$62,000 Spent. Here’s Where it Went.

In today’s post, I’ll review and breakdown the spending for our family of four in 2016, and will make projections for 2017. In about a year, we’ll see how close my predictions were.

A few months ago, I shared our spending totals after our first twelve months of actually tracking it. I was relieved to find that we had spent about $74,000, just shy of the $75,000 I had used as a ballpark to determine that we were financially independent.

I also was confident that we would spend significantly less in the final four months of 2016 when compared to 2015. Back then, we bought a hot tub, paid a huge orthodontist bill, made our last ever preschool payment, and purchased a Disney cruise.

We did spend some money at the end of 2016, too. My car required $1,200 in brake work. We spent $1,700 on four airline tickets for an upcoming trip to Paris and Iceland, and another $2,000 on a landscaping project. We paid our annual homeowner’s insurance and one of two property tax payments on each of our homes.

Still, we managed to close out the year having spent about $12,000 less in the last third of 2016 as compared to the year before.


What’s Missing?


I’ll detail where the money went, but first, it’s only fair to tell you where it didn’t go. One way we keep our expenses relatively modest is by cheating. How do we cheat?

  • No mortgage or rent payments. We own our homes.
  • No loan payments. Student loans have been paid off.
  • No term life or disability insurance. We dropped them once we were FI.
  • Health Insurance provided by employer. We will bear this cost when RE.
  • Travel Hacks. Credit card points and CME travel reduce our travel costs.
  • School-aged children. Both are enrolled in a quality public school.
  • Donations. We give to and from donor advised funds, and track that separately.

We’re not exactly cheating per se, but we are able to avoid some of the big bills that other families will be paying. We also benefit from geographic arbitrage, living in a relatively low cost of living area while making an above average salary. It wouldn’t be difficult for us to spend a six-figure sum if we lived elsewhere or had the burden of a mortgage, daycare, private school tuition, etc…


How Did We Spend It?


I’ll be using screen captures from Mint.com to help with the analysis. It’s a free service, and I get nothing from them if you use it (unlike Personal Capital), but I like Mint’s service and highly recommend it.






Apparently, we like to eat and drink. Cars, even old ones, are surprisingly expensive to own and operate. If gas goes back up to $4.00 or more per gallon, I could see us spending $10,000 in the automobile category. I have a minimal work commute, but our second home is over 500 miles away. The “Misc Expenses” is our second home, but does not include about $1,000 in taxes on the property.

Let’s break down some of the bigger spending categories.


Food & Dining



We eat most of our meals at home, and I pack my own lunch to eat when working. I’m happy with the grocery bill coming in under $600 a month. The amount of fast food is somewhat surprising, but the more we travel, the more fast food we eat.

In terms of beverages, we’re clearly not buying a latte a day, with $23 attributed to coffee shops. On the other hand, we spend an average of $5 a day as a couple on a different vice – alcohol. That includes homebrewing supplies and equipment, hosting neighborhood parties, and buying some of the best beers on the planet for personal consumption.


Founders KBS 2011


Auto & Transport


This is for a couple cars that could almost be considered “beaters” at this point. At nine and eleven years old, and more than 120,000 miles apiece, they are going to require some ongoing maintenance. Also, deer like to take out your front quarterpanel and headlight in their spare time. So, that happened.

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The $516 was mostly for rental cars in Orlando and northern California. Those expenses might have been more appropriately labeled as “travel,” but they landed here.


Health & Fitness


Darn those doctors! We spent more than $5,000 on them this year. Each of our boys underwent surgical procedures this year, requiring general anesthesia and intubation. Darn those anesthesiologists! With a high-deductible health plan, I’m not surprised we spent this much.

Money spent at the gym and for athletic activities is money well spent. Fitness figures into our retirement plans.



Everything Else


The next two categories — Home and Bills & Utilities — could probably be combined into one category totaling over $10,000. Add in the property taxes, and we’re closer to $15,000. When you consider that number, along with the opportunity cost of having a few hundred thousand dollars tied up in a slowly-appreciating asset, home ownership is quite expensive! It’s worth it for my family, but I don’t view owning a home to be a great investment.

