Build Family Wealth and Happiness.

Fill out this form to receive our free 39-page Family Wealth and Happiness guidebook. You'll also receive periodic updates from me to help you take your family to the next level.

July 15, 2019

How We Decreased our Spending by $20,000 (While Increasing Our Fun by $10,000)


This post may contain affiliate links or links from our advertisers where we earn a commission, direct payment or products. Opinions are the author's alone, and this content has not been provided by, reviewed, approved or endorsed by any advertiser. Information shared on this site is for entertainment purposes only and should not be considered as professional advice.

In order to achieve financial independence, you need to first understand what your annual expenses are. That’s how much money you need to live comfortably every year.

Your annual expenses can include things like housing, transportation, food, utility bills, entertainment, travel and the many other things that make your life … well, your life! 

For our family, I’ve found that number to range between $60,000 and $70,000 per year. That number is after taxes and it doesn’t include money for saving and investing. 

With lower annual expenses, it would definitely be a lot easier for our family to become financially independent.

If we're using the 4% rule to calculate how much to save to become FI, then we’d need $1,500,000 – $1,750,000. Considering I have around $4,000 in a taxable brokerage account at 37 years old, that’s going to take quite a while!

But a few years ago, I started interviewing people on my podcast about their financial independence plans and successes.

I’ve chatted with some couples that happily live on around $30,000 – $40,000 per year. With annual expenses like that, you could hit FI at $750,000 – $1,000,000. That’s a  lot more feasible when you factor compound interest into the equation.

As I continued these interviews, I got inspired to lower our family’s annual expenses. With lower expenses, our family would be able to hit FI much sooner!

I was also conscious of not whittling down our expenses so much that we wouldn’t have fun together during the early part of my marriage and our kid's lives. 

So … how can we decrease our annual expenses while increasing the fun in our lives?

Well … here’s what our family did over the last 4 years to make this a reality. 

Decreasing Our Expenses

1. Pay off the Mortgage

When we bought our home in 2013, my wife and I agreed that we’d pay off our mortgage in less than 5 years. This would allow us to own our dream home in our ideal neighborhood with a great school district … and live there mortgage-free. 

This 4-year mortgage freedom process helped us to reduce our annual expenses by $14,000 per year. 

Mortgage Freedom chart

2. Save Money on Groceries

In 2014, we were shopping at Kroger for our regular grocery needs. It’s a great store with an awesome selection, but it’s a little pricey. 

After chatting with some frugal shoppers, I learned about Aldi. My wife was hesitant at first because of the following reasons:

  • The store was 15 minutes further from our house
  • You had to bring your own bags
  • There weren’t very many brand name items
  • And you had to bring a quarter to get your own shopping cart (you get it back at the end, but nevertheless … it was different!)

She decided to go anyway (because she sometimes indulges my craziness) and to her surprise, she started to REALLY like it.

Fewer choices meant a quicker shopping experience and the “bring your own bags” thing filled up her environmentally conscious heart. 

My frugal experiment worked too. We saved around $3,000 by making the switch to Aldi. And the stars aligned for my awesome wife as well! A brand new Aldi opened just minutes from our house last year.

3. Crush the Monthly Bills

My next victims were our monthly bills. These included:

  • Cell phone
  • Electric
  • Cable

To save on our cell phone bill, it was a quick and easy process really. Nicole and I were on separate cell phone plans. By combining into a “family plan”, we saved around $400 per year. 

For the electric bill, I’m going to attribute our overall annual savings to our Nest Thermostat.

Now, I don’t have ANY actual proof whatsoever, but that’s the only major difference we’ve made in our electrical spending. My favorite feature is the “ECO” mode. It essentially turns your AC unit off while you’re away from the house automatically.

Our overall savings for electric between 2014 and 2018 was around $600.

Lastly, we cut the cord on cable. Simple as that. Bye-bye Comcast and hello $600 of annual savings. 

Increasing Our Fun

1. Vacation More

In 2014, we didn’t travel very much. We had a newborn baby and went down to 1 full-time income instead of 2 so Nicole could become a Stay-at-Home Mom and take care of our two kids. 

Now that our kids are older, we want to vacation more. Last year was our first test run at more travel and more fun. We increased our travel spending by $5,000

We went to Cabo San Lucas (well, that was on points), Northern Michigan, Los Angeles (points again) and Cancun. It was an incredible year of vacation fun. 

