2015 has been a year of significant changes for our Crumb Saver household. Little Miss Crumb Saver was born in August, which was also when Deb quit her job to become a full-time stay-at-home-mom. Needless to say, this caused some big changes to our financial situation—but by HOW MUCH?! Did the baby break the budget like everyone predicted? Were there any major surprises? Did we have to throw out our crumb-saving ways? Read on to find out!
2015 in Review
A little background on our year:
- In 2015, I continued working full-time in my previous job and got a slight raise. (Yay!)
- Deb worked at her job until the end of July, which was when she switched to full-on Mommy Mode.
- We paid off our house on July 31, exactly 2 years to the day from when we closed on the house. Having the mortgage off of our monthly expense list (it was the largest item) greatly helped balance out the additional expenses associated with the baby.
- We continued renting out our guest house at the same rate as 2014, and it was occupied for the whole year.
- We didn’t do as much traveling this year, and were away for only about 1 month total in the year. These trips were for business so didn’t come out of our budget.
|Net Income (Saved):
- The income numbers represent after-tax income.
- The reason why our income came so close to our 2014 earnings even though Deb stopped working in August was because she was able to cash out her accrued vacation hours. She had racked up quite a few. That, alongside the raise I got at my job, ended up keeping our income much closer to our 2014 number. The big dip in our earnings will likely come in 2016 though.
- Tithe/Charitable Gifts is the single largest expense in our budget so we break it out in order to give an accurate picture of what we spent to live. We practice the Biblical principle of tithing so we give 10% to our church, then after that we give another 10% to other ministries and charitable causes.
- So even with a new baby in the house for the last 4 months of the year, it still cost us only $16,000 to live in 2015. This includes all living expenses: Food, insurance, mortgage payments, fixing/maintaining the car, home repairs, gifts, recreation, baby labor/delivery, baby supplies, and everything minus our business travel.
- We were able to maintain a 21% rate of giving and also a 55% savings rate despite all of these big changes.
The Monthly Breakdown
|Housing & Utilities
Mortgage, home insurance, property tax, water, electricity, cellphone
Premiums only (not deductibles) for health insurance, auto insurance, life insurance, etc. but not home insurance
Gasoline, oil changes, vehicle maintenance, registration
Household cleaning, tools, personal hygiene, and misc.
Includes groceries, but not eating out. Dining out is classed under “Recreation”.
Eating out, gifts for people, and other fun things.
Includes all expenses related to the baby, including delivery costs (medical deductible).
Breaking It Down
So how do we keep our living expenses so low? We’ve written about the tricks we use to keep our expenses low throughout this blog, but let’s go through each line to give you a bit more background:
- Mortgage – As we’ve mentioned earlier, we paid off our mortgage around the midpoint of 2015. That means our previous monthly payment of $607.24 was freed up to help cover the additional expenses that came our way with the baby. Having the mortgage paid off right before the baby came was the biggest reason why our spending didn’t go up much from 2014. The mortgage payments for the last 5 months of the year would have been over $3000, and pretty much all of that went toward baby expenses.
- Water – Our monthly water bill has consistently been $10 every month since we moved in, but we had a lot of family stay with us the past few months so that bumped up our water usage a little bit. Moreover, we discovered a leak in our water main that has also been increasing our water bill but we haven’t been able to fix it yet due to the record amount of rain we’ve been getting the past few weeks.
- Electricity – We’ve written about how we save electricity in general, as well as specifically how to save on heating in winter (we have only electric heat) and cheap ways to stay cool in summer. But our big electricity secret is that not only do we pay $0 for our electricity, but the power company actually PAYS US due to the solar panels we’ve installed. Curious? Check out my one year update on our solar panels here.
- Cellphone – At the end of 2014 my whole family switched over to a Group Save Plan with Cricket Wireless so both Deb and my iPhones have unlimited calling, texting, and 4G LTE data for just $20 a month each (including tax)! Find out if you’re getting ripped off by your cell carrier at this post.
- Health Insurance – In 2015, we used a Christian medical expense-sharing program called Medi-Share which was much cheaper than Obamacare when there were just two of us. However since we are a family of 3 now, the numbers have changed and we have switched over to Obamacare for 2016. You can expect a post on that soon.
