A Monument To All Your Sins – Actual vs Expected spending for the year so far

Back at the start of the year I wrote a post about your budget vs your actual spending, where I said that our budget was based on what we actually spend instead of what we think we spend.

The reason for doing it this way is to have a realistic idea of what we will likely spend as opposed to some ideal scenario with minimal spending based on the things that I could actually think of at the time of doing up the budget. 

This way I can see what we’re spending money on and decide whether or not we should be spending that much or any at all.  Damn you occasional trip to Krispy Kreme, alas a sweet tooth (gluttony) is one of my many sins.  

We’re now halfway through the year so it’s a good time to have a look at how we’re going so far!

Before we get started…

As I discussed in this post here a lot of my bigger bills are setup on an annual cycle rather than monthly or fortnightly. The reason for this is generally because I get a discount for paying it that way, or in some instances (car registration for example) there isn’t an option for a regular fortnightly or monthly payment.

Because of this my expected 6 monthly spending is different for each half of the year as I have some big bills like personal insurance and care registration and insurance in the second half of the year and other bills like rates and house insurance in the first half of the year, and those amounts don’t match up exactly.

Therefore my expected spending for the second half of the year is about $1,500 more than for the first half, which isn’t huge obviously but does affect what I would expect to spend. 

Why yes, people do sometimes tell me that I overthink things!

How did we go?

Well the good news is that actual spending was about 4% less than expected, which was nice. Even better, our actual spending on what we anticipate spending money on was even lower at about 10% under what we expecting.  

How does that work you ask?  Obviously overall we spent less than expected, but we also spent more than expected in some areas however more offsetting that was lower than expected spending in other areas.

The higher expenses were a combination of some one off purchases for furniture which shouldn’t recur again for a long time if ever, an operation for me which increased our medical bills which also should never need to be repeated (I’m fine, don’t worry), and some recurring stuff like new tyres for the car and some electrical goods (phone and computer) which will probably need to be updated every 3-5 years or so.  

I may try to incorporate the latter set of expenses into a theoretical sinking fund for the sake of budgeting, as I said with the others hopefully I don’t have to worry about them again for a long time or even better never.

The lower expenses were fairly mixed as well. Some of it was lower than budgeted spending on the fun stuff like Entertainment and Travel. As much as it’s nice to not be spending money, I’d actually prefer to be spending up to and even over the budget because these are things that make the whole family happy and the path to FIRE much more enjoyable.

We’ll see how the second half of the year goes for that stuff I suppose, there is definitely going to be more spending coming as we’re off to the UK for a holiday later this year and although we’ve paid for flights and some accommodation there is a lot more that needs to be paid for yet.

We also had lower than budgeted for bills for house maintenance, this is really to be expected given the house is only just over a year old so there really shouldn’t be much that needs to be repaired yet.

The good news it that a lot of our bigger expenses like Food and Groceries, Eating Out, Utilities came in about 15% under budget.  I’m not entirely sure why Food and Groceries were cheaper given I have two young kids who are eating more not less than they were last year, and as far as I know my wife and I are both eating about the same and shopping in the same way.

Because I categorise spending into this based purely on where the shopping is done (so anything from Aldi, Coles and Woolworths goes into here) it could be that in the past we bought a bunch of stuff at some Aldi sale and don’t have that expense again?  This would explain at least past of it given I bought some exercise equipment from Aldi last year, but not the whole amount of the difference.  In any case it came in cheaper, but I’m not going to adjust my spending down because I think it’ll likely go back up again either through mean reversion or just my kids eating more as they get older.

Eating Out was down a fair bit as well, this is probably due to it being more of a pain to eat out with a toddler than a baby.  As babies both our kids tended to just sit in their pram or at least not move around much, as toddlers they both wanted to (or still do) wander all over the place which isn’t ideal when you’re trying to eat a meal.  Hence us eating out a lot less.  As our youngest gets a bit older we’ll probably start eating out a bit more again.

Our Utilities bills being lower may just be a seasonal thing.  Our house seems to be quite energy efficient, we very rarely need to turn the air conditioner on in summer and although we need to turn the heater on a bit more often in winter it generally isn’t required for long.  This is presumably due to a mix of efficient materials being used in the construction (Hebel), having the honeycomb blinds which keep in the warmth and keep out the cold, and making sure doors are closed etc.  Also we rug up if it’s cold and get around in less clothing if it’s warm which helps reduce the use of electricity, gas etc that we use to heat or cool the house.  I think it probably costs us more in winter than in summer though, and so far apart from a few cold weeks it hasn’t been too bad. 

We also had some of our smaller expenses come in a bit lower than expected as well, this includes categories like Exercise.  Which to be honest is mostly running stuff for me, either shoes or race entries.   My employer now gives a $500 allowance for this though so I can just get work to pay for it which is nice.  So I’m all stocked up on shoes for the year ahead and it hasn’t cost me any money! 

Also our various subscriptions to things like Netflix, Norton, various magazines and organisations came in a bit lower than what was expected as well.  This was probably mostly due to not renewing stuff like XBox Gold and a magazine subscription given I very rarely have time to use either.  Hopefully a day will come when I’ll have time to wreck noobs in matchmaking again, but it is not this day, or any in the foreseeable future.

All our other bills were pretty much as they were previously which is nice but to be expected really given they’re a reflection of previous spending and much of it is entirely predictable like internet, Kinder fees, swimming lessons etc.

So all up it was a pretty good 6 months spending wise, and as a result we’ve managed to put aside a decent amount of money.  By my calculations we’re a pretty decent chance of being able to tick off my new years resolution goal of saving 52.5% of our net household income (excluding employer contributions to super) which would be great!

Do you have a budget and track your expenses, if so how did the first half of the year go for you?  If you enjoyed this post and would like to read more like it please subscribe!