A Software Engineer's Path to Financial Independence and Early Retirement (FIRE)

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The Ultimate Guide To Cost Cutting

Our 2019 Expenses and Tips for Cost Cutting

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Many engineering couples (especially when both spouses are working) belong to the “High Income High Expenses” category. At least, we do! The goal of this post is for us to show our 2019 expenses (with the goal to reduce them next year) and to also share what we are doing to reduce them. We’d also love to get your suggestions about additional tips for cost cutting!

In my blog post “Your Plan to Achieve Financial Independence” I provided a list of 7 steps that I can be used to minimize expenses:

  1. Monitor your expenses for a few months (using Mint, Personal Capital, Excel, credit card reports, paper or any other way that works for you)
  2. Write all your expenses down (on a piece of paper, in Notepad, in Excel, etc). Order them from the highest total expense to the lowest expense
  3. Go down the list one by one and find ways to reduce each item as much as possible. You can brainstorm, search the internet, ask friends, etc)
  4. Create expense targets for each category, based on your findings
  5. Use these expense targets as the basis of your first budget
  6. Try to follow your budget as much as possible within the next few months
  7. Go to step #1

Look everywhere you can to cut a little bit from your expenses. It will all add up to a meaningful sum.

Suze Orman

We personally track our expenses using Mint and Personal Capital. They do a great job in providing a high-level overview of the trends, our net worth, send alerts, etc. However their automated way to categorize each expense could definitely be optimized. As a result, I downloaded all our 2019 expenses and manually categorized them. It just took me 10-15 minutes, so it was not so bad. Here is the end result:

The total expenses for 2019 were almost $150k! It is definitely not a surprising number, since it’s on par with our 2018 expenses. However, it would be great to reduce it for next year! I’m definitely looking forward to the day, when the mortgage will be paid off and my children will be in public schools, which will reduce the annual costs by $50k.

The next sections will talk about each category and our tips on reducing each expense.

Our 2019 Expenses and Tips for Cost Cutting - Mortgage

Mortgage – $31,896.60

What is included:

This is the mortgage for our primary house. It is a 15-year fixed mortgage with a 3% interest rate.


  1. Reduce your interest rate: Right now the mortgage interest rates are rock bottom, so it definitely pays off to shop around and find the lowest interest rate available. Typically credit unions provide lower interest rates than banks. Just pick a reputable financial institution that provides the lowest rate.
  2. Reduce the mortgage length: Going for a shorter mortgage does increase your monthly payment, however it is definitely worth to pick the lowest duration that you can afford. Did you know that the total interest that you pay for a 30-year mortgage is more than double of that of a 15-year mortgage?
    • For example, today’s (1/10/2020) rates at Bank of America are: 3.5% for a 30-year mortgage and 2.875% for a 15-year mortgage
    • The 30-year $1M mortgage with 3.5% interest will cost you $1.62M within those 30 years. This is 62% higher than the principal!
    • The 15-year $1M mortgage with 2.875% interest rate will cost you $1.23M. This is almost $400k less than the total cost of the 30-year mortgage (which corresponds to 40% of your principal)!
  3. Utilize the Home Equity Line of Credit (HELOC): In our case we financed some part of the mortgage using a fixed-length mortgage and another part using HELOC. We paid down the HELOC to $0 quickly, which means that we only had to pay the fixed-length mortgage. This allowed us to reduce the monthly payments and switch from a 30-year mortgage to a 15-year mortgage
  4. Forget about the tax benefit of a mortgage: In the past, one of the “benefits” of a mortgage was that the interest was tax deductible. However, with the latest tax laws and the increase in the standard deductible from $12k to $24k (for a married couple), most families will not be able to itemize. This means that the additional paid interest is not tax deductible anymore.
Our 2019 Expenses and Tips for Cost Cutting - Daycare

Daycare – $21,230

What is included:

Daycare for one child. Unfortunately, daycare in our area is quite expensive. We found a great school and we don’t want to compromise in this category.


