Max Out of Pocket’s Q1 2020 Spending

What can I say? I guess the quarantine got me curious. The current state of the markets and ongoing pandemic motivated me to check in on our spending patterns for the first three months of 2020. In finance, we call this ‘quarter one’ (Q1 2020). I was thinking this would be more of a ‘yearly’ update on the blog. I suppose it doesn’t hurt to check in more often if I feel like it. To me, all of this is basically a hobby anyway.

I also recently documented how much cash I keep in my pocket. Since that decision was a function of our 2019 expenses, I thought I would make sure things are still in line.

In my early days of personal finance, I would pretty much check in on our expenses monthly. I wasn’t getting as much value from it in 2019, so I backed off going through this process as often so I could focus on other things.

I am a big fan of going through this process manually. It probably takes me 30-60 minutes. There are plenty of personal finance bloggers out there who swear by Mint or Personal Capital for expense tracking. Automation is great if you understand what you are automating. I download our transaction history from our Fidelity credit card into Excel and self-categorize everything manually. There is definitely value in doing this the long way, particularly early on in our understanding of personal finance. I am probably far along enough in personal finance mastery where automating might make some sense. I suppose part of me is still old school.

So what’s the damage? From January – March 2020 the Max Out of Pocket Crew saw $10,941 leave our pockets.

Q1 Spending

Annualizing Expenses

As I like to say, some might look at this and think we are slumming it. Others might say we have a spending problem on our hands. Max, I am more than comfortable where things are. We live a good life and that’s what makes personal finance ‘personal’.

Making some small adjustments, if we hold this trend, we will come in at $41,365 for the year.

If you don’t know how to annualize your expenses, don’t sweat it. You basically take the total expenses to date, divide it by the number of months, and multiply it by 12.

For example, our rent. Annualizing this out, I can project we will spend about $12,000 on rent assuming all things stay the same.

$3000 / 3 months = $1000

$1000 X 12 month = $12,000

I made a small adjustment to utilities because we had a $700 tank of oil delivered in February. It doesn’t make sense to annualize that because we probably won’t get another delivery in 2020.


Housing is holding tight at $1,000 a month. This comes in at $3,000 for the first three months of 2020. This represents a whopping 27% of our entire spending for the quarter. I suppose having a place to live and sleep is important and probably not something we are looking to cut back on.

Our rent has been flat since we moved to New England back in 2017. Thinking about it, if I take my “half” of the rent, I am paying what I was paying way back in 2006 to rent a room in Nashville, TN. When I started my first job out of college, I was still paying $500/month way back then. Hard to believe I have been able to hold this expense flat for so long.

We currently live in a modest house nestled in the mountains. We have a babbling brook behind our house. It is a pretty amazing setup.

Food and Dining

We spent another $2,736 on food and dining. This includes things like eating out, groceries, shampoo, cotton, toothpaste, and alcohol. I don’t itemize this or anything so if Mrs. Max OOP happens to slip in her favorite movie into the cart while we are at Walmart, it probably accidentally gets counted as a grocery. Overall, this is about 25% of our spending from January through March. We beefed up (no pun intended) our grocery bill in March in response to the pandemic. We didn’t go crazy or anything, just a heavier inventory of food in the house. Our deep freezer purchase from 2019 certainly came in handy.

Our $179 deep freezer

About $500 of this was spent at restaurants and coffee shops. This will drop to $0.00 in April due to the pandemic. This is a number I like to watch closely and a category most families in America struggle with. For us, it includes things like ordering a drink at a pub, dinner, fast food (rare), or anything like that. We are not afraid to spend money on a nice meal; we spent $84.00 on a lunch (and drinks) while we were skiing one weekend in early March.

Annualized, this will come in at $10,944 which is over $1,000 less than where we ended 2019. I’ll tell you, after April we will be looking even better.


Utilities include things like electric, oil, internet, cell phones, and our Netflix subscription. This category came in at $1,572 and is inflated because we had a $716 oil delivery in February. Unfortunately, we use oil to heat our poorly insulated rental house and it is expensive. This oil fee only hits a few times per year so I excluded some of it in the annualization of our utility expenses.

Everything else looks pretty good except we are still overpaying for the internet. Electric should start coming down in April since we are no longer using the space heater to keep our bedroom warm at night.

Auto & Transport

As I mentioned in my 2019 update, this is an area we do really well in. Our only expense here was gas and that came in at $359 for the quarter. I will say, April is shaping up to be a $0.00 gas month since Mrs. Max OOP is teaching from home and my commute is less than 2.5 miles. I do think I have an auto insurance bill coming from Geico that will probably run me about $300 for both vehicles.


