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Where DOES all the money go every month?
Old 06-19-2008, 04:47 PM   #1
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Where DOES all the money go every month?

Based on advice gathered on this forum, I finally started analyzing our household expenses. I loath budgeting, and have never been in the habit of doing more than eyeballing our accounts to ensure that there were no unexpected charges, and sufficient funds to cover outgoing payments. Thankfully BofA has incorporated some nifty portfolio tracking, budgeting and reporting features into their website, so I can continue to be lazy and still gather the info I need. Here is a 6 month snapshot of our household expenses (just percentages, no actual dollar figures). What I learned: kids are expensive!

I'm curious how this compares to others, for anyone else willing to share.

Code:
 
Child/Dependent Expenses       20.85%
Mortgages                      18.56%
Travel                          9.89% 
Groceries                       7.83% 
Home Maintenance                5.47% 
Home Improvement                5.47% 
Insurance                       4.68% 
ATM/Cash Withdrawals            4.68% 
Automotive Expenses             3.66% 
Gasoline/Fuel                   3.30% 
Restaurants/Dining              2.73% 
Clothing/Shoes                  2.09% 
Telephone Services              2.01% 
Utilities                       1.78% 
Hobbies                         1.28% 
Electronics                     0.99% 
Entertainment                   0.97% 
Healthcare/Medical              0.71% 
General Merchandise             0.70% 
Personal Care                   0.69% 
Cable/Satellite Services        0.67% 
Gifts                           0.55% 
Office Supplies                 0.11% 
Checks                          0.10% 
Other Expenses                  0.09%  
Online Services                 0.07%  
Other Bills                     0.06%
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Old 06-19-2008, 05:24 PM   #2
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OK... this is really rough

Child/Dependent Expenses 0%
Mortgages 0%
Travel 0%
Groceries 8.60%
Home Maintenance & Improvement 7.17%
Insurance 5.80%
ATM/Cash Withdrawals 10.80%
Automotive Expenses 0.37%
Gasoline/Fuel 0.86%
Restaurants/Dining 2.58%
Clothing/Shoes 0.46%
Telephone Services 0.97%
Utilities 3.30%
Hobbies ? see ATM
Electronics ? see ATM
Entertainment ? see ATM
Healthcare/Medical 0.72%
General Merchandise ? see ATM
Personal Care ? see ATM
Cable/Satellite Services 1.75%
Gifts ? see ATM
Office Supplies ? see ATM
Checks 0%
Other Expenses ? see ATM
Online Services 0%
Other Bills 1.32% property tax
savings/investments 58.34% (Roth and taxable)
TSP/401K not included in these percentages of take-home pay, but maxed out
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Old 06-19-2008, 05:36 PM   #3
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Thanks Want2Retire! It's helpful to see other people's expense ratios, as it helps in planning for the day when the kids are gone and we're ready to step off the hamster wheel.

Question: do you not enjoy travel, or just haven't had any expenses in that area? My travel number is artificially high because I just booked an August vacation for the family, but I imagine that we'll continue to travel quite a bit once we reach ER.
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Old 06-19-2008, 05:51 PM   #4
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I don't really like travel. The only trips I have gone on in the past few years (other than traveling for work), are car trips to potential retirement locations. Frank and I share expenses and don't spend much, and I just don't buy much else from the ATM category that month (and maybe the next), so it comes out of that.

I will probably spend a lot more in ER, but right now I am working so much that I don't really have time to do much shopping.
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Old 06-19-2008, 06:20 PM   #5
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Here it goes (average for the past 12 months):

Child/Dependent Expenses 1% (2 cats )
Mortgages 12.8%
Travel 3.9% (1 domestic trip + 1 trip to Europe)
Groceries 10.3%
Home Maintenance 9% (particularly high this year because of A/C unit replacement)
Home Improvement 1.9%
Insurance 11.6% (car, umbrella, home, life, disability)
ATM/Cash Withdrawals 2.3%
Automotive Expenses 2.7%
Gasoline/Fuel 2.7%
Restaurants/Dining 0.8%
Clothing/Shoes 3.6% (atypically high for us - special circumstances apply)
Telephone Services 2.5%
Utilities 3.30%
Electronics 4%
Entertainment 2.2%
Healthcare/Medical 0.4%
Durable goods 10.1% (furniture, appliances, home decor...)
Personal Care 0.5%
Cable/Satellite Services 2.3%
Gifts 6.2%
Property Tax 1.9%
Other Expenses 4% (charitable donations mostly...)
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Old 06-19-2008, 06:25 PM   #6
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First thing you need to do is to find out exactly where your
money is going. Then you can adjust spending in those areas
that are out of control.

I use a calendar journal and record daily every dollar I spend.