  1. Dependent Care FSA (DCFSA): Use up to $5k of pre-tax income to pay for daycare. Depending on your tax bracket, this could be $1,500-$2,000 of “free money” compared to not using this benefit. You can read more about this tax benefit in Investopedia.
  2. Consider other daycare options: Before finalizing our daycare, we looked at several different options, some as home daycares, smaller/larger daycares, nannies, nanny shares, etc. Find the best one that works for you. Each one is different!
  3. Delay sending your children to daycare as much as possible: We utilized the full length of our maternity and paternal leaves for our children. We took them in order (i.e. one after the other), in order to delay sending the newborn to daycare. We also had family, who took care of the newborn, after our leaves were over (and we are REALLY grateful!). Apart from the financial benefits, this is a great opportunity to spend time with those cute newborns. Your children will never be so young again!
Our 2019 Expenses and Tips for Cost Cutting - Home Maintenance

Home maintenance – $16,254.47

What is included

This is the amount that we paid contractors for painting, fix damages, etc. Unfortunately this year we had quite high expenses for home maintenance, especially because we had an unpredictable damage due to cold weather. Hopefully this expense will be lower next year!


  1. Get multiple quotes: Every time that we had to hire a contractor we got at least 3 quotes. We found most contractors from Yelp, after looking at their previous reviews. In many cases, the highest quote was 2x-3x the lowest quote for exactly the same task!
  2. Consider when/if you should utilize your home insurance: In theory, we pay for home insurance, in order to get reimbursed for damages in our house. In practice, if we do get the reimbursement, then the next year’s premium might increase and there are several cases in the internet, where the insurance company decided to stop covering the house. Take everything in advantage when you select a house insurance and also when you want to use them. We have decided to only use them when something really catastrophic happens, i.e. when the amount of expenses is so high that we cannot cover it ourselves easily. This might not work for everybody, though.
Our 2019 Expenses and Tips for Cost Cutting - Groceries

Groceries – $15,267.21

What is included

This is a very high expense, because we are mostly buying organic food and cooking at home. We feel that this is important for us, as we want to invest in our family’s health, so we cook at home from scratch. Most of our expenses are in the following stores:

Whole Foods$6,764.90
Trader Joe’s$3,259.81


  1. Compare prices: Prefer Costco, Trader Joe’s, Aldi and other lower cost grocery stores.
  2. Create a meal plan: Every Friday at the dinner table we discuss what we’re going to eat next week (breakfast, snacks, lunch and dinner). Then we write down an explicit shopping list for all the ingredients that we need (as well as their quantities). We create a shared list using a cell phone app. For each line item we write down the store that we’ll buy it from (based on previous experience regarding their prices). Currently, we are quite knowledgeable about the relative prices, however in the beginning we spent quite some time to compare store prices (as I mentioned in suggestion #1) and finalize where we’ll buy each item from.
  3. Only shop with a shopping list. Also, only shop once a week: Once a week we do our weekly food planning and create a shopping list. This way we are targeted when we go to the store. Before we started using a shopping list, we did lots of impulse buying and had to throw away lots of items when they went bad. We also went to the store every couple of days, because were always missing items when we were trying to cook for the next day.
  4. Buy items when they are in discount: Use the retail store’s mobile application to find out which items are in discount and which ones will be in discount the following week(s). When an item is in discount, buy it in bulk. This applies especially to items with long shelf life, such as dry grains, dry legumes, flour, nuts, seeds, etc.
  5. Buy items from the bulk section: This is almost always a cheaper option than buying packaged items. However, you should do your own research, because the corresponding packaged items might be cheaper due to discounts.
  6. Buy a mini freezer to store items: We bought an Insignia 10.2 cu ft mini freezer from Best Buy and it has been very useful, as we use it to store the items that we buy in bulk, especially meat, fish, seafood, frozen vegetables and frozen fruit (see suggestion #4 above)
  7. Local farms: Search your area for local farms that might sell produce directly to consumers, in order to avoid the additional markup from retailers/wholesalers. For example, during the last few months we reduced our weekly expenses by 40%, because we were buying fresh organic in-season produce from a local farm.
  8. Amazon Rewards Visa Signature credit card: Receive 5% cash back at Amazon and Whole Foods, after you become an Amazon Prime member (which has an annual fee of $99). If you are not an Amazon Prime member, then you will receive 3% cash back. So if you spend more than $4,950 in these two stores, then it’s worth to become a Prime Member.
  9. Costco order history report: You can talk to Costco customer service (e.g. via the costco.com website) and ask for a full history of all your purchases. They will email you a pdf with the date, item number, product description, department number, and cost. This is a great way to understand where you are spending your money at Costco (and price compare with other places as well)
  10. Kroger Order History: If you have a Kroger Shopper’s Card (e.g. from Fred Meyer), then you can login to the website and see the list of purchased items. Unfortunately, there is no way to download this list, so there is a lot of manual work to analyze your purchase habits at Kroger.
Our 2019 Expenses and Tips for Cost Cutting - Travel

