What are your One or Two Largest Spending Categories?

[WB52]

1. Mortgage
2. Tuition
3. Unreimbursed car expens to drive to w*rk.
4. Food
5. Medical

 

[bosco]

1. Food
2. Vehicle maintenance (not including gas)
3. health care

However, we are building a house. We have a lump sum set aside for that, and are also contributing monthly. It would be the largest monthly expense if I counted it.

Once the house is built, I am guessing property taxes will rocket up in the standings.

 

[rescueme]

1. Travel.
2. Household/retirement income taxes.
3. My girlfriend (don't tell my wife; just call me "Mr. Woods" ...

 

[Maurice]

For me income taxes vastly exceed all of my other expenses combined. Around 2/3 of my total expenditures are income taxes.

 

[Gumby]

For me income taxes vastly exceed all of my other expenses combined. Around 2/3 of my total expenditures are income taxes.

I'll bet most people did not count income tax (I know I didn't. If I did, it would be Number 1 on my list)

 

[Westernskies]

Like yours...property tax and medical expenses are the largest for me.

Number 3 would be home improvements/maintenance.

Discretionary expense would be travel.

What about them boots, missy?

 

[Westernskies]

Income taxes, by about a 3:1 margin...

 

[Goonie]

I'll bet most people did not count income tax (I know I didn't. If I did, it would be Number 1 on my list)

For me, income tax would be an even tie with "#4 - Health Care". My taxable income is just below halfway in the 15% tax bracket. My pension is exempt of state income taxes, and since almost all of my nestegg is in tax-exempt or tax-deferred accounts, and only a very small portion is in taxable accounts, I pay no state income tax.

#1 - Travel (mutli-day trips & vacations, day trips, live theater/music/shows)
#2 - Food (both groceries and restaurants)
#3 - Hobbies (gardening, model railroading, etc.)
#4 - Health Care (insurance, deductibles, co-pays, meds)
#5 - Home (insurance, property taxes, upkeep)

 

[scrabbler1]

I'll bet most people did not count income tax (I know I didn't. If I did, it would be Number 1 on my list)

Income taxes were #4 on my list shown above. They are about 6% of my total expenses in retirement.

 

[FIREd]

If we take taxes into account, our 10 largest expenses look like this (over the last 12 months):

1) Income Taxes 43%
2) Payroll Taxes 7.0%
3) Groceries 5.4%
4) Mortgage 5.4%
5) Furnishings/Durable Goods 5.3%
6) Auto 3.8%
7) Charity 3.4%
8) Utilities 3.4%
9) Vacations 3.4%
10) Clothing 3.4%

Property taxes are <0.7% and healthcare costs are about 1.3%

 

[kyounge1956]

If we take taxes into account, our 10 largest expenses look like this (over the last 12 months):

1) Income Taxes 43%
2) Payroll Taxes 7.0%
3) Groceries 5.4%
4) Mortgage 5.4%
5) Furnishings/Durable Goods 5.3%
6) Auto 3.8%
7) Charity 3.4%
8) Utilities 3.4%
9) Vacations 3.4%
10) Clothing 3.4%

Property taxes are <0.7% and healthcare costs are about 1.3%

You pay almost half of your income in taxes?? Ouch!

 

[FIREd]

You pay almost half of your income in taxes?? Ouch!

Not quite. Half of our expenses go to taxes. We save about half of our gross income, so we "only" pay 1/4 of our income in taxes.

 

[deserat]

Wow - I keep telling people here in Europe that we in the US are taxed a lot as well - it's just not all done at once. I remember before we moved here, fully 50-60% of our income was taxed - that included federal and state income tax, property tax and sales tax.....and I didn't consider myself rich by any means!

 

[Rambler]

Not FIREd yet, but FIRE budget calls for health premiums (11.5%) to be the largest expense, followed by property tax and insurance on the home (11%), followed by tithes (10%). There are also large amounts for food, travel, hobbies, and "pocket money" to be spent as each of us wish to spend it.

R

 

[Alan]

Wow - I keep telling people here in Europe that we in the US are taxed a lot as well - it's just not all done at once. I remember before we moved here, fully 50-60% of our income was taxed - that included federal and state income tax, property tax and sales tax.....and I didn't consider myself rich by any means!

I didn't count my income tax when I responded earlier, if I did then 40% of my EXPENSES would be income tax (less than 20% of of my gross INCOME goes to taxes).

