One of my goals in 2019 is to get back to basics. I feel like I’ve succumbed to lifestyle inflation, so I’m taking the time to track my money in detail (using my fave tool: Quicken 2007 for Mac) in an attempt to identify problem areas. When I find money leaks, I need to decide whether to eliminate them or accept them.
While I’m skeptical that sharing my monthly spending report has any real value — and it invites unnecessary judgment (I’m already judging myself!) — popular opinion from GRS readers seems to be: Do it!
You folks like looking at my struggles with money haha.
So, here’s a quick look at how I spent my money in February — the good, the bad, and the ugly.
February Spending Report
In January, I spent $4819.27 to support my lifestyle. In February, I spent $4556.49, a decline of $250.
That’s great! But it still misses my target: $4000 per month. While this is an arbitrary goal, I think it’s a good one. I feel like that’s a sustainable level for the future. (If my income from Get Rich Slowly and other sources increases, then I can consider boosting my target spending.)
Here’s a quick run-down of how I spent on certain key categories:
- I spent $726.00 on food in February, up $24.99 from January. Of this, $146.41 was spent on dining out, which is extremely low for me. I spent $373.31 on groceries and $189.75 on HelloFresh. (For more info, see my HelloFresh review and look at HelloFresh costs.) In 2018, I averaged $1038.03 per month on food (and spent $1104.97 in February of last year), so I’m happy with the decline so far in 2019. I’d like to see this drop even more, though.
- Pet spending dropped from $186.63 in January to $112.14 in February. That still seems like a lot. As a point of comparison, I pulled up the numbers from last year. In 2018, I spent an average of $121.40 per month to support our one dog and three cats. Apparently, that’s just how much it costs to feed and care for our beasts. (And they’re certain they could eat more than we currently feed them.)
- In January, I spent $326.08 on sin, a category I use to track how much I spend on alcohol, tobacco, and marijuana. (Pot is legal in Oregon. I don’t often use it recreationally, but I use it nearly every night to help me sleep. A couple of times per year, I buy cigars and/or clove cigarettes.) In February, my spending on sin dropped to $117.15. This is primarily because I went four weeks without touching a drop off alcohol. And since I resumed drinking, I’ve been much more moderate in my consumption.
- As I mentioned at the end of the year, the iTunes store is a dangerous spot for me. I have a tendency to browse and buy a lot of movies. In January, I spent only $3.99 on the iTunes store. Last month, I spent only $39.94. That two-month total of $43.93 is far below the $356.33 I spent at iTunes during the first two months of 2018. Progress!
- In January, I had $1034.40 of one-time expenses. At the time, I worried that every month would have one-time expenses. That’s still a worry. In February, I spent $376.80 to replace the bald tires on my new 1993 Toyota pickup. I also spent $1340 to renew our subscription to Broadway Across America (two tickets for seven shows throughout the year).
Despite spending $4556.49 in February, my net worth increased by $24,276.77 (or 1.78%) — and that’s after a 2.29% increase in January. My net worth has grown $54,894.68 (or 4.11%) during the first two months of 2019.
I wish I could say my increase in wealth has come because I’m so damn smart, but that’s just not the case. All credit goes to gains in the stock market. If we enter a rocky patch — or worse, a recession — my net worth is going to fall fast. When that happens, I want to be ready to cut spending, if necessary.
Final Thoughts
After two months of updating Quicken daily, I’m noticing some patterns. For example, my spending falls into four broad categories.
- Fixed expenses (such as pets, insurance, and utilities) come to roughly $1100 per month.
- Variable spending on necessities (such as food, haircuts, and home + car repairs) comes to about $1200 per month.
- Variable spending on luxuries (such as books, sin, and the hot tub) comes to about $700 per month.
- One-time expenses (new pickup, theater tickets, and the like) are totaling about $1500 per month.
I consider roughly half of my spending to be necessary; the other half is (mostly) indulgent.
The fixed expenses are obligations. They’re not going away and they’re unlikely to change. Variable spending on necessities can be altered, although there’s going to be a floor for each expense. (You’ve been watching in real-time as I toy with my food spending, for instance.)
Variable spending on luxuries is by definition an indulgence. I could absolutely cut these costs, if needed. And, in fact, I have my eye on some of these. Finally, the one-time expenses are a mixed bag. Some, like the 1993 Toyota pickup, are necessities (or close to necessities). Others, like the theater tickets, are absolute luxuries.
I suspect that I’ll want to re-evaluate some of my one-time expenses by the time the year is over. Some are more like annual expenses than “one-time” expenses, and I’d probably profit from determining which to continue…and which to cancel.
