Today, I want to dive deeper into my first year of FIRE, and see how things have been going since I began attempting FIRE in October, 2018.
Let’s take a look at debt, savings, and expenses for the past year. It was a bit frightening to write this post, to be honest. I’m spending much more and saving much less than most of the individuals I’ve been following on the various social medias. However I think one of the worst things I can do is compare myself to others in totally different situations. Learn from them? Definitely! But the fact is, I’m starting off late in life with a well-established family of sweet peas after lots of money missteps (at least in the eyes of me, a semi-average person attempting FI/RE). So, let’s get started and get the scare on, just in time for Halloween.
Debt repayment
We had a pretty good run here. In our first month of FIRE, we spent almost 10k on our line of credit to purchase heat pumps & insulation in order to save on electricity costs. Note: “Heat pump year in review” post coming soon. Also, I had a sizable balance left on an RRSP loan I took out a few years prior.
Since Oct 2018, we’ve paid $26,614 to debt. This includes payments to the mortgage principal (also included in expense report below). It will be so nice to cut this way back in year 2. We still owe over 3k but it should be gone by early 2020.
Savings for the year
In the first year of FIRE, we saved about $4200. Blerg.
There are a few reasons our savings are so low.
- While paying the RRSP loan off, I actually planned to stop RRSP payments for 5 years. And that’s what I did. Fortunately I’m starting up again 2 years early.
- When I first decided to shoot for FI/RE, paying off debt was the top priority. All the extra cash was funneled there.
- Hubs will get a pension from the government when he reaches the typical retirement age. As a result he’s currently saving very little into RRSPs since he is planning to work to age 65. That said, I would like to convince him that he needs to retire early WITH me, and therefore increase savings and investments in registered accounts.
Plan for year 2: Jam cash in RRSP and TFSA once debt is finally paid, increase Hubs’ registered account deposits.
Expenses for the year
WELL. It was not as good as I was hoping for the first year of FIRE, but at least now I’m “aware”. We clearly aren’t Mustachians (correction: My family as a unit is not the least bit Mustachian. If in some alternate universe I was all alone, I would be hard-core. With exception to the travel budget. Alas, being in this family it will never happen, but it’s totally worth it :)).
In the past year, we spent $89,111.
Wowza! A couple of notes:
- This includes a $9500 purchase of 2 heat pumps and insulation for our home. That said, I wouldn’t want to remove that. There will be other big home costs in our future so it’s best if you expect to pay extra annually for maintenance. Going forward, I’m aiming to save 1% of the purchase price annually in order to cover future home maintenance costs.
- When we become FIRE, we anticipate about a $60,000 per year annual spend. If I subtract things like the mortgage payments and interest ($14,833), Child Care ($4850), Parking ($1250), more than half the fuel ($2000), insurance for one vehicle ($550), Life Insurance eventually ($1873) along with some other smaller categories, we’ll be pretty close to that number. So I think my predictions are pretty on the money. Pardon the pun.
That said, after looking at the final costs for some budget categories, there is most definitely room for improvement. Let us dive in, shall we?
Specific Expenses. (THANK YOU YNAB FOR YOUR KICK-ASS REPORTS!)
| Category | Average | Total | Relevant Notes of Noteyness |
| Mortgage Principal, Interest, Property Tax, Insurance | -1509 | -18109 | |
| Interest & Banking Fees | -44 | -525 | This will go down once debt is paid and once I swear off the big 5 banks once and for all. |
| Child Care | -404 | -4851 | |
| Parking | -102 | -1227 | We can get cheaper parking. It just won’t be in a covered garage directly next to the downtown building that Hubs works in. Can you say “cushy”? |
| Auto Insurance | -95 | -1134 | |
| Electric | -268 | -3219 | I’d like to check some of our appliances to see how many KWh they are consuming, replace a few baseboards with more efficient models, and reduce dryer usage. |
| Home Phone, ISP and 2 Mobile Phones | -301 | -3618 | In the process of switching to Public Mobile. Gotta check around for internet deals. |
| Life Insurance | -156 | -1873 | We’ve had this for a few years. Worth rate-checking. |
| Netflix | -13 | -153 | Honestly, still a deal, even after they jacked up my rate. |
| Water & Sewer | -76 | -908 | |
| Home Insurance (pre-paid until June 2020) | -274 | -3293 | |
| Groceries, Toiletries, Household Supplies | -985 | -11826 | This still seems ridiculous for 3 people. I believe some purchases may be wrongly categorized here. This is really the place I can get the biggest wins in Year 2. |
| Fuel | -320 | -3835 | Mr. Money Mustache tells me to “batch” my driving tasks so that I take less trips. I really try to do this…maybe there’s more I can do here. I could probably try a bit harder to car pool but there isn’t anyone I know well enough in my area. Might ask Hubs if he has options here. |
| Auto Repair, Maintenance, Renewals, License | -365 | -4378 | This is a fair chunk of change, but $365 a month on average for 2 cars is still less than a car payment on one car. Let’s see if they’ll last another year without totally falling apart! |
| Medical, Eyecare, Prescriptions,Vitamins | -46 | -555 | |
| Vacations | -355 | -4257 | |
| Dental | -13 | -160 | |
| School Supplies | -7 | -86 | |
| Home Improvement, Services, Supplies, Maintenance | -837 | -10046 | Most of this is heat pumps + insulation. |
| Education | -4 | -50 | |
| Health & Fitness, Sports | -79 | -950 | |
| Haircuts | -84 | -1004 | REDONK. I’ve stopped colouring my hair as of 3 months ago. No one so far has called me an old hag. Fingers crossed it won’t happen for a few more years. |
| Car Seat | -12 | -148 | |
| Gifts & Holiday Expenses | -255 | -3059 | INSANITY. Definitely room for improvement. Planning ahead is something I need to work on. |
| Clothing | -56 | -674 | This wasn’t as bad as I thought…things can be done to improve however. Footwear seems to be a big money sucker. Canadian winters are hard on footwear. |
| Charitable Donations | -33 | -396 | |
| Annual Memberships & Subscriptions | -27 | -326 | Costco, YNAB, CAA, MLB Subscription. Might try for less expensive roadside assistance this coming year. |
| Heat (Wood & Propane) | -2 | -22 | |
| Furniture & Decor | -20 | -244 | |
| UNKNOWN EXPENSE | -66 | -797 | Need to tighten up this category. Where did this $800 go? I have no idea. |
| Allowance M | -8 | -94 | |
| Allowance Hubs | -268 | -3217 | Some people need to stick to their allowances a bit better. |
| Allowance T | -182 | -1487 | $700 of my allowance went to my Questrade account in October. This has been deducted from the expenses. |
| Dining Out – Family | -140 | -1676 | We really don’t need to be doing this so often. |
| Entertainment – Family | -48 | -571 | |
| Lotto Tickets | -22 | -263 | |
| Alcohol | -7 | -79 | |
| Average/Total Expenses | -7484 | -89111 |
Ok if you made it this far, I’m IMPRESSED!
