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Expense Analysis

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Back when I spent my days working in front of a computer, it was easy for me to analyze our spending. These days, with 3 kids in tow, I’m lucky to record our finances timely. There’s no time for analyzing. But over the past two years, I haven’t been happy with our spending total for the year, so it was time to look into it a bit more. It’s hard to know what has changed since I don’t have month over month, or year over year, trends to compare this data to, but it’s a start.

There are some caveats.

  • I don’t include any spending that isn’t on a credit card here. That means some of our rental property bills aren’t captured (they’re paid via Venmo or check), but I decided that’s ok because I can see that in a different way (a separate spreadsheet). Those expenses are reactive and a necessity to running the business, so it’s not like I can change a spending trend there. I’m more curious about our actual expenses and where our money is going for personal decisions. There will be some rental expenses captured here though.
  • I’m doing this analysis for the first half of the year. If this was for a month at a time (which is a goal), then I’d be able to dive deeper into spending at each place. For instance, at Walmart, those expenses aren’t always ‘grocery.’ However, I don’t have the time to go through all the purchases and siphon out non-food purchases. I did go through most of the Amazon purchases and categorize them.
  • If a purchase was made at Lowe’s or Home Depot, it’s classified as home improvement. It may have been rental property work, but generally it’s related to something we’re doing at our house.
  • If a purchase was made while on vacation (such as amusement park, tolls, hotels, dog sitting) , it’s categorized as ‘vacation.’ If we were on vacation and purchased food, it wasn’t labeled as vacation. All fast food or restaurant purchases for the first half of the year are categorized as ‘restaurant.’
  • If we did an activity from home, it’s labeled as ‘entertainment.’ If we did something related to sports (this includes swim lessons, ticket purchases for performances, etc.), then it’s labeled as ‘sports.’ The entertainment versus sports delineation is because something like a single tournament could be considered entertainment, but I kept all sports items as ‘sports.’
  • None of this includes whether we were reimbursed by someone else for a purchase. For example, we purchased tickets for 15 of us to go to an amusement park on vacation, but we only paid for 4 tickets of that personally. Mr. ODA is a personal shopper for restaurants, so much of our restaurant shopping around town is actually later reimbursed in that process (but not captured here because it’s not a credit card line item).

In the process of going line-by-line on my expenses, I discovered that I never received a refund for something. I placed an order on Etsy for a personalized gift for my niece’s birthday. A few days later, I went to check the status of the order, and I discovered that the shop I ordered from was no longer selling on Etsy. I was frustrated that I received no email that told me my order wouldn’t be fulfilled. I contacted Etsy customer service. At the time, I misunderstood Etsy’s billing process. I assumed it was charged when the item shipped. As I was just going through charges, I realized that the amount was charged on the date of purchase (e.g., not when shipped), and I had never received a response from Etsy. After another frustrating round of attempting to contact customer service this morning, I finally received a resolution. Now my ‘to do list’ has to keep track of this refund appearing. It’s $10.01, so it’s not the end of the world. However, it would be nice if Etsy shuts down a seller (their words), that they manage the outstanding orders without me having to take my time to get it corrected. Plus, if I let every “it’s just $10” go, it could add up quickly.

FIRST HALF OF THE YEAR SPENDING

By far, our largest slice of the pie up there is for rental expenses. Honestly, I’m happy to see that so much of our credit card expenses are taken up by rental expenses we had. I pay our insurance premiums (where they aren’t escrowed) via credit card, and I can pay our county taxes for one house with a credit card, which I do for the cash back rewards. There was flooring replaced at one house, which was a significant amount of that slice.

The ‘home improvement’ category includes new patio furniture we purchased, but were reimbursed by insurance (a tree fell on our deck). It also includes the electrician work and dirt fill purchases that we needed for the deck rebuild. Our house has a few more fairly large projects we want to complete, so I expect that to continue being a larger chunk.

I know that our “grocery” expense isn’t completely groceries. I’d like to focus on this category of spending more in the second half of the year. I want to quantify what’s purchased at Walmart that is actually grocery versus personal shopping type purchases. I think that our grocery purchases are higher than they should be, but I can’t put my finger on exactly why. Historically, I’ve blamed it on ‘bulk’ shopping; Mr. ODA will go to Kroger for the “buy 5” type sales. I’m not sure that’s it though.