Last but not least, the dreaded miscellaneous category. This came in at $3,274. Frankly, 58% of that was spent on our two cats. Charlotte is sick and ran up $1,593 in vet and prescription bills. I suppose it is worth keeping her around, though. She is often sitting right next to me when I write these posts, as she is now. In theory, I hate cats and I am probably seriously risking my credibility by posting yet another photo of this cat. I guess she has grown on me over the years.

This is the thanks I get as I head to work to pay off the vet bills

Mrs. Max OOP also spent about $191 on a new United States passport now that she is officially a US citizen. Hopefully, the last expense associated with that process.

That’s technically my American passport, Mrs. Max OOP’s should come soon

Like I did with my 2019 update, I am going to do a rapid-fire 80/20 rule to make sure I understand where at least 80% of our miscellaneous expenses went.

  • $1,593 for the cat’s food, litter, and vet bill. Ouch.
  • $326 for more dental work for me and this will technically be paid from my HSA. I should be all set for awhile.
  • $191 on Mrs. Max OOP’s new United States passport.
  • $140 for Turbo Tax.
  • $135 on the blog – renewal fees (I take donations).
  • $113 gifts for family.
  • $100 cash withdrawals from ATM – no idea where this money went, I don’t think it has been spent yet.
  • $96 from the gym, technically offset by my healthy benefits.
  • $60 for a secret project Mrs. Max OOP is working on.
  • $46 for our PO Box renewal.
  • $42 for Mrs. Max OOP’s hair cut.

This covers 87% of this category for January – March.

$2,842 / $3,274 = 87%


How can a blog called Max Out of Pocket just ignore healthcare premiums? I prefer to tackle those on their own since there are so many moving parts to them. My current costs don’t reflect how my costs would look if I wasn’t employed. Last year, my plan was valued at $21,564. There are also FICA considerations when we buy things off a cafeteria plan.

So once again, I am keeping my employer-sponsored healthcare premiums out of this calculation. I pay $191.24 per pay period for health insurance and through March there have been seven pay periods. This comes out to $1,339 in premiums. By the end of the year, I will pay exactly $4,972 for our portion of the health insurance.

After throwing Mrs. Max OOP off the dental in 2019, I put her back on the plan for 2020. We have paid $26.18 per pay period for that coming in at $183 through March. That will run us exactly $680.68 in 2020.

Final Thoughts

Even with a sick cat, for the first 3 months of 2020 we are coming in light on expenses compared to 2019. Annualized, I am projecting about $10,000 less in expenses in 2020 as compared to 2019. With the pandemic shutdown really ramping up in April, I expect that gap to grow. Thankfully, so far our W2 income has been steady despite layoffs and pay cuts across the country. Not everyone is so lucky.

$51,436 (2019 Expense) – $41,365 (2020 Annualized) = $10,071

2020 Expenses Compared to 2019 Expenses

Does that mean I can reduce my cash allocation down from $51,436? Not so fast. Three months isn’t a trend. I have also not addressed a move like that in my “investor policy statement” yet, a document I am still drafting up. I need to have rules in place before I make adjustments to things. So I will hold onto my $51,436 VMMXX allocation as is.

We do have some planned expenses for the latter part of the year related to a top-secret project Mrs. OOP is working on. That project would likely take place in Canada. With that, there will be some income reductions to allow her to focus on it for a few months. She may make up some of that income over the summer, but there are too many unknowns to justify reducing our cash allocation yet. So we will hold tight, and see what the next few months bring.

How are your first few months of 2020 coming?


2 Responses

  1. Dragon Guy says:

    I appreciate your acknowledgment that you are excluding health insurance costs. I think many people easily overlook that since it is deducted from one’s paycheck. From a long term planning perspective, do you at least include some estimate of it in your calculations for a financial independence number?

    I’ll be interested to see what you do with your Investor Policy Statement. Although we have an early retirement plan, I haven’t built a separate IPS, but I really need to.

    • Max OOP says:

      Hi Dragon Guy,

      I have not done much long term planning in that department believe it or not. Our plans are all over the place at the moment and require built-in flexibility.

      One plan involves moving to Canada (now that Mrs. Max OOP is a US citizen) and my understanding is her Canadian Health insurance would turn on about 90 days after that move. I am still researching how my path to health insurance would look in Canada. Call it a form of ‘healthcare geo-arbitrage’ in the making.

      If by chance we both decided to retire early or take a sabbatical in the States, I think I am familiar enough with the healthcare system that I would consider going self-insured or short term travel insurance. I wouldn’t recommend this for anyone, but I understand the system enough to make that work. I could negotiate with just about any hospital out there and we have over 50k in our HSA. If either of us had a major issue come up, we would probably settle down close to a really good hospital and one of us would get a part-time cleaning/cafeteria position at the hospital and jump on the insurance. We would have insurance within a month. The black swan would be if both of us got a major disease at the same time.

      As for the IPS, mentally, I was more than ready for this bear market. I just see an opportunity to give me better direction in how and when to invest and correct allocations during times like these.


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