Travel costs came in under $5,000. The Disney cruise was paid for in 2015. In 2016, we purchased airfare for a trip we’ll take this year, so that partially evens out. We scored some free flights with credit card bonus rewards, and my hospital paid for me to attend conferences in San Francisco and Maui. Thanks, hospital!


maui shoreline


We spent some money on our boys, but bought nothing too extravagant. They each got $10,000 in a 529 Plan, but we don’t count that as spending. Piano lessons were the biggest splurge at $1,500 total, and we pay $15 a month for subscription based online family Spanish language program.

The Department of Agriculture estimates we’ll spend $12,000 to $14,000 per year per child to raise them to adulthood. A big chunk of that is for housing (extra bedrooms), so it may not be as ridiculous as it sounds. It’s all about how you do the accounting.


What About Taxes?


I didn’t include our income taxes, but as you might imagine, those dwarf the $62,000 we spent on everything else. I also anticipate them to be minimal in early retirement, so they don’t factor much into our future spending plan. If they are more than minimal, it will be from ongoing income (i.e. this website).

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I did include property taxes, because those aren’t going anywhere (except up).


2017 Prediction and Beyond


I expect 2017 to look a lot like 2016. We’ll probably spend a bit less on the home with no major projects pending, and hopefully spend a bit less on the cars as well. The odds of multiple surgical procedures is quite low, so our out-of pocket spending on healthcare ought to drop. I’ll revisit the prediction next year and let you know how well the crystal ball worked.

2018, on the other hand, could look a whole lot different than this year and last. I may wrap up my full-time job here and embark on our next adventure. We could be looking at major purchases and shifting of expenses. Downsizing from a 3,600 square foot home to a 30 foot long motorhome, for example, would have drastic short and long-term effects on our annual spending


Why Track Expenses?


We didn’t track expenses until just a few months before starting this blog. I had a rough idea from our monthly credit card bills, but did not know the breakdown.

Tracking expenses can help identify wasteful spending. It’s not the same as living on a budget, but monitoring spending can be useful. Now that I know what it costs to live the way we like to live, I can make informed decisions about our future.

If we were to continue to spend $62,000 a year, we would only need $1.55 Million to have financial independence. If we consider $40,000 to be core spending, and $22,000 to be discretionary, our financial freedom number would be 25 x ($40,000 + 2 x $22,000) = 25 x $88,000 = $2.2 Million.

I’ll add $1,000 a month for health insurance to say we need $2.5 Million to have financial freedom as early retirees. With eighteen months to go, I’m happy to report we’re right on track.


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Do you know how much you spent last year? Are you looking to spend more, spend less, or are you happy with the status quo?


  • Thank you for sharing this, PoF. I love your feelings toward the healthcare bills — I feel the same way when getting doctor’s bills in the mail. Why is healthcare so expensive?!?!?!?!?…oh wait.

    Did you pay your healthcare bills out of an HSA? I assume you have one because you are in a high-deductible health plan. It’d be interesting if you did an out-of-pocket analysis of your HDHP compared to a traditional health plan for 2016. It sounds like you might have come out ahead with your HDHP even though your family had two surgeries this year. Assuming you contributed the maximum $6,750 to the HSA and you paid your 2016 healthcare bills out of the HSA, you got approximately a 40% discount from the government on your healthcare bill by using the HSA.

    • Great question, WaSP. Can I call you WaSP?

      Too late. Anyway, you’re probably right about coming out ahead, but it would be an interesting exercise. We do have an HSA, and I will eventually take money from it to cover that $5,000. For now, I’m saving receipts and letting the money grow, covering out of pocket costs with cash.

      At some point in the future, I’ll make one big withdrawal based on all the saved and scanned receipts. I’ll come out a bit ahead this way due to tax free growth in the account, but it’s rather cumbersome.


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  • We, too, are fairly happy with where our expenses landed in 2016. We tend to operate by purchasing quality items but spending only when necessary. I would much rather pay more for something than have to buy it again.