We don’t eat at restaurants very often. We usually eat at fast food places while we travel or are away from home at an inopportune time. When we’re at home, we’re usually eating at a “personal shopper” experience where our food cost is mostly reimbursed (although that’s not captured in the chart).

Our health insurance deductible is $3,200 per year, so we expect slightly more than that each year in the medical expense category (and based on how deductibles work, that expense is front loaded in the year). I actually pre-paid a bill at a child’s urgent care visit. I paid them $50, but that visit, along with two more visits since then, came to a total of $12. I’m waiting for their reimbursement of that difference.

PERSONAL SPENDING

I’m going to dig deeper into the ‘personal’ category. I labeled a bunch of things as ‘personal’ as a means of not having too many small slivers of the overall spending pie. This includes all gifts, needs for kids (new shoes), clothing for kids, gym membership, sports, etc. It includes a ‘shopping’ category. I spent some time going through my Amazon orders and categorizing them, but the ‘shopping’ category was too daunting and difficult to parse out further. About a third of the ‘shopping’ category is Amazon orders through Mr. ODA’s account that I didn’t pull up to categorize. The rest is random purchases that were probably related to gifts or kids clothing.

For entertainment, this is small things like going to the movies (which we go for $2 per ticket), bowling, and aquarium. The largest chunk of this pie part here is actually 4 season pass lift tickets for our family’s future winter season. I put the ‘mom’ category to see what I’ve purchased for myself that wasn’t a necessity (e.g., a travel cosmetic bag, baseball shirts to wear to my son’s games), as well as my one hair cut and one pedicure that I’ve gotten this year so far. The ‘other’ category is boring stuff – utilities, car maintenance, professional fees, etc.

Had I gone through my Walmart orders in detail, I would have been able to identify some more purchases that could be removed from ‘shopping’ and put into other categories. For instance, the ‘dog’ category is actually higher because I order his glucosamine and tooth cleaning treats from Walmart most of the time, and that’s a monthly expense. His annual vet appointment is in the Fall, so this will be a larger slice of the pie for the end of the year.

SUMMARY

Our annual credit card payment total for the last three years have been about the same. While it’s a ‘win,’ that it isn’t increasing, it’s still at a number that I don’t like. Mr. ODA has been working towards a ‘retirement’ date. We’ve pushed it back just because his job hasn’t significantly impeded our lifestyle, but the day will eventually come. If it’s next year, I’d feel better if our credit card payments weren’t as high.

I went into this expecting my grocery category to be higher than I’d prefer. I didn’t identify much of what is causing that, so I’ll try to focus heavily on watching that expense each time it hits the credit card, rather than trying to remember what each purchase entailed six months later.

I was surprised to see the gas category such a small sliver of the pie. We’ve done a lot of trips (although, I suppose a majority were in July, which isn’t captured in this data). It appears living in a smaller city and doing things mostly on this side of town means we’re not having to fill up our tanks too often.

Overall, I didn’t notice any egregious spending. We don’t spend for the sake of spending. This year we traveled more than we had the previous two years, but mostly our spending is the same. Now that we’re two years into our house, there are less projects that we’re putting money towards. I’m encouraged that now that I’m looking at this, I’ll be able to identify areas to scale back.

2023 in Review: Personal Spending

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I’ve been working on the ‘year in review’ posts for 3 months. I really want to be consistent on tracking our spending and making sure I’m being intentional in our spending. Our main credit card had the nerve to tell me that it was exporting 461 line items for me to categorize and manipulate in Excel. We have 8 credit cards. So that wasn’t a fun realization.

Additionally, if I track it more than once every two years, I may be able to better categorize our spending. For example, a Walgreens purchase may be pictures that I printed, or it could be a prescription. My Amazon purchase may be clothes for the kids they needed, a gift for someone, something in the home improvement category, etc. The entertainment category can include exercise that we’ve paid for (e.g., 5K, ultimate frisbee, kids’ activities) or a trip we went on.