Travel – $13,516.81

What is included

We love to travel! Every year we do at least one multi-week trip to visit our parents. And we typically do more trips as tourists. This cost includes travel airfare and lodging.


  1. Travel hacking: I am definitely not an expert in this area (as is shown by the high expense in this category), but there is great advice by other bloggers regarding how to use credit cards, in order to get free (or subsidized) trips, e.g. Travel Miles 101.
  2. Google Flights Date Grid: After you do a flight search and get the results for your trip, click on the Date Grid. It will show you a grid with the lowest prices for multiple departure and arrival dates. Very often you’ll see that departing or arriving a few days earlier/later will save you considerable amounts of money.
  3. Airbnb: While traveling with a family very often it’s more convenient and much cheaper for us to rent an apartment than to stay at a hotel. If you haven’t tried Airbnb yet, you should definitely check out the Airbnb pros and cons.
  4. Price comparison: After finding the cheapest combination of departure and arrival dates in Google Flights it’s always good to check Skyscanner, Kayak, Expedia, Priceline, (flights, hotels and rental cars), as well as hotels.com and booking.com (hotels) for cheaper alternatives.
Our 2019 Expenses and Tips for Cost Cutting - Shopping

Shopping – $10,468,23

What is included

This includes all our shopping expenses for clothing, gifts, etc. It includes both online (mostly Amazon) and shopping in brick-and-mortar stores. Most of our expenses are in the following stores:



  1. Amazon Rewards Visa Signature credit card: Receive 5% cash back at Amazon and Whole Foods, after you become an Amazon Prime member (which has an annual fee of $99). If you are not an Amazon Prime member, then you will receive 3% cash back. So if you spend more than $4,950 in these two stores, then it’s worth to become a Prime Member.
  2. Amazon Order History Report: Amazon allows customers to download a full list of their purchases since the account was created. It also includes the category for each item. Our highest expenses for 2019 were related to children and toys (around 60% of total)
  3. Enjoy audiobooks and ebooks for free using OverDrive: Since I found OverDrive, I have stopped buying books. I just listen to the audiobooks for free in my free time! You enjoy the full selection of audiobooks and ebooks that your local library has.
  4. Get cash back for your online sales using Rakuten/Ebates: You install a plugin in your browser and enable it just before you are about to make a purchase. After a few months you get a paycheck at your house. Awesome!
Our 2019 Expenses and Tips for Cost Cutting - Healthcare

Healthcare for our family ($8,195.39) and our parents ($7,079.17) – $15,274.56

What is included

This year was quite expensive for us from the healthcare perspective. We maxed out our healthcare out-of-pocket expenses. We’re so glad that our employers provide good healthcare.