    Like your family, we also make above average salaries while living in a low-cost area. We also keep our living expenses to a minimum. We don’t do cable or spend a ton of going out for entertainment. We did drop more than $23 at coffee shops though…but that IS one of our vices. 😉 Onward to 2017…were focusing on paying off our rental mortgage this year. It could be eliminated entirely, depending on my huaband’s income. He does contract work so it’s always a surprise. After that we focus on our primary mortgage and then buying additional rentals with cash. I love this FI stuff!

    Mrs. Mad Money Monster

  • Looks like you’re doing a great job of keeping your expenses in check, especially with a large family. Definitely a big help to “cheat” by not having those mortgage payments. That’s easily our biggest expense category for the year. This is probably a helpful exercise for the wife and I to go through as well…

    • Yes, “cheating” keeps our budget out of the six-figure spending category.

      Some docs will say we’re way too frugal, but we simply do what works best for us. If spending more is a better way for you to be happy and achieve your goals, by all means, do what works for you.


  • Nice breakdown. I don’t track every expense quite this closely but have a rough idea of what I spend on everything. Groceries is an area we spend a little more on so I check in on it every now and then to make sure it’s not getting too crazy. Overall, I set a savings goal for the year, automate it, and then spend what’s left over. This year, our savings goal is increasing, but will mainly come from increased income. I expect our spending to remain relatively steady with last year.

    Thanks for sharing!

  • Great job keeping your expenses in line PoF! I just did the analysis myself and our expenses in 2016 were down about 5% vs. 2015 which was good, but nowhere near your levels.

    With two high-school aged kids in a relatively high cost of living area, our kids’ expenses are through the roof for food and clothes alone, not to mention activities: tennis, soccer, piano, TaeKwonDo, etc…

  • This is a terrific example of how much a doctor family of four could spend and still live well. I think we’ll be copying your style one day!

    This must have taken a long time to figure out too. I often have trouble with Mint (and Personal Capital) not categorizing things correctly, especially since I have a lot of money getting funneled into other bank accounts constantly.

    • Thanks, FP — we log in every week or two and Categorize the Uncategorized, and briefly review the categorization. We’re not over-the-top hardcore with it. Mint loves to categorize every Walmart purchase as “shopping,” when it’s usually groceries.

      When you buy stuff from multiple categories at one place, you can split it manually after the charge has posted, but we’re not very good about doing that. Costco and Walmart are places where you could have expenses from multiple categories. In the end, it doesn’t matter much to me. I know about how much we spend annually, and that’s what helps us plan for the future.


  • Hatton1

    One question. How can you have a pet that will only cost you $20 this year? I spent more on my 2 dogs and 2 cats than I spend on health insurance and food for myself. One dog had knee surgery and the other had an ear injury. They definitely can unexpectly bust a budget. Oh well! I guess I will keep working!?

    • Ha! I know for a fact that the 3 days a week you work are 3 more than you need to afford those animals.

      I’ve estimated $20 a month for our little dog based on previous years. That’s one vet visit, heartworm pills, tick & flea goo on the neck, and a few bags of food from Costco.

      Surgery could certainly bust that budget, though.


  • Throwingyourmoneyaway

    What no term life ? I am also FI and that is the reaction I get when someone talks to me about insurance. Great Post!

    • Right?

      I need someone with a Doximity account to help Dr. Z interpret this statement that I made in a previous spending report that was just published there.

      “You don’t see a whole lot of insurance there, either. While term life insurance and disability insurance are vital when others are dependent upon your income, they are superfluous for a financially independent physician. Being self insured saves me about $4,000 a year.”

      The comment: “As a neurosurgeon who was forced into retirement by a medical disability with at least 10 more active years ahead of him, I vigorously object to the characterization of disability insurance as superfluous. ”

      What? I did say that disability insurance is vital for those not FI…

      Bonus points to the first person to help set the record straight with a clarification in the comments @ Doximity.


  • Fascinating reading Doc!

    Although much of our expenses are similar to you (we are family of four with two young boys 10 and 8), here are some big differences for you to chew on a little. We run two houses like you but still pay a mortgage on one of them. Costs below are for 2016.

