2018 Household Spending: Mastering Frugal Living with a Growing Family

Hello, fellow FIRE enthusiasts! It’s hard to believe we’re already wrapping up our 2018 spending report. Time flies when you’re busy living life and enjoying precious moments with our little one, Yuna.

2018: A Year of Financial Stability and Personal Growth

This marks our fifth year of sharing our spending journey on this blog. One thing remains constant: our annual expenses hover around the same amount, regardless of how we allocate our funds. The great news? Our investments are on track to cover our projected lifestyle expenses in early retirement.

While we can’t splurge like the ultra-wealthy (nor would we want to), we’ve found a comfortable balance that aligns with our FIRE goals. To be honest, I don’t obsess over money like I used to. Once we hit our FIRE number and secured our house fund, the pressure eased off. Why complicate things when the simple path to FI has already led us to the promised land?

Staying the Course: Our Investment Strategy

Our investment approach remains steadfast. We chose an allocation a few years ago and have stuck to it, allowing us to sleep soundly despite market fluctuations. When the market dipped in Q4 2018, we didn’t flinch. We invest whenever funds are available, regardless of market conditions–a strategy that has served us well for over a decade.

Remember, there’s always someone sounding the alarm. Imagine if we had listened to the experts crying, “SELL NOW, BEFORE YOU LOSE MORE!” or “GO HEAVY IN CASH!” By staying the course, we’ve avoided knee-jerk reactions and kept our long-term goals in focus.

Frivolous Spending? Not Quite!

As we approach early retirement, we’re allowing ourselves some “fun” purchases that align with our passions. A nice karaoke system and musical instruments (I’ve got my eye on some congas and bongos!) are on our wishlist. After all, isn’t that what the FI lifestyle is all about? Spending money on things that truly bring joy and using FI as a catalyst for genuine happiness.

2018 Expenses: A New Approach

This year, we’ve simplified our expense tracking by adopting Mint’s main categories. This change not only saves time but also makes our report more relatable to readers who use Mint. Let’s dive into the numbers!

Key Takeaways:

1. Low Essential Expenses: With a paid-off car, rental property income, no debt, and funds for our future home, our “overhead” is remarkably low.
2. Flexible Discretionary Spending: Most of our expenses are discretionary, allowing us to easily cut back in leaner times.
3. Health & Fitness: This category saw an increase due to the birth of our daughter, Yuna. Our work-sponsored health insurance and rewards program helped offset costs.
4. Food & Dining: We saw significant savings in alcohol spending–nothing like a pregnancy to curb those expenses!
5. Travel: Despite not flying, we enjoyed road trips to Virginia, North Carolina, and Florida. Travel hacking saved us nearly $2,800!

Welcoming Yuna: Frugal Parenting 101

One of the most significant changes in 2018 was welcoming our daughter. Contrary to popular belief, we managed to keep child-related expenses impressively low. Here’s how:

1. Second-hand Items: We embraced hand-me-downs for clothing and baby equipment.
2. Cloth Diapers: This eco-friendly choice saves hundreds of dollars annually.
3. Early Potty Training: Inspired by “The Diaper-Free Baby,” we started potty training from day one!
4. Free Diaper Program: We benefited from a non-profit organization that loaned out cloth diapers.

Cloth Diaper Tips:

• Use a detergent with specific enzymes (we chose Biokleen powder)
• Add baking soda to soften water
• Dry diapers in the sun to naturally whiten them
• Expect to size up in baby clothes due to diaper bulk

Looking Ahead

As we close out 2018, we’re excited for what the future holds. Our 2019 spending will likely look quite different, with a few surprises in store. Maybe those congas are in my near future? 😉

Remember, the FIRE journey is about finding what truly makes you happy and aligning your finances to support that vision. We’d love to hear about your 2018 experiences and financial goals for the coming year. Drop a comment below or reach out via email!