Early Retirement Costs - April 2018
Should we track our spending?
In the business world, it's not even a question. Every successful business tracks its spending in some way. Those that don't will most likely go bankrupt.
However, I read in a CNBC article that only one third of Americans track their spending, and it's probably the same in other countries. Does that mean that two out of three people are winging it with their finances, and simply hoping for the best? Quite possibly, or at the least they may not be giving themselves the best chance to optimise their financial position.
I track my spending. I've always done so, but I now do it to a greater level of detail. The benefits that I find are:
It helps me keep my costs less than my income.
The simple act of keeping track makes me more careful with my spending. My unnecessary purchases are reduced.
It helps me budget for big expenses, like a vacation. I know that if I have a big cost coming up, I should try to spend a bit less now.
I get to know if I spend more than expected, so I can try to figure out why, and whether I can avoid doing the same in the future.
By seeing how much I've spent on different items, I can decide whether I'm happy with my spending. If I'm not, I can try to change my spend going forward.
When I was working, it helped me achieve my saving goals because I budgeted to save a minimum amount each month.
It puts me in control of my money. Tracking helps me understand my spend, and if I understand it, I can make informed choices about it.
These are just the benefits that are most important to me. The list is not exhaustive, and other people will find other benefits that work well for them.
I'm convinced that the simple act of recording and tracking expenditure can help most people spend less without compromising quality of life. The trick is to then save, invest or perhaps spend a portion of this extra money wisely.
April 2018 Costs
So what is my expense tracking telling me for April? Here are the numbers, and I've put some comments below the table:
Normal Day to Day Costs
Our normal day to day living costs were £2,350 ($3,327) for April, and the average over the four months of the year so far is similar at £2,397 ($3,394). This is at or below what I'm happy with, and I have no worries that our money will last based on this level of spending.
I need to have a talk with Sally about her record keeping! Her sister came to stay and Sally paid for some things and her sister for others, and they figured it balanced out OK, which I'm sure it did. The trouble is that this doesn't get the costs in the right boxes for my blog - I'm pretty sure that the actual grocery spend was higher than it looks and the going out costs lower. I'm the sad type of person who has sleepless nights over this sort of thing😂
On the car costs, we've sold Sally's car - getting ready to leave Dubai in July and start our travels. We've rented a Toyota Yaris for the next few months, and month one rent (£308/$438) is included on the car costs line. Sally's car needed four new tyres, new brake pads and a service, so I figure the rental cost over the next few months will be much the same as the tyres, pads and service would have been.
The other normal costs in the month were generally as expected.
Less Normal Costs
The unusual thing in April was that I was away from home for almost the whole month, visiting our daughter in Switzerland, our son in the UK, and going to New York and Boston, the latter to run the marathon.
Vacation in New York - I was in NYC for 5 nights. The costs in April are for my accommodation £263 ($372), food £225 ($318) and some tourist attractions/metro £36 ($51). I then spent a further £102 ($145) which I forgot to write down - I'm guessing snacks and coffee shops make up some of that.
My accommodation costs in NYC were quite low even though I was in a fantastic location, just moments from Central Park and Broadway. I stayed in a hostel, partly to keep the costs down, but mostly because it's an adventure and fun to meet the other people staying there.
Visiting my kids was great fun. I spent more time with Rebecca as it's easy to stay in her apartment, whereas Sam is in university accommodation. My two nights in a hostel near Sam's university cost just £38 ($54), and then we stayed with my Dad for a few days. I spent £221 ($312) on transport (car rental in UK and train fares in Switzerland), and eating out and snacks/coffee cost £198 ($280).
Last but not least, my trip to Boston for the marathon. In addition to the airfare and hotel that I'd already paid for in previous months, I spent £76 ($106) for the Amtrak from NYC to Boston, £13 ($17) on the metro, £232 ($335) eating out, £64 ($89) on souvenirs and £72 ($100) on hat, gloves, joggers and sweatshirt to try and keep warm before and during the marathon.
A third of the way through the year, how do I think we're doing on the money front?
Our day to day costs are fine for our budget, so I'm not worried about them and, as I've said before, I'm sure we'll spend less on groceries and going out costs when we move to a lower cost location.
We've spent a ton of money so far this year on vacation, visiting kids, international running events and round the world trip. Whether we're overspending, or whether it will average out by the end of the year, we'll have to wait and see. We've had some big costs near the start of the year, for example, we paid for flights for our big trip even though it only takes place later in the year between July and November.
To be honest, the international running events and round the world trip costs don't matter too much. They are mostly one off events, or at the very least very infrequent and discretionary.
And I suspect that in the future there is a likelihood that we may live closer to our kids, at least on the same continent! Currently, popping round for a cup of tea is neither a quick nor a cheap thing to do.
Lastly, did I say I was going to have to talk to Sally about her financial record keeping? I'm jesting of course - I don't claim to be clever, but I'm really not that stupid, at least not most of the time!