    Mortgage $25,200
    Property taxes on mortgaged property $6,500
    Major maintenance on second home (new roof and siding) $21,000
    Before / after school care and 8wks of summer camp for two boys $14,400
    Gas/auto (2 x lengthy commutes and frequent travel to / from mountain home) $7,500
    We also spend more on groceries (includes beer / wine) – $200 per month more than you

    Yup, an extra $77,000 on top of your spend!! Ka-ching! You can see why our projected FIRE spend once we both cut the cord, sell primary home and relocate to the mountains will be nowhere near what we spend currently. We are certainly in that camp of “what we spend now IS NOT what we will spend at FIRE”. Our projected spend at FIRE is ~$78K per year, with lots of travel (of course with large doses of travel hacking to offset much of it), hobbies (skiing for family of four ain’t cheap) and healthcare costs the major items.

    • Thanks for sharing your numbers, Mr. PIE.

      That $21,000 home upgrade increases your net worth, so I wouldn’t necessarily consider that spending (although the same could be said for the $2,000 landscaping project we did).

      Your retirement expenses look a lot like I expect ours will. On Reddit, they call it fatFIRE (opposite of a low budget leanFIRE).


  • One of the best decisions I made was to start a budget and finance tracking spreadsheet 15 years ago. It helps keep things in perspective, and also helps keep me honest on spending. You guys are doing fantastic! 18 months is a very short tunnel to get to that light!

    • Wow, Max! You’ve been tracking for about 14 years longer than I have. Of course, 15 years ago, I was still in medical school.

      I do recall realizing that at $6 to $8 USD per pint, I spent at least $1,000 on ale in 7 weeks as an exchange med student in Stockholm and Oslo 15 years ago. That conclusion made me not want to track spending for awhile. 🙂


  • Awesome spend, dude! We were at 38k, but with half the people. It looks like you have your money allocated to a lot of the same things. Our hot tub purchase is luckily behind us as well 😉

    France and Iceland should be a lot of fun, and $1700 for four tickets is a heck of a deal! We just booked tickets to Barcelona using just over $1100 in vouchers for the two of us 🙂

  • Cool synopsis of your spending. Interestingly enough while we live in a higher cost of living area I can already tell my income and property tax are lower here in Delaware. It just goes to show sometime col balances across factors, unless you live someplace like New Jersey, then your hosed.

    We held spending constant in 2016. I don’t measure to his level of detail regularly, instead I pay everything with a credit card and track how much those payments move. I could probably be slightly more efficient but I find a full budget as something I do when situations change, gen I revert to the card method for the rest. In any case our cards were almost exactly the same in 16.

    Given major changes of stay at home mom I see significant changes in spending in 2017. Some are obvious, no day care and added gym. But others like electricity from her being home are still up in the air.

    • Thanks, FTF.

      A stay-at-home spouse can do amazing things to your spending. We’ve never had to pay for daycare, after-school care, and getting the boys to appointments and lessons is rarely a hardship.

      Also, there’s this amazing magic laundry basket that exists in our home. That thing is worth its weight in gold!


  • RocDoc

    Great job on the spending! You might want to allot more for health care premiums in the future to bridge you through to age 65. Unfortunately the premiums seem to go WAY up after age 50.

  • We review spending monthly but haven’t done a year end total. I will browse through personal capital and see if anything stands out.

    Happy to hear (and not surprised) that you are right on track.

  • Saving on housing is such a huge thing! Sorry there were so many medial expenses this year, but that’s not something you have a lot of control over. I firmly believe health is one of the biggest, if not THE biggest asset you have! It’s interesting to peek into someone’s financial life. 🙂

  • We are transitioning away from budgets to just tracking. I hadn’t carefully tracked our expenses in years, but it has been awesome. Even though we are basically FI, we kept Mr. Mt’s life insurance for 2 reasons. 1. If he dies, our expenses would go WAY up, as I would have to hire a lot of help for the household and our rentals. and 2. If we both passed away, I don’t think anyone else could raise our kids as affordably as we do. I want to have a very generous monthly stipend for their care. (5-7k monthly, even though we generally spend 2-3k a month.) That would allow for someone to show it as income to afford a loan for a larger house (if you add 5 kids to your family, you will need a bigger house!) and a larger vehicle.

