that.
I’m concerned about the cash flow.
The refinancing has allowed me to put more money into the market and gives me room to breathe if shit does hit the fan. Especially dropping my escrow payments. I’m now in manual mode and have more control, plus I like paying property tax myself so I can earn some decent credit card points. Long term plan is to rent the house out, and dropping the monthly payment also gives us some more profit when this home becomes an investment vehicle. Good debt be damned.
Groceries will always be the Achilles heel of my monthly spending. I happen to live outside of town and the closest supermarket is a mid-tier store, above Wal-Mart and below Whole Foods in price/quality. So it’s not the cheapest. My laziness in not driving an extra 8 miles on the freeway contributes a bit to the number here. I see it as a convenience tax for my laziness. After all, lazy people spend more.
Soft (Luxury) Expenses: $31,335K or ~30%
This is what we need to spend on to enjoy the hell out of life and the moment. Haha.
Okay, maybe not exactly that. But we did make a conscious decision to do more now than live like zombies and put everything in the basket for a future that does not exist. There is certainly a balance to be had when saving hardcore and I think we’ve found that balance. Especially with kids. These parenting moments simply cannot take a backseat to saving. We eased off the pedal in 2021, and I can look back over the year and smile knowing I won’t have any regrets when I’m an old man. No feeling like I might have missed or cheaped out on a moment, yet still saving ~50%-ish of income 9 months out of the year (the other 3 months were to save and pay for vacation/sailing school).
All this is probably extending our early retirement date by a year or two, but that’s just fine for us. Happiness is our north star, not a bank account sum.
So we spent 31k last year on luxury.
There may be a couple of grey area items in this list, like union dues and home improvement, but they are negligible enough I kept them in this category. As long as electricity and water are flowing in and out of the house, there’s not much home improvement that ‘has’ to get done. Hence the soft categorization. Also, general merchandise is mish mash of things.
Most items I’ve written about in one post or another, but I’ll highlight.
Travel is the biggest expense here and the one, again, I’m most proud of. We went to Portugal in November and rented a cabin in the Sierra in the early part of the year. 2022 probably won’t be this high. I have a bunch of credit card points ready to be used, and we won’t cross any oceans. We’re thinking Costa Rica or a domestic train trip on the California Zephyr to Chicago. Something credit card point friendly.
Yes, we’ve spent a lot more in 2021 on luxurious ‘soft’ expenses. Like a ton more.
Sailing school? How is that FIRE? Well, it is. I’m setting the stage for a life well-lived. Part of living well means doing and learning new things. Mrs. Disengaged and I had a blast going to school and studying with each other, then applying it to operating a 22′ sailboat together (and surviving) amid bustling maritime traffic and strong winds that compromise navigation on the San Francisco Bay, if that’s not marriage garden tending I don’t know what is. Who knows, maybe we will decide to live on a sailboat one day in early retirement? Again, seeds are being planted.
Baseball and Football? We spent a couple hundred on sporting events. We try to make a game a year, this year our anniversary happened upon an epic Giant-Dodger playoff game. The Giants had a 107 game win year, and I have no regrets about going to see that team live. If I lived in another time, say ancient Rome or Byzantium, and passed on opportunities to attend any festivities at the hippodrome or colosseum, I would certainly regret that. Well, I see today’s modern-day sporting events in the same light. I’ve been meaning to do a post on the high cost of being a sports fan, hope I can get around to it this year.
Couches? At 38 years old I finally bought new couches for the first time in my life. We bought them at Ikea and threw away the second-hand couches we’ve had for 8 years. They were just getting too uncomfortable with well-worn depressions. The cushion coverings had been through the wash one too many times and were unraveling. Not to mention the ketchup-esque war paint my toddlers have given the couches over the years. It was just time. My kids are old enough now to know not to wipe their hands on or eat messy things on the couches. We purchased some sleek leather couches from Ikea. Game changer as far as comfort goes and super easy to clean.
Marijuana? It’s legal here and of high quality.
Okay, I don’t drink, but we do indulge and enjoy Northern California’s ‘other’ crop specialties once and a while.
The goal for 2022 is to spend less in our soft category. Shouldn’t be too hard. Now that we have a few outliers out of the way, sailing school, couches, spending less here is a nice easy softball down the middle. Again, as long as we can travel, max our 401k’s, and save 40-50%-ish of our after-tax income for 3/4’s of the year, we call that a win.
How Do We Compare to America?
With 2021’s inflation and the lag in data for 2021, I’ll use 2019 and 2020’s average to compare.
Here’s a chart with the national average spending. 2020 dips lower than the trend, but it was an odd year.
Okay, tough to compare the Bay Area to the rest of our big and beautiful country. But if we did, we are obviously way above average with our $96k, at 44% higher than the nation.
