Spending Habit Profile

Hi everyone, I hope 2023 has started well for you and that you achieve all of your goals this year.

This post is about giving perspective on how the Mrs and I live our life. I was recently trying to gauge how much money we spend when compared to other people but I struggled to find much information online. So hopefully this post can give someone else perspective when comparing themselves with our spending habits.

The whole purpose in us tracking our spending habits is to understand what we spend prior to reaching financial independence. We want to be confident in our spending habits so that we will be more comfortable with taking the plunge to quit working in the rat race when it comes.

The Mrs is 34 and I am 31. We live in Newcastle in the North of England in a 4-bedroom house with our lodger. We bought out house in 2021 for approx. £320,000 and put down an approx. 25% deposit (roughly £80,000). Our current jobs bring us a combined gross salary income (excluding bonuses and other benefits) of £106,000 with the lodger bringing an extra £9,960 tax free.

We would not describe ourselves as people who spend “willy nilly”. We are quite intentional with our money and try to spend on things that we feel bring us value while hunting out the best deals.

In 2022, we decided to start tracking our spending. You can see the breakdown in the table below. In total, we spent £36,862.07 in total across the year.

We split the expenses into “Fixed” and “Variable” costs. In all honesty, the categories did not always exactly match the description of what we spent money on and there were times when we couldn’t accurately split out the costs (e.g. normal grocery shopping vs alcohol grocery shopping) but it gives us a good starting point.

Fixed Expenses

Mortgage

In terms of fixed expenses, since we own a 4-bedroom house, the mortgage is a big one. However, we made the decision to have the mortgage on a long term deal (35 years) to keep the monthly costs down. This also allows us to invest the money we would otherwise have used to pay down the mortgage. We were lucky that we took out the mortgage before interest rates started rapidly rising – we fixed our current deal for 5 years. The interest rate on the mortgage is a little complicated as it is split into two parts as I ported my old mortgage from the flat I sold before we bought this place. One part has an interest rate of 1.84% and the other is 1.64%.

Council Tax, Electricity & Gas, Water

Since Council Tax really relates to the value of the house and the area, this probably doesn’t represent our spending habits greatly but at least it gives you perspective on what we pay. Quite a bit when you tot it up!

As for Electricity and Gas, I pride myself on being able to get a 24month fixed deal with Octopus starting in June 2021. Therefore, we have completely avoided the hikes in energy prices to date (with the exception of petrol for the car). Our fixed deal doesn’t need renewed until July 2023. Due to the government support, we are actually currently only paying £19.70! We also try not to have the heating on all the time and switch the lights off in rooms when we are not using them.

Water is one that has increased and this was due to us using more water. Probably because I like having long showers but also because we have a lodger living with us.

Engagement Ring Payment

This is a bit of an embarrassing one as the Mrs shouldn’t really know how expensive her engagement ring was but since we are being transparent with our expenses I thought I better include it. I just got the engagement ring on finance as it was 0% interest.

Remaining Fixed Expenses

The remaining fixed expenses are relatively common with maybe the exception of the chimney sweep. We have a log burner in the house so need to pay for it to be cleaned out once a year. I have to say, having a log burner through the winter months is class and well worth it.

We also pay for a window cleaner mainly due to the windows upstairs in our house being impossible to clean if we didn’t have one. I have thought about investing in my own telescopic window cleaner but never got round to it yet.

Variable Expenses

Grocery Shopping (Including Alcohol)

We mainly shop at Aldi for our groceries as we have read that this is the cheapest place and we also have an Aldi really close to our house. We then buy anything we can’t buy at Aldi at Sainsbury’s or Morrisons. We cook most meals from scratch – I particularly like cooking my own curry. The Mrs is really good at keeping a routine with cooking although I have to say that we probably used to be better than we are with batch cooking and stuff. If we are being lazy, we sometimes buy a pizza or cook pasta. We are quite bad for having a glass of red wine with some crisps while curled up on the sofa – something I hope we can reduce a bit in 2023.

We regularly go to the shops through the week as and when we need things. You could say this is a positive because we don’t often throw food out as it becomes out of date but it also means that we don’t stick to a strict shopping budget.

Home Spending

I have to say, this seems a bit excessive this year but we have to keep in mind that we only moved into our house in 2021 so quite often we have been buying bits and pieces (well mainly the Mrs). We also noticed that our budget didn’t really allow for cleaning products so quite often added these to this category in the budget.

Holidays

This year we went on holidays to Poland (the Mrs), Spain (both of us) – Malaga / Granada and Belfast. The Mrs also had friends and family over from Poland at different points throughout the year. I went on a stag do to Liverpool as well. This year wasn’t extremely lavish in the way of holidays but when we did go it was great.

When we go on holiday, we are normally more interested in the place we are going more than spending lots of money to sit in an expensive hotel. I would say we normally stay in mid-range hotels. This is mainly because we want to be out exploring and don’t intend on spending loads of time in the hotel – for example, in Granada we were too busy eating tapas and drinking Rioja. Somewhere that is nice enough as a place to sleep and allows us to enjoy the holiday without being the talking point (good or bad).

Eating Out

The eating out category also includes take away food. To be fair, when we have had a craving for food other than our own cooking we have quite often opted for a take away from a local “posh” kebab shop. They do the most amazing flat bread with wood fired chicken. Otherwise, we sometimes go out for dinner with friends. I would say we don’t spend excessive amounts of money on eating out but could also do better. In terms of restaurants, Newcastle has a lot to offer. We don’t tend to go to fine dining restaurants but we don’t penny pinch when we do go out either. Our favourite would probably be to go to one of the Indians or a Turkish place that does the most amazing Alinazik.

Gifts

This year I think we have been quite generous in terms of gifts – particularly at Christmas. Although we didn’t buy each other Christmas gifts and opted to plan a holiday in January (we still haven’t actually booked it yet). As the Mrs is Polish and Catholic, she gets to have both a birthday and a “name day”. I hadn’t heard of this before meeting her. The unfair part is I am not allowed a name day because I haven’t earned it? Not sure I should really accept that - what do you think?

Drinking Out

This one is one I think we could probably do a bit better on. I think particularly on my side. Although I have definitely improved since moving out to the coast. It is too easy to go out and have one too many beers. Although I am starting to get the age where I see it more as a health risk rather than being enjoyable. The problem is that in the UK it is difficult to meet up with friends without going for a drink. It’s a culture thing.

Transport

For transport, we only have one car between us – just a little run around. I sold my car in December 2020. I work from home now and have done for the last 3 years. So I decided to take the plunge and sell my car. We both work from home actually (well most of the time) so our travel is quite reduced. We mainly drive short distances (to town, the shops, etc.) or take the metro / train.

Clothing

This year we haven’t spent a lot on clothing (well I haven’t anyway) but it still seems to be coming out as quite a big number. Generally we both try to keep our clothing purchases low and look for deals.

Entertainment

This is a funny category and I am not exactly sure what we have included here. If I was to guess, this is likely things like football match tickets and the theatre. We also played squash throughout the year which we didn’t have a category for so this came under this.

Wrap Up

So there you have it, a bit of a profile on our expenses. I hope you found it useful and if you have any useful references / resources that you think we could benefit from, please put these in the comments. In general, we don’t see ourselves as living overly lavishly but we don’t live extremely frugally either. We like to be able to save but also live a relatively uncompromised life in the meantime.