(income tax) / (spending + income tax) = ~40%

I still think taxes in Europe are much higher than in the USA, both income and indirect taxes (such as VAT, sin and carbon taxes.)

 

[jimnjana]

For us the big three are 1) mortgage & equity loan 2) Property Tax 3) Property Insurance.

When we do decide to downsize, our #1 expense will become travel & entertainment.

 

[M Paquette]

I'm retired, and putting DD through college...

1) Medical insurance
2) Groceries
3) Taxes
4) Education
5) Other insurance

and so on...

 

[BUM]

#1 Health insurance
#2 Single barrel and small batch bourbon

 

[Rustic23]

Property Tax
Mortgage
Automobile

The third category included repair, replacement, and operating expense. We allocate $500 a month to savings for replacement of the car every 10 years. It is a little high, but I'll bet 10 years worth of inflation might make it just about right.

 

[lets-retire]

Our top two are taxes and mortgage.

 

[FurBall]

1. Groceries
2. Health Insurance
3. Gifts
4. Charity

 

[deserat]

I didn't count my income tax when I responded earlier, if I did then 40% of my EXPENSES would be income tax (less than 20% of of my gross INCOME goes to taxes).

(income tax) / (spending + income tax) = ~40%

I still think taxes in Europe are much higher than in the USA, both income and indirect taxes (such as VAT, sin and carbon taxes.)

Alan,

It all depends - if you own a car, then yes, the taxes on fuel, tolls (outside of Germany) can make it very expensive. Yes, the VAT is high, although it is moderated, i.e. not on food, mainly on material goods. They do have property taxes here in Germany, but they are paid once for the lifetime of the house (as I understand). They have income tax and part of that is for their healthcare and other social programs. What's interesting about the VAT is the price you see is with VAT - you don't see how much the total of the VAT is until you purchase and it is shown as a percentage and amount on your receipt. I consider Sales Tax in the US a VAT-like tax. The effect is the same, the consumer sees it at the point of sale. However in the US, it is added at the counter and not in the price as stated on the price tag.

As I remember, the tax burden on the Germans was 50-60% of their income going to one form of tax or another. For me, when I lived in CA, that was true for a summary from the federal, state and local perspective - 50-60% of my income went to taxes.

 

[Maurice]

Here are my top 5:

66% - Income taxes
6.7% - Housing and Maintenance
5.5% - Baby (born this year so lots of start-up costs)
4.7% - Consumer goods and services (expensive year, new high-end computer for DW)
2.2% - Food

 

[Alan]

Alan,

It all depends - if you own a car, then yes, the taxes on fuel, tolls (outside of Germany) can make it very expensive. Yes, the VAT is high, although it is moderated, i.e. not on food, mainly on material goods. They do have property taxes here in Germany, but they are paid once for the lifetime of the house (as I understand). They have income tax and part of that is for their healthcare and other social programs. What's interesting about the VAT is the price you see is with VAT - you don't see how much the total of the VAT is until you purchase and it is shown as a percentage and amount on your receipt. I consider Sales Tax in the US a VAT-like tax. The effect is the same, the consumer sees it at the point of sale. However in the US, it is added at the counter and not in the price as stated on the price tag.

As I remember, the tax burden on the Germans was 50-60% of their income going to one form of tax or another. For me, when I lived in CA, that was true for a summary from the federal, state and local perspective - 50-60% of my income went to taxes.

Interesting, and you are correct that if you have a lot of medical needs then your out of pocket in that area is a small fraction of what it is in the USA.

I'm most familiar with the UK where most of my family still live where the top band of income tax starts at a very low $60K. They also have the equivalent of FICA at ~ 6.2%. VAT was reduced as part of the stimulus to 15% this year but is set to go back to 17.5% Jan 1st so that also is a lot higher than sales taxes in Texas and Louisiana (more than double).

Income tax: taxable bands and rates 2009/2010

Taxable incomerate of tax
0 - £2,440 (savings only) 10 per cent (starting rate for savings)
0 - £37,400 20 per cent (basic rate)
Over £37,400 40 per cent (higher rate)

VAT Standard rate

You pay VAT on most goods and services in the UK at the standard rate, which is 15 per cent. The standard rate will increase to 17.5 per cent on 1 January 2010.

 

[ikubak]

Groceries

with a 14 year old boy, it will be groceries for several more years