Readers, I have been derelict in my duties. I’ve hardly been writing at all this year, and I even skipped a quarterly expense update or two. But I felt I owed you all the annual spending report for this year of years, 2020.
Was 2020 a bad year in general? Yeah, it was. Sure 400,000 Americans have died from the coronavirus in less than a year. Sure the unemployment rate skyrocketed while the stock market hit record highs, making the rich even richer and the poor even poorer. Sure conspiracy theorizing somehow reached new heights of both absurdity and acceptance. But do you know who has been left out of the 2020 conversation so far? Personal finance bloggers!
Snow on Christmas Day
Oh woe to us, personal finance bloggers! While we worked from home, focused on our stock portfolios, and wondered if it was finally time to splurge on takeout in order to save the restaurant down the street, no one was interested in our latest financial hacks! Don’t you want to know what to do with your excess cash? Does no one care how much a trip to Japan costs anymore? We are truly the pariahs of modern society!
What I’m trying to say is, what a dumb year to be an early retirement explainer on the internet. Everything I would usually cover here seemed so completely out of touch that it would be tone-deaf to even talk about it. Somehow, a discussion of pet insurance or LED light bulbs did not seem important when America saw its largest protest movement ever form after the death of George Floyd. Just before the shutdowns happened, we took a trip to Puerto Rico. I never wrote it up because, what would be the point? Who even wants to read that?
It’s been so long now, the Before Times seem like a different place entirely. I used to live there? Really? These days, I can’t envision traveling anywhere much further than screaming distance from my house. I’m so used to “dressing down” and staying indoors that when it came time to pack for our Christmas visit to the farm, I had a hard time remembering what constituted an “outfit.” A shirt? Socks go on feet. But so do shoes? What about hand. Will hand get cold?
Social distancing in Burlington
Marge and I have been working from home, and will be at home into at least through March. I’ve been enjoying not commuting, not being tied to a desk for eight hours a day, and instead playing my music and watching my rabbits while I work. Since last March, our lives have been fine and we have stuck to the frugal plan. Do I know people who were killed by the virus? Yeah, I do. At this point, I’m assuming everyone does. I know many people who’ve been infected, especially in the last month or two. It’s so prevalent, the virus feels like it’s knocking at the door now, so it’s never been more important to be vigilant in protecting yourself and others.
But for the most part, our lives have been pretty good this year, all things considered. And in some exciting developments, we’re moving ahead with two long-planned projects. We are finally getting our porch rebuilt, and we are buying a new house!
Previously…
It just so happens to all be coming together at the same time. We have wanted to replace our deteriorating, hundred year-old porch since we moved here in 2009. Ten years ago, contractors told us they didn’t know how the porch was still standing, the posts were so rotted. It’s slowly sunken further into the ground and away from the house, parts of the ceiling came off, and the kicker was when Marge saw a creature with a long tail crawl into a big hole under the roof. Probably a possum. We had put it off because of how darned expensive it would be.
After demo
We finally contracted with someone back in May. Like I (might have) written before, we live in a historic district, which means any changes to the exterior of our house must go through the local historic board. So between designing, getting historic board approval, getting permitted, and getting ahold of increasingly short supplies, the crew finally demolished the old structure right after our huge December snowstorm. But they did it and got to building our new and improved smaller porch straight away. It is not cheap, but it will be done. It is probably not going to increase the value of the house, but I feel like we owe it to the house and the city to not leave this house looking like trash from the streetside.
And did I mention we’re buying a new house? Of course we’ve been looking since March 2019, so we were not in any rush. We love our house and we love Cohoes, but it felt like time to move on and try something new. So we were very picky, only made visits to places we really liked online, and would only buy for a good price.
Like a good accountant, I made a house value calculation spreadsheet. It lists attributes we were looking for (sun room, gym area, a walkable neighborhood, etc), each worth a certain number of points, and the spreadsheet would then calculate a price we should be willing to pay based on those points, the square footage and the size of the land. We made bids on five or six houses over time, and lost on all them as the housing market heated up, but we wanted to be sure we didn’t overpay.
We ended up finding a house that was incredibly underpriced, so that it invited a bidding war. Knowing how far underpriced it was, we went well over the asking price, and still feel we got a good deal. When we walked through in person, we thought, “This is the place,” and the spreadsheet verified that it was indeed a good value. The kitchen in particular needs a lot of help, and the price we paid allows us to spend some money there. If I can get my s— together, I will post about our potentially semi-DIY kitchen renovation.
I would love to post some pictures of our swanky new pad, but I will hold off until all is said and done. For now, let’s take a look back at the decade that was 2020!