To console myself, our ‘Hard’ expenses do align with the typical American Household of $61k.
How We Compare to the San Francisco Region
Okay, this aligns better and doesn’t make me feel like a mutant FI blogger. We are right there in annual average expenditures for our area $91k, okay, slightly above at 96k, but closer to the mark.
2021 was an outlier for us, like I said earlier, we aim (and usually hit) for the $70k spending range. But I can’t hang my hat on the past. To steal a football quote and tweak it for PF:
“We are what our spending says we are…”
The Tuned Instrument
As you can see we let loose quite a bit in 2021. All of it in the name of having fun and enjoying life. I think we found my sweet spot as far as spending goes. In 2020 we hunkered down and saved big time. In 2021 we spent a little more than we’d like.
Finding the right spending amount, and I’d go so far to say the accumulation stage of FIRE, in general, is like tuning a guitar string. If the tension is too low, the string won’t make any sound when picked. It’s flat and dead. Just hanging there doing nothing. If the tension is too high, the string will make a sound, but it will snap and break. The same goes for spending and happiness. Too low and there is no sound, no happiness, too high and we will break our finances.
I think I can say I’m finally tuned, for now.
What about you? Did your 2021 expenses meet expectations? Buying any stocks on sale this month? I’m very tempted to buy some netflix and other highly discounted tech stocks…
*Affiliate Link: Yes, you did see an affiliate link used for the first time on this blog. I really do enjoy using Personal Capital and was going to plug them anyway, so I felt now is the time to get a link if there ever was any. If I can make one dollar to compensate for the cost and time spent on the blog, I would be a happy man, and I dislike pop up ads. So here goes.
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Hey Noel, that’s funny we spent almost exactly the same amount, although I spent way more on childcare than you did on groceries. I’m also thinking more about cash flow than anything else these days, and it’s the main reason I’m hesitant to quit my job right now. Once the kids are in school (or at least one), the situation looks a lot better on paper.
I totally agree with you on letting off the gas pedal a bit and focusing on enjoying today. I’ve struggled with this for years, but clearly we’re both well on our way to early retirement and there’s no reason to live like misers to squeeze out another 2% of savings rate.
Cheers to 2022, at least you have aspirations of pulling your spending in a little. Ours will almost certainly be over $100k this year. We are what our spending says we are, and we let it off the hook!
Hey Adam thanks for swinging by. Yea our expenses do eerily align…somehow that eases the shock to know a fellow FI blogger spends like we do. Yup very nice to have a decent chunk of change saved up and a long horizon mindset.
Yea living in the “now” is probably one of the hardest things to do as someone with FI ambitions. Very tough balance. But it looks like we’re both figuring it out as we go. No regrets with a FI approach is sort of my mindset as of late.
The goal is to reign it back in. I’m hoping we can. That’s right. Let it off the hook!!! Thanks for commenting.
wow, that’s a lot of money! we would likely be spending close to that (minus the mortgage) if we were still both working full time. i always found it a fine line between enjoying your income now and buying future freedom and security. the guitar tuning analogy is a very good one.
you gotta spend on what makes you happy right? i think those sailing lessons should serve y’all well. sounds like fun. you must be the only one i know with insurance costs more outrageous than ours. our cars are about 114 and home about 147/month.
Haha. Yeah it is. The consolation is that it was a conscious choice and that I still save enough that I don’t feel like a lost consumer trapped on the wheel. Funny how 2020 and 2021 vary so much for us. There’s about a 25k difference for us between the years.
The sailing is fun and we’ve already gone back out with the kids for a handful of trips through the school. It’s really not that bad of a price to rent the 22′ footer catalinas once you’ve gone through their school. Yeah the insurance is crazy. We’re classified as “good drivers” too.
Thanks for stopping by!
Thanks for sharing Noel. To be fair you live in one of the most expensive areas in the US. Also, good on you for spending on luxuries like travel, learning new thing and even new furniture.
I still have yet to do my 2021 analysis, but discretionary spending will definitely be the majority.
You got that right. I’m always shocked when I read other bloggers expenses…or just any report on national average spending or earning. I have to remind myself that I’m living in an expensive place. This should be an easy target to undershoot for 2022 as we don’t plan on any more sailing classes, couches, or trips abroad.
Discretionary spending is what we save for after all. It should be the end goal. Thanks for commenting. Hope you’re tearing it up on the road.
I absolutely love gawking at a fellow Bay Area resident’s expenses–thank you for sharing! Only out here would weed have it’s own budget line (well, maybe a few more places these days).
The travel budget is definitely something to be proud of, and an area of my budget I wish was higher. The “going out” portion of my budget needs improvement though.