2011 Expense Categories and Amounts

[Mulligan]

Sitting here with a stack of receipts I need to enter into the ol' spread sheet. Maybe by year end - if this thread is still active - I'll show you mine.

But, while we're on the subject, how do folks account for things like:

Deferred maintenance and/or replacement on house, cars, electronics, household devices, etc.?

Car depreciation?

Anticipated "big" future expenses (daughter(s)' wedding(s), special trips rather than yearly vacations, "big toys" (boat, RV, plastic surgery))

etc.?

I don't see much accounting for any of these (especially car depreciation which is an unfortunate fact of life). I'll probably estimate with a straight line approach. Two used cars cost a total of $15K. Assume they will last me 7.5 years total before junking them. Thats about $2K/year. Not very precise, but probably accurate enough in the great scheme of things. YMMV

A car can be a big dent in the old budget. When I retired thats the main reason I constructed a loose budget to make sure I can afford a car payment. Since it is long in tooth ( 2002, 170,000 miles) I verbally threaten the junk yard to it, so it behaves. In two years my child support and college expenses go away and then I will have plenty of money for a car, so I just keep my savings stash up in case something happens.

 

[youbet]

Your response sounds as though you took my post as being directed at you. Actually, I was answering a question that Midpack put in front of us.

1. If it's automatically taken out of my paycheck (parking, contribution to health insurance) I don't track it as an expense.

Everybody has their own way of cooking their books. In my case, I consider the financial equivalent of any employer provided benefits as part of my "budget" as though I've received and am spending those dollars. For example, I'm FIRE'd but have been receiving subsidized retiree health insurance from MegaCorp since 2006. The number I use in my cost of living estimate is what I pay plus my estimate of what my employer is paying. That works for me. Your way is apparently working for you.

2. I track everything when it comes to my auto expenses -- tires, inspection, registration, insurance, maintenance. In the annual account I posted above, I included the new tires and oil changes in the discretionary account only because I was too lazy to break each expense out individually.

Sounds good.

3. House has been paid off for 7 years years. I had it built for $170,000 to my specification 10 years ago. i.e. I paid it off in 3 years.

Yeah..... our house is long ago paid off too...... This area is one where apples to apples comparisons get tougher. For example, my 37 yr old son would like to FIRE someday too and we've talked about what it takes. He's familar with our spending. But, I always remind him that in order to to have the low housing costs that we do (given the Chicago suburban area), requires a significant investment up front to buy a house.

Like my special account set aside to fund future health insurance needs, I also have a separate account that will allow me at least 2 replacement of my car, replace all major appliances at least twice, and put two more roofs on the house.

"Special" funds and accounts are another factor that make apples to apples comparisons difficult. There's nothing wrong with what you're doing if it's working for you. But accounting for the accumulation of funds for major purchases or special needs is an area folks tend to see differently.

5. Tons of hobbies. All accounted for in discretionary expenses -- gardening, golf, travel, crafts, skiing (downhill and cross country), photography. When I retire in 17 months, I will be able to fund at least 4 trips (one per season) each year if I choose to do so. Granted, they will be domestic trips that I'm budgeting $2,500 towards each.

As long as your travel and recreational activities meet your own personal life expectations, you're good to go.

I will retire at 55 years of age.

Similar to us. DW made it at 55. I dragged it out until 58. Hardly ER for folks on this board. But it's all good as long as things are working for you and your're enjoying your life.

 

[LauAnn]

Your response sounds as though you took my post as being directed at you. Actually, I was answering a question that Midpack put in front of us.

.

Sorry. Didn't intend for it to come off that way. Just was clarifying why I feel pretty good about where I am, what I've done, and where I hope to be.

 

[haha]

But, while we're on the subject, how do folks account for things like:

Deferred maintenance and/or replacement on house, cars, electronics, household devices, etc.?

Car depreciation?

Anticipated "big" future expenses (daughter(s)' wedding(s), special trips rather than yearly vacations, "big toys" (boat, RV, plastic surgery))

etc.?