There’s also no direct way that I’m tracking where a credit card expense has been offset by someone paying us back. For instance, I put $980 on my credit card for a trip, but someone paid me $480 for it via Venmo. That offset is in my year’s total transactions, but not in a manner where I can capture it for this year-long-view of expenses. Additionally, we go out to eat at restaurants, but Mr. ODA gets paid for some of those as a secret shopper.

EXPENSES

This doesn’t identify the actual money spent in each category, but it shows how categories align with each other. To simplify this graph (and to allow all bars to even be seen), I combined several smaller categories into an overarching category. For example, the entertainment category includes anything from doing a brewery tour to traveling to another state. Home Improvement includes $10,000 worth of new carpeting, so it’s an outlier. This also doesn’t include expenses that were paid for out of our checking account(s); although nearly all of our expenses are paid via credit card to gain the rewards.

MEDICAL: We spent the first half of the year managing doctor appointments. They were mostly for the baby, and then halfway through the year, I started having serious vertigo issues. The baby was born a little early, had jaundice, diagnosed with reflux and put on medication, and then had trouble gaining weight. My 3rd baby then needed to have formula supplemented, after I nursed two kids and had extra milk to donate to NICU babies. That was an unexpected psychological and financial change. Once he started to become healthier, I hit a wall. After a week of wondering why I kept feeling lightheaded and dizzy, I woke up one morning not able to walk a straight line, and if I even attempted to, I’d throw up. I was diagnosed with an ear infection, which seemed to make sense, but the antibiotics didn’t stop the vertigo episodes. After several specialists, I was given the same thing that I always am: “your symptoms don’t fit neatly into any one category, and I don’t know what’s wrong with you.” Luckily, most of my symptoms have died down at this point. And thankfully, outside of random viruses and a bout of pink eye through 3/5 of us, the others were healthy.

SPORTS: We joined the Y and were really strong for the first 3 months. Once my mom died, I didn’t have it in me to go exercise, and then I got sick for most of the summer with that vertigo issue. Mr. ODA played softball, vintage baseball, and ultimate frisbee; I was able to play some ultimate frisbee and run a 5K. The kids did swim lessons at the Y (and was quite a terrible experience). Our oldest attempted soccer for the second time, and then cried through all practices and games. Our middle thrived in ‘acro’ for the second half of the year. I plan to finish our this semester with her in acro, but I think she’s going to love gymnastics after that.

TRAVEL: We traveled to NY for my mom’s funeral. I took 3 flights in a few days with the baby, all with points (which American Airlines was super easy to work with for last minute flights and using points). We went to the middle of nowhere Tennessee with Mr. ODA’s family, to NY two more times, a short family camping trip, to Indy for some kid-related fun, and a trip to Cincinnati to see Christmas lights and take the kids skiing for the first time. I bought myself new skis (I had been snowboarding for the last 13 years), which led to buying the kids ski equipment (although, it’s noteworthy that we bought them second hand and their skis and boots totaled $100 for two kids). That then led to buying mid-week season passes at our local ski resort. On top of our family trips, Mr. ODA took two work trips, a golf trip, and a mountain biking trip.

GAS: Typically, our gas usage can correlate to our travel because we usually drive somewhere instead of fly with 3 little kids and all the gear they come with. In June and November, we drove to NY, so those have bigger spikes in the graph below (June also included a trip about 4 hours away). In the beginning of the year, we were more interested in staying home because we had a new little baby, but we ventured out more towards the end of the summer.

RESTAURANTS: I was pleasantly surprised to see the amount spent each month in this category. I didn’t feel like we ate at restaurants all that much in the last year, but I was concerned with whether the numbers who support that. There’s an outlier in March because we spent a lot at one restaurant during the week of my mom’s funeral. On Long Island, food is a big deal; while every one else was paying for meals, I felt it was our turn. We don’t need to actually mention how much that meal was. May’s spike was simply the volume of times we went out to eat, and the majority of them being related to Mr. ODA’s secret shopper gig.

HOME: In July, we had a storm come through that wrecked our neighborhood. No one reported the damage to the National Weather Service, which makes me sad because I wanted to know if it was a tornado! We had several trees fall. One took out our deck, another took out our fence, and another cracked our driveway, but missed Mr. ODA’s car by centimeters. We fought insurance for 5 months, and now we’re in the queue to have it replaced some time late Spring.

