It’s time to tally up the damage. Way back at the beginning of the year, we established a total annual budget of $57,000. So how did our 2021 spending compare to that goal? You’re about to find out!
Drumroll, please…
| CATEGORY | BUDGET | TOTAL SPENT | OVER/(UNDER) |
| Home | $27,109 | $26,746 | ($363) |
| Utilities | $2,621 | $2,787 | $166 |
| Automotive | $5,762 | $5,000 | ($762) |
| Groceries | $4,500 | $4,557 | $57 |
| Dining Out | $1,400 | $2,376 | $976 |
| Health & Beauty | $3,203 | $8,012 | $4,809 |
| Cell Phones | $200 | $237 | $37 |
| Travel & Entertainment | $4,432 | $10,218 | $5,786 |
| Pets | $1,430 | $1,613 | $183 |
| Work-Related | $102 | $3,097 | $2,995 |
| Merchandise | $3,004 | $4,876 | $1,872 |
| Other | $3,237 | $3,589 | $352 |
| TOTAL | $57,000 | $73,108 | $16,108 |
Uhhhh….whoops. As it turns out, we absolutely demolished the budget – a full $16,000 over! How did that happen?!?!
While the average American household spent $61,334 in 2020 (the most recent data available from the Bureau of Labor Statistics), our 2021 spending ramped up almost $6,000 over the previous year, eclipsing $73,100.
*Several deep breaths* Okay, let me explain.
Where we went wrong
Dining Out
At nearly $1,000 over budget, we showed a little lack of self-control in this area. However, as I’ve noted in the past few monthly financial updates, this seems to be an area that we just enjoy spending money. I have a serious obsession affinity for breweries, and Mrs. FIby35 takes advantage of that to get me out of the house. She also enjoys the occasional brunch date with friends.
Really, it comes down to the social aspect of going out while enjoying some food or drink that we don’t have available at home. If that involves some occasional overspending because I ordered another beer to sip on while we continue a conversation about our future life, then I suppose I can accept it.
Health & Beauty
This is actually pretty easy to explain: I had LASIK surgery in December at a whopping cost of $4,100, which was not budgeted. Maybe I’m just rationalizing our blown budget, but this seems like another instance of choosing an improvement in quality of life than a true budget-blasting expense. It should provide years of convenience when it comes to travel now that I don’t have to haul around all the extras that came with wearing contacts/glasses.
I also may not have been talked into the procedure if we hadn’t earned a fair amount of extra money during the year. Selling my car for $4,500 back in June alone paid for this life upgrade.
Travel & Entertainment
Not surprisingly, we went absolutely wild on travel this year, with many more trips taken than in 2020. The pandemic couldn’t hold us down for long!
2021 included the following trips:
- 3(!) separate trips to Las Vegas (Round 1 & Round 2 here)
- 2 trips to Phoenix, AZ (1 together, 1 as a guys’ trip for a football game)
- a weekend in Charlotte, NC
- 1 night in Wisconsin Dells for a bachelor party
- a girls’ trip to Cancun, Mexico
- a 2-week winter getaway for Mrs. FIby35 to Florida
- another week spent with family in Key West, FL
- multiple visits to central WI to see my family & friends
- 3 separate trips to Green Bay, WI to watch my beloved Packers
Oh yeah, and our incredible 2-week vacation to Hawaii back in May of 2021 (it seems so long ago!). You can read about our exploits on that trip in 4 parts: Part 1, Part 2, Part 3, and Part 4.
So did we overspend the budget? Yup. Did we get our money’s worth? Hell yeah. $10,200 is admittedly a lot of money to spend on traveling, but we consider it a true necessity for our happiness and sanity. That also doesn’t consider how much money we saved by travel hacking – our 2021 spending could have been so much worse!
Work-Related
This category might be mislabeled at this point, as it doesn’t really involve much work-related expenses; the majority of those are reimbursed by our employers. It does include the cost of buying and re-selling items to earn additional money on the side, which Mrs. FIby35 had set up as her own business a few years ago and has since closed.
Anyway, our true work-related expenses totaled only about $150…the rest was the cost of selling our shit. We unloaded a bunch of stuff that was just sitting around the house in an attempt to pare down the excess (and make some money, of course). Total net profit of these efforts, including the aforementioned car sale: $11,400.
I think I’ll just net these costs against the profits in 2022, as they are really only generated as part of the sale (listing fees, shipping, etc.).
Merchandise
Last but not least, we blasted the merchandise budget. This includes mostly clothes and other miscellaneous goods purchased throughout the year. As I’ve mentioned the past few months, I completely revamped my wardrobe and Mrs. FIby35 has been working on refreshing hers; the $1,800 overage is all within the last 3 months of 2021 once we decided to go that route.
Where we went right
Home & Utilities
I’m not sure there’s a ton that we actually did to save money in this category, but we were fortunate to not have any significant unforeseen home repairs this past year. The cost of electricity and natural gas has increased, so our utility costs were a bit high with Mrs. FIby35 working from home the entire year. Not much to be done about that, so let’s move on.
Automotive
In last year’s spending round-up, I complained about my disdain for the maintenance required of cars; that issue was solved (at least for now) by selling my car in June. I still miss driving it, but it was costing too much money to be reliable. Since that time, the excessive repairs have stopped, we saved a bunch of money on gas with Mrs. FIby35 not needing to commute to work, and this category overall was a pleasant surprise.
Groceries
Shockingly, we came within $100 of our grocery budget for the year. Some of that is by luck, since we did overspend in the dining out category. But we’re also very intentional when it comes to grocery shopping: we (mostly Mrs. FIby35) come up with a meal plan each week and grocery shop accordingly; our fridge and pantry are pretty lean, and we usually only buy what we need. Combine that with shopping at Aldi and other low-cost stores, and we’re able to eat pretty well for a reasonable price.
Conclusion
On the surface, $73,000 is a boat load to spend on 2 people and a small dog, in my opinion. But I’m able to reconcile that in my head (and in The Spreadsheets) knowing we also made almost $18,000 more in miscellaneous income than we anticipated. That includes selling our stuff, stimulus checks, gifts, etc. I would not have been so eager to overspend the budget by $16,000 without that additional cash in our pockets.
As always, I would have loved to have come in under budget in 2021. But knowing we still came out ahead when you net out the overspending with additional miscellaneous income, I think I can sleep tonight. We were also able to achieve our major financial goals in the process: hitting our target savings rate while maxing out all of our tax-advantaged retirement accounts.
As one last bit of insight, I think it’s interesting that we came in pretty close to budget in the Big 3 categories (Home, Transportation, Food/Drink). Those costs make up less than 60% of our overall spending too, which tells me that we’ve got a pretty good handle on the necessities. The rest of our spending was on things that are more discretionary in nature, i.e. things we like. Seems like a pretty good balance to me!
I’m excited (and nervous) to see what 2022 has in store for us, as there could be a lot of moving parts… How did your 2021 spending end up? Were you able to stick to your budget better than we did?