  1. Employer’s healthcare coverage: Check your employer’s healthcare coverage, especially the out-of-pocket maximum and the in-network providers. Coverage varies quite a big among the tech companies.
  2. Health Savings Account (HSA): If your employer provides you the option to enroll in an HSA account, then do so. It is $3,550 (for individuals) or $7,100 (for married couples) of pre-tax money that can be used for healthcare expenses. The money that is in the HSA account can be invested tax-free and is rolled over from year to year.
    1. One option would be to pay for all your healthcare expenses using the HSA card.
    2. A slightly better option would be to pay for them using a credit card that provides cash back (or some other benefit) and then reimburse yourself using the HSA account. This way you get the additional cash or other benefit from the credit card
    3. A more advanced option would be to pay with a credit card and keep the receipts. The reason is that you can reimburse yourself from HSA anytime. So, you can leave the HSA money to grow tax-free in the HSA account and then withdraw them many years later using your receipts as proof for the medical expense that occurred in the past. This is what we are currently doing.
    4. Check the investment funds in your employer’s HSA. If you don’t find good low-cost index funds, then you should transfer your HSA money to a different HSA provider, such as Fidelity or Lively.
  3. Flexible Spending Account (FSA): This employer-provided option allows you to save pre-tax money, in order to spend them on dental and vision expenses. You will lose the money at the end of the year, if you don’t use it.
  4. Buy glasses from Zenni Optical: I used to pay at least $200-$300 every year for glasses, on top of what my insurance covered! Now, with Zenni Optical I can get a pair of glasses for $100 (total cost)! It’s really easy to see the pairs online, select one and get it at your door. Insurance will typically reimburse the full amount.
Our 2019 Expenses and Tips for Cost Cutting - Utilities

8. Utilities – $4,513.36

What is included

Our utility bills are as follows:

Water & Sewer$2,050.88
Electricity & Gas $1,400.11


All the suggestions in this section are related to reducing your utility bills.

  1. Water
    1. Low flow shower heads: A regular shower head has a flow rate of 2.5 gallons per minute (gpm). By switching to a low flow shower head, which has a flow rate of 1.25gpm – 2gpm you can save 20%-50% in your shower costs
    2. Repair leaking toilets asap: Leaking toilets can be really expensive! Believe me, I’m speaking from experience!
  2. Electricity and Gas
    1. Request a free home energy assessment from your Electricity company: Most electricity companies allow you to request a free home energy audit/assessment. They inspect your house and inform you about how you can reduce your electricity bill. Most of the times they also replace your incandescent light bulbs with LEDs.
    2. Replace incandescent light bulbs with LEDs: The price of an LED light bulb is now under $1 in multiple stores, such as Costco, Home Depot, Target, Lowes, etc. The energy consumption is typically 10% of that of an incandescent light bulb, so you can reduce your electricity bills by up to 90%!
    3. Select Natural Gas appliances: Natural gas is cheaper than electricity. Also, you can get rebates from your electricity provider.
    4. Buy a programmable thermostat: Programmable thermostats can optimize power consumption for house heating and A/C. Nest is definitely a good option. Also heck if your electricity company offers rebates for buying one (they usually do)!
  3. Alarm
    1. Install your own equipment: ADT and similar companies install the equipment and charge high monitoring fees (~$50/month). If you decide to install an alarm, then you should buy the equipment and select a provider only for monitoring (e.g. SimpliSafe has an option for $15-$20/month).
    2. Reduce bill by calling your alarm company and letting them know that you are planning on leaving: I reduced my monthly bill from $50 to $15 just by letting my alarm company know that I have a better alternative. This is almost $500/year!
  4. Internet
    1. Select the cheapest option (lowest bandwidth): Most houses don’t need 1Gbps lines. We just have a 25Mbps line and it works great (and is much cheaper than the advertised 100Mbps line).
  5. Garbage
    1. Select the cheapest option (smallest bin): Most houses don’t need the medium/large garbage bins. A smaller bin should be enough (and cheaper). I reduced my bill by $10/bill just by switching from the medium bin to the smallest bin!
  6. Cable TV
    1. Cut the cord: You don’t need cable TV. There are so many better options.
Our 2019 Expenses and Tips for Cost Cutting - Entertainment

Entertainment – $4,389.28

What is included

Activities (children)$2,173.33
Personal care (wife)$815.69
Coffee (family)$536.39
Babysitting (family) $430.00
Movies and nights out (me)$414.13


  1. Happy wife, happy life: Enough said 🙂
  2. Movie plans and discount tickets: Moviepass was great, but not an option anymore 🙁 Fortunately, Costco has discounted tickets for the big movie chains. Also, if you visit the same movie chain often, then you should become a member and get discounts.
Our 2019 Expenses and Tips for Cost Cutting - House Cleaning

Housecleaning – $4,260.31

What is included

We have somebody cleaning the house twice a week.


