# Spending Update 2024

I'm generally a pretty big fan of transparency, and one way I try to promote this is writing up our finances every few years ( [2022](https://www.jefftk.com/p/spending-update-2022), [2020](https://www.jefftk.com/p/spending-update-2020), [2018](https://www.jefftk.com/p/spending-update-2018), [2016](https://www.jefftk.com/p/spending-update), [2014](https://www.jefftk.com/p/spending-over-time)). This is also useful to me: putting things into a form where others can understand it is pretty good for getting myself to really understand it!

This post uses the same approach as [last year](https://www.jefftk.com/p/spending-update-2022), which is almost the same as before then. Numbers are monthly, based on 2023 spending:

*   Donations: $6.2k ([48%](https://www.jefftk.com/donations) of 2023 adjusted gross income)
*   Taxes: $3.4k
    *   Income tax: $1k
    *   State tax: $400
    *   Social Security tax: $900
    *   Medicare tax: $200
    *   Property tax: $800
*   Childcare: $4.3k ($200/workday, three kids)
*   Housing: $2.7k
    *   *Note: this is tricky; see details below on how this is calculated*
    *   One time expenses (all time)
        *   Purchase and all one-time expenses up through [the 2022 update](https://www.jefftk.com/p/spending-update-2022): $1.1M
        *   Major one-time expenses since the 2022 update: $19.4k:
            *   [Bathroom](https://www.jefftk.com/news/bathroom) renovation: $14.5k
            *   Porch roof replacement: $1.5k
            *   Replacement fridge: $1.8k
            *   Shower leak: $1.6k
    *   Ongoing expenses, covering the whole house including the tenants' unit:
        *   Electricity: $271
        *   Gas (Heat): $202
        *   Water/Sewer: $165
        *   Other: $165
    *   Rent income: $4.1k
*   Retirement saving: $3.7k (all pre-tax)
*   Other savings: -$6.4k (see below)
*   Medical: $244 in pre-tax health insurance, ~$400 in post-tax co-pays etc
*   Food: $732 (two adults, two kids, one toddler)
*   Other: $1k
    *   Includes phone bills, taxis, car rentals, clothes, vacation, stuff for the kids, and other smaller expenses.
    *   Because we are no longer tracking our expenses to the dollar, the distinction between "Other" and "Savings" is an estimate.

Here's a summary of our monthly spending as a table:

| Category | pre-tax | post-tax | total |
| --- | --- | --- | --- |
| Donations | $0  | $6,167 | $6,167 |
| Taxes | $0  | $3,400 | $3,400 |
| Housing | $0  | $2,793 | $2,793 |
| Childcare | $0  | $4,275 | $4,275 |
| Medical | $244 | $400 | $644 |
| Food | $0  | $732 | $732 |
| Other | $0  | $1,000 | $1,000 |
| Savings | $3,750 | -$6,000 | -$2,250 |

Comparing to previous years and adjusting for inflation, still monthly:

|     | 2024 | 2022 | 2020 | 2018 | 2016 |
| --- | --- | --- | --- | --- | --- |
| Donations | $6,167 | $35,870 | $23,614 | $14,750 | $16,053 |
| Savings | -$2,250 | $7,065 | $9,277 | $1,875 | $1,974 |
| Taxes | $3,400 | $15,217 | $5,301 | $5,188 | $5,447 |
| Housing | $2,793 | $4,022 | $3,892 | $3,438 | $2,461 |
| Childcare | $4,275 | $5,978 | $3,313 | $2,125 | $4,566 |
| Food | $732 | $748 | $904 | $938 | $303 |
| Medical | $644 | $773 | $784 | $933 | $417 |
| Other | $1,000 | $1,087 | $602 | $1,400 | $388 |

Here's this as a chart:

[![](https://www.jefftk.com/historical-spending-comparison-2024.png)](https://www.jefftk.com/historical-spending-comparison-2024-big.png)

The biggest changes with 2024 are:

*   Donations are down a lot, because our income is down a lot. We're still going for 50%, though I'm still unsure whether this makes sense given that our workplaces are both altruistically funded.
    
*   Savings are down a lot, showing up as negative above. A lot of this is an effect of the amortized approach I'm using for the housing accounting ([more](https://www.jefftk.com/p/spending-update)). Above I have our housing as $2,800/month, but a lot of that was effectively pre-paid through the [downpayment](https://www.jefftk.com/p/house-buying-timeline), [dormers](https://www.jefftk.com/p/adding-dormers-to-our-house), [mercury spill](https://www.jefftk.com/p/mercury-spill), [solar](https://www.jefftk.com/p/solar-one-year-in), [heating upgrades](https://www.jefftk.com/p/assessing-heating-improvements), etc. and at the time was counted as 'saving'. While we did spend $14.5k on [gut-renovating the first floor bathroom](https://www.jefftk.com/p/gut-renovating-another-bathroom), that's the only really big expense in the last two years: our house expenses have slowed down a lot. And we refinanced in 2021, spreading our remaining payments out over another 30y and dropping our rate from 4% to 3.375%.
    
    All together, if you just look at it on a cashflow basis (how much money left our bank account to deal with housing less how much came back in as rent) over the past two years we've averaged spending of -$442/month. That is, we've brought in enough from rent to cover the portion of our housing that we didn't pre-pay, with a bit left over. This is enough that, on a cashflow basis, we're not spending down our savings and are actually saving a small amount of money.
    
    This all feels awfully messy, but I guess handling this kind of complexity is why accounting is a profession.
    
*   Taxes are much lower. A more detailed view:
    
    [![](https://www.jefftk.com/taxes-vs-income-2024.png)](https://www.jefftk.com/taxes-vs-income-2024-big.png)
    
    Most of what's going on is that we're earning much less money, and so pay less in tax. Our income tax was maybe $5k higher this year than it should have been because half our 2023 donations [ended up](https://www.jefftk.com/p/a-strange-ach-corner-case) formally in 2024. It's also interesting that Social Security tax is now a much greater proportion: this is because it's 6.2% of wages up to [contribution and benefit base](https://www.ssa.gov/oact/cola/cbb.html), which was $160k in 2023. Since it's only linear up to that cap, and for many years I was earning more than the cap, it's grown as a fraction of our taxes.
    
*   Housing is down a bit because rent has increased (partly Boston [getting more expensive](https://www.jefftk.com/p/boston-rents-over-time-ii), partly [renovating and renting out the backyard office](https://www.jefftk.com/news/shed)).
    
*   Childcare is down a bit because we're now doing a nanny share. While the rates we're paying are a bit higher than the end-of-2021 numbers I used last time, each family now pays 2/3 of what they would pay if the nanny were watching only that family's children.
    

This is the first time I've included inflation in one of these posts, through a combination of it having a larger effect than before and my previously being too lazy to include it.

When I write this post in 2026, what do I expect to be saying?

*   I think there's a good chance we'll have switched from giving 50% to some form of [salary sacrifice](https://www.jefftk.com/p/passing-up-pay). If we do, our pay, donations, and taxes will all be a lot lower.
    
*   Childcare should be similar: the nanny share is working and I expect we'll do something similar at least until our youngest starts kindergarten in Fall 2026 (and will show up in the 2028 update).
    
*   I'd like to hope I have a better way of accounting for housing and savings in general and have gone back and redone all my previous numbers under the new system, but since that sounds like a ton of work I doubt I'll have done that.
    
*   I put about a 10% chance on AI, war, or other major events in this timeframe changing things enough that everything is weird in hard to predict ways.
    

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