I don't see much accounting for any of these (especially car depreciation which is an unfortunate fact of life). I'll probably estimate with a straight line approach. Two used cars cost a total of $15K. Assume they will last me 7.5 years total before junking them. Thats about $2K/year. Not very precise, but probably accurate enough in the great scheme of things. YMMV

When I was young and trying to raise a family, I decided the best thing was to pretend that I was financing all these wear prone items, at the rate I could get on savings or CDs, over the estimated life of the item. A simple straight line sinking fund works well too, if after tax interest rates approximate inflation, which of course is a fantasy today.

Now I usually don't bother. With the very low amount that I drive, my car will likely last as long as I wish to drive. My residence address was planned to allow giving this up when I want to. My apartment is simple and will not need much, my only appliances are washer & dryer, refrigerator & range. All of these are new (the range and reefer I am replacing on move-in.)

My HD TV is still pretty new, but if it breaks I can replace it much more cheaply than it originally cost.

I may draw the line on electronics. No smart phone for me, and for stereo etc my son always has something he is tired of long before my old one is broken. He generally replaces my desktop computer for me too. When I did assume that all this stuff had to be replaced, and I had 2 cars and a pickup, the totals were frightening.

Ha

 

[Aiming_4_55]

Well, I rounded up a tad, but seems higher this year.

Details: Family - 2 adults, 2 kids under six, 1 dog
No mortgage or car payments, but saving for replacements. We can trim expenses in a few areas, but trying to enjoy more as we save a good % from salary, plus rental income.
I list 529 savings as an expense for now, but probably should not.

We're looking at 54 - 55k this year.


Description
Property Tax, Home Insurance - no mortgage 400
Auto, Gas, Insurance, Tabs, Maintenance, Replacement - 2 cars 900
Medical/Dental (out of pocket)/Life Insurance 325
Electric, Gas, Water, Trash 200
Internet, Cable, Cell - 2 phones 200
Food - Grocery 600
Entertainment 300
Vacation Savings 450
Birthdays / Gifts 250
Kids - 529 savings/clothing 800
Misc 125
Total 4550

 

[NW-Bound]

Since I started using Quicken to download transactions from my bank accounts and credit cards, I've got the number, not for 2011, but for the last 12 months right here.

$97,167 for everything except fed and state income taxes and FICA.

Gosh, it's still high, though quite lower than last year, when I bought a used motorhome and a used toad to go with it. Before you cry "spendthrift", let me tell you about some of the bigger line items.

$29K total for gift to my daughter for a down payment for her home, plus college tuition for my younger son.
$9K for healthcare (insurance + out-of-pocket).
$9K utilities (for 2 homes)
$7K for car expenses (fuel+insurance+licensing+repair, no car payments), out of that $2K goes for the MH 6 new tires and miscellaneous maintenance. The fuel cost for the MH is not included in the above $7K, and is counted separately under travel.

It just goes on and on. Somebody pays $300/year on electricity. My main home costs $386 in Aug alone for AC cooling! That's dry heat for you!

It's scary to see my expenses are that high, ever since I started to track it. But then, you can see that how much more money I will have, once my kids become independent.

Considering that we own two homes, and 4 vehicles (including the MH), we actually do not spend that much. I do all my vehicle maintenance, for example.

Another example is that our food cost including eating out is $6K/yr. Compared that to that of FIRED, I think that he must be washing down a lot of foie gras with Dom Perignon

 

[Bestwifeever]

This is our monthly budget for 2012, 2 people, of pretty much fixed or routine expenses. A figure for out of the ordinary expenses is not included, as they would be paid out of Vanguard money market. This year we hope not to have those we've had the past three years (a new car, some home remodeling, family wedding, extensive travel).

re taxes $700
elec 60
nat gas 60
water 50
sewer 20
car gas 200
cable 100
car/home 140
ins
health ins 830
garbage 30
cel 100
home phone 50
food 400
misc 100
health club 85

total $2925

 

[W2R]

This is pretty preliminary and I added in my December property tax and car insurance payments to amounts so far this year (or else it would have made no sense). I combined some categories to make this more comparable to others.