Kim and I enjoy our theater excursions and our Portland Timbers season tickets, but if we truly want to cut costs, some of these indulgences may have to go. We’ll see. For now, I’m content tracking them and flagging them for future discussion.
J.D., appreciate your honesty. One thing I was wondering (and maybe I missed it) is if you do sinking funds for insurance, property taxes, etc. I am working on doing this since we paid off our mortgage recently. I think your analysis of your spending was practical. We all have things that are important to us, that others might consider luxuries. But they help enhance our lives in tangible and intangible ways. We have put $$ down on a dream vacation to celebrate paying off our house and my spouses’s 60th birthday this year. It is the most we have ever spent on a vacation, and some people might think we were being extravagant, but the trip aligns with our values. Being frugal all our lives has allowed us to be able to do this.
Hey, Chris. I’ve never heard the term “sinking fund” before. What do you mean by that?
I think he means setting aside 1/12 of a yearly expense every month. So if you know that you have a $1200 home insurance bill that you pay with cash every July, $100 hits your monthly budget to handle that. Anyone, feel free to correct me. I’ve got four children and big shoulders. I can take it. 😉
Ha ha, you’re right.
The term sinking fund originally comes from bond markets and it’s an account where money is set aside to retire long-term debt.
But for PF it’s what you say. E.g.: https://www.thebalance.com/sinking-funds-2385686
YNAB auto-does this, so that’s a system I use, although I have a separate sinking fund (“meta” sink I guess) where I throw in windfalls to allocate for future, use either for investment or capital purchases etc…
Yes, this is what I was asking about. For instance, we put $100/mo aside to pay for our car insurance that is due every 6 mos.
We, currently, have six sinking funds: insurance, gifts, house insurance and taxes, car- repair/replace, house repairs/dog bills, propane. It is nice not to be stressed out when a big bill comes in. One fourth of our monthly income is funneled into these savings accounts.
Food is tough. The six of us get by on about $1300/ month, but in MO food is generally less expensive than the Pacific NW. I think that’s our floor since we generally have to keep all gluten, legumes, and most dairy out of our diets. When I hear people recommend “beans and rice” I think, “If only!”
Preach!
The limitations are different, but I feel you.
Us “looking at your struggles with money” actually benefit from your honesty because it makes us pause and look into our own.
I don’t track monthly payment since we paid off the mortgage and freed plenty a-money, but I watch it closely. We use 2 credit cards: one joint goes for all (paid in full), and my husband’s goes for his mocha consumption at work and his lunches and dinners with his son weekly. That “other” runs between $350 and 400, what in my mind is more than necessary in general (they are easy with food out, Taco’s or Chipotle), but if I am pressed for truth, it generates them time together and joy – and mocha’s gets him through the work day of high pressure (I still don’t like the cost of it and calories coming along).
The food bill is really low by many standards ($400 average) as I cook at home always – and go meatless at least twice if not trice a week (the other days are chicken for dinner and left-over for lunch). It all definitely cuts costs. I don’t drink (choice), he consumes, maybe, a pack of beer a month if lucky. So there’s that, sin is minimal. Eating out category is dinner date once a month (runs at about $70 max) and 4 Sunday coffee dates ($7 a piece).
I wish, wish I could say we spend at luxury of theater/concert/etc., but here there is nothing that I find worthy driving downtown for (I grew up on classical theater and ballet/conservatory music, plus 11 years in NYC were a spoil, and Austin Capital of Music is not cutting it for me). One day. We add those when travel. Travel, though, is our extra, for sure – on a cheap, but 3-4 times a year. Phone bill is $85 for two, utility combined $150 average. Then, of course, insurance policies, property taxes, gas. And yes, accidentals (changed bold tires in December, dragged a whole year until it was, literally, dangerous!).
So there you go. Thanks for sharing, once again. Keep on tracking – literally and figuratively.
Nice job reducing your sin expense. It was pretty high in January. Less alcohol is a good thing.
Our sin and fun expense have been very low lately. We’ve been busy with our move.
Once our old home sold, we’ll relax a bit and spend more. I’m just a bit stressed out with 2 mortgages (soon to be 3…)
I definitely appreciate that we aren’t the only ones that struggle mightily to control our food costs. Love that you support the arts in such a way as well.
I agree with Chris and Catherine on starting a sinking fund for some expenses. You know your car will need new tires at some point, plus oil changes, new shocks and struts, etc. Open a separate savings account for vehicle repair expenses and just deposit $50/month or whatever is appropriate into it. When repairs are needed, they are then no longer one-time expenses. They are something you’ve planned for and have funds set aside to pay for. And by keeping the money in its own account, you are less tempted to use it for other things.
Hey, congrats!
