Why is my budget so high ??

[Moemg]

I'd like to ask more about your electric bill and homeowners insurance. I have my A/C set really low (75) so I know I could up it and save money. Is your house rather new with much better insulation perhaps ? My homeowners deductable is $1k (and 3% of home value for wind damage) and I also have flood insurance ($350 / yr). Maybe I've overinsured the contents ?

My deductible is $20,000 for homeowners. Plus my SO's son is an insurance broker so he always scouts for the best deals for me . This year I started setting my air at 76 .I did not notice the one degree difference.We also have a pretty new air conditioner and two years ago when we got a new refrigerator and dryer the bill dropped by $25 a month and it had already dropped $50 a month with the new ac system.

 

[ikubak]

I am FI but still working, so some of my expenses are less because of work. We spend about 50K a year and I think that is high. From looking at your expenses, I notice we spend less on the following:

Taxes and Insurance (about 3500 less)
Electricity
Phone and Cable
HOA Pool etc. (no HOA or pool)
Taxes on Dividends etc.
Health Insurance (spend 15K less)

We spend at least 25K less on the items above, maybe more.

We spend more on the following items:

gifts
vacation
food (16 y.o. male living in our house)

I have been working to lower our monthly expenses on a long-term basis. We replaced our HVAC system along with all the ducting and we've seen a substantial savings in electric bills. We are also growing more veggies in our garden, which cuts down on food costs and gives us what I think are higher quality foods. We are now looking at replacing our toilets which will take us from 7 or 8 gallons a flush down to 1.3 gallons. I also installed low flow shower heads and we actually like them better than the old mega-flow shower heads. We replaced our water heater with a tankless water heater that heats only the water we need at the time. The shower heads and water heater were my efforts to combat my 16 year old's fondness of 30 minute showers. We have replaced a lot of light bulbs with those new funky energy saver bulbs. I also walk to work much more which saves on gas and I'm even foregoing purchasing my annual parking pass at work. I wanted to install a Franklin stove and burn wood for heat, but DW was against it for aesthetic reasons. I am still thinking of ways to reduce spending though.

 

[easysurfer]

Your health insurance is about 25% of your overall budget. Don't know if you have options to save on that, but it takes up a pretty good chunk.

 

[ikubak]

Oh, I also spend more on beer and wine. Beer/wine is its own category in my budget.

 

[W2R]

Oh, I also spend more on beer and wine. Beer/wine is it's own category in my budget.

I spend $0.00/year on beer and wine, but I spend more on food (per capita), on utilities, and probably on some other categories than Live And Learn does.

 

[easysurfer]

I am FI but still working, so some of my expenses are less because of work. We spend about 50K a year and I think that is high. From looking at your expenses, I notice we spend less on the following:

Taxes and Insurance (about 3500 less)
Electricity
Phone and Cable
HOA Pool etc. (no HOA or pool)
Taxes on Dividends etc.
Health Insurance (spend 15K less)

We spend at least 25K less on the items above, maybe more.

We spend more on the following items:

gifts
vacation
food (16 y.o. male living in our house)

I have been working to lower our monthly expenses on a long-term basis. We replaced our HVAC system along with all the ducting and we've seen a substantial savings in electric bills. We are also growing more veggies in our garden, which cuts down on food costs and gives us what I think are higher quality foods. We are now looking at replacing our toilets which will take us from 7 or 8 gallons a flush down to 1.3 gallons. I also installed low flow shower heads and we actually like them better than the old mega-flow shower heads. We replaced our water heater with a tankless water heater that heats only the water we need at the time. The shower heads and water heater were my efforts to combat my 16 year old's fondness of 30 minute showers. We have replaced a lot of light bulbs with those new funky energy saver bulbs. I also walk to work much more which saves on gas and I'm even foregoing purchasing my annual parking pass at work. I wanted to install a Franklin stove and burn wood for heat, but DW was against it for aesthetic reasons. I am still thinking of ways to reduce spending though.

Which low-flow shower head do you use? I was trying several different ones about a year ago for a friend and only found one that I really liked. It did do a good job of saving money and still giving a comfortable shower -- until I tried it at my place (the water pressure at my place must have been lower). The cost of water usage is already paid for in my monthly maintenance fee (condo), but I don't like to waste if I don't have to. So, instead of a low-flow, I have a full flowing shower head that has a shut valve button. I can use that to have almost none to very low flow as I soap up and then back to full as I rinse off. Best of both worlds. Also, one can get a shut off valve (for about $10) that installs between the shower pipe and shower head if the head doesn't come with a shut off valve.

