When I hear about people needing to spend more than $100,000 a year to be happy, I question their source of happiness. The more we lead fulfilling lives that require less material possessions, the happier we are, and last year was no exception: we traveled, we ate well, we danced, we spent a great amount of time with family, friends and each other. We were living and living well!
And how do we get to “travel so much”? It’s all about priorities and the choices you make. If you fall for the peer pressure and need to impress others, you’re going to struggle no matter how much income you bring in.
To give you a better view of our financial picture, we’re a working couple with middle class salaries with no children yet. We’re also very disciplined savers. We can get by in life with a lot less and still be happy, and when we do splurge, it’s usually on experiences instead of materialistic possessions.
You might be wondering why we choose to put our expenses out in public. We want to show that the majority of Americans can lead happy lives with a lot less, Enchumbao Style. That you can minimize your spending, reduce stress and be happier altogether.
2015 was a great year for us when it comes to our personal finances. We always say that our expenses must reflect our values and bring us true happiness , and once again, we accomplished that. We’re conscious of our spending because they represent our life energy. One main goal of spending consciously is to able to reach financial independence as soon as possible without sacrificing the present.
Our formula for the Enchumbao lifestyle is to live in the moment with a line of sight to the future. After all, if you don’t have a target to aim for, how are you supposed to even shoot in the right direction? One way to do this is by knowing how your money is being spent.
Now, let’s see how we spent our Benjamins last year. We divided our expenses into three buckets: Essential, Discretionary and Gift/Donations. What’s different from the 2014 spending report? We combined cost for fuel and insurance on both cars to simplify the report, and we also added a column with our expenses from the previous year. What didn’t change? We were too lazy to put the second car, ’03 Suzuki Aereo, for sale but we’re committed to getting it done this year!
Let’s get some comments going at the end of the post, people. We’d love to hear from you!
We spend $13,171 of our money or 33% of our total spending went to essential expenses. These are expenses that we deem necessary to live.
Homeownership vs. Renting
The question of whether one should rent or buy is a never-ending one in the personal finance community. One can be more beneficial than the other depending on your situation. You just have to do the math. It is more beneficial to us at the moment to have a rental property than owning a home for several reasons, mobility being one of them. Renting is not throwing your money away as long as you’re investing the rest of the income that could have gone towards a mortgage and the costs of maintaining a home. Paula Pant at Afford Anything has a great article comparing both: Renting is Throwing Money Away… Right?
We spent $18,909 or 46% of our total spending went to discretionary expenses. Although these expenses were not necessary, most of them brought extra happiness into our lives. At some point the return on extra purchases diminishes and can bring stress, more than anything. There could be lots of ‘wants’ in this category that people might categorize as ‘needs’. The key here is to avoid spending money that you don’t have.
We are Latin music concert goers and were able to enjoy two great concerts this year: Chayanne’s En Todo Estare Tour and Ricky Martin’s One World Tour, which is now heading to Latin America. Both concerts were held in Boardwalk Hall in Atlantic City. The venue is medium-sized and very cozy compared to a bigger venue such as Madison Square Garden. During Ricky’s concert we only sat down for a slow jam and danced the rest of the time. Wisin opened the show and later joined Ricky on stage to perform Adrenalina (sube la adrenalina!). Ricky Martin is a must-see performer and a great human being, when he says that he’s going to live his soul on stage, he means it and knows how to connect well with his audience. We were naturally high for days following the show and wouldn’t miss it for the world!
Fees, Interest and Bank Charges
There were no interest charges here. We live debt free and intend to stay that way.
If you add up the essential and discretionary expenses, our living expenses were $32,080 in 2015.
Gifts and Donations
This one is very dear to us. Last year, $8,802 or 21% percent of our total expenses went to this bucket. We’re happy that we are at a point in our lives where we can make a difference by helping others. No one gets somewhere by themselves. We got here because there were others helping us along the way. Our parents sacrificed a lot for us to be able to get an education. A big chunk of this money goes to help them and the rest for donations to charitable causes and a few thoughtful gifts to friends and family. Thankfully, we got everyone to unsubscribe from excessive gift exchanges for birthdays and holidays, and instead we spend time together with our loved ones.
Drum roll please… Our New Projected FI Date!
Back in March 2015, when we posted our first annual spending report, our projected FI date was March 2019. According to our new projections, our new FI date is November 2018. Yay! We’re doing better than our original projection and hope to get there quicker. The stock market could delay or advance our FI date, but it can’t delay our early retirement plans, as we’re not investing the reserves that we’ll need immediately after early retirement in the market.