Category|Amount|Comments
Utilities|$386|cable tv+internet, cell, landline, electr., etc.
Groceries|$189|
Entertainment|$344|mostly eating out, ~$300
Car|$158|gas, maintenance, insurance
House|$319|insurance, maint, upgrades, prop tax, lawn guy
Clothes|$36|
Fitness|$92|
Misc|$601|tv, laptops, 2 rms furniture, iPhone, books, gifts, etc.
Medical|$276|fed retiree insurance, colonoscopy, prescriptions, copays...
Total|$2401|plus taxes

Notice how big misc is! I'm working on e x p a n d i n g my lifestyle. Amazon is my friend...

 

[FIREd]

Another example is that our food cost including eating out is $6K/yr. Compared that to that of FIRED, I think that he must be washing down a lot of foie gras with Dom Perignon

We live only once my friend...

 

[W2R]

We live only once my friend...

So true!

 

[haha]

We live only once my friend...

Absolutely. I eat almost $6000/year, me only. I have guests sometimes, but they have me too so it mostly is a wash. And another much smaller but also nice sum on really good meals out. Tonight I was shopping for dinner after coming home from downtown where I had a dozen superb oysters and some house chablis. I saw 2 beautiful thin sliced porterhouse steaks for ony $9. I briefly thought about this thread and considered hamburger, then thought-Nah, look at those steaks! I just fried one rare in really hot butter, covered with big salt crystals and cracked peppercorns. Splashed some wine in the skillet and boiled it off then poured over my steak. With a good Trader Joe salad and a glass of cheap Trader Joe Cabernet it was excellent.

I have nothing to say about the way others eat, (except I kind of worry about that $3/day one) but I am sure glad to be able to eat the way I do.

Ha

 

[NW-Bound]

Yeah, yeah...

See the numbers I posted? Next year, when my youngest is gone, look how much foie gras, jamón ibérico, and prosciutto I can afford with the extra $29K/year. I will out-eat ya'all...

Just kidding... I have been eating a lot of veggie for health reason. Yet, veggie can be expensive if you do not know where to shop. My wife has been going to Hispanic and Oriental grocery stores to buy the veggie there, and when on sales, they are even cheaper.

I only eat homemade soup and salad for lunch. For dinner, I try to gorge myself on about two or three cups of steamed or sauteed veggie before I touch the main dish. The veggie fills me up so that I eat less of the higher calorie foodstuff. As for my wife, she hardly eats anything.

So, that's why our food cost is so low. Yet, my blood pressure and weight have been inching up alarmingly over the years.

Yep, it is sad that when you are financially secure and can afford to eat "real food", your body can't take it any more. Oh well....

 

[StevenJ]

Interesting thread! Here's my data:

Discretionary 1200
Car 291 ins, tax, fuel. No payments
Comm 299 phone, TV, Internet, sat radio
Food 500
Health 52 insurance is company paid
Home 144 tax + insurance. No Mortgage
Security 20 identity & computer data
Subscriptions 30 newspaper, magazines
Utility 230 total electric + $19 trash pickup
Total $2766

Considerations: Still working, company paid insurance (mostly )
Household of 2. DW is retired, I'm getting close
Assorted expenses such as auto maintenance come out of discretionary.

 

[Brett_Cameron]

When I retired at the end of July, I made sure my income streams could match our historical pre-retirement expenses with margin. This thread is a great benchmark for reducing spending. I see many areas to cut costs without appreciable loss of quality of life. Thanks to everyone for sharing. Next year I will post my monthly expenses after I have taken the chain saw to certain categories and a scalpel to the rest.

 

[Midpack]

But, while we're on the subject, how do folks account for things like:

Deferred maintenance and/or replacement on house, cars, electronics, household devices, etc.?