A good percentage of the light bulbs at my place are LED. None of them have failed yet. Initially cost is high (though prices on the way down), but I really like them.

 

[NW-Bound]

Talk about the electric bill, I just pulled up Quicken and saw that I paid a total of [-]$2057[/-] $2437 for the last 12 months for my 2,700 sq.ft. home. It's in the "dry heat" part of the country (122F record high!), and I keep the temperature at 77F most of the day, and raise it to 78F during the peak hours of 1PM-8PM. Electric cost goes up more than 2x during peak hours, I think, when the AC is needed the most. Refrigeration is a 5-ton central air that is less than 10 yr. old. I do not remember the EER. I also have a 1HP pool pump running 6 hrs/day. No nat gas, all electric for cooking and water heating.

Just want to provide a comparison point to the OP's $2700/yr. Wonder if dry heat costs less for cooling than humid climate.

PS. Missing the month of Aug, where the highest bill was! Correction made above.

 

[imoldernu]

Always interesting to see budgets/expenses.

Not the same format, but for the most part similar. Big difference in taxes. to do with no taxable earnings.

Budget includes 3 residences, of which 2 will disappear in a year or two, total $15,600. Also 2 old cars.

OP

US

Re electric bill... our current rate (permanent home) is $.0676/KWH, vs. $.145/KWH in loc. 3.

In fact, our fun/sin expense is about $2000 less and dental/med expenses are about $2000 less than budget.

 

[MichaelB]

What am I doing wrong ?

I don't think you're doing anything wrong. Everything looks fine as long as you are saving enough to fund your retirement and you have a rainy day fund for expensive repairs and auto replacement.

 

[Purron]

I don't think you're doing anything wrong. Everything looks fine as long as you are saving enough to fund your retirement and you have a rainy day fund for expensive repairs and auto replacement.

My thoughts exactly. DH and I also carry a high health insurance cost which makes our total spending much higher than those with subsidized coverage. Our other expenses vary, but not by that much. We consider ourselves pretty frugal, but don't deny ourselves reasonable enjoyment in life.

 

[rbmrtn]

Your health insurance expenses are more than my total budget. I don't currently pay for HI ( J*b provided ) but it will $300/month for COBRA. I don't include income/dividends/cap gains taxes as an expense. Big difference in the "spending money" category. I DIY all my car maintence, get oil/filters for free with sales/rebates. $200/month for a pet seems a lot.

My totals for 2011 are attached ( if I did it correctly )

 

[NW-Bound]

Wow! I look at the above budget, and everything is listed. I just did not see travel expenses. But still...

 

[Purron]

Your health insurance expenses are more than my total budget. I don't currently pay for HI ( J*b provided ) but it will $300/month for COBRA. I don't include income/dividends/cap gains taxes as an expense. Big difference in the "spending money" category. I DIY all my car maintence, get oil/filters for free with sales/rebates. $200/month for a pet seems a lot.

My totals for 2011 are attached ( if I did it correctly )

Yup, you did it correctly. Very impressive! Love the line item for WalMart

 

[Moemg]

But remember, there is only ONE of me, not two, and I suspect that the old maxim "two can live as cheaply as one" might be misleading/untrue.

I think two living together live cheaper than two maintaining separate households.

 

[NW-Bound]

I think two living together live cheaper than two maintaining separate households.

Yes. If we are in a race to see who spends less, I reserve the right to divide our expenses by 2 to reflect the fact that I am married. Heck, I may be running neck-to-neck with some single people here, or if I lose, it would not be by much.

I am a bigger spender than my wife with my toy purchases, so together she averages down my costs.

 

[rbmrtn]

Wow! I look at the above budget, and everything is listed. I just did not see travel expenses. But still...

I don't travel. Hate it, had my fill it with megacorp

 

[NW-Bound]

Eh, I started a thread a while back about how work-related travel simply does not compare to personal travel for leisure. For the latter, I would gladly pay my own money, while for work, heck they would have to pay me to do it.

Oops. Forgot that they did! Well, I meant that they would have to pay even more, but since they didn't, I just wouldn't go.

 

[rbmrtn]

Love the line item for WalMart

Where I am at Wally-world is pretty much it. There is a homedepot and a kroger. That item is mostly misc one time crap I could cut, not an ongoing expense. I think it was a couple of fans and some space heaters.

