My Monthly House Expenses – Mid-2016 Update

Hello everyone!  I wanted to be able to update one of life’s biggest monthly costs that I am chewing on – and that is – the cost of living in my house each and every month.  Surprisingly it has been over 2 years since I have written about my payments that go out each month, and to show the community whether that has changed for better or for worse, even though I internally review this each and every month.  I find more data and time interesting, as it can really tell how well you manage and how consistent you are able to keep with your management & money.  Without further-ado here is my 2016 update to my housing expenses!

pay down the mortgage or invest

May 2014 Re-Cap Housing expenses

Way back in the day, er-circa May 2014, I had a post regarding my fixed expenses, which including my rough average of housing expenses.  Back then, on average, I was around $942.00 per month.  What did this include: Mortgage, Mortgage interest, Property Tax, House Insurance, Utilities (Gas, Electric, Water/Sewer), Netflix (NFLX) and Internet.  My Mortgage with interest, taxes and insurance at the time was $788, with the average of the others in order from above at: $68, $25, $17/$10, $8.50 and $25.50 (at that time had a promo deal going).  That is what embarked my end amount at approximately $942 each and every month.  So what has changed?  What has happened?  Well, I believe we all know now about my battle of internet with AT&T and ultimately switching.  Further, I always ask the readers and community whether I should pay down the mortgage or invest and even with asking when the Netflix (NFLX) cost may be too high to continue to use.  The question then is – has my amounts gone up, stayed the same or even lowered?  We all love to save money and to keep our expenses in check, but how well did I do in 2 years, given the increased cost of everything – property taxes, insurance, utilities, you name it.  Further, this was prompted in one of my dividend income articles and a reader suggested I do an update, so here we are… The analysis – Mid-2016 style!

Mid-2016 Housing Expenses Analysis

I thought I would break the last 12 months down in a very easy to read format, and then to document the results and analysis to show what has occurred in 24 months.  Here are the last 12 months of home expenses:

Last 12 months of house expenses

Well, first off the bat – we can see that only this current month and last July that my main expenses on the house are below my prior average of $942, and that came in at $920.47 and $932.09 as you can see above (hilarious).  Including those two, and others, I was below $950 for the month 4 total times and over $1,000 3 different occasions.

Internet is now within check, at $24.99 versus the previous $25.50 two years ago and the even more recent $37.00 per month.  Additionally, Netflix is now $10 per month (not included above) going forward.  My sewer on a monthly basis was approximately $7.95, with water at $19.27, therefore – truly staying consistent and comparable to two years ago.   Gas, on average, is now at $46.20 with Electricity at $21.15, which are both lower than they were on average 2 years ago (primarily because I kicked my roommate out during that year of 2014).  Now the big kicker – the mortgage, interest, taxes and insurance is now at an average of $853 vs. the $788 from prior year – with the primary focus on the tax and insurance – both are WAY up in two years.  But what does all this mean?  What do the full totals come out to?  That new average total = $984.00

In conclusion and summary – My new monthly expense average that I will be using in comparison is $984 vs the previous $942.   This is up $42 in the course of two years, or 2.29% in 2014-2015, and then 2.18% increase from 2015-2016.  These are moderate increases, but $42 per month more x 12 months = $504 on an annual basis, that could be a stock purchase!!

Action, Thoughts & Summary

The absolute biggest jump here is the tax and insurance on my house, NO doubt.  I have two actions here: Do nothing or Do something.  My plan of attack is to see what my next house insurance premium will be going forward.  If I see another change that is higher – I will call and argue on it.  If they can’t do anything – then it’s time to say goodbye to my house & auto carrier altogether, as I had to kick some ass on my auto insurance to reduce that finally to an average of $65 per month.  So one more rate increase and it’s off to bidding wars with at least 5 carriers to see if I can keep that in check or to reduce.  Property taxes are a little harder to defend, that I’ll have to do more research on.  All other expenses such as gas, electric, water/sewer and internet are all in check, so I feel OKAY here.  Would you agree?  These could be a few reasons why Bert is in no hurry to buy a house, I guess? haha

With my expenses laid out – is there anything else that you see?  Should I reduce somewhere else?  Are you seeing any increase in your house that is mind boggling?  Thanks for reading, stopping by and your thoughts!  Much appreciated and talk soon.