2. Give More to Charity

Something that brings a smile to our face is giving away our money. There are causes and charities that our family is passionate about.

Here are a few of them that I've had the pleasure to interview on my show:

When you have money to give, it feels incredible to be generous. In 2018, we set a goal of giving 3% of our income to charity. We were happy to achieve that goal and teach our kids the importance of giving as well. 

Overall in 2018, we gave around $3,000 more than we did in 2014. This spending makes us happy and others as well. 

charitable giving chart from 2014 to 2018

3.  Schedule Activities for our Kids

We love our kids to freakin’ pieces and we want them to have happy, healthy and fun childhoods. With that desire, comes some investment. 

Last year, we signed our kids up for summer camps, swimming lessons, the soccer team and, of course, pre-school. This increase was around $2,000 more than what we spent in 2014. And we’d do it all over again.

Andy Hill and son laughing
Daddy's boy …

All of our Expenses

When you combine our annual expenses that decreased and the ones that increased, we see a net savings of around $7,500. Not bad!

Here’s the full chart that shows more categories of increases and decreases over the period of 2014 to 2018:

2014 to 2018 spending chart

Now, will $63,548 of annual expenses make it easier for our family's financial independence plan? Probably not by much, but it doesn’t hurt our chances either!

According to the 4% rule, that’s about $187,000 less we’ll need to save up to hit FI. That’s right! A $7,500 difference in annual spending can dramatically affect the savings required to become financially independent. 

What I’ve learned by analyzing our spending differences over the past 4 years is that, as long as we’re increasing our happiness and decreasing our spending on the “unimportant stuff,” we’re headed in the right direction.

And really, I’m already feeling pretty financially independent without actually being financially independent. 

What do you think of financial independence?

Is it motivating you to decrease your annual expenses? 

Please let us know in the comments below.


Marriage, Kids and Money, Andy Hill

Show Sponsor


Refinance your student loans and save thousands. Click here to learn more.

MKM Podcast Resources

Personal Finance Coach, Personal Finance Influencer, Personal Finance Speaker

Personal Capital: Track your net worth for FREE and receive a $20 Amazon credit! (FYI – You’ll need to sync up one investment account)

Personal Capital Charts

Thriving Families Facebook Group:  Join our new FREE Facebook Community!

Support this Show

If you enjoyed this episode, here are some excellent ways to support the show:

I truly appreciate the support everyone!


I’d love to hear from you!

If you’d like your question featured on the show, reach out and let me know. It would be my honor to support you in your journey toward financial freedom.

Leave me a voicemail or connect with me on TwitterFacebook or shoot me an email.

Carpe Diem Quote

“Being rich is having money; being wealthy is having time.” — Margaret Bonanno

decrease annual expenses

Andy Hill

Andy Hill, AFC® is the award-winning family finance coach behind Marriage Kids and Money - a platform dedicated to helping families build wealth and happiness. With millions of podcast downloads and video views, Andy’s message of family financial empowerment has resonated with listeners, readers and viewers across the world. When he's not "talking money", Andy enjoys being a Soccer Dad, singing karaoke with his wife and relaxing on his hammock.


  • Great post! I am currently trying to bring down our families annual expenses. Just this week, I went into an Aldi store for the first time. It is incredible how much that can help with your food cost. Loved hearing how you were able to cut out $20,000 in expense. Your families story is very inspiring.

    • I’m so glad to hear that! The Aldi prices are crazy – aren’t they?!

      Thanks for sharing your feedback. It means a lot to me!

  • Wow, a $350,000 mortgage in 5 years? That’s pretty impressive! No wonder you were able to lower expenses so much over the course of one year. But it’s great that you were able to trim in so many places. We don’t have any Aldi stores here in Arizona, and I definitely feel like I’m missing out when I hear these great savings stories!

    • To be specific, it was a $195,000 mortgage. The home value was $350,000. We put in a large down payment when we bought the home in 2013.

      But thank you for the kind words!

      Aldi is a bit magical on the wallet, but Walmart is also a good option for low cost with organic options. We don’t shop there much but I’ve heard it’s comparable.


Leave a Reply

Your email address will not be published. Required fields are marked *

Marriage Kids and Money Podcast

About Marriage Kids & Money

The Marriage Kids and Money Podcast is dedicated to helping young families build wealth and happiness.

With over 400 episodes and counting, we share interviews with wealthy families, award-winning authors, and personal finance experts to help you find your version of family financial independence.

Scroll to Top