    It would be rather easy for someone to take on 2 more kids, but 5 is a logistical challenge! =)

  • Bravo for owning your homes. 🙂 That cuts down on quite a few draining monthly expenses right off the bat.

    Ouch on those health costs, but caring for your body is a great investment, after all. 🙂

    I believe our spending was in the $50,000 range. That’s pretty impressive, considering we bought and renovated a home in 2016. I’m hoping we can save 60% of our income in 2017 and apply it to our damned student loans. Let’s do this!

  • Between raising kids and maiming deer, those credit card rewards points sure add up fast!

    As Little Libre continues growing and eating and banging into stuff, I can see we’ll be in for lots of exciting new spending in the future – and that’s just one hijo… So I’d say y’all did pretty great with two of ’em, and much bigger, hungrier ones at that!

    Nice work up there. Cheers!

  • Great job with your expenses. That’s really good for a high-income household.
    It’s amazing how much you spend on housing even when you don’t have a mortgage. This is why our expense won’t drop much even after our mortgage is gone. Property tax and repair will cost a lot even with no mortgage payments.

  • At your income level, that is pretty darn frugal! Good work. Personally, I spent just under $27k for the year. Moving out of Manhattan helped, and the fact that I don’t own a car definitely helps. Mooching my GF’s fully paid for car when I need it is the way to go (I pay my share for gas and maintenance so I guess I’m not that much of a freeloader).

  • Those are some excellent numbers for a family of four. Your lack of mortgage and daycare expenses turn me an ugly shade of green. Toddler BITA has lately started to eat her weight in food, and we can sadly no longer just buy and cook for two and feed her scraps. Just last night she ate an entire mango. It was the last one too, and I had imagined us sharing it. She now almost needs to be counted as a proper person for groceries. Sigh.

  • Tracking your expenses is seriously life changing. For sure it would be the absolute number one piece of advice I would give someone looking to improve their finances.

    This auto expenses are making me cringe though-I’m looking forward to an analysis here about the costs of a slightly used car vs. old beaters (lol!). At some point, car repairs are going to be a lot more expensive than buying a car that’s a couple years old and needs almost no repairs. We’ve had great luck buying certified used vehicles in the past, now we’re required to own new cars (husband is in auto industry). I have to say there’s a lot more to having a new car than the personal finance community credits. For one: no repair costs during the warranty period.

  • MS

    For those who don’t have the goal of FI by 45 or 50, there is a middle option. I’m the non-working, and more frugal spouse, in this physician household. My husband is 46, a hem/oncology physician. I’ve been using mint for over 6 years, so I know exactly where our money has gone.

    We spend way too much on a country club membership, kids activities/tuition and dining out. We didn’t pay off our house when we could, instead we have been funding a tax deferred 401k, backdoor Roths and taxable investment accounts for the past 13 years. We still have $25k on our $250k home loan. One thing that I would say has been in our favor to achieve a $3.4M net worth was the fact that we invested more when the market was down. The $75k that we put into the market in 2009 instead of paying off our house has grown way more than paying off our house would have ever done. We always have disability insurance and term life (locked in for 20 years, once that is done we will not replace). We have over $300,000 in 529 plans for our 3 kids (age 9-15).

    My husband loves his job (and golfing). He will work until he is 60 (or not) because he loves his patients and what he does. The good news is that we have the option. One spouse must have an eye on the ball, in my household that is me. I can only dream of being able to keep my expenses in your range! In our favor is the low cost of living location, low burnout specialty, and not keeping up with the Jones for house and car. But if we needed to cut some of our luxuries (private school, country club, eating at nice restaurants), it may be difficult.

    Reading your blog motivates me.

    • You sound you’re doing amazingly well, MS!

      I have no qualms with anyone spending money any way they see fit — live and let live. Do what works for you (and your husband). If I hadn’t had an awakening of sorts a couple years ago, I would probably have kept on trucking until we had accumulated double or triple what we have now. I just came to the realization that I’ll be happier with more freedom, less work, and Enough money.


    • Hi MS. Reading your comment here reminds me so much of the chapter “Running the Family Office” in Millionaire Women Next Door by T. J. Stanley. If you ever run across it, I think you would find that section very interesting.