Such a journal can reveal all sorts of useful information... how much
is being spent in cash on small stuff that adds up big time... how
much is being spent on gas from month to month [recording mileage
is also helpful], etc.
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Old 06-19-2008, 07:11 PM   #7
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Conveniently, the gov't does a significant survey of this information. The results are here: Consumer Expenditure Survey Home Page

Note the "current cross tabulated tables" give two-way breakdowns.

They start with an overload of information on food, don't let that bog you down.

Note that this is a spending survey, the income information is an after-thought and isn't very accurate.
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Old 06-20-2008, 08:51 AM   #8
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From Microsoft Money - Expenses - Jan 1 thru Jun 15, 2008:

Automotive - 4.1%
Bank Charges - 0% ($9.70)
Clothing - .7%
Computer - 14.8%
Entertainment - 3.4% (mostly DW's Slot Machine lessons aboard cruis ship)
Gifts - .4%
Groceries - 9.2%
Healthcare - 1.5%
Home - 2.7% (mostly supplies)
House - .1%
Insurance - 13.3% (Health & 2 Autos)
Investing - .5%
Leisure - 5.4% (Mostly photography related)
Liquor - 3.4%
Memberships - 1.4%
Personal Care - .1%
Taxes - 12.8%
Travel - 18%
Utilities - 7.6% (includes Telephone -- two Cell and one land line))

(No mortgage and just the two of us)
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Old 06-20-2008, 03:18 PM   #9
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Quote:
Originally Posted by RonBoyd View Post
From Microsoft Money - Expenses - Jan 1 thru Jun 15, 2008:

Automotive - 4.1%
Computer - 14.8%
Entertainment - 3.4% (mostly DW's Slot Machine lessons aboard cruis ship)
Groceries - 9.2%
Leisure - 5.4% (Mostly photography related)
Liquor - 3.4%
Travel - 18%
Looks like roughly 50% of your expenses go to these categories. Seems that your priorities are roughly in line with mine! Is that 14% computer bucket correct? Did you just buy yourself a system, or are you a gadget junkie?

Independent, thanks for the link; the average expenditures were interesting (and about what I would have guessed for Joe Taxpayer).

At first I was thinking that I'm paying way less for insurance than the rest of you, but in hindsight, I think it's just a lower % of my expenses because those darn daycare fees are such a big outlay every month.

Interesting stuff, folks, thanks!
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Old 06-20-2008, 05:20 PM   #10
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Quote:
Originally Posted by ProspectiveBum View Post
Looks like roughly 50% of your expenses go to these categories. Seems that your priorities are roughly in line with mine! Is that 14% computer bucket correct? Did you just buy yourself a system, or are you a gadget junkie?
Yes. Oh! and yeah, I did buy a Toshiba X205-SLi1 Notebook... I forgot about that. I should also point out that the Travel included a 6,000 mile road trip to Florida and back (to Denver) this Spring -- most of our automobile fuel cost is included in this category. (Nevertheless, spending on Travel is within normal parameters. <grin>)
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Old 06-20-2008, 06:29 PM   #11
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Quote:
ATM/Cash Withdrawals 4.68
...
Other Expenses 0.09%
...
Other Bills 0.06%
Three different categories of miscellaneous?
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Old 06-20-2008, 06:51 PM   #12
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DW and I never really budgeted after we graduated college... we're both LBYM types, (and DINKs) and have consistently saved. We pretty much live the lifestyle that we want to, and don't consider that we deprive ourselves.

So what we've done for the past few years is break out the total year's income into "taxes", "spending", and "savings" (roughly 25% / 37.5%, / 37.5%, depending on how you account for various things - close enough, anyway).

But lately (and after re-reading Your Money Or Your Life) we've gotten discontented with the idea that we can't really give a good answer to "where does the money go?". Oh sure, I can rattle off a couple big categories (mortgage!) and know roughly how much our credit card bills average, but I just don't have the data to do a detailed breakdown like the ones above.

So, we've started tracking expenses by category, going back to the beginning of 2008. I don't expect to create a budget, but we may see areas to focus on and maybe save a little more... stay tuned...
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Old 06-20-2008, 07:21 PM   #13
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I have never been very good at "budgeting" our home life. I did, however, spend many years in management and am very familiar with the concept. I just have never found that type of budgeting very useful in my (our) personal life. On the other hand, I discovered, in my early 20's, the power of tracking every penny that came our way. There were a couple periods after that in which we drifted away from that exercise -- both with disasterous consequences. For the last thirty years, we have gotten a receipt for (or wrote down) every purchase, no matter how small. (For those who shudder at the time involved in this should be aware that done daily it is not even noticible.) Anyway, we spend what ever we spend on whatever we spend it on without much concious thought. On the other hand, because we are so aware of each and every penny, our spending has never gotten "out of hand." (Well, except for those previously mentioned episodes.)