 

[ikubak]

Which low-flow shower head do you use? I was trying several different ones about a year ago for a friend and only found one that I really liked. It did do a good job of saving money and still giving a comfortable shower -- until I tried it at my place (the water pressure at my place must have been lower). The cost of water usage is already paid for in my monthly maintenance fee (condo), but I don't like to waste if I don't have to. So, instead of a low-flow, I have a full flowing shower head that has a shut valve button. I can use that to have almost none to very low flow as I soap up and then back to full as I rinse off. Best of both worlds. Also, one can get a shut off valve (for about $10) that installs between the shower pipe and shower head if the head doesn't come with a shut off valve.

A good percentage of the light bulbs at my place are LED. None of them have failed yet. Initially cost is high (though prices on the way down), but I really like them.

I don't know what kind of low-flow shower heads they were. Picked them up at Home Depot. They were very inexpensive. I just wanted to try them out and I've really liked them.

I like the idea of your shut off valve on the shower! If I didn't have the tankless water heater I would look into that. With the tankless, I set the temperature to the right shower temp. and then just turn on the hot water and turn it off to soap up. I live in the southeast, so when it's hot like right now, I don't even use the hot water to shower. Since I am growing a lot of my own veggies and watering the garden as necessary, I try and cut down on water usage where ever possible. My next water saving effort will be to get some rain barrels to catch the rain from the gutters.

 

[easysurfer]

I don't know what kind of low-flow shower heads they were. Picked them up at Home Depot. They were very inexpensive. I just wanted to try them out and I've really liked them.

I like the idea of your shut off valve on the shower! If I didn't have the tankless water heater I would look into that. With the tankless, I set the temperature to the right shower temp. and then just turn on the hot water and turn it off to soap up. I live in the southeast, so when it's hot like right now, I don't even use the hot water to shower. Since I am growing a lot of my own veggies and watering the garden as necessary, I try and cut down on water usage where ever possible. My next water saving effort will be to get some rain barrels to catch the rain from the gutters.

The low-flow shower head that I liked is from Home Depot. Delta brand. Though it's a low flow, the showerhead put out bigger drops of water so it would keep one's body warmer. It really did do a great job of cutting down water usage. Unfortunately, when used at my shower I'd still get too much of a chill. Now, I'm used to the shut off valve. I usually put the water to a moderate flow as I soap up so the net effect probably isn't that different than a low flow.

 

[NW-Bound]

Hmm... No need for hot water to shower. Gardener who needs to water his plants... Lemme think...

How about an outside shower over the veggie area? The waste water would not be too difficult to recycle.

 

[eridanus]

What's with the car maintenance for a 3 and 10 year old car? That includes gas as well, right?

1) Increase the house deductible.
2) Drop the him/her fund to $250 each (-$62).
3) Cut the cable (-$80) and use Hulu or Netflix (+$8-15) instead.
4) Your electric seems high (how many kwH?). Blow in some attic insulation. Edit: From experience, a lot of this is probably from the pool.

 

[JOHNNIE36]

I guess it's a "to each his own" thing when it comes to temp settings on the thermostat, but according to the posts, it seems like most people really like the temp down in the summer (someone was at 75 degrees). We're in Florida, and I guess it doesn't matter where you are, we keep ours set at 78 all the time during the warm and hot season. Anything lower than that and I get chills. In the cool season (Jan and Feb) when the heat pump needs to heat the house, we set the thermostat at 70 and bump it up or down depending on how DW is feeling. Most of the time we use our fireplace electric insert and it really does a good job.

 

[Meadbh]

Healthcare insurance is the elephant in the room and dwarfs all other possible costs. Is there any opportunity to negotiate this cost? The average cost per capita of healthcare in the US is somewhere between $7000 and $8000. If there are two of you, it seems you are not getting a fair deal, unless you have expensive preexisting conditions, or pay for concierge service.

http://en.wikipedia.org/wiki/List_of_countries_by_total_health_expenditure_(PPP)_per_capita

FWIW, my total personal income tax bill for 2011 was ~ 50% of your health insurance costs. I did pay a healthcare premium of ~$700.

 

[Danmar]

If you take out the budgeted taxes on dividends and interest of $12,000, your living expenses drop to $72K a year. There - does that make you feel a lot better? Clearly you can only trim this "expense" by making less money.

I only look at my income as after income taxes, and thus my expenses/budget is also after taxes. Kind of like when I had a paycheck and my income was after payroll taxes.

Agree. I Think budgets work better on an after tax basis. Taxes are really out of your control once your income level is set. We treat taxes as an offset to income and know we can only spend the net after tax amount.