For the last four years I've been putting together reports on our spending over the Australian financial year, which runs from 1 July to 30 June. This makes it easy to do a break down of gross income including taxes that's comparable to many you'll see online, though all our numbers are in Australian Dollars. At the top level we can break down total income (as reported in our tax returns plus superannuation contributions):
The gross income for this year is just an estimate. Tax includes local property tax as well as income tax and tax on superannuation contributions. Investing costs include margin interest. Mortgage interest is included in spending, while mortgage principal payments are considered as saving. Spending also includes the insurance premia paid through our superannuation. Current saving is then what is left over. This is much bigger than saving out of salaries because gross income includes investment returns reported in our tax returns. The latter number depends on capital gains reported for tax purposes, so is fairly arbitrary. Still, it has increased each year over this period. Spending also increased until this year when it was flat. Graphically, it looks like this:
We break down spending into quite detailed categories. Some of these are then aggregated up into broader categories:
Our biggest spending category, if we don't count tax, is now childcare and education, which has risen steeply. Given this it is surprising that spending didn't increase this year. Commentary on each category follows:
Franking credits: Income reported on our tax returns includes franking credits (tax paid by companies we invest in). We need to deduct this money which we don't receive as cash. Foreign tax paid is the same story.
Life and disability insurance: I have been trying to bring this under control and the amount paid has fallen as a result.
Health: Includes health insurance and direct spending. Spending peaked with the birth of our second child.
Housing: Includes mortgage interest, maintenance, and body corporate fees (condo association).
Transport: Continues to rise as I spend more on Uber and e-scooters and Moominmama drives more.
Utilities: This includes spending on online subscriptions etc as well as more conventional utilities.
Supermarkets: Includes convenience stores, liquor stores etc as well as supermarkets.
Restaurants: This was low in 2017-18 because we spent a lot of cash at restaurants. It's low this year because of the pandemic.
Cash spending: This has collapsed. It's hard to believe it is really that low, but that's what the numbers say. Moominmama also gets some cash out at supermarkets that is included in that category.
Department stores: All other stores selling goods that aren't supermarkets. No real trend here.
Mail order: This continues to rise. For example, I recently bought a new iMac by mail order.
Childcare and education: We are paying for private school for one child, full time daycare for the other, plus music classes...
Travel: This includes flights, hotels etc. It was very high in 2017-18 when we went to Europe and Japan. This year it was down to zero due to the pandemic and having a small child. We haven't travelled in Australia either. With the family it needs a lot of planning and borders are likely to suddenly close.
Charity: A growing category.
Other: This is mostly other services. It includes everything from haircuts to professional photography.
Clearly, we only kept spending under control in 2020-21 because we have stopped spending on travel and greatly reduced spending on restaurants.
