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I think a lot of people who read personal finance blogs do so because they want to see in public what most people keep private. It’s financial voyeurism. Money porn.
What’s funny is we receive around 2 readers per day who, apparently, are searching for some combination of “money” and “porn.” I don’t think a personal finance blog is what they have in mind. Imagine their annoyance. “Hey, this isn’t money porn! It’s just a couple bloggers who are cousins bickering over nonsense!”
My question is, what the heck are they actually looking for??
Don’t answer that.
Ok, let’s have a look at my finances for the month of March. First, net worth.
In March, Mrs. Rich and I got paid 3 times. That’s the primary reason our net worth jumped by $22,488. Our average net worth gain per month in 2017 has been $12,358, waayyyy ahead of the pace we need to reach my goal of $1MM when I’m 45.
Now for the bad news. We won’t be able to maintain this pace, because we’ve got some lumpy expenses coming up.
OUR EXPENSES ARE LUMPY
I’ve been tracking my expenses for 3 months now. I’d never done it before, but I thought it’d be interesting money porn for you and our readers. Have you found it … exciting?
I think I’ve confirmed 2 truths about my budget that I had suspected. First, we spend a lot on food (average = $2,200 per month). It’s more than I expected, but not ridiculously more than I expected. We’re not frugal when it comes to food, I knew that already.
Second, I’ve confirmed to myself why I don’t usually track regular, recurring expenses. This will sound crazy: I don’t think they matter in my situation. Look at this chart (click image for a better view):
Everything is in a narrow, somewhat predictable range, and then BOOM — half a year of preschool for 2 kids for $12,000. In the past 2 years, we’ve spent, I don’t know, $60,000 on preschool-related expenses. We more or less had to send our kids to this preschool because we’re in a foreign country, but even without preschool we’d still need full time child care. In the past 5 years we’ve spent $150,000 on preschool + child care. Conservatively.
When the kids were little we had a live-in nanny. Having a nanny was just as affordable as day care in our area ($30K per year), so we weren’t acting like celebrities. I’m glad we could afford all this for our kids, because neither of us wanted to stay home and our salaries easily covered the cost. I’m not complaining. We have twins, so almost everything we’ve paid for since their birth is double that of one child at a time. Double the lumps.
Why Track Coffee?
Anyway, the point of all this is that the lumps matter more than the small stuff, which flies in the face of many budgeting tips in personal finance articles. Sure, I could save $3 by not buying that Starbucks latte or whatever. But it just doesn’t make a whole latte difference. Get it?
Consider that child care number: $150,000. That’s 50,000 lattes. I could have a latte every day for the next 137 years. I could fill a swimming pool with lattes. I could stack my latte cups on top of each other and they’d be 18,040 feet high — higher than the highest mountain in the Alps, Mt. Blanc!
For the record we brew french press coffee at home. And we need it — the kids are up at 530am every day.
So, it’s not the coffee. A few big expenses, here and there, really dominate my budget. Staring at my monthly phone bill is not going to yield the secret to wealth. Instead, I need to just plan for the lumps and get past them. And we’ve got some lumps coming our way this summer:
- Taxes: $9,000
- Kids Summer Camp: $2,300
- Buy A Car: $18,000
- Move back to US: $10,000
- Total Lumps: $39,300
Bah! Almost 40K! So here are my monthly expenses, but I’m not really sure why I’m tracking them. Maybe I should be tracking something else? I need to think about this more. What do you think? Later, Rich