  • Nice breakdown. We published our spending report this week as well. Our travel cost came in about the same as yours but we’re only two people. We did take advantage of some travel hacking.

  • Those are excellent numbers for a family of four. It’s great that you have avoided dining out and having cafe outside. I’ve always enjoyed these breakdowns as they give me a good sense where we stand.

  • Wow, you’re living the good life PoF! Obviously we’re paying those damn doctors too much! 😉

    Our spending came in at $55k, but that also includes our mortgage and daycare…aka the Two Devils!

    I was really surprised how much you guys spend on food…nearly twice what we do, and you live in the mid-west! Amazeballs!

    It’s also interesting that you are targeting $2.5 million as your financial freedom number. Well, I just hit $2.5 million and it doesn’t seem like enough even given our lower level of spending. Although maybe I’m too conservative.

    • Thanks, Mr. T!

      I’m surprised by the food expense being double yours, too. The $1,800 in alcohol is about $1,800 more than you spend, so that may account for some of it.

      We do eat a fair amount of meat, seafood, fresh fruits and veggies, but do much of our shopping at Costco and Aldi.

      Congrats on hitting my big number! We’re there in terms of net worth, but after subtracting home equity and 529 $ (neither of which we plan to spend in retirement), we’ve got a ways to go.


  • Smart Provisions

    Thanks for sharing, PoF!

    My spending came in at $20,000, which was a bit more than I had expected coming out of college. Most of my expenses were mainly because of my auto payments though and eating out though, which will hopefully be reduced in 2017.

  • Thanks for sharing your numbers. We like Mint as well and our expenses will be less for 2017 than it was for 2016. We purchased a second car and had a baby in 2016; talk about extra expenses! Phew!

  • Thanks for pointing out that a large chunk of the annual “cost of children” is housing. I hadn’t considered that- As I track our expenses leading up to the birth of our first it just wasn’t adding up- adding in the housing component should give me a more realistic picture of future costs.

    • Right, John. People are quick to criticize the dollar amount every year when The Number makes the rounds in news stories, but rarely are the methods use to arrive at The Number actually considered.


  • Thanks for sharing your annual spending, PoF! Hopefully you saved your receipts from those darned doctor bills. Maybe you can use your HSA funds tax-free later on in the future.

    I didn’t really track our expenses last year, but I plan to do so this year. It’ll be interesting to see how that turns out.

  • Paul

    PoF, great detail, thanks for sharing. The one item that caught my eye was the
    “No term life or disability insurance. We dropped them once we were FI.” I am what most on this blog consider FI (but still work full time – because what else am I going to do :-). I still have active Term Life and Disability (ug..$$$). I ‘get’ the general thought that if you are FI you/spouse can rely on your assets, but do you have more details on the thought process up to the point where you cancelled your policies. My concern might be that a serious disease may drain assets (not covered by insurance) and then the spouse might need to rely on insurance to bring the asset levels back up. This might be a full topic for you, but any response appreciated. Thanks again.

    • That’s a great question, Paul.

      If you’re worried about an illness draining your life savings, you should take a closer look at your health insurance polity. ACA compliant policies cannot lawfully have yearly or lifetime limits.

      As far as disability insurance, I suppose it doesn’t take too much imagination to come up with a scenario in which you’re incapacitated and faced with increased living expenses as a result. While I agree that’s possible, even people who make a living selling disability insurance have suggested the insurance is no longer needed for financially independent individuals. Jamie Fleischner of Set For Life Insurance (this site’s platinum sponsor) wrote a nice guest post @ The White Coat Investor discussing this.


  • Tell me about the hot tub expense! I’m thinking about getting a six person outdoor hot tub, but I need to build a flat cement slab, and then hire an electrician to hardwire it to my main.

    Hot tub looks like it’s gonna cost $10,000 plus $2000 or so for all the other set up stuff.


    • I can tell you about hot tubs, Sam.

      I’ve bought four in the last ten years — moved a couple times and decided to upgrade from a cheap used tub to a bigger, better new one when we finished off the patio last fall.