CAR: We bought a car. That’s $6,000 worth of the “Home Bills” category. Since most of our bills actually can’t be paid by credit card, it’s surprising to have such a high category for that on the graph, but that’s why. They allowed us to do two $3,000 transactions on a credit card so we could get the points, and then we paid the balance by personal check.

GROCERIES: I’d like to watch this spending more in the future. A purchase at Walmart may include non-grocery items (e.g., shoes), but that is being lumped in with the groceries because I can’t possibly siphon out individual transaction expenses for an entire year in one sitting. So here’s a graph of our “grocery” spending per month, but noting such a caveat.

SUMMARY

While I know we’ve had some larger one-time expenses, I’m still not happy to see the amount spent in each category. I feel we’re diligent in our food spending, but I think we can reduce that amount.

I removed rental information, any rewards received, the $6,000 car purchase, and the $10,000 worth of carpet purchase to try to show that our spending is consistent month-to-month. Again, the baby kept us home in January and February, but we’re generally consistent in spending. I hope that I can review our expenses more often going forward so that I can more accurately categorize our spending.

August Financial Update

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We took a week-long vacation the first week of August. I haven’t taken an entire week trip in a very long time. The kids are young, and the daily activities of swimming at the pool and the beach were exhausting for them, but we had a great time. I had projected about $500 worth of food expenses for the week, but we only spent $250 (including a grocery shopping trip). Our daily schedule was dictated by children sleeping, so it was a lot of little meals or snacks at the condo rather than looking to take the time to sit down at a restaurant. It also helped that we paid about $3.45 for gas (which is still terrible, but it’s not $4.30!), so our gas costs for the 11-12 hour trip each way was $190. Our lodging costs were significantly more than we’d typically spend, so the reduced costs in other areas was welcomed.

We’re still working on the new house and haven’t moved. That’s starting to weigh on me. We won’t see much progress this month based on our activity schedules, but hopefully we’ll knock nearly everything off the list next month. Our expenses were high in June and July for the house, but now it’s just a matter of finishing the projects that we already bought materials for, so hopefully expenses will be low the rest of this month. Our HELOC balance increased because we used it to pay for our concrete replacement at the new house (tear out driveway, garbage pad, walkway and stoop to the house, and 3 sidewalk squares; then replace everything in kind except widen the driveway).

RENTAL PROPERTIES

We offered our tenant that has paid rent late 71% of the months we’ve owned the house a new option, and they accepted. They had been paying rent around the 15th and then the last Friday of every month. After several months of this, I spoke up that it was unacceptable. They started paying the first half by the 5th, but the second half was still coming the last week of the month. That means every month, they’re paying $1450 in rent and $145 in late fee. We offered them the ability to pay half at the beginning of the month and half by the 15th. Each payment has a 5 day grace period, and then the late fee is tied only to the payment not made. However, since this is an inconvenience to us, the rent increased to $1500. They could be saving $95 per month if they pay both payments on time. However, they could also be paying as much as $1650 per month now if they pay each payment late.

We got one house turned over and rented last month, and rent was paid timely this month. We also received credits from our KY property manager for costs they overcharged us on.

NET WORTH

We continue to hold high balances on credit cards because of 0% interest incentives. As I mentioned, you don’t typically see a personal mortgage line increase, but we drew almost $9k out of the HELOC to pay for concrete replacement at our new house. Our investments have increased in value over the last month, offsetting the additional draw on the HELOC and higher-than-average credit card balances, helping increase our net worth.

A Second Home & Summer of Travel

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Why did we do so much traveling and activities this spring and summer? Most people probably assume all our travel was making up for a year of not traveling during the pandemic, but we came at it from a different perspective.

We’ve had a long term goal of a beach/lake/mountain home. After another failed search to make this dream come true this past Spring, we decided to redirect that money to trips this summer. I’ll run through the background, the financial decision, and how we spent our travel “budget.”

BACKGROUND

We first looked into a vacation rental in Snowshoe, WV – six years ago. Snowshoe is a ski resort, and one of the better available ones to those of us south of the Mason Dixon. It also has a draw during the summer with hiking and mountain biking, albeit not as constant of a stream of people needing a rental. The draw for us was that it was halfway between our home in VA and Mr. ODA’s family in KY.