I just zoomed into this problem you mention, and have to ask–why buy movies? Real question here. I love movies, used to watch one a day (these days I’m catching up with TV shows), but it’s a lot cheaper to rent than to buy, especially considering that buying streams you don’t actually own the media, you’re just buying a license, so zero resale value there, unlike discs.
I used to rent Netflix DVD because they have stuff nobody else has, all it takes is a day or two of wait, and it costs you something like a buck per viewing if you time your deliveries right. However, I got tired of going to the post office (I don’t get mail delivery at home) and streaming got better, so I quit that for now.
For streams, until recently I was using Filmstruck, which unfortunately went under last year (ouch). HOWEVER, The Criterion Channel is about to launch its service in April. If you sign as a charter member you pay $89 per year for eternity (however that lasts, lol,) and while the completely library is not available all at once (they curate seasonally), it’s a tremendous value and more than anyone can watch all at once.
Check them out, it’s going to be a glorious Cinema Paradiso: https://www.criterionchannel.com
I can’t wait!
Anyway, for non-criterion, Amazon has rentals starting at like $3 apiece? That is if you must rent, because subscription streaming services will give you a better deal and you can watch endlessly, if they match your tastes. (Big IF, but it all depends). iTunes should have rentals too, but I don’t use so I can tell.
But check your cost per use vs. alternative options like the library (free), bargain bins, buy/resell used discs, rental kiosks, digital rentals, and streaming services. So many options.
I think owning a license to a stream is not a good value unless you’re planning to rewatch a movie 20 times or more. So, maybe for video wallpaper it could be a great bang for the buck… like your own 24 Hour Psycho, ha ha ha (see: https://en.wikipedia.org/wiki/24_Hour_Psycho )
OK! Have fun.
Piggy backing on this to say, great to see iTunes spending going way down. That’s a huge win, JD!
JD –we also have a subscription to our nearby performing arts center’s Broadway series. This may be awful to say, but I’ve realized that I can make money on reselling our tickets if we decide to pass or have a conflict. Some are clearly more sought after than others, but last season we ended up make a few bucks AFTER covering our costs. You are probably nice and give your seats to a friend if you can’t go. I used to do that, but then actually looked at the resale market and sold some instead.
It’s possible that it won’t be as successful next season because we had Hamilton this year which basically sold out every season ticket membership which meant every show was essentially sold out, so we’ll see.
Interesting that you’d put this subscription in “one time expense” rather than Entertainment. As you note, some one time expenses are unavoidable, but nearly all “entertainment” is, if you want to scrutinize that category. I even put any concessions associated with theater or sports in “entertainment” as well since the prices are bonkers and I’d never pay that much had I not been at the event.
Ah, I should clear this up: I absolutely classify these theater tickets as Entertainment in Quicken. When I say at the end of the post that I’ve realized my spending falls into four broad categories, these aren’t actually the categories I use to track things. They’re sort of meta categories that I can use to evaluate the overall utility of an expense. Insurance and utilities are necessities. Some luxury expenses are ongoing (books, hot tub, etc.). Others are one-time or annual.
Does that make sense?
Gotcha. 🙂
Oooh I’m jealous of your Broadway in Portland seats at that price 🙂 I’m about to renew my subscription as well & I can confirm that the First Balcony, Section A falls into the Tier 4 pricing but has a great view — in case you want to keep your tickets but go for a less expensive option. Our two seats are getting renewed at $690 for the six shows (we’re skipping the Book of Mormon option because it was just here last season & also we walked out at intermission).
Had one of those “one damn thing after another” months in Feb and there was a planned-months-in-advance vacation, too.
Per Mint I had a $200 cash surplus, but that’s really not true as the hotel screwed up billing on the CC and $525 of expenses was pushed into March.
However, once I rule out the “one damn thing after another” expenses, the budget numbers are okay, and “household petty cash” covered them without me having to tap the “oh $nap!” fund.
One of the things that has helped me reign in casual spending is Fun Cheap or Free’s One Envelope Budget (https://www.youtube.com/watch?v=VCr-54OH7IY) which assumes that you autopay the fundamentals but need help reigning in your petty cash spending to find those extra savings.
I do a slight variation and set myself a weekly food budget of $75 (I have a special diet) and a discretionary weekly spending budget of $75. I sweep the leftovers into the petty household cash account. And through doing this, PHC has hit the threshold where I shave some off the top and send it to the Oh $nap fund.