      Plan on paying an electrician $1000 or more to hardwire it to a new 220 volt 50 amp circuit. We already had the slab, so that part was done.

      I ordered our most recent one from Costo – a 45 jet Aquaterra. We’re happy with it. Not top of the line, but cost half what our first new one cost 8 years earlier.

      Costco doesn’t install, but I’m sure you could find someone to put it in place. Ours was dropped off in the driveway on a pallet. I had a fun hour or so bringing around the side of the house and down a hill, tipping it into place by myself (not recommended). Used four 3″ PVC pipes to roll it like the Egyptians moving pyramid stones. 🙂 I’m pretty sure I had the electricians come back to finish the hookup, but I don’t recall. Sounds dangerous to attempt, but also sounds like something I would do.

      We use ours ~3x a week year round. When we hit -32 F a couple weeks ago, it was 15 F above on the patio, and 104 F in the hot tub. Fantastic.


      • HAH! Hilarious. I can envision the Egyptian roll now.

        Awesome investment though right? I LOVE getting in the hot tub after showering after a long workout or tennis match. SF is pretty cool weather too.

        I guess my question to you is, I bought a ~$4,000 indoor jacuzzi bathtub when I built my master bathroom (link in the website field). Do you think it’s worth spending $10,000 for an outdoor one too? Might seem a little excessive.


        • I think it’s a totally different experience. We had one of the Jacuzzi jet tubs in the 4,000 square foot house we once built, and we never used it. We used the outdoor hot tub all the time, though.

          The hot tub is always full and warm, it can accommodate four grown-ups without playing footsie, and on the deck, you’ll have fantastic views of the city.

          I would also say the hot tub is where my wife and I have our best and most honest conversations. There’s no TV or electronic distractions, and if it’s in the evening, there’s usually beer.

          Our Costco tub was about $4,000 plus tax. The markup at pool and spa places is huge.


  • Nice detailed analysis. I might start to do that for 2017!

    Hehe, I spent nearly your entire 2016 budget on mortgage alone! I think that you’ve built up great habits that’s allowed you to FIRE. I think that you hold the record, unless you compare to those doctors who actually never started working after residency (married doctor spouse…etc)

    • Eliminating many of the “typical expenses” allows us to spend more like a “typical family” while actually living sorta large. And, yes, I highly recommend tracking the outflow. You might be surprised at the results.


  • Toocold

    Our living expenses are so similar, including no mortgage payments. One exception though, my wife loves going to target, walmart, and sam’s club adding up to spending a whopping $9500 last year within my “general merchandise” category . Where do you account for those expenses?

  • Ohhhhh – I love to see all those numbers and graphs. I tried Mint but hated recategorizing everything and gave up. I am officially living out my graph and chart dreams vicariously through you!

    It seems like your expenses are great for a family of 4. Taking the housing payments out is a huge help but if you kick the kids to the curb this year you can save even more! I was shocked to hear of those medical bills considering you are a doc but I suppose you can’t do it all – that’s why the anesthesiologist get paid the big bucks!!! Hmmm. It would be like asking a flight attendant to fly the plane. I mean, I’m sure I could do it but….. 😉

  • Thanks for the transparency PoF. There is something oddly satisfying about peering into someone elses finances. Curious though, if you stripped out the travel hacking and added in a mortgage on your primary residence what do you estimate your spending would be?

    I’ve been loosely tracking my spending for about 5 years now. I wish I had done it earlier. I don’t use any fancy spreadsheets or software, just a notebook and a pencil. I loosely categorize my bank transactions and add in the total numbers on all my credit card annual summaries. Takes about 2-3 hours a year.

    I would suggest not relying on 1 or 2 years of data for retirement planning. My last three years have been pretty steady, but the two years before that were unusually low. Had I based my number on year 1 of spending I would have been way off.

  • M

    Well, you really screwed me this time, PoF. My wife (the more frugal member of this duo) read your post and now she’s obsessing about how much more we spend than you. We’ve been at just over 100k/year for the past 2 years. I tried to reassure her that our portfolio can easily support that level of spending even if we stopped working tomorrow, but I think she’s going to start combing over our data until she finds five figures worth of cuts that could be made. Fortunately for me, she lives for vacations, so the 15-20k per year we spend on trips is probably safe.