Spend what you need to spend, keep track of it, and enjoy yourself.
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Old 06-20-2008, 08:03 PM   #14
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Quote:
Originally Posted by RonBoyd View Post
I should also point out that the Travel included a 6,000 mile road trip to Florida and back (to Denver) this Spring -- most of our automobile fuel cost is included in this category. (Nevertheless, spending on Travel is within normal parameters. <grin>)
Interesting to hear how other folks categorize their expenses. I'd probably just leave the gas changes under the Fuel category, but can see the logic in including it in Travel (since it's an unusual fuel expense directly related to your trip).

Quote:
Originally Posted by Khan View Post
Three different categories of miscellaneous?
What, you mean I'm supposed to actually read those categories? The 'Other Bills' category is a single expense for a reimbursed business expense. BofA doesn't have an appropriate category for it, so I left it there. The 'Other Expenses' were actually shipping charges related to X-mas gifts we sent. I moved them to the 'Gifts' category. Thanks for pointing that out.

I like having the ATM withdrawals bucketed separately, since it gives me an idea of how much mad money I tend to run around with (and therefore how much of my overall expenses I'm not tracking better, since I'm too lazy so far to track those cash expenses manually).
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Old 06-20-2008, 08:19 PM   #15
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At the beginning of the year, we usually set a range of annual expenses for the upcoming year. This year for example it's 65-70K. We don't decide in advance how that money will be spent because over the years we have found that our expenses are quite fluid and a rigid budget just doesn't work for us. Some years we spend more on travel, some years on gifts, some years on home repairs, it depends what comes up during the year. But we do track each and every cent spent using Quicken. Every 3 months, we check to make sure we are on track. For example so far this year we have spent just over 32K (even though we had to pay 6K to replace an old A/C system which quit unexpectedly) and since we are about halfway through the year, we are on track so far and we don't need to adjust our spending for the second part of the year. Last year, though, we overspent in the first half of the year, so in the second half we tried to avoid large impulse purchases.
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Old 06-20-2008, 08:20 PM   #16
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Here's mine for the last six months ending today:

Kids 38.8%
Tax 17.8%
Interest Exp 15.6%
Food 6.4%
Insurance 4.1%
Utilities 3.8%
Medical 3.6%
Misc 2.6%
Auto 1.9%
Bank Charge 1.7%
Recreation 1.6%
House 1.2%
Clothing 0.4%
Cash 0.3%
Divorce 0.1%
Pets 0.1%
Christmas -0.1%

Food is grocery store expenses plus eating out.
Cell phone is under Utilities.
"Medical" is high right now because it includes a surgery for my son.
"Misc" really is the cost to refinance my mortgage.
"Bank charge" is really the BT fees associated with my 0% BT hijinks.
All my travel is under Recreation
"Cash" is money spent I can't or don't wish to bother accounting for - I use this for adjustments of various kinds.
"Christmas" is probably negative because I include Christmas returns in this category and I was already done with my Christmas expenditures by 12/21/07.

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Cash Withdrawals
Old 06-20-2008, 08:21 PM   #17
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Cash Withdrawals

I track all daily expenditures with Microsoft Money, including detailing out Cash Withdrawals on what the money was spent on. E.g. $100 ATM withdrawal ($50 for babysitter, $40 dining out, etc.). You'd be surprised over the course of a year how much money "disappears" from the ATM withdrawals. At $500/mo., it adds up! Just a suggestion!

RonBoyd - you are right on regarding spending what you need to spend, track it, and have fun! We adpoted this philosophy 6 years ago at 30 yrs. old and have been semi-retired ever since. It's all about making smart choices and not trying to keep up with the consumer culture so prevalent today.
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Old 06-20-2008, 09:22 PM   #18
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Originally Posted by budgetgal View Post
I track all daily expenditures with Microsoft Money, including detailing out Cash Withdrawals on what the money was spent on. E.g. $100 ATM withdrawal ($50 for babysitter, $40 dining out, etc.). You'd be surprised over the course of a year how much money "disappears" from the ATM withdrawals. At $500/mo., it adds up! Just a suggestion!
If this paragraph is directed at me -- can't tell if it is or not -- I do actually do as you describe. However, sometimes I get a little lazy or busy and don't keep track of every single transaction. When I get off, I make an adjusting entry and use the "Cash" category.

I posted my expenses in percentages to maintain a degree of privacy for myself, but trust me, the 0.3% of my expenses that is my "Cash" category is far far less than $500 per month! (In fact, it's orders of magnitude smaller than $500 every six months!)

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Old 06-20-2008, 09:56 PM   #19
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Whoa, am I the only one paying paying for local government? My property taxes are 10% of our household budget. 'Dis McMansion is eating me up.
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Old 06-20-2008, 11:38 PM   #20
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Whoa, am I the only one paying paying for local government? My property taxes are 10% of our household budget. 'Dis McMansion is eating me up.
My property taxes are included under "Taxes", along with federal income, state income, SS and Medicare. If I were to separate them out, they would be about 2% of my spending.

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