- Life Insurance – As we discussed not long ago, we purchased life insurance for both Deb and me and we are set up to pay our premiums annually, so this was a big additional expense for us this year.
- Automobile – Since Deb quit her job, our driving has gone down significantly (I work from home). This along with the record low gas prices means that we have spent less on fuel this year than anytime in recent memory. Of course, since we drive a reliable old car (2002 Honda Accord), our liability-only car insurance is very cheap. Just about $30/month with GEICO. Learn about the total cost of ownership for a vehicle, and you’ll better understand why you shouldn’t ever borrow money to buy a new one.
- Household Supplies – Our household supplies purchases went up a bit this year in anticipation of a new member of the household, having many visitors staying with us, and also simply because we made a number of purchases that we were waiting on until the house was paid off. (I got Deb a new chest freezer for Christmas!)
- Groceries – It seems impossible, but our food budget has gone down AGAIN this year. But there’s a good explanation for this. (We didn’t starve.) Since the baby was born in August, both sets of grandparents have come to see the baby multiple times already. Being the typical Asian grandparents who speak the sixth love language of food, they help a lot with the grocery shopping and cooking while they’re here. Then after they leave, Deb goes as long as she can using up what’s left before grocery shopping again. The steady stream of helpful visitors is certainly an anomaly that explains why we hardly spent anything on food this year. (Of course, we still had our garden, which produced bountifully for us this year.)
- Recreation – Since the baby’s been born, recreation hasn’t registered much on the radar. Let’s just say that for a while, sleep was the only form of recreation we cared about! This will likely change as we take the baby out to experience the world more in the future, but you can be sure we’ll still be opting for the simpler (i.e. cheaper) pleasures in life.
- Baby – We had saved up a sum of money for the labor and delivery of the baby (we had to meet a $5000 deductible with Medi-Share), and some of those bills are still trickling in, but we are thankful we haven’t had to spend much more than that on the baby! (Actually, there are still several thousands of dollars we haven’t gotten bills for yet, that’s why the baby line in our expenses is only $2500–the rest will likely show up in our 2016 finance report.) We were greatly blessed by getting a TON of hand-me-down and gifted baby supplies so we hardly had to spend any money on anything outside of the medical expenses. While the baby has certainly increased our spending in certain areas, we haven’t found her to be “a black hole of endless expenses” that babies are sometimes made out to be. I’m sure there will be more costs to consider as she grows, but so far, so good!
The New Savings Goals
So now that the house is paid off and the baby is born, what are we doing with all of our savings?
You see, that’s the most exciting part. Like we explained in our How to Budget for Maximum Savings post, we can now look ahead and use that savings to prepare for other needs in the future.
- A New Car – You already know what I think about borrowing money to purchase cars, and seeing we may have more kids in the future, now is the time to start saving up for the likely minivan upgrade.
- Home Improvements – There have been certain aspects of our home that have needed improving since we moved in, but because they weren’t urgent and we had a mortgage, we put them off. Now we can save up to make those discretionary changes.
- Retirement – Since we hit pause on our retirement savings to finish paying off the house before the baby came, it’s now time to get caught up and to max out our retirement accounts.
- College Fund – As we discussed in a previous post, we want to help provide an education for our daughter and so we are regularly socking a couple hundred dollars away each month for her college savings.
- Health Savings – As a preview to an upcoming post, we switched to an ACA (Affordable Care Act or Obamacare) health insurance plan for 2016, but it has a very high deductible. The way to mitigate against that risk is to save up adequately to cover the deductible. There are some special tips and tricks to accomplishing this that we will share in a future post.
Onward to 2016
2015 was a significant year for our finances. It actually functioned as sort of a stress test to see whether the preparations and plans we laid ahead of time would pay off in helping us manage the big life transitions. There were certainly a few surprises along the way, but we are happy to report that the sky did not fall, our budget did not blow up, and we are still happily saving our crumbs—even with Little Miss Crumb Saver now in tow!
How did YOU do in your financial goals in 2015? If you’re tempted to start trimming your lifestyle and to live more efficiently, 2016 can be YOUR year! It’s never too late to start spending less and saving more. We’d love to hear from you in the comments below.