Car depreciation?

Anticipated "big" future expenses (daughter(s)' wedding(s), special trips rather than yearly vacations, "big toys" (boat, RV, plastic surgery))



etc.?

That's what accrual expenses are in my post. I budget for each year knowing it will flucuate, and then show actual expenses in each year. I include:

• periodic cars for myself and DW (shorter cycle for DW),
• furniture (some may have to be replaced, I certainly don't expect to have the same bed for 30-40 years, I've never had a couch that lasted 30-40 years, etc.),
• major home expenses (roof replacement, painting the house, HVAC replacement, appliance replacement, bath kitchen remodeling every 20 yrs or so),
• electronics (PC, TV, etc.),
• major vacations (we do them every 2-3 years, so budget for same).
• And I've projected a few more major purchase items that occur at intervals greater than annual.

The total is significant, so I can't imagine not acknowledging it in managing a 30-40 year spendout. I've tried to be reasonable with my projections, I know what our history has been for more than 30 years. And if we spend less, great. My plan has modest (IMO) safety factors built in by design.

But I show operating expenses as a subtotal for comparison (who cares?) to those who don't. YMMV

 

[happy2bretired]

Ok, here's mine... I probably spend more than some of you on some things, but....that's just me. I didn't include my daughter's wedding expenses but the clothes amount does include some new clothes for wedding. These are averages through November for one person, in a paid off house. Entertainment includes dining out with my kids. Medical does not include insurance but only expenses paid out of pocket and it was not a good year for medical.

auto ($123.57)
cable ($118.66)
cell ($8.75)
clothes ($159.68)
elec ($77.54)
entertainment ($156.36)
food ($383.15)
garbage ($31.09)
gifts ($68.47)
heat ($70.55)
home repair ($132.55)
household ($634.66)
landline ($90.04)
medical ($491.17)
personal care ($62.62)
pets ($104.20)
prop tax ($327.47)
travel ($270.42)
water/sewer ($16.49)

 

[Bimmerbill]

Wow, I am afraid to list my expenses. Maybe it is living in the North East where everything costs a lot.

 

[region2]

I have problems characterizing our expenses. I do keep track of income and outgo to the penny, and in this our first year of retirement, <gulp> our total expenses are a razor-thin 1.5% less than our total income. Here in frigid fly-over land. (Total income includes value of retirement benefits).

I do know where we must cut back, I overspend on ridiculously empty calories like energy drinks, and my DW has a gift-buying habit. It is interesting to see what everyone spends their dough on.

 

[Lagniappe]

I know I shouldn't, but I somehow feel ashamed to post my full numbers given the low numbers shown here. But I really appreciate seeing everyone else's numbers, and feel I should reciprocate. It really helps to have a sense of how your spending in various categories compares to others - if nothing else for ideas about where you may be too high. I had two homes for part of the year. I bought a new car intended to last 15 years, and I had the expenses of the two houses (property taxes, mortgage, utilities, staging, selling costs, etc). So here are my abridged numbers, without the over $50K that went for those line items.

One person, new mortgage, 2011 average monthly spending $6837:

Home related
Mortgage $1730.43;
property taxes $869.50; condo fee $255, utilities (electric, water, gas, trash) $269.58, utilities (cable, phone internet) $228.50; home furn, maint & supplies (painting, ceiling fans, new couch and rugs, etc)$577

Auto:
Gasoline $67; registration $6; maintenance $17; insurance (includes umbrella and home) $241
Transportation other $6

Groceries $276; Dining Out $128
Clothing $150
Health/ Medical $244 (does not include employer paid health insurance)
Gym $76
Charity $28
Family $263 (Help mom with monthly expenses)
Gifts $218
Travel $566
Entertainment $151
Personal $168 (hair, makeup, massage, etc)
Misc $71
Investment Expenses $167

 

[FUEGO]

For our family of 4 (plus a cat), we are running about $25,600 a year for core spending (that spending which will carry over into ER). That includes roughly $7000 on food/household items (including dining out), $7000 on housing related items (utilities and maintenance, insurance, taxes), and $3000 for maintaining and fueling our autos. The remainder, in order from largest expense to least, are vacations/entertainment, gifts, medical/dental, electronics, educational, clothing, and misc.

