Monday, January 9, 2017

2016 Expense Totals And It's Time to Really Cut Costs

The final total of all of our expenses in 2016 was $ 39,457.76. Yikes! We had a very spendy year. This is out of our net income.

I am almost embarrassed to say that we spent about $5467.00 for groceries during the year considering there are only two of us. That is about $ 455.58 a month. It really doesn't sound so bad but then you realize that there were no non-food items in that total such as toilet paper, shampoo, bug spray, bandaids, etc.

We spent another $ 3836. on those items. So the total of just these two categories was $ 9303. That is a bit over 23% of our net income. Just ridiculous, in my estimation.

Our expense total does not include any Federal or State Income taxes. However it does include school and property taxes for the home we live in and for our property in Texas which totaled $ 7809.51. That is another large chunk of our net income. So after these taxes we spent about $ 31,648. on everything else.

We spent a few hundred dollars during the year from our net income on charity. But then we spent another $XXXX.XX from our dividend income(which we don't usually include in our every day income because the majority of it gets reinvested) in a lump sum at the end of the year which we did not show because we want to keep those donations private.  

If you want to see what we spent in the other categories, just look at our monthly expense reports. They are all out there for the year. 

Did you guys track your income, expenses, and savings last year? I hope so. If not you should be tracking every dime since January 1st this year. If you do nothing else, track those expenses because they are an eye opener as to where you need to cut. You can't get a handle on a budget without doing this.

We need to cut our grocery and non food bills this year. So I am making as much from scratch as I can. We are eating from our stockpile as much as possible. We are monitoring our portions. I am learning how to make bread and all kinds of other bakery products from scratch. I have had a bread maker for years. Even though we still will use it in a pinch, I want to learn to do it from scratch. So that is a major project for me this year that I will enjoy. Another major project is to always make sure that I am getting the best price on the non food items that I can by researching the prices again. I always kept a price book but prices are going up again so I need to update that.

We would also like to cut our medical expenses. Our supplemental medical insurance( for the 20% that Medicare doesn't pay) went up another $ 354. this year. Our Medicare also went up and wiped out our miniscule Social Security increase.  We know that there isn't much we can do about some of them but others we can. So we will be working on those.

We spent little over a years time on personal care so there isn't much to cut there.

We also can't cut household maintenance. It could be lower if Hubby could still do most things himself. But we pay for lawn care, and garden and tree maintenance. We also pay for car maintenance. All of these things Hubby did for years but he no longer can or wants to do them. Of course, we could always move to a condo where everything would be taken care of. However, we love our home and the privacy it affords us so this is an expense we are willing to pay for. 

Netflix,our alarm system, cable TV and internet we enjoy so we will not cut them but we could in a pinch.

There isn't much we can do to cut our water and sewer bills. We do not waste water and the sewer bills are set. 

We have pretty much done every thing we can to keep our electric and natural gas bills as low as possible. We will continue to do that. 

Gift expenses are being reduced this year not only to save money but to make sure that our grandchildren aren't spoiled too much. I wrote in a prior post about that.

We have done everything that we can to reduce our auto and homeowners insurance premiums. It is expensive to insure these items in NYS.

We do what we can to reduce our gasoline costs especially by not driving. We will continue to do those things.

Clothing will again be minimal. There isn't much we need. We continue to watch sales when we do.

We cut cut our wine and liquor bill and will work on that.

The gift card deals we got at the end of last year will defray the cost of restaurant and take out this year. We will be going to other restaurants though too. 

So come along this year as we continue to cut costs and show you how we do that. We will be spending as little as possible this year because every dollar counts.


  1. Hi, I think you did very well with spending; you managed to save $50,000 and spent almost $40,000. So your savings rate is about 55%? That is amazing in retirement. In addition you are not really spending anything from your outside investments except for donations to charity. Think you did extremely well by most standards! Sherri

    1. Hi Sherry,

      Thanks but we are spending from our investments. Interest, leasing of our Texas property,and many more, etc. We do have a small pension and Social Security. When we invest, we are investing in the stock market and we never take money from there to live on.

  2. I actually bumped up our grocery budget for 2017, but plan to shop smarter & comparison shop for things we need. On my target list is coffee (pods & beans - we drink both), pasta, and substituting organic eggs for non organic when baking. These are small tweaks, but I have two quickly growing boys who play lots of sports, so I'm trying to keep the huge variety of healthy produce & lean meats, while reducing costs. It's hard! We do a great job of making our own, not buying snacks, & mostly eating at home, but it still adds up. Dairy is another place that surprises me with our amount of spend.

    Household is on my list of places to cut back this year as well. For us, that includes: ziplock bags, paper towels (a rarity), toilet paper, laundry soap, dishwasher tabs, etc. I started tracking the cost per unit for the first time ever, I'm embarrassed to say.

