Home > Mr. Money Mustache Bares All

Mr. Money Mustache Bares All

January 21st, 2013 at 07:56 pm

Mr. Money Mustache bared all - his spending for the past 3 years.

He spent about $24,000 last year (Family of 3 with a home in Colorado). Cutting all the fat could have easily lived on $14,000.

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I can relate to Mr. MM. *Obviously* we don't live anywhere near this lean. On a scale of 1 - 10, MMM is maybe a 10. (Or an 11?) No doubt about it!! I am nowhere near a 10. BUT, I can still totally relate. I am used to people telling me that our lifestyle is impossible on my income. We are clearly on a continuum where we spend less money every single year. We will probably never live as extreme as MMM, but are generally headed in the same direction.

I share because anyone can learn from MMM and he gives us all a direction to strive for. Even if we only want to be 4, 5 or 6 on this scale. You don't have to be a 10 to see the benefits.


Comparative notes on MMM's spending reveal:

Mortgage - we have a mortgage but no intention to keep one forever. Right now our mortgage runs us about $7,500 per year in mortgage interest. Not there yet, but eventually we will be down to $0.

**Plus, regionally, we have *always* kept our housing costs VERY low. Very key for living well while spending less.**

Property Taxes - As long as we don't buy up over time (lord knows we have no plans for that!), property taxes are actually pretty inexpensive in California. I Can compete with MMM here. In fact, the property taxes on our home are the same as they were on our last condo in more expensive city. (Value of both homes was the same, thought current home is far more luxurious). So basically, we have never "bought up" our property taxes, and no plans to in the future.

Food and Dining We are very much in line with MMM. I'd say we eat quite well, but eat the bulk of our meals at home. This was a habit we solidifed when my spouse was first laid off from his job (I was first pregnant). This has been REALLY key in living on a lower income. I have always been surprised how much we could stretch our budget by eating at home. We improve with time. We are always learning and getting more efficient. I expect the tides to turn at some point because I have 2 extremely high-metabolismed boys. Teenage years might be fun! But in the interim, we have improved every single year, for about a decade. Even adding two mouths to feed. We are just much more efficient than when we ever fed just us. (We used to probably eat out most the time - we worked long hours and both had a lot of meals provided by employers).

Healthcare - Healthcare is a financial beast for us. There is no comparison, but with our commitment to high quality healthcare and TRULY getting our money's worth the past few years, I don't have a lot of issue with this. We may always work more for good healthcare. & that is fine. We also just do not have the assets for a super high deductible plan. MMM and us live on two different planets when it comes to this area. {My spouse had brain surgery "out of nowhere" a couple of years back - so why we will always live on another planet - not sure my spouse could get any cheap insurance ever again, with the pre-existing}.

We could also maybe move to another state to lower our insurance premiums, but it's not quite that simple. Wages would also likely be lower. & we are fairly committed to staying put and being close to family. I will pay anything to stay close to my family. It's a deal breaker for us. For that, we will never be a 10, and I don't think everyone has to be a 10. I think my whole approach is to get all our other costs down so, "who cares about the beast? Will deal..."

Auto Our auto habits are somewhat in line with MMM. Buy inexpensive, used, fuel efficient vehicles in cash. We don't have a lot of auto expenses.

We are not DIY in this area, but having a trusted mechanic has always saved us a fortune. It's the next best thing when you can't/won't do it all yourself. For 2012, our spending was about the same as MMM, for example.

Gas - we are guilty on the gas. I have a commute and we *love* to travel by car. BUT, we don't have two commutes, and I could certainly see our gas usage going down considerably when I retire. I *get* it.

Auto insurance - oh, and auto insurance rates are totally insane in our city. That will be another fun one when it comes to teenaged boys! Not much we can do here - we already have inexpensive cars, no collision coverage on the old one, and "perfect" driving records and good credit scores. We've got the best rates we can get in this zip code.