Does anyone else spend more than roughly $1k a month on food and eating out that others are stating above? I know that my family spends way more than we should, but when I keep seeing everyone spending $1k a month, it blows my mind. There are three of us (My wife, my four year old and I) and we live in San Jose (Bay Area, higher cost area). We spend closer to $3k a month. I include everything that is dining related to eating out. For example, Starbucks, desert, and drinks along with meals out. I also include stops at places like gas stations to buy snacks as eating out. Groceries might be overstated as well as I import expenses from our credit card and lump Costco/Target to groceries. My wife might buy other things that are not groceries from these stores such as clothing, kids toys, books, etc. Do others break down individual purchases from these types of stores or are they lumping them into one category such as groceries? Do you include in your grocery bill purchases such as laundry detergent, personal care items, etc, or is this considered something else?
Overall, clothing and kids toys are not going to make up the $2k difference that exists and we will have work to do to get that bill down going forward, but I just am curious if I am comparing apples to apples.
I have groceries & dining out separate. I don’t frequent Starbucks (or any coffee habit) and I include drinks with dinner in my dining out category. I don’t go to Costco or Target much (empty nest) so I don’t have clothing/toys/books lumped in with food purchases, but I would separate those if I did.
I do keep a “personal/self care” item, but that’s mostly for haircuts and the VERY rare trip to manicure/pedicure. If I got the drug store or target for specific items for hair, I’d probably put those items in the person/self care category.
My whole budget set up (I use YNAB) is predicated on the idea that I want to easily know which amounts are required vs discretionary. So my “food” line items are split into different sections of my budget. Groceries are in the Monthly/required section, dining out is in the “Fun” section.
I have worked with a few families with their budgets in the DC area. Close to the same amounts spent 2.5-3.5K per month loosely tracked.
Food category is the easiest to get crazy in. You work hard, you deserve to eat (live) well. A dinner out is easily $125 without drinks. It is what it is.
You need to keep your goals in mind. Do you want to retire early/ get it under control, or do you want to just enjoy the money you are making today and not worry? That is where commitment starts. Make sure both of you agree on where you want to go.
If you choose the first, track everything- and I mean everything. Write down what is bought every day. “Target- $90 clothes(baby, him), $25 toys, $7 wine, $45 cleaning”. “Gas station- $40. Gas, $3.5o drink” Try not to cut back because you are writing it down.
Then, at the end of the month, sit down together over a glass of wine and put things in categories.
Here is the hard part—NO judgements at this meeting. If you judge each other, things will begin to “not be shared” and that is the absolute worse thing for your relationship and your budget.
Usually, that meeting is a huge eye opener. You will see where your money is going. Then, together, you make realistic expectations of where you want your money to go. This is not that easy. You have different opinions on what is important/fun/needed for sanity. Listen. We established an allowance at our first meeting. We could spend that money on whatever we chose. That helped us keep to the other expectations for the last 2o years.
This is one of the most adult conversations you will have in your marriage. Work together and you will be stronger for it.
Great advice JanBo.
If one is concerned about their ____ budget, the only way to know if it’s unavoidable vs potential for reduction is to get that category accurate.
I don’t have a single budget category that is > $1000 / month (aside from Mortgage). Unless there is a single 1 time expense (like auto repair), I suspect it should be broken down into smaller items.
If $3k/month for “food” is okay, so be it. But if it’s being described as “way more”, then the first step is to see which components are actually the ones with potential to reduce. Toys and books are certainly not food. So one could break out those items from the total receipt, or perhaps more easily, just not combine those trips/purchases.
I appreciate your perspectives. The reason I haven’t separated the target and Costco receipts comes down to time. I can see how this is helpful to get that level of detail and try to separate it when I know there is a big purchase (ie christmas gifts, electronic, etc), but my main goal is to have enough information to get an idea of where our money is going.
We have lifestyle creep which is why we spend $3k on food. We are two working professionals while being parents at home and definitely revert to eating out or the quick whole foods line rather than cook. I was more curious to see if we were WAY out of the box or maybe just a little out of the box and it sounds like the answer is, it depends. We are able to save, but at the end of the day, I value time and getting to a point where perhaps only one has to work. Food is one of the biggest places where we can cut back.
You both are right in that breaking out those individual expenses will give perspective to the true food budget. I am going to make it a priority to track that over the next couple of months to truly identify how much is food and work on cutting that back. Thanks!
Just my husband and I and our grocery budget is $250 a month. Honestly, we don’t cook the complicated meals of years ago and often just microwave something. Our “entertainment” budget is $600 a month and that would include movies and eating out. We eat lunch out several times a week, but usually just nicer fast food. We always have several hundred left over in that account.
I haven’t a clue how people spend $1000 a month on food.
When we go to Costco or Target I break up the receipt into categories: food, non-food, medical, clothes, even flowers are separate.
FWIW, Spencer, we (husband, self, adult son) live in the Bay Area as well and generally count “food” similarly. We’re about 2K a month.
Good to know. Thanks Sassy