Our Amazon Spending Is Out of Control
In the last 12 years, we have spent $24,760.67 just on Amazon, most of those purchases occur outside of our budget.
Maybe you caught my post about monthly subscriptions where I casually mentioned I had ordered 754 items off Amazon since I have been a Prime Subscriber. For the last 140 months we have, on average, spent $176.86 each month. Large enough to be a line item in our budget, but certainly nowhere to be found in our spreadsheet.
I want to be clear that spending money isn’t a bad thing. This is a confession post because I had no idea where money was going before we started keeping track of it. (Also, I was shocked at how much it was once I added it up.) Spending money at Amazon is OK. This exercise is to help me (and you if you do it) understand where my money is going and look for trends so I can be better about my spending in the future. It is all about progress and becoming a more financially responsible person.
Obviously not every single purchase was a waste, in fact we still have some things that we bought years ago that we still use today. However, our order history is littered with “junk” that we didn’t need, rarely used, or worse – never used.
Getting the Data (not for the faint of heart)
It is very easy to pull your Amazon order history from their website. It takes a few clicks after you log on to Amazon to do it:
Once you log visit smile.amazon.com (always use smile.amazon because a fraction of your eligible purchases go towards a charity of your choice) click on “Your Account”
Next, scroll to the “Ordering and shopping preferences” section and click “Download order records.”
Finally, you can set the time frame that you want to pull your data. After you click “Request Report”, it will download automatically after a couple of minutes. It is an Excel report with a lot of information, I deleted all of the columns except “Order Date”, “Title”, “Category”, & “Item Total.” Once you have your report you will be able to add up totals, apply filters, etc. and learn all about your past spending habits on Amazon.
Our spending on Amazon really accelerated since I made my first purchase in Feb. 2007 (it was my only Amazon purchase in 2007). What was my first purchase way back in February 2007? I spent $29.97 on these two bad boys:
I really can’t remember why I bought these two “Nerf” guns. It probably had something to do with receiving my ROTC stipend and I just had to spend it on something. I hardly remember using them. I think I ended up throwing these away years later. The kid in me wishes I still had them. The one on the bottom would eject the orange cartridge each time you cocked the lever, pretty sweet. Totally useless for a 30 year old, but sweet nonetheless.
These foam dart guns were the beginning of a spending spree that has gone on for 140 months. Take a look at how much was spent each year up to today:
Year by Year
Purchases were fairly consistent from 2009-2012.
In 2013 we had a huge jump in our Amazon spending. Looking back at what could be the cause of that spending, that was our first full year in our new home. Prior to that we lived in a smaller town home, so we had a lot of new space to fill with “stuff” in our new home, and a new puppy to spoil.
In 2014 our spending dipped quite a bit, we spent just half as much as we did in 2013. I attribute this decline due to us finalizing our plans to go on our “once in a lifetime” vacation. We cut a lot of spending so we could save for our trip, because our vacation was very expensive.
The explosion in 2015 and 2016 was due to a lot of lifestyle inflation. We bought a lot of things that we probably could have done without, but bought because it was so easy. For example, we spent $684.24 on “Toys” that were not related to my wife’s classroom, most of them used once.
Not everything was money best spent elsewhere. We had our first child in 2016 and furnished it with stuff off of Amazon. Everything we bought for the nursery I would highly recommend.
Towards the end of 2016 was when I started getting serious about finances. The buying that we did in 2017 was probably some of the smartest that we had done on Amazon in several years. Meaning, I didn’t buy AS MUCH useless junk that I had been. We’ve carried our thoughtful spending into 2018 as well. I imagine the Amazon spending decline will continue into 2019.
We’re getting better about how our money is spent. Every data point of information we learn can be applied to be more fiscally responsible. Also, some of the stuff we bought was money well spent, both in the moment and long term. Some of the things we bought that I am totally happy with purchasing are:
All of my undergraduate text books and my wife’s graduate books. In many cases I would spend ~$50 for a used book that the bookstore was selling for ~$150+. At the end of the semester I would re-sell my book back to Amazon and would save a lot of money.
Compression shorts – I don’t know why I bought a 2 pack, I didn’t exercise that much. But over the last 12 years I have worn them hundreds of times and they have held up really well. In fact, they are sitting in my gym bag right now for my afternoon workout.
A 5 gallon gas tank – I bought this in a fit of frustration, after running to the gas station for the upteenth time in a month. Our small gas can had run out of gas again and I needed to mow the lawn. Ever since, I fill up the container every spring and, at most, fill it up one more time during the year. Think of all the time saved, and money saved on the gas to and from the gas station. It has paid for itself.
Every single thing for our nursery. Feel free to click the links and see each item. They look great and have held up thus far. Our swivel rocker recliner is probably our best baby related purchase we made that wasn’t essential. Seriously look how great our nursery looks:
My Amazon Order history is littered with items that I have rarely used. I have to wonder what subliminal marketing took place in order for me to make some of the purchases that I did. Take a look:
Even worse that stuff that I’ve only used sparingly (at best) are the items I never opened. I am sure I need an item, only to have the feeling pass within a day of ordering it on Amazon. With the 2 day shipping, it’s already too late to cancel. Here are some items that remain unopened in my house to this day:
So What Now?
I love Amazon. I’m not going to completely stop buying things from Amazon in light of this revelation. Instead I plan on taking this learning and apply it across all of my spending. Being a more conscientious spender is one of the best ways I can positively impact our free cash flow. If you noticed in our last net worth update, we’ve been hemorrhaging cash the last couple of months.
I’m going to impose a 72 hour time limit before I make any purchase that isn’t a need. If, after 72 hours, I still feel like it is something I need to have then I will bring it up to my wife. She can typically talk me out of most of the stuff I want to order. If she agrees that it is money well spent, I’ll make the purchase.
I would hate to look back 10 years from now and find that we’ve spent another $30,000 on Amazon stuff that we never budgeted for. That extra money we don’t spend will make our journey to FI (financial independence) much easier.
4,282 days until we are scheduled to hit the $1,000,000 mark, every little bit will help.