  1. Shop around: Talk to multiple providers and find the appropriate option for your house. Also, it doesn’t hurt to use the trial-and-error approach, where you change a housecleaning provider after a few times, if you are not satisfied with the result.
  2. Find providers, who include the cleaning detergents in their price: Paying for detergents can become quite expensive, especially if you own a large house.
Our 2019 Expenses and Tips for Cost Cutting - Restaurants

Restaurants – $4,225.71

What is included

All the amount that we spent in restaurants and coffee places, both while being at home and while traveling.


  1. Credit cards with high cash-back for restaurant expenses: Find a card that gives you at 2.5%-5% in restaurant expenses.
  2. Cook more at home and eat less frequently in restaurants: Do as I say and not as I do 🙂

Education – $2,849.96

What is included

I love to register for classes that I can learn something valuable from.


  1. Employer reimbursement: Check with your employer if they offer reimbursements for the classes that you take. Or if they offer the same class in-house. I know that both Google and Microsoft provide both options.
Our 2019 Expenses and Tips for Cost Cutting - Gas

Gas – $1,848.29

What is included

Gas for 2 cars.


  1. Buy gas from Costco: Costco is always the cheapest option in our area. It’s also a member of the TOP TIER Gasoline Brands, which means that it’s high quality.
  2. Buy gas from Arco: Arco is the second cheapest option in our area and it’s also a member of the TOP TIER Gasoline Brands.
  3. Use an app to find cheap gas in your area: There are several great apps for iOS and Android that crowdsource data for the cheapest available gas options in each area. We use GasBuddy.
  4. Use a credit card that provides 3%-5% cash back for gas: PenFed Platinum is one option that has 5% unlimited cash back for gas.
Our 2019 Expenses and Tips for Cost Cutting - Car Insurance

Car insurance – $1,187.45

What is included

Car insurance for 2 cars and 2 drivers


  1. Shop around: Clark Howard has a great list of the best car insurances. Call multiple of those and get quotes. Always ask for exact the same options, in order to compare apples to apples.
  2. Increase your deductibles: Insurance should be used for cases when there is a big damage, e.g. if a car is totaled or a $10k damage. It does not make sense to get a reimbursement for a small damage, e.g. $500, because your premiums will go up. Check the difference, if you use $500 deductibles vs $1000 deductibles. We are using $1000 deductibles for our cars.
  3. Look for discounts: Understand what types of discounts can reduce your car insurance. For example, anti-theft devices, low mileage, no accidents, etc. Geico provides a discount, if you own Berkshire Hathaway shares (tip: it is worth to buy one!). Check Clark Howard’s website for additional discount ideas.
  4. Uninsured motorist coverage: I always include this coverage due to high number of uninsured motorists. In 2015, 13% of all motorists in the US were uninsured and there were 5 states, where the number was more than 20%.
Our 2019 Expenses and Tips for Cost Cutting - Cell Phone

Cell phone – $936.00

What is included

2 cell phone plans with unlimited minutes, text messages and data.


  1. Skip Verizon & AT&T. Check T-Mobile: I used to be an AT&T customer and paying $200/month. I switched to T-mobile and paying less than $80. T-Mobile is having great deals to acquire more customers.
  2. Look at Mobile Virtual Network Operators (MVNOs): MVNOs lease the networks from the Big3 Operators (Verizon, AT&T, T-Mobile) and provide much cheaper plans for the same quality. Mint has an option for $15/line/month. Ting rates can go even lower, if you are using little data and don’t talk a lot on the phone.
  3. Check your minute/text/data usage and find the best plan that works for you: Yes, we are still using unlimited options. However, this might not be the best option for you. For example, if you only talk on the phone for 5 minutes on workdays and use less than 100MB of data, then why paid for unlimited?
Our 2019 Expenses and Tips for Cost Cutting - Car maintenance

Car maintenance – $553.72

What is included

Oil changes, registrations and other maintenance for 2 cars.


