Expenses Revealed! – Q1 2017

The first three months of 2017 were relatively uneventful compared to our action-packed 2016. We spent a lot of time at home with our little one, and I kept myself pretty busy with work, and studying for the last CPA exam, which I’m glad to say is behind me as I passed all 4 parts!

Without further introduction, here are all of our expenses for the first three months of 2016!

Let’s dive into the bigger and more interesting items.

Travel: the travel category includes the cost of obtaining a passport for our daughter, about $190 of embassy fees for me to get a visa stamp on my passport, one round trip plane ticket to Colombia (we bought the other one with credit card miles), and last but not least, a $150 effective annual fee for Elisa’s Chase Sapphire Reserve. The 100,000 Ultimate Rewards Points from this credit card are worth at least $1,500 towards travel or $1,000 if redeemed for cash. We are already redeemed about 40,000 points for two round trip tickets to Mexico later this year!

Supermarkets: this includes mostly groceries. Other items such as diapers and paper towels get lumped into this category as well. We do most of our grocery shopping at Aldi, and some at Trader Joe’s for items that cannot be found at Aldi. If you are not an Aldi customer already, I suggest you check it out. It has the best grocery prices I have been able to find in my area.

How we found Aldi:

We used to do our grocery shopping at Walmart. About 2 years ago, Walmart had this program where you could enter your receipt number into the website, and if they found another grocery store that had lower prices on the items you bought, Walmart would refund you the difference. For a few weeks into the program, we kept seeing that this store called Aldi was beating Walmart’s prices by far. We were curious, but kept shopping at Walmart since we were getting refunds for the difference. One day, we stopped getting the refunds so I checked the program’s fine print. Turns out Walmart was no longer using Aldi as a competitor for their program. My guess? They were losing too much money. Since we were no longer getting the refunds we decided to check Aldi for ourselves and have never looked back!

Taco Filling – Shrimp, Garbanzo Beans, and Vegies. A delicious, healthy, and inexpensive meal!


Mortgage interest: fairly self explanatory. This is the portion of out mortgage payment that goes towards interest. The rest gets split between principal repayment (A.K.A. home equity), property taxes, and homeowner’s insurance. In fact, insurance and taxes get paid out of the Mortgage Escrow account (#5 on the table above). You can see all the numbers behind our home purchase here.

Daycare: our little one started daycare the second week of March as Elisa returned to work. Going forward this will be one of our most expensive line items. Fortunately, this expense will be somewhat offset thanks to Uncle Sam. Through the use of a Flexible Spending Account (FSA), we can pay up to $5,000 worth of childcare expenses with pretax dollars. The child tax credit and an additional personal exemption on our tax return will also help offset the cost of childcare and child related expenses in general. I plan on writing a more comprehensive article about these tax advantages once we start making withdrawals from our FSA, stay tuned! Last but not least, Elisa was able to find a 10% discount from the standard childcare rate through her employer. 10% may not seem like much at first, but trust me, 10% off of daycare adds up to a good chunk of cash. Just in March, our savings from this discount were $76. They will be close to $1,000 over an entire year! Make sure to check your employer’s benefits.

Others: this is all the random stuff that doesn’t fit into the main categories. In 2015, I was surprised to see how large the “Other” category was at the end of the year, and the worst part, I couldn’t easily tell where exactly my money had gone! Very frustrating… So, I vowed to keep more detailed notes, so far so good. The $337 comes mainly from having my car towed 🙁 , tennis supplies, and tax preparation fees. The good news is that to pick up my car I had to bike to the impound lot in 40-degree weather. This adventure gave me the courage and motivation to bike to work several times over the next few weeks, which helped me recoup part of the cost.

Savings Rate: our income was very atypical for this first quarter. On one hand, Elisa was at home with our baby in January and part of February so she had no income for this period of time. On the other hand, I received a bonus at work for passing all 4 parts of the CPA exam, and we received our income tax refund . So in the end our income was a little higher than usual. And so, our savings for the quarter was 75% (as you can see from the table above). This is an all time high for us! And although it may come down a bit as income normalizes and daycare expenses come in full swing, it is still an interesting exercise to think about what it means. Saving 75% of your income means you could choose to work for 3 months of the year and do whatever you want for the other 9 months! Now, we are not going to pursue this path since we are working towards full financial independence, but it is still a liberating thought.

Methodology and Closing Thoughts

We use Personal Capital, a very useful free online tool to track all of our finances. From there, it is easy to move the data into a spreadsheet to have it in the format you see above. You can download a free copy of the spreadsheet we use here. Finally, we calculate our savings rate based on our take home pay (the money that ultimately makes its way to us after Uncle Sam has taken his share). The entire process takes 10 to 15 minutes, and you get a clear picture of where your money is going. You work hard for your money! Make sure you know where it is going, and ask yourself if the things you buy with it actually make you happy.

How was your first quarter?

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