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Sunday, January 12

How Can I Cut My Spending in 2020?

In 2019 I spent over $146,000:  $84K on our various business ventures and $62K on what I consider personal spending.

AirBnB Expenses-$54,311
Rental Expense-$29,020
App Expenses-$86
Interest Expense-$199
Reimbursed Job Expense$811
Unreimbursed Job Expense-$2,144
Auto Expenses-$7,211
Bank Fees-$1,792
Clothes/Personal Care-$1,193
House Expense-$17,204
Health & Dental-$8,677

My goal (or more strongly, my mandate!) is to drastically reduce expenses in 2020.  Here's the plan:

Airbnb Expenses

Last year our single Airbnb took in just south of $30,000.  But I spent $54,000.  It's easy to conclude expenses will be much lower this year:  in 2019 I replaced the siding and windows.  And I didn't go cheap - I selected the nicest windows and siding I could find.  I'm learning firsthand a business principle I've struggled to adopt:  simply, you invest in your best opportunities, not the cigar butts.

Once we realized its potential, I knew how important it was to upgrade some things to keep guests coming back.  A side benefit:  it's still early, but it looks like the power bill will be lower this year thanks to the better insulating properties of the windows and siding.

With that project checked off, the biggest change in 2020 will be that our Airbnb expenses will be significantly less than the income.

Rental Expenses

Four of our five long-term rentals are in the Birmingham, AL area.  Last year I sold 5 townhouses there.  Naturally, spending will be lower (rental income will be as well!).  Lately I've been dissatisfied with the performance of my Birmingham properties.  One of the most frustrating things is an empty property.  It simply takes longer to rent a house in Birmingham versus Tampa Bay.  It's been 60 days already for the one vacant property I currently have, and there haven't been any qualified applications.  I'm thinking about selling it.  Bottom line, rental expenses will be lower in 2020.


This is the discretionary category.  Technically, I don't have to spend anything here, but it gives us balance:  I live (and love) to travel!  In 2019 I spent over $10,000 on vacations, gambling, alcohol and movies.  In 2020, I will significantly reduce spending on fun, but not because we're going to have less of it!

How?  I joined a Facebook group called 10x Travel last year.  The group is all about opening new credit cards for the bonus points being offered.  Currently I'm working on earning a Companion Pass on Southwest Airlines.  In the process of earning the pass (which gets my partner a free seat on any flight I am on), I will earn 125,000 miles.  So, our spending on flights this year will be drastically reduced.  I've also accumulated thousands (in some cases, hundreds of thousands) of hotel points which we can use for free rooms.  By redeeming free flights and hotel stays, I expect this to significantly lower our spending in the "fun" category.

Other Observations

There are other categories that need to go down, but I'm not sure how much I can reduce.  The most obvious is spending on food.  It's a simple equation:  eat out less, save money.  I'm working on this.  Then there's auto expenses.  My car has over 200,000 miles on it, so keeping it will mean ongoing repair expenses.  Probably time to start looking at a new car.  With health and dental, the only thing that might go down is what I spend on dental work.  If my teeth stay healthy this year, I can save a bit.  Finally, spending on housing.  That's a big one:  I spent over $17,000 last year to keep a roof over our heads.  I would really like to move back to the area where our Airbnb is located.  Not only will this save time (two hours of commuting each time we clean - we made over 80 trips last year!), it will also save some on gas for the car.  A final benefit would be buying a house we can rent out on Airbnb when we aren't going to be there.  My partner has been reluctant to do this, but I think if I pick out the right house with the right layout, it could be a minimal inconvenience.  House hacking could significantly cut down our home costs.

So there it is.  These are the areas I'd like to reduce spending on in 2020.  What are your goals?


  1. Your bank fees seem incredibly high, might we worth checking to see if there is a flat fee rate for the amount of transactions you do. Eating out is a budget killer. Airline/hotel freebie management is a real thing, make sure to track it with a spread sheet so you know when things expire, you likely already do that though.

    1. The bank fees are mostly the annual fees on my credit cards. The rewards and opening bonuses tend to cancel those out. Eating out less is definitely one of the things I'm doing in 2020 to reduce expenses. Thanks!

  2. We are pretty simple people, so eating out is casual dining and it never cost $25 including tip, usually under $20. We put about 6,000 miles a year on our car. I use the "1/3 system" on my income. 1/3 for taxes, 1/3 for re-investment, and 1/3 for personal spending.

    1. Thanks. 1/3 for taxes - ouch. Do you live in a high tax state?