-Lanny

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12 thoughts on “My Monthly House Expenses – Mid-2016 Update

  1. And Auntie Janet says there isn’t any inflation…Kind of funny that it works out to just around 2% isn’t it?

    Is your trash service part of the sewer bill? Ours is separate. At least you don’t have an H.O.A. I have a hard time knowing if we get our money’s worth out of that. We also need to pay for a pest control company. I swear this town was built on an ant hill.

    Looks like from the link to your mortgage post you’re at 4.375%. You might want to look at refinancing before rates start going up. I haven’t closed yet, but I’m in the refi process now and Capital One locked me in at 3.85%…it might be worth a look anyway.

    We’ve looked at capital improvement projects to try to bring down our energy costs, but we’re in a similar boat as you. With gas and electric costs that low, the ROI on any kind of major efficiency projects (new windows, insulation, solar, etc.) would take forever! Say you could cut your energy cost by 30%…or even completely eliminate your electric bill…which would be a huge savings, that’s still only ~$20/month. It would take 20 years just to pay off a $5K project (okay…more like 13 years if you can earn a 7% return on the money you save)…but I doubt $5K would be a big enough of a project to garner that kind of savings anyway.

    In other words…I don’t think there’s too much you can do to get this a lot lower…other than pay off the mortgage 😛

    • Catfish,

      Great comment. It does feel like we never achieve “value” from the fees surrendered for “services”. My garbage is part of my local taxation, so all covered within there. With the rate at 4.375% and my mortgage balance not too significant (just south of $80K), it makes refinancing not too intriguing with closing costs for a half percent break. With home improvement projects – my utilities are rock bottom right now haha. It sucks! I think I can do something with house insurance and keep researching on how I can build a case for lower property taxes (though not sure how successful I would be there). Great ideas and I appreciate you for sharing!

      -Lanny

  2. Hi Lanny,
    Great job on keeping the costs fairly level – you’re doing a fantastic job! I just wish my house expenses were nearer yours!

    Does your mortgage payment include the insurance premiums in escrow? I used to do that but now pay the insurance premium directly so that I can get additional credit card rewards and control the costs better.

    Best wishes,
    -DL

    • DivLife –

      It does include my house insurance premium. I love the idea of separately paying the house insurance for at least some sort of cash back perk – thank you for sharing that tip. Hmm… time to get the gloves on and battle though as well? You know I love doing that.

      -Lanny

    • D4S,

      Appreciate the stop by and the confidence boost/analysis/review by you as well.

      I’ll more than likely keep making extra payments knocking the principal down, but funny to do at such a low interest rate. Ah.. the life and inner battles of being a home owner. Thanks again!

      -Lanny

  3. This is a great visualization of inflation. You are working on being consistent, and things go up. So important to remember when we plan for our futures.

    • ZJ,

      Thank you. I think this is one takeaway from the post – that no matter how much scratching/clawing – inflation is occurring. I had to fight fairly hard on all items (O/S of property tax and refi – though i did talk to about 4 banks that told me it made no sense to do so), and I still suffered an increase. AKA – inflation is real.

      -Lanny

  4. All I can say is wow, that’s pretty cheap compared to Australia. I think there are just certain things that you have to accept as a homeowner – you are smashing your savings rate and you’re investing lots of money. Eventually you’ll have that loan paid off and you’ll be better off monthly than your bro, that that point, all these payments will be worth it. Plus you’ll have a great asset 🙂 Patience young (older than me) padawan, eventually you’ll be glad you’re paying these things.

    Tristan

    • T,

      Thank you very much for the comment. Haha – I’m the old man here! Almost gearing towards the big 3-0… damn! But you are right, I’ve been lucky as well to keep my monthly expenses living at the house in check, even over a 2 year period. It’s very weird looking back over such a long stretch and to see that no real significant changes. The long-haul, is just that – long and sometimes feels like a haul, for sure.

      -Lanny

  5. Less than $1000 is amazing. I am jealous. I rent a 1+ den condo unit in downtown Toronto and pay $1700 monthly including all utilities. I wish mine was around $1000 so that I could compound $700 /month extra for years. 🙂

    Cheers!

    BeSmartRich

    • BSR,

      Thank you and I do feel lucky to pay less than $1,000 but I know a few people paying less than $500 and an extra $6K per year would be nice, right? haha

      But downtown Toronto I know is wild – the market has been BOOMING there. That’s just a whole nother ball game/league.

      -Lanny

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