We went as far as meeting a Realtor and looking at properties. If the house was off Snowshoe proper, it was a good distance from the ski lifts and not in great condition. If the house (condo) was on Snowshoe proper, it came with a lot of rules and regulations and costs. Everything near the ski lifts had to be under Snowshoe’s management, which included their cleaning costs, and their booking process. This meant that someone couldn’t necessarily go onto the website to book our unit. Someone would go on their website and book “a 2 bed and 1 bath unit” and the system would cycle through the bookings. With the high condo costs and the uncertain bookings for those units, as well as the distant location of the units that weren’t subject to the condo process and cost (plus finding a management and cleaning company for that), we stopped the search.

Since then, it’s been on the wish list, but we weren’t sure what direction we wanted to go. 

When we moved to KY, we decided to look into a lake house. We want it to be close enough that we could just pick up and go (e.g., trying to keep it under 2 hours), we want it to be on a lake that allows motor sports (so this rules out anything that’s “no wake” or prohibits motors of any kind), and we want it to be lake front (we learned this during our recent search, and hadn’t fully realized how much we wanted this until we saw a house that wasn’t on the lake directly). 

We looked at parcels of land and kept an eye on a few houses listed in the March/April timeframe of this year. Our initial thought was that we would purchase land and hold it until we were ready to have a house built. The parcels of land we looked at didn’t meet the criteria we wanted (good size, on the water, ability to build a dock). I started to feel like we were pressuring ourselves to make a decision for something that we didn’t actually need. 

We took a break and just kept an eye on Zillow. We went to see a new construction house on Herrington Lake, but it wasn’t actually on the lake. It was next to the community pool, across the street from the community’s dock, had 3 bedrooms and 2 bathrooms with a loft, and it was brand new. It even had a two car garage, which wasn’t something on our wish list. However, the price tag was high; it had been listed for many months, and we didn’t feel the comps supported such a cost for it not being literally on the lake. We spent a lot of time mulling it over, but decided to not even put an offer in. Lucky for the seller, they did get a full price offer shortly after that. 

I decided that we should wait at that point. I figured we may have better luck waiting until the end of the summer (perhaps people will think they’ll spend their last summer on the lake and then unload it?), and that we shouldn’t force this decision to not get exactly what we want for something that isn’t a necessity. 

THE FINANCIAL DECISION

If we purchased a $250,000 second home, and I assume an interest rate at 4.5% (even with excellent credit, the rates you see advertised are for primary residences), we’re looking at a mortgage payment of $1,200. On top of that, we’ll have escrow costs, HOA costs, the possibility of management fees, and then even PMI costs. That was another big factor; we’ve been throwing any ‘extra’ money towards paying off two rental property mortgages, so we don’t have $50,000 liquid to cover a 20% down payment. Without having the 20% down payment, it wasn’t even guaranteed that we’d be able to get a loan for a vacation house.

Knowing $250,000 was even more than we expected to spend, I conservatively assumed $1,200 in monthly house costs. Instead of spending $1,200 each month to go to the same destination over and over again, why don’t we just mentally allocate $1,200 each month to travel and go to all different places? And so, months of a crazy amount of travel began.

HOW DID WE SPEND OUR ENTERTAINMENT ALLOCATION?

MAY: $618

We started with a last minute trip to Atlanta to see the Braves. We spent 4 nights in Atlanta, went to two baseball games, met up with family for lunch, visited Stone Mountain, and explored the city parks. We stayed in a 2-bedroom hotel room because it was cheaper than any AirBnB options, and I was highly focused on giving the kids separate sleeping spaces. The hotel experience was less than favorable (dirty, AC broken, limited breakfast, roaches … and a good name hotel!), and after some conversations with the hotel, we ended up not paying for it. They had credited us one night without us asking after the AC continued to not work after their “fix.” Mr. ODA then had a casual conversation with the manager about the stay as he was checking out, and the manager credited a second night. I thought we paid for the rest of the nights, but it never showed up on the credit card. Our total trip cost was $460.