Utilities MMM is good. His level of utility spending is about equal to the flat fee we get from our city and county for water/sewer/storm drainage. NOT going to happen for us. We keep our gas and electricity usage very low though. I know we are well below average. Having an energy efficient home is crucial. Having a fairly large home, people always assume our bills are insane. People have asked me if my gas bill is $300+ in winter months. We don't even pay that much for the WHOLE YEAR! We pay less utilities in our current home than we did in our last condo. The condo was not energy efficient in the least, though half the size with shared walls. Appearances can deceive. I know the questions to ask when we buy our next home.

cell and internet We pay large sums for these luxuries these days. This is not forever. We are seriously considering Ting for cell service eventually and internet offerings seem to improve with time. Waiting for more competition and options. My dh is always telling me about this or that - just waiting for when it is right for us. Just to say, just because I will pay a premium for something now doesn't mean I expect to pay it forever - we are always re-evaluating.

Home - Insurance and renovations. Insurance is a little pricer here, but not by a lot.

I would argue the love of the DIY could be a rather expensive hobby (versus always being painted as simply better and cheaper). We don't spend a lot on home maintenance. Our strategy had been to buy a new home that would not need much the first decade or so of home ownership. Likewise, our first home and our next home will be a condo. LOW maintenance. There are certainly other strategies if you don't love going to Home Depot all the time. Wink

Speaking of DIY, clearly we do the tax and financial DIY (another area where people spend a LOT of money). MMM is a jack of all trades. We are not, but we have plenty of major cost-saving skills. My dh is very good with the IT/computer stuff. I am musical and financial and tax savvy. Can always barter tax skills, computer skills, piano lessons, etc. I find our skills quite useful.

Travel - We don't spend much more on travel. I know MMM is a 10, but we do *plenty* without spending much money. Our vacation spending is comparable.

Other/Misc - Our spending is also pretty comparable. We are not big on the retail.

There are some glaring differences in our spending habits:

Insurance - MMM does not spend money on disability or life insurance. Understandable - I also will not bother when I reach his level of net worth.

Luxuries - I am willing to spend money on a few luxuries that I probably would not bother with as much if I were not working full-time. My luxuries are my $15 gym membership and $80/month to never have to do anything with the yard. (I mentioned we will eventually retire to a condo, to eliminate all yard concerns and costs). A gym membership would not matter so much if I could work out *any time.* I like to use for the dark and cold/hot hours. Is obviously a very small splurge. I don't see my dh giving up his internet and cell phone, BUT, like I said we are always keeping our ears open for alternatives. We kind of allow ourseleves a couple of regular luxuries here and there. OF course, do did MMM with some of his other costs.

Other Notes:

--MM probably easily pays no income taxes. We are in a similar boat. We don't pay a lot of income taxes with the decision to live on one income. But I do pay a fair amount of payroll taxes, working. (Which is not *all bad* as provides social insurance like state disability for me and social security for the both of us). But, yes, the "no income tax" thing is very relateable when you are willing to raise a family on one income.

--Debt - no debt payments were mentioned aside from mortgage - neither of our budgets have other debt payments.

--Daycare - MMM's kid goes to public school, of course. Public school + parents at home means little need for childcare. We are fairly committed to a public school education, not having MMM's financial resources.

So, there you have it. I think no matter where we all are on our financial journey, there is something to be learned. My approach is very "one thing at a time" but I feel like there is certainly always room for improvement in our spending. That is what I am always striving for and why I am here. The more efficient I am, the more I can do with my money. & that feeling is AWESOME.

P.S. My dad is a LOT like MMM, so where I got a lot of frugal habits. Funny enough, he would never hire anyone to do *anything,* and I do not think that is always a good thing. Thus, I am a lot more laid back about paying people to do things "right" once in a while. But I am sure my parents easily survived on $15k last year and spent another $10k on hobbies and travel - something like that. It doesn't strike me as weird or impossible. They paid off their home a long time ago and barely put any mileage on their cars. Besides food and utilities, what else do they really need? Apparently not much.

3 Responses to “Mr. Money Mustache Bares All”

  1. Says:

    in 2014 we'll have obamacare and insurers will no longer be able to discriminate based on pre-existing conditions. Since everyone will be required to have insurance, it's supposed to bring costs down, but I worry...and wonder what rates will look like a year from now.

  2. Looking Forward Says:

    I need to get over there and read more of MMM's posts. Thanks for the reminder.

  3. Bob B. Says:

    I read the MMM post. Good information. At the end he mentioned living well on less than half of what your neighbors spend. I had to chuckle at that - a substantial number of my neighbors are Amish, and we'd do well to live on 150-200% of what they spend. And, most of them have 5-8 children!

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