  1. Shop online and check for coupons: Whenever you need to go to a mechanic, check online and search for coupons. Some maintenance (e.g. oil change) is trivial and could be performed almost anywhere.

How to easily track your monthly expenses

This is the methodology that I use to monitor my monthly expenses. You can also do the same:

  1. Create a free online account at Personal Capital
  2. Link your accounts, so that you can track them in the Personal Capital dashboard
    • Bank accounts
    • Retirement accounts (401k, IRA, etc)
    • Credit cards
    • Investment accounts
  3. At the end of each month, view the list of your Expenses (also found if you go to Banking -> Cash Flow -> Expense)
    • Go through each line one by one
    • Check if the “Category” of the expense is correct. If not, then move it to the correct category. You can also create your own categories
    • When you are done, you can view the graphs with the aggregate data and compare your expenses with last month

Conclusion: We’d love to hear your thoughts!

Please leave a comment and let us know how we could do better! Are there any other tips that you have?

About Me

I am an engineer with 15+ years in the tech industry, including roles at Google, Amazon, and Microsoft. I've been a Software Engineer, Product Manager, and Technical Program Manager. I also have an MBA from Kellogg School of Management with Majors in Finance and Marketing.

What drives me? A passion for empowering engineers to achieve Financial Independence and Retire Early (FIRE). I reached FIRE, when I turned 40 years old. Whether it's through personal finance strategies or career insights, I'm here to guide you on this path. Have questions or need advice? Feel free to reach out!

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  1. Firstly, awesome posts and details. Thank you for creating this. This makes me more conscious of my spending

    You mentioned “Healthcare for our family ($8,195.39) and our parents ($7,079.17) – $15,274.56”

    1) is $7K your parents health related expenses in US?
    2) If yes, what kind of insurance they have in the US?

  2. Thank you for sharing your expenses and going into detail about how to cost cut. It was very interesting to read and exactly what I was searching for (someone recommended your blog). There is one piece of information that is missing IMO, which is what you/your family earns, and conversely, what you’re saving and your total net worth.
    Knowing how much of your total income this spending represents would really put things in perspective. I wanted to read other people expenses because I want to know how our family spends in comparison, but without knowing the total, the numbers are not a good measure. Please consider including your savings and total income in your future reports.

  3. An engineer writing a FIRE blog, definitely looking to follow this.

    Here are some of my thoughts:
    – I don’t think about costs yearly, so it might be helpful to present them as monthly costs in addition to the yearly cost. This would allow me (and I’m certain other readers as well) to perform comparisons to their own situations.
    -The only costs that seem truly out of the ordinary are groceries. $1200 a month is a seriously large amount, even shopping at Whole Paycheck, that’s a solid 3x over the average for high grocery spenders in the FIRE movement (from what I’ve seen).
    – I think it’s great that you shared a bunch of ideas, but I do think it would be even better to dive into the ideas you’ve tried and your experiences with them working or not.
    – I’m really impressed that you were able to categorize your expenses a year after the fact. We do it monthly and it can still be challenging sometimes to figure out what a particular “Square” payment is referring to.

    Anyways, thanks for the excellent blog post!

  4. This was really interesting for me to read. I love seeing how much others spend on core expenses, especially when their earning/spending differs from ours.

    It’s apparent to me that you’re generally in-tune with how much you’re spending and what you’re spending on. And that your spending brings you value (e.g. the decision to eat high-quality, organic food).

    If you’re still meeting your financial goals, just keep doing what you’re doing! Still, it never hurts to revisit the numbers ever now and then. It’s helpful to lay it all out as you have and see if it’s all still working for your family.

    Great post! I look forward to checking out the rest of your blog. 🙂

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