Later in May, we went camping in the Daniel Boone National Forest with some family. We booked a “cabin” (I used that term loosely; it was walls, a roof, and platforms for sleeping bags, but it had electricity and AC!) for two nights. We went swimming, rode bikes, and hung out under a canopy while it poured on us for most of the main day we were there. Our dog got to come on this trip, so we didn’t have any pet fees. We brought groceries to cover our meals since there’s nothing close by. Since we’d be buying groceries anyway and gas is negligible since it’s an hour away, I’ll just focus on lodging, which cost us $158.

JUNE: $200

Almost a year ago, we planned a trip with the extended family to Hocking Hills. This shouldn’t really count against our “monthly allowance” mentality since it was going to happen regardless, but I’m including it anyway since we didn’t do any other June trip. Mr. ODA’s parents covered the cost of lodging, and the rest of us covered the cost of food and our canoe rentals. We went hiking, got rained on, and played games at our rental. On the last full day, we rented canoes and went down the Hocking River, which was a great experience. We went with 6 kids, 3 of which were under 3 years old. So if you’re a beginner or looking for something to do with little ones, this was a fun time for $52 per canoe! This trip cost us about $200.

JULY: $690

Before we left Virginia, we discussed doing walk throughs of our properties and being more present with them. There were some properties that we hadn’t seen since we bought it because they don’t have maintenance requests or we call someone else for the work. Well, it was a whirlwind to move, and we didn’t do that last summer. After the debacle with the flooring replacement at one of the houses, we knew we needed to get back there to tie up loose ends. We have a wedding to attend in the area in September, but decided this couldn’t wait until then. The first weekend we could go ended up being the 4th of July. Being in Richmond, VA, there isn’t a large AirBnB market for a normal sized family. All of the options that were available were meant for multiple families in a large house, and we just aren’t interested in paying $700 per night for ourselves. We went with a hotel halfway between Richmond and our old neighborhood, and because we stayed for 5 nights, it was considered “long term,” and it only cost us $525, which included $75 for the dog being with us. Since our entertainment was either working on rental houses or visiting with our old friends, we just had food and gas costs. The total trip cost was $690 (and most of that was tax deductible!).

AUGUST $1069

We learned that St. Louis is only about 4.5 hours away from us, so we looked to see the Braves’ schedule. They were scheduled for mid-week games for the first week of August, so we marked it down. Unfortunately, things were busy, and I didn’t make the plans in advance. I struggled to find pet care for our dog, and I ended up booking an AirBnB the morning before we left. We searched and searched, and this one randomly popped up that morning, and it worked out well. Lodging cost us $585. Our entertainment (tickets and parking) cost us $135. Food and gas cost us $213. Total trip cost was $933.

My plan to visit my family in NY in July didn’t come to fruition because we had to manage 4 days worth of our builder being here to fix things in the house, and then I had a doctors appointment pop up that had to be a specific time. Instead of driving there and back (12+ hours each way), we booked some flights. We’re able to go from Cincinnati to JFK directly (such a blessing with 2 kids under 3!). The flight was 2 hours, plus an hour on each side for driving (although, it took us an hour and a half to get to my parents’ house when we landed at JFK because a 3:20 arrival, plus what felt like a 2 mile walk from the gate to passenger pickup, put us at getting on the Belt Parkway at 4 pm – that’s not good for that area!), and getting to the airport an hour early. We left out of LGA, but it was still a direct flight, and we arrived 25 minutes early! We had hardly any wait at TSA for either leg, no issues with boarding or the flight, and we got our gate checked bags easily. I’ll take 5-6 hours of travel over 12+ hours. The flights were booked through our Chase Travel Portal, costing us the equivalent of $833 in points. The parking is $9 per day, the gas to get there is negligible, and we actually didn’t spend anything on food (I very much owe my parents for that!). Our entertainment goal was to go swimming in my parents’ pool the whole time, and that’s just what we did! The trip cost us $36 in parking and $100 for our dog’s boarding.

On top of these long trips, we also did a lot more activities that were just for one day. We went to 2 Reds games, the Cincinnati Zoo several times, a UK baseball game, Bernheim Forest, and random family/friend activities. It turns out we didn’t spend the $1200 per month we had mentally allocated, but we kept ourselves really busy and had a great time making memories! 

Now it’s time to enter a new phase of life: preschool and sports! I’m pretty excited!