Total Expenses: $77,476
Avg Per Month: $6,456
Without Debt PaymentsTotal Expenses: $71,043
Avg Per Month: $5,920
Savings Rate: 24.2%
Without Home RenovationsTotal Expenses: $40,409
Avg Per Month: $3,367
Savings Rate: 56.9%
Social distancing in Dorset, Vermont
Summary
| Quarterly Total | Monthly Average | |
| Serious Stuff | $44,946.05 | $3,748.00 |
| Food | $9,192.60 | $766.05 |
| Transportation | $4,392.42 | $366.04 |
| Utilities | $2,716.12 | $226.34 |
| Fun Stuff | $8,874.85 | $739.57 |
| Pets | $1,290.29 | $107.52 |
| Miscellaneous | $6,034.12 | $502.84 |
I made a couple different savings rate calculations so I could compare this year to past years. When you spend $30,000 on home renovations that will (supposedly) increase the value of your house, it’s hard to compare this year to the previous years when you were saving for said renovations. In the end, excluding renovation spending, we spent about $40,000 and saved about 55%. Those are both about average. Spending has been closer to $35,000 in the past, but with increased incomes, the savings rate didn’t take a hit.
Serious Stuff:
| Quarterly Total | Monthly Average | |
| Mortgage | $8,334.96 | $694.58 |
| Medical | $506.40 | $42.20 |
| Home Maintenance – DIY | $299.66 | $24.97 |
| Home Maintenance – Contractors | $30,784.16 | $2,565.35 |
| Insurance | $1,084.88 | $90.41 |
| Property Taxes | $3,965.99 | $330.50 |
All normal except for that spending on the bathroom and porch! Holy moley!
Foley’s Tacos in Brandon, Vermont
Food:
| Quarterly Total | Monthly Average | |
| Groceries | $6,533.05 | $544.42 |
| Wine & Beer | $402.80 | $33.57 |
| Dining Out | $1,122.65 | $93.55 |
| Takeout Food | $1,134.10 | $94.51 |
| Total Food | $9,192.60 | $766.05 |
Food spending was definitely up. We spent more on takeout to help out our local businesses. I’m sure we spent more on groceries this year, because in 2020, what else is there to do but eat? And dining expense is up mostly because of our meals in San Juan in February. And we had a few pandemic dining experiences when the virus numbers were low over the summer. The dire state of the economy encouraged us to open up those wallets. Wine & Beer spending included about $150 in homebrew ingredients, and the rest was bottles of cheap red wine. It’s healthy!
Transportation:
| Quarterly Expense | Monthly Average | |
| Auto Maintenance / Tolls | $1,495.14 | $124.60 |
| Auto Loan | $4,486.33 | $373.86 |
| Gas | $1,035.15 | $86.26 |
| Insurance | $1,642.13 | $136.84 |
| Bus Tickets | $220.00 | $18.33 |
| Total Transportation | $8,878.75 | $739.90 |
It’s unbelievable to me how much was spent on transportation during a year when we couldn’t go anywhere. I am busy paying off the loan on my Subaru Crosstrek. Maintenance includes new tires I had to get since the originals were bald after 60,000 miles. The bus ticket expense is all pre-pandemic. I have a bus card with probably $100 on it burning a hole in my closet.
Social distancing in Warren, Vermont
Utilities:
| Quarterly Total | Monthly Average | |
| Cable | $669.88 | $55.82 |
| Electric | $707.93 | $58.99 |
| Gas | $762.59 | $63.55 |
| Cell Phones | $214.82 | $17.90 |
| Water & Sewer | $360.90 | $30.08 |
| Total Utilities | $2,716.12 | $226.34 |
Utilities expense was predictably boring this year. The only difference is the inflated cell phone cost. Since my office is so behind the times, we do a daily conference call by phone. And since I have a pay-as-you-go Tracfone, I basically have to pay at least 30 cents every day for the privilege of being on a conference call.
Social distancing in Sconset, Nantucket
Fun Stuff:
| Quarterly Total | Monthly Average | |
| Entertainment | $1,498.25 | $124.85 |
| Recreation | $1,562.79 | $130.23 |
| Travel | $5,813.81 | $484.48 |
| Total Fun Stuff | $8,874.85 | $739.57 |
Obviously in a year when we were all staying at home… we spent more on travel than ever before! Well this is a little embarrassing. But I’ll explain. First, we were planning on our usual Cape Cod trip in May with family. That didn’t happen, but we re-scheduled for May 2021, so we have a prepaid trip in there. We ended up taking our trip for this year in August when virus cases were lower. We would’ve gone to Ireland in July for a wedding, but that got moved also to next April, so we have some prepaid expenses for that as well. Then we took a bunch of little trips around the northeast so we wouldn’t go stir crazy.
Social Distancing in Hancock, Vermont
In September, it was camping in the Thousand Islands. In October we stayed at a motel in Warren, Vermont. In November we went to Nantucket. And in December, back to Vermont. The commonality with all these destinations is that we could spend our time doing outdoorsy things. Museums, shows, historic sites, it’s all out. That’s fine for us, because we usually focus on the outdoors while traveling. But while we obviously love to take big trips using frequent flyer miles and hotels points, these trips were mostly paid out of pocket, hence the higher expenses.
