Our Family’s Annual Spend for 2020

A bit late to the game but finally getting around to posting our family’s annual spend for 2020.

All in all we spent:

39,592€

This is slightly less than last year even though it includes additional expenses like:

• health/dental insurance costs (which we lost as a benefit when my husband left work to be a stay at home dad)
• blog costs (which ramped up this year as I started providing consultations and needed insurance)
• a portion of our mini-retirement trial to Portugal and
• costs from our Canadian property which we sold back in July

Not included in this figure are the costs related to the sale of our property (realtor, legal fees, capital gains taxes and withholding taxes and so on), also excluded are the income taxes we paid on our additional income here in Ireland as these are income-related expenses.

For those wondering, the report graphics are from my expense tracking tool YNAB.

Overall Spend

Here is a summary of the main categories

Monthly bills

The vast majority of our monthly bills was our mortgage (77% or 9,194€). The rest were made up of Gas, Mobiles, Electricity, Internet, Refuse, Life Insurance (for me only to cover our mortgage) and Skype. In December, we paid down our mortgage with the sale proceeds from our Canadian property so this category should be almost halved for 2021.

Food

The next biggest spend was food. Our grocery category includes everything you’d buy at the grocery store so can include alcohol, toiletries, cleaning products, cat food/litter, the odd centre aisle item like small tools, toys for our son etc. Obviously the food bought out of the house like lunches, restaurants and coffees are minimal due to COVID. This does not include the food costs we spent during our 7 weeks in Portugal so this spend is only for 45 weeks of the year.

If we convert that into cost per person per week (assuming 2 adults 1 toddler and 1 cat (I’ll average at 2.75), it comes to close to 60€/week/adult, 36€/week/child and 9€/week/cat.

Mr. MH is coeliac so we spend a bit more on gluten-free pasta and bread and since Mr. MH is now the main grocery shopper and chef, we’ve been eating more meat. We really did try to cut back on meat for a while which did reduce costs but it took a lot of effort to try and find new recipes all the time that didn’t end up all tasting the same. I found veggie recipes use a lot of the same base ingredients and eventually most of our meals ended up tasting very similar. I’d still like to eat less meat but this change has been bumped down the list with everything else that’s been going on.

Medical

Our next biggest expense, which we didn’t have last year, was health insurance. We used to have cover through Mr. MH’s work and when we decided to go down to one non-permanent income, this was an additional cost we had to cover. The cost below covers 1.5 years of cover as when Mr. MH left work we took over his corporate policy and just paid the rest of the year. In December, we took out our own policy and paid for the whole year upfront. Mr. MH also pays out of pocket for glucose monitoring sensors which are not currently covered by the long-term illness scheme.

Home

House related costs were our 4th largest expense. Sure, what else did we have to spend money on last year? We bought 2 new mattresses (the cost of which was offset by the sale of some of our furniture in Canada), a few “accessories” like toy storage, pressure washer, xmas decorations, a mirror, plants, stainless steel pans, pillows etc. Our dishwasher gave up in September, so that was replaced. And the usual home insurance, maintenance, property tax (yes, Canadian readers you read that amount right, just 236€ for the year for property tax!) and TV license.

Mini-retirement Trial

Our mini-retirement costs of 2,315€ were what we actually spent in Jan-Feb while in Portugal. The other larger costs like accommodation and flights would have been paid before we went so were included in last years annual spend review. The 2,315€ includes Food, Transport, Accommodation and Misc spend while in Portugal. For more details on what the mini-retirement cost in total you can check out this article.

Transportation

Transport came in at just over 2k. We paid cash for our car so have no car payment in this category. Despite not commuting to work we still spent almost 1k on petrol. We did have a few trips up to Sligo/Mayo/Dublin pre-lock down and even though I am not commuting, we still drive around a good bit to various playgrounds and nature walks with our son. Even still, when we were both commuting to work, me with the car and Mr. MH on the bus, and able to drive to visit friends and family, we spent closer to 2k on petrol and public transport alone.

Investments

I’m not sure about calling this an investment but this is where I decided to categorise our Canadian property costs. The condo was cash flow negative and had been costing us about 2,500€/year out of pocket to maintain. As we sold it in July, we only were our of pocket 1,615€ for 2020. Again another cost we will not have for 2021!

Entertainment

Another expense category wiped out by COVID. Biggest expense here was Mr. MH got a smart watch, the alcohol spend is only those bought directly at an off-license, the remainder is included in our grocery spend. We both play video games so spend a bit there and we paid for a 6 month pass to a Blarney Castle and Gardens which has lovely walking paths free from burned rubbish and dog poo, which we have grown accustomed to in our local playground and nature walks. 🙁

Kid stuff

We actually spent a good bit on toys which I was surprised by. We had been buying toys second hand before the lock down but have stalled on that until it’s safer to buy used goods. I also like to buy open ended play type toys and natural materials like wood which can be hard to find in the local second hand market so do splurge every now and then. The 652€ includes Christmas and birthday items, some of which we purchased with cash from family in Canada so this is not all our personal spend.

Clothing/accessory wise, we luckily get most of our clothes from Mr. MH’s sister so explains the small sum. We did dish out for new shoes/wellies, training pants etc.

Supply wise this includes a new baby monitor to replace the one that broke by being pulled off the dresser, the sleep training clock, probiotics and so on.

Just thinking on the cost of kids, while childcare costs are usually the biggest cost to consider, looking at our own expenses, if you include the 1,347€ estimate of food spend + 984€ below = 2,331€ for the year minus 1,680€ child benefit = 651€. Of course, if you consider foregone income from staying home then this becomes a far more costly life choice!

Weddings

We had a family wedding in Feb right before lockdown. Does that ever feel like a lifetime ago! Anyway, this category cost us just shy of 800€ once gift, food, accommodation and travel were accounted for.

Other

The remaining categories include things like:

Personal expenses such as clothes, Mr. MH’s vape, hair cuts. We spent a good bit on new clothes this year as we were well overdue a refresh.

The blog costs are racking up for things like an accounting consultation, domain and hosting costs and insurance.

In terms of work expenses, I bought a desk, a stand-up desk due to working from home and renewed my professional association membership.

Goals for 2021

The power of tracking your expenses means you can really drill down and analyse where you might best be suited to cut back without feeling too much pain.

For us, our biggest expenses are accommodation and food. As our current strategy is to pay down our mortgage asap, and we have halved our current mortgage with the sale of our condo, for 2021 we will see a reduction in that expense line by 5,700€. We also got a better mortgage interest rate due to the lower loan to value ratio.

We also will no longer have the 1,615€ to maintain the Canadian property.

I don’t foresee any major changes in the other categories as we’ve already fine-tuned our spending as much as we can. While there may be savings in one category, I’m leaving wiggle room as things usually crop up in other categories. For example, we won’t need new clothes, mattresses or a dishwasher for a while but something else may give up to eat up those savings. So far this year we have already had to replace our oven and hob so there will always be something and it’s best to plan conservatively and be pleasantly surprised.

This brings our expected annual spend for 2021 to just over 32k and our financial independence goal down to 800k from the more than a million that it would have been this time last year.