    • Did she not see all the ways in which I cheat?!?

      I’m guessing your portfolio is something north of $2.5 Million and you’re working, so you shouldn’t have anything to worry about. If you want to save some money, do more travel hacking with credit card bonuses. We’ve scored quite a few free flights that way.

      Cheers! (and sorry),

  • HW

    I think your projected 1k/month spending on future health insurance may be too optimistic. I am an employed physician and the cost of my family plan is about 24k a year. I pay about $800 a month and my employer kicks in another $1200.

    We are pretty frugal for our income level and we don’t budget. I have been tracking our yearly spending for about 4 years. Our spending has gone up from about 100k a year to 120k a year. We still have a monthly mortgage payment and a private school tuition bill.

    • You may be right, HW. I’ll be the $24,000 plan is pretty sweet, though. All we really need is coverage for a catastrophe. A good HDHP partnered with our growing HSA.

      Just for kicks, I went to the Federal Exchange site and plugged in our numbers. A low range plan (bronze, silver) was on the order of $600 to $800 a month with high deductibles. What it will be next month, next year, or in 10 months, I have no idea. Shooting for 36x anticipated expenses (rather than 25x) gives us a lot of wiggle room.


  • Nice spending review. I have similar numbers, consistently spending ~$80,000 per year for quite a number of years (I seem to have avoided inflation somehow…..probably reading too many FI blogs). $20,000 of that is for daycare though so I assume about $70,000 if we retired (no daycare but a conservative $10,000 for health insurance using a high deductible catastrophic plan).

    I wanted to mention that I’ve seen less effect from geographic arbitrage. We moved from a low cost to higher cost area but except for needing more to buy the house, the core expenses aren’t much different. Once you’re mortgage-free, it mainly depends on the property tax rate and whether the public schools are good (neither of which always correlate with cost of living). All the other stuff, from milk to parking, is more expensive too but it’s on the order of a few thousand dollars a year……not enough to matter once the biggest one, your housing costs, is addressed.

    So one good approach is to use geographic arbitrage to get rich (i.e. don’t start in a huge hole by living in a high housing cost area at the start), but then it’s possible to have enough later in life to actually move to a higher cost area if you really want. You just need enough to cover the housing cost difference and still have a lot of cash-generating investments left over. Obviously moving to San Francisco or Manhattan will be out of reach for most, but there are many options between these places (especially if you can be outside a core city area), and living in somewhere like rural Mississippi to minimize cost of living.

    Thanks again for the detailed spending review. It’s interesting to learn from what others are doing to think of new ways to spend less and be as happy or happier at the same time.

  • ken kienow

    Do you ever find mint.com to have inaccurate data? Every once in awhile it doesn’t download a transaction for me, and sometimes things like the “net income” calculation on the home page is horrendously wrong (even compared to the “trends” section). I’m losing faith in their data accuracy and haven’t noticed the same problems with Personal Capital.

    • I log in maybe two to three times a month now. I do have to recategorize some expenses, and if we’re being really precise, we can divide one receipt into two categories (grocery and gift in one Costco trip). I haven’t noticed charges missing, but if it were small, I wouldn’t notice. I love Personal Capital, but haven’t utilized expense tracking in it.


  • Thank you for sharing your expenses and breakdown. It’s interesting to see how others spend their money and how you see the need for a high FI number in the bank.

    We spend about $25,000 or less per year (minus the mortgage) and our FI number is around $500,000 (hopefully in 10 years). I would absolutely love to be able to spend $62k in retirement! The trips we could take! As a much lower paid public employee it would take me until I was 70 to get to $2.5 million (if ever!). That’s awesome, though, keep inspiring others to work towards FI! Great work!

    • Strong work on your budget, FM. I like to think we spend intentionally, and the size of the budget is all relative. Many docs can’t imagine how I spend so little. I can’t imagine trimming $20,000 from our annual spend, either.

      Freedom in ten years is a whole lot quicker than most people can hope to attain it. Good luck in your journey!

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