We planned a trip to Nantucket for November 4-8 to either celebrate or mourn the election, whatever the case may be. I’d never been to Nantucket before, and I realized the only affordable time to visit is the off-season. (Seriously, our room was about $220 a night, but during the summer it would be close to $1,000!) So we decided to embrace the globalist elite scum we really are and ventured to this rich person’s playground in November. It was one of those truly great trips. Unbelievable weather in the 70’s, unbelievably comfortable bed to eat cake and watch tv in, free bikes to ride around, and when the election was called on Saturday, we were waiting for a bus at a trailhead and a random woman in a van stopped to tell us the results. People were honking their car horns downtown as we sipped our discount French wine brought from off-island and ate sandwiches in lounge chairs by the water. That’s the moment 2020 needed.
Office buddy Freya
Pets:
| Quarterly Total | Monthly Average | |
| Boarding | $547.45 | $45.62 |
| Food | $281.03 | $23.42 |
| Other | $461.81 | $38.48 |
| Total Pet | $1,290.29 | $107.52 |
The rabbits are very happy that we’ve been home all year. That means they get to have morning exercise when we would normally be away at work. Rabbits are mostly active in the early morning until about noon when they shut down.
Miscellaneous:
| Quarterly Total | Monthly Average | |
| Cash (Untracked) | $330.00 | $27.50 |
| Charity | $1,235.70 | $102.98 |
| Clothing | $862.08 | $71.84 |
| Gifts | $1,106.62 | $92.22 |
| Home | $1,719.89 | $143.32 |
| Personal Care | $779.83 | $64.99 |
| Total Miscellaneous | $6,034.12 | $502.84 |
Definitely some inflated charitable giving this year. In addition to my usual paycheck deduction, we made donations to civil rights organizations, and I made a promise that whenever a friend starts one of those Facebook charity campaigns on their birthday, I would donate, so I’ve given small amounts to random things like suicide prevention and senior dog fostering.
A big piece of Home spending this year was webhosting for the very site you’re reading right now. Honestly it also includes a bunch of Amazon gift cards I bought to meet minimum spending requirements on various travel credit cards. So I will be spending those in the coming year, probably on stuff for the new house. We stayed under our goal $1,000 for clothing again. I’m surprised we even spent that much, but we did replace a lot of basics
Goal Progress
Total 2019 Spending of $35,000:
If you exclude debt payments and home renovation, we’re still off by $5,000. It should be interesting to see what happens if we move into this new house. Property taxes are twice as high and I’m sure heating will be more expensive, too.
Savings Rate of 65%:
- Actual Savings Rate : 56.9%
Again, without debt or renovation costs included, we’re still off of this goal. But this is still a seriously good savings rate. Maybe one of the beneficial knock-on effects of the pandemic will be that Americans will pay more attention to their short-term savings. As you can see in this chart, savings rates were stuck between 6 % and 8% for years. In April, that shot up to 33% as people hoarded cash, and it’s still above 10% now.
Max Out 457 Plan and Roth IRAs
- Goals: $19,500 in 457 Plan / $6,000 in each Roth IRA
- Saved so far: $12,745 in 457 Plan / $3,000 in each Roth IRA
Because of the never-ending saving we had to do for these renovations and eventual home purchase, we didn’t max out any retirement plans this year. We can still max out the Roth IRAs for 2020 before April 15, so we’ll see about that.
Contribute to Marge’s 401(k)
- Goal: $10,000
- Saved: $7,084
Also, not so far off. This will be something we can do in 2021.
Read 26 Books
Since the pandemic eliminated my scheduled book-reading time (on the bus) I had to make time to read, which I am not good about. Hoping to be better about this in 2021.
Burn 3,000 calories on 200 days
I can pass 3,000 calories burned per day with a little concerted effort. Unfortunately there was not enough concerted effort this year. I got into a few ruts that really did me in. But for some encouragement, here’s my Fitbit during the week we were camping. That isn’t the result of purposefully exercising. The result of being outside all day is you do a lot of movement, and it helps if your campsite is on a hill you’re constantly traversing.
Pay off Subaru
Not even close, although I have a feeling that when we sell our present house, this will be one debt that disappears.
Pay off HELOC so $10,000 remains
On the other hand, I did pay off the HELOC completely. It had been at $20,000. After the rate ticked up, I figured since we had the cash on hand, we’d better do it. And if we need it in the future to work on the new house before we move in, we can just borrow it again.
Years of Savings:
This magical calculation demonstrates how far we could get if we kept living every month like this ones listed above. We take our investable assets and divide them by our monthly expenses above. The number to shoot for is 25, because at that level of savings, you could afford to live forever on your money stash. According to our monthly average non-debt expenses and our investable assets, we have…
13.7 years of savings
Retirement Location Possibility:
If we take that number of years of savings above, and divide by 25, we can figure out where in the world we could afford to retire right now by dividing another country’s cost of living price index by our own cost of living. I averaged Buffalo and Hartford for our own cost of living since those are the closest to us on Expatistan’s index.
Our International Retirement Cost of Living Number is….
87
According to Expatistan’s index, that means we can retire in…
Quito, Ecuador!
I’ve wanted to visit Quito for a while, pretty much since we visited Peru. It’s the second highest capital city in the world, second to La Paz. You can use it as a jumping off point to visit the Galapagos. And Anthony Bourdain went there on No Reservations, a show that always has a way of making a place look good.