I have omitted our mortgage payment because we could easily pay it off but choose to keep it due to the ridiculously low rate, and it has 4 years left on the loan anyway. If I included that it would up the numbers by about $6000 a year, but mentally to me, it is just a matter of accounting and cash flow whether to keep or pay off the mortgage so I don't really consider it an "expense".

I would say we are very cost conscious but have no problem spending money when it brings value.

 

[W2R]

Wow, I am afraid to list my expenses. Maybe it is living in the North East where everything costs a lot.

Don't be afraid - - nobody's gonna bite. Most of us know that it costs a lot more to live in the Northeast than in the South or Midwest. Also many of us would find the distribution of expenses in a larger budget to be interesting.

 

[FANOFJESUS]

OK here goes we are big spenders.

Utilities 250
Home taxes, home and car insurance 275
Health care 110
Food 400
Car 150
Home maintance 75

Total 1260

 

[skyvue]

Here are my 2011 Averages (divorce, one child). Paid off the condo mid way thru the year so they are skewed a bit. I do not track things taken out of my check such as health insurance premiums, taxes, charity, etc... Basically these are my expenses I must pay with my "net" take home pay:

Mortage/Property Taxes: $553
Child Support/High School Tuition: $1,365
Condo Maint Fees & Condo Repairs: $311
Car: $410
Car Gas & Maint: $118
Shopping (clothes, house) and Misc: $249
Auto/Condo Insurance: $124
Water: $17
Natural Gas: $34
Electric: $59
Cable/Inet/Phone: $152
Medical/Dental (out of pocket only): $44
Grocery: $240
Cash (Entertainment, Gifts, vacation, bars, etc..): $1,333
Total: $5,009

Good news is child support and tuition will only be for two more years. The obvious area I need to cut back on is my "cash" which is mostly spent in bars, restaurants, concerts, sporting events, etc.... Feel kind of ashamed that I spend more on "fun" than some of you do on EVERYTHING!

 

[aaronc879]

way thru the year so they are skewed a bit. I do not track things taken out of Here are my 2011 Averages (divorce, one child). Paid off the condo midmy check such as health insurance premiums, taxes, charity, etc... Basically these are my expenses I must pay with my "net" take home pay:

Mortage/Property Taxes: $553
Child Support/High School Tuition: $1,365
Condo Maint Fees & Condo Repairs: $311
Car: $410
Car Gas & Maint: $118
Shopping (clothes, house) and Misc: $249
Auto/Condo Insurance: $124
Water: $17
Natural Gas: $34
Electric: $59
Cable/Inet/Phone: $152
Medical/Dental (out of pocket only): $44
Grocery: $240
Cash (Entertainment, Gifts, vacation, bars, etc..): $1,333
Total: $5,009

Good news is child support and tuition will only be for two more years. The obvious area I need to cut back on is my "cash" which is mostly spent in bars, restaurants, concerts, sporting events, etc.... Feel kind of ashamed that I spend more on "fun" than some of you do on EVERYTHING!

No need to feel ashamed. You clearly make much more money therefore you can spend much more money. Yes your "fun" money is more than my entire budget but that's because i'm unemployed with a total portfolio hovering at the border between 5 and 6 figures and when I eventually get another job i'll barely(or not even) have a take-home pay of $1000/mo so I have to keep my expenses low. You don't. Enjoy yourself if you're able to, as you clearly are. Not all of us can.

 

[NW-Bound]

Sorry to hear about your job loss there, Aaron. I remember that early this year, or was it even before that, you had some apprehension that your job might be in jeopardy. Hope the economy picks up and you will find something soon.