    You can do it! One option may be to evaluate how much you spend while entertaining (when your family is in town) & look for small adjustments to your menu plan when entertaining? Or, choose the top 5% of your grocery expenditures (desserts, snacks?, coffee) & make that the target for the first few months for finding cheaper alternatives.

    1. You have some terrific goals. Thanks for sharing hoe I can cut the grocery bill and household back.

  3. I'm using earned gift cards and rewards (Target, CVS, RA) to help defray our grocery costs, especially for HBA.

  4. Good afternoon,
    We have not done it in awhile but we are tracking all our expenses for 2017.
    Our grocery bill has been too high, We think, but groceries are expensive and we tend to feed more than just ourselves.
    Have a good week 😄

    1. Yeah on tracking. It really is eye opening Rhonda. We do feed our son and grandson breakfast almost every Sunday but breakfast is pretty cheap meal. However we have lots of company during the year too.

  5. I have a finance background and track everything we spend as well as income. And it is startling to see these numbers sometimes. Our medical and dental expenses last year were $21,000...just crazy. I am 60 so have to pay for a high cost plan...with high deductibles. I believe that if we see what we spend, we can make adjustments.

    You should be fine cutting your food costs. By just focusing on food costs, they is funny how it works. We were averaging $650 a month for are at $350, the trick is to eat at home and cook! When I was working,that seemed impossible. This month I might not even spend $100. All it takes is a bit of attention and some practice of self control ;)

    1. Hi Hilogene,

      Yikes on the dental bills. I thought my $18,000+ was bad a couple of years ago. Thanks for giving me some motivation. I would love to get down to $100.

  6. We used to spend between $500 and $600 a month on groceries for two people! Got it down to $300 and once we got used to it, I can't complain. We have learned to eat less, use more of our leftovers, stock pile and shop at discount stores, such as Aldi. Going out to eat is almost non-existent...but we do got out every once in a while. Moving into a condo in a less expensive area (Taxes went from $5500 a year down to $1750....big diff!!)
    You guys will figure it out.
    People like us always do!
    Good luck.
    Love your blog.

    1. Hi Cindi,

      Thanks for sharing. One thing I won't do is move again. Two 3000 mile moves was enough for me in retirement.

      Yes I will lower the grocery bill this year.

  7. Good luck on expanding your bread baking skills. I use my breadmaker to mix the dough and let it rise. When the dough cycle is done, then I divide the dough between two bread pans, let rise for a half hour, then bake in my oven. I like the texture and size better when baked in the oven better than the breadmaker. I also make my homemade pizza dough in it too.

    1. Hi mamabeanof4,

      Thanks for sharing. I may try that.

  8. Do you still need a recipe for homemade pizza day to try? I found one that you can freeze a few years ago that we like and it saves on buying the pre-made. I will dig it out next week when I unpack if you'd like it..... I got it from my mom's 1970s cookbook. You can freeze the dough without rolling it out then thaw let rise a few hours and roll out or
    Sometimes I roll it out already before I freeze it to make it faster on week nights. I mix it up with different flours sometimes for variety. I think you did a great job and I applaud your further efforts- Amazon is one I am going to watch this year for our personal care items....sometimes DH has just reordered from there for convenience and it may not be the best price since their Prices change all the time. I managed to use up all the food in the fridge and we got down to only one dinner left before the move.... I beat myself up a little because I left out some meatballs overnight when I was distracted packing..... but DH pointed out that only having to buy takeout with coupons for one night is really good and we have zero waste from fridge/ freezer we can't take all I have left is honey. I am pretty excited about that.

  9. Hi Aj,

    Is your recipe the one that Pubbler talked about her blog yesterday? If so, I have it. Thanks. I agree that Amazon definitely needs watching as far as prices.

    Don't beat yourself up. You did great with using up the food for the move. You should be excited. I wish you and your family much happiness in your new home.

    1. Hi AJ,

      I don't know where my mind was yesterday but I seem to have lost it. It was the your laundry detergent recipe that Pubbler posted.

      I would love your pizza recipe when you have time and find it! Thanks so much.

  10. Hi AD this is Chris. I think you did very well last year. I am appreciative that you have been so generous to share your expenses with us. It is an encouragement to me that some of my monthly expenses are similar to yours. I am also especially interested to see how your medical expenses on Medicare are vs mine, which our insurance is through hubby's job. I see now that we really do need to have a lot saved for that, and my thought of saving the maximum in our HSA every year to reduce our taxable income, and paying our medical expenses OOP instead of using the HSA is a good idea. It will help us have a good amount saved for future health care expenses when hubby retires.

    1. Hi Chris,

      Yes, when you reach Medicare age you do seem to have many more medical expenses. I barely used medical until I was 55. Now it seems like we are constantly at the Drs. You not only need Medicare but a Medicare Advantage plan because Medicare only pays 80% of your bills and some things they pay nothing.

    2. Chris again. Thanks for mentioning that. I know I will have to research when it gets closer to the time, we are 6-10 years out.