Next Steps
That’s our first year of FIRE. I’m very excited to start tracking Year 2 so that I can use this as my baseline for spending and saving. Over the next few weeks, I’m going to look at ways to tackle the most impactful areas on the spending list – starting with groceries, toiletries and household supplies.
Fortunately I’ve already bumped up my savings for October, but there’s more to be done. I plan to really tackle that once our final bit of debt is paid.
Thank you for sticking around, please leave a comment with your thoughts and suggestions for improvement! Sometimes the outside objective feedback is what’s missing in a lonely life of FI/RE.
I guess I should also try to find some FI/RE friends. HA!
Thanks for the update and don’t give up. I’ve spent the last year discovering and reading about FIRE but haven’t budged the needle one bit yet. It’s hard to make changes when we are set in our ways and habits. I’m hoping to do a better job of actually implementing some ideas and taking action rather than just continuing to gather more info.
I enjoy reading about someone else who is at the beginning of the journey too 🙂
Thank you Jessica! I find that the journey so far has just been a bunch of little steps that eventually add up. I hope to make some big improvements over the next year. Best of luck in your FIRE journey!
I’m impressed you spent only $79 the entire year on Alcohol. I’m not a huge drinker but we definately spend more than that. Some months in the summer we were spending that monthly.
Haha thanks! I do admit we bought maybe 3 bottles of wine at the grocery store which didn’t get categorized properly, and maybe 1 or 2 gift cards were used. This is definitely a big improvement over last year. Also it doesn’t include what we bought while on vacation:)
You have accomplished so much! Love your expense report. I think that’s pretty good for monthly expenses on groceries etc. I’m trying to keep ours under $1,000 for family of three. I stopped paying for salon hair color too and have been touching up the roots at home. It doesn’t look as nice but it gets the job done, ha! Keep up the great work!
Thank you Amelia!! I feel like we could save more on the groceries but at least now we have a baseline to track our progress. Best of luck in your journey.
Nice work on the debt paydown! You’re really going to notice things once that is kicked next year. I question your home insurance cost? Is that normal out there? Ours is $68/month on a $700k property. Maybe I’m under-insured! Also, you mention road-side assistance cost. The (free) Rogers world elite mastercard comes with road-side assistance. Mind you, I still pay for CAA because I save more than the cost on home insurance!!
I can always count on Money Mechanic to give me the BC perspective 🙂 So: home insurance. That is insanely cheap. How much is your replacement cost coverage? CAA wouldn’t even cover me for water damage due to recent flooding in an area close to me (however, they don’t bother looking at elevation or else they would discover I live on the top ridge of an extremely deep valley. If we have flooding from the river, there are MUCH bigger problems). So, I checked rates with 5 other companies on my 270k 2400 square foot home, and the best price was $1818 for the year, or $151 per month assuming a 400k+ replacement cost. (Exception: online insurance provider Sonnet.ca. I read reviews and it was too scary but I may try them out next year if things improve). All that said who is your provider? I would like to give them a shout 🙂 I think this is a regional issue but I’d love to try other avenues if there are any!
I’m with CAA. I should probably up my replacement cost. The house is only valued at $120k, the rest is just land value. Probably unlikely that we could re-build for the $300k we are covered for. I also don’t have earthquake insurance, which adds quite a bit to the premium. Again, the closer to FIRE one is, the more you can be self insured. Definitely a regional issue, I’ll have to ask around and see what others are paying here.
Duh. You said that in your first comment 😛 I’m multitasking today…can you tell?? Serves me right I guess. Your rate makes more sense now considering your cost to replace will be lower. But really not THAT much lower – I think we’re around 430k or something like that. Regardless I’ll continue to challenge the expense…hoping next year I’ll see better reviews on Sonnet. Being broker-free, they are able to offer deep discounts it seems.
P.s. Thanks for the tip on Rogers world elite. Have you been able to use the roadside assistance yet? Do you think it is on par with CAA?
Good question. We only have the roadside for Mrs. Money Mechanic when I am away at work. We have used the CAA once for a short tow. No experience with the TD or Rogers service. Sounds like a question for the internet hive mind. Having the CAA membership saves my $200/year on home insurance though.
Excellent!
Tracking is such a huge step! No way to know how much you actually spend if you’re just guessing.
Thank you Angela!