I had a vague suspicion that combining my finances with my husband’s was something we should do — that it was somehow essential to this renewed effort at the happy, frugal life.  But I didn’t know exactly what it would yield.  Turns out, it has been vastly more informative than I ever imagined.

People:  it’s time for some cold, hard, facts.

To get an idea of where we are and where we need to be, I tried to estimate how much we spent in 2016.  I knew I wasn’t going to love the answer.  After all, if I thought we were doing great already, would I be going through all this?  But the truth is, it was worse — far worse — than I thought.

In 2016, we spent… $110,000 !!!!!!!!!!!!!!!!!!!!!!!!!!!!  WHAT THE HELL?!?!?!

That sent me for a serious loop.  I figured this out 2 days ago and have been stewing over it ever since.  Phewwwww.  I mean this is… embarrassing.  Good thing this is just the Internet, and we’re all just a bunch of anonymous, faceless strangers, right?

Let’s dig into it.  First, how did I arrive at the number?  Since (as previously discussed) our finances were separate and in a bzillion different accounts, the easiest way I could think of was to add up our total post-tax income, figure out our total savings for 2016, and the difference would approximate how much we spent.  It was helpful that I decided to do this right after we did our taxes, because I had ready access to our W2s and other info that helped me do this calculation relatively painlessly.

So, what’s excluded from the $110,000?  Like I said, anything we saved or invested is not included in the $110,000, including money we saved for kids’ college funds.  I’ve already realized that for retirement planning purposes that college fund money is essentially not savings, because it’s really just money we plan to spend later.  But, for this little task, I excluded the college savings because I really wanted to know what we’re actually spending now.

And, what’s included in the $110,000?  I actually don’t fully know!  Pinning that down is part of my next task!  But I do know some of the biggies, and those things are not changing (in the near future), so let’s just get them out of the way.

  1.  Mortgage payments.  Our mortgage is about $2000/month.  Which is actually artificially high because we chose to take out a 20-year mortgage rather than a 30-year mortgage as a means of forced savings.  But anyway… so mortgage payments alone account for about $24,000 of the total.  Some would argue that I should only really be counting the mortgage interest as spending because anything going towards the principal is really like savings.  And I would agree, that’s one of the points of home ownership.  But the fact is, unless I want to refinance or sell (which I don’t right now), this is a fixed monthly cost that I have to figure into my future income calculations, so I’m counting the whole kit and caboodle.
  2. Childcare.  About $18,000 to keep 1 kid in daycare for the year.  That’s right!  For those of you who don’t have kids, THIS IS WHAT WE MEAN when we say having kids is expensive!  I mean F!  We don’t even have a fancy nanny situation, this is daycare, and it’s basically a second mortgage.  Could we find a cheaper daycare?  Yes.  Definitely.  I think about it all. the. time.  In the beginning, when the little guy was an infant and I went back to work, we decided to put him in daycare right next to the office so we could visit him during the day.  That was invaluable to me.  But, there’s a big premium for having him downtown in the commercial center of the city where all of the other professionals are putting their kids!  So now that he’s not as teeny tiny anymore, a change may be in the air.  But for now… that’s a big fixed cost.  And, it’s a cost that would either go away or drop substantially if/when one or both of us stop working or dramatically decrease our hours.
  3. The rest of it.  The above two items account for $42,000, so what about the other $68,000?  I actually have a pretty good handle on our fixed, recurring expenses, and not a good handle on the variable expenses (food, clothing, home improvement, travel, etc.).  So, the next task is going to be to get into those.

So there you have it.  I feel low.  But YOU should feel great — after all, if you want to read about someone who’s already got their spending to amazingly low levels that will make you feel inferior…. there’s plenty of places you can go for that!  This blog is about the journey of how to get there.  So at least there’s nowhere we can go but up, right?

5 comments on “Holy shit, Batman.

  1. I remember those days well, except our daycare was about 10,000 a year. Other expenses… it’s hard with two professional careers and a young child, but with your skills and education you can definitely set some goals for your money and get traction quick. For us, we opted to pay off our house (our only debt) so I could stay home. Your goals might vary.

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  3. Lucky Girl

    LOL. Just found your blog and interested to read along. I have two kids, and live in a HCOL area. For a while our daycare expense were well over $18k. Probably more like $36k. Pretty easy to have expenses over $100k in that situation! But we track it all carefully now, and our retirement accounts are very healthy, so we know where we are going and how we will get there. Good luck!

    Liked by 1 person

    • Thanks for reading and the comment! The cost of childcare is bananas, but I keep reminding myself it’s temporary, and keeping an eye out for ways to cut down on it. Good luck to you too!!

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  4. Pingback: Where are we going, where have we been? (a New Year’s Day Post!) – Greener Pasture$

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