Top Ten Expenses

[pcooley]

I've been obsessing over keeping our heating low now that winter is here. For some reason, utilities sticks out in my mind as one of the areas of expense that you have to keep an eye on. However, looking at our top ten expenses, none of the utilities are even near there. What is also curious is that some of the things I feel we're really scrimping by on are our biggest expenses. I keep thinking that we won't have to stress out about groceries as much once the house is paid for, and we'll be able to eat out a little more. (I would prefer to eat mostly organic as opposed to about half-organic, and I would like to eat out more in general, though it always seems so expensive when we do go out). I'm curious how other family's top ten expenses look. Here's ours for the last quarter - First of July to end of September -

1) Mortgage Principal - 36.78% of expenses (Mortgage Interest is a separate category, but it's negligible at this point) - $3,950.10
2) Groceries - 27.10% (Includes grocery store items like laundry detergent, etc.) - $2,910.07
3) Vacation Lodging - 7.45% A week at the Beach - $800
4) Family Clothing - 5.82% $625.35
5) Dining - 5.25% $563.63
6) Supplements - 4.08% (A subtle source of marital discord. My wife keeps piling new ones on. Three herbal sleep aids?) $438.63
7) Bicycling - 4.07% (Mostly my daughter's new bicycle) $437.48
8) Automotive Fuel - 3.31% We still try to ride our bikes mostly, but our daughter has become the after school activity queen. $355.14
9) Children School and Art Supplies - 3.14% $337.71
10) Family Books and Magazines - 2.99% $321.33 (I'm going to have to look to see what I have under there. I can't imagine buying that many books!)

That list really surprises me. Some of it represents the gap between what I budget and what my family spends. I usually budget $200 in the fall for school clothes, but my wife volunteers at a thrift store and brings home $30 to $40 of clothes a week for the kids, (over my grumblings about the budget). I'm surprised that gas is such a big part of our budget since we bicycle. I read somewhere that the average family spends 9% of their income on groceries.

Are we really all that odd budget-wise?

We'll have the mortgage paid off in the next few months. I'd like to relax on the food a little bit, but we still need to cut everything in order to save for college.

[try2bfrugal]

You can compare your budget to other in the Consumer Expenditure Survey tables -

http://www.bls.gov/cex/csxstnd.htm

Our biggest budget expenses are medical, mortgage, groceries, home repair, property taxes, vacations, and reserves for car replacements, in that order.

[ctg492]

Number one through nine: husband. Have to think what ten would be.

[lhamo]

Ours are pretty dramatic -- percentage breakdowns of our annual spending to date:

1. Kids schooling: 44% This is for our share (not even the entire cost) of private school for two kids.

2. Travel/Vacation: 17% Higher than the average year because we took a family cruise, but does not yet include cost for trip to the US we may take in December. we typically make two trips back to the US per year to visit family, as well as 3-4 trips to visit my inlaws in another part of China

3. Housing: 12% Includes mortgage and management fees, but not utilities. More than half our mortgage payment is going to principal at this point, so out-of-pocket cost is more than the actual realized cost.

4. Local Taxes: 7% Our income is exempt from US federal income tax, and what we put into retirement is shielded from local taxes.

5. Food In: 4% This is groceries and food eaten at home

6. Medical: 3% Insurance, deductible and and co-pays

7. Childcare: 3% Not really in this category any more as kids are older -- more for household help (cleaning/cooking/pet sitting when we are away

8. Computer: 3% New laptop for DS and tablet for DH. My computer also needs replacing but may wait until next year for that

9. Utilities: 2% Mostly the annual heating fee, which we have no control over, and electricity, which is hard to bring down due to poorly insulated, extremely large windows on three sides of the house. we're in a 30th floor condo and I am loathe to try to replace the windows...

Dining out, clothing, household items, and gifts all come in at around 1%

[ApatheticNoMore]

Mine are after taxes (since taxes are of course the biggest) in this order: rent, groceries, health insurance, gasoline, utilities, car insurance.

[reader99]

1. 21% Food, mostly at home but including eating out
2. 20% Water and Electric; these are high because of guests in the house
3. 18% Transportation; includes buying a 49cc scooter
4. 18% Condo fee
5. 7% Medical, dental and vision
6. 6% Communication: internet and phone; includes replacing laptop
7. 4% Giving
8. 3% Home care and repair; includes detergent and cleaning tools, plumbing repair, a/c repair
9. 3% Entertainment – basic cable
10. That's all

This thread illustrates why thinking in terms of the "average" family doesn't really get us anywhere; our ways of life naturally differ, and also the smaller the income the greater percentage is spent on food and housing.

[iris lilies]

These are our top categories, grouped in a general order, not exact order because I don't know the exact order:

1) Income taxes
2) Insurance: auto, house, DH's business, his health insurance
3) Property taxes
4) Food & household supplies
5) Heating/cooling of house
6) Entertainment (movies, Netflix, computer, dinner out)
7) Veterinary bills
9) gasoline for the cars--we have no repairs because they are both late model cars
10) Charitable giving
11)Dental, vision
12)Gardening --we spend a lot!

Home repair--hard to know an average annual cost. This year we are tuckpointing for $7,000 but that is a one time thing.

I count income taxes even though some on this site say that really isn't our money (insert eye roll here) and should not be counted as such.

[Blackdog Lin]

I really wish you hadn't asked, PCooley. Running the graphs was something of an eye-opener for me. I don't track taxes nor health insurance, since it comes out of the top of my pension. Per Quicken, for 2013:

(1) "other" - 30% - haven't figured out how to drill this down further.
(2) home repair - 14% - but a unusual year, as we did some minorly extensive remodeling, which won't be repeated for many years.
(3) travel - 13% - again, something not to be repeated for many years. We took a big trip to see family we hadn't seen in 11 years.
(4) Visa - 9% - I would have to drill this down further. Generally, the cc bill is for minor household purchases, but why oh why is it #4 on the list?!!!
(5) Insurance - 9%. I'm a big believer in insurance, so I can see this one being in the top 10.
(6) groceries - 6%. Not bad. At least this one doesn't surprise me.
(7) investments - 4.5% - good girl.
(8) beer - 4% - umm, let's not go there, ok?
(9) utilities - 3.5% - I can live with this.
(10) spending money - 3% - it makes us feel good to have our own discretionary cash in our pockets, which we seldom spend. So it's okay.

But these are somewhat entirely weird categories to have in the top 10. Either I need to get a better handle on my Quicken categories, or we need to.....I don't know. Quit drinking beer, for one thing. :)

Thanks Paul for the food for thought.

[try2bfrugal]

I did mine after income taxes. I also have our insurance budgeted by type, so if I lumped them all together they would come out higher. I also kept business expenses separate.

[iris lilies]

I really wish you hadn't asked, PCooley. Running the graphs was something of an eye-opener for me. I don't track taxes nor health insurance, since it comes out of the top of my pension. Per Quicken, for 2013:

(1) "other" - 30% - haven't figured out how to drill this down further.
(2) home repair - 14% - but a unusual year, as we did some minorly extensive remodeling, which won't be repeated for many years.
(3) travel - 13% - again, something not to be repeated for many years. We took a big trip to see family we hadn't seen in 11 years.
(4) Visa - 9% - I would have to drill this down further. Generally, the cc bill is for minor household purchases, but why oh why is it #4 on the list?!!!
(5) Insurance - 9%. I'm a big believer in insurance, so I can see this one being in the top 10.
(6) groceries - 6%. Not bad. At least this one doesn't surprise me.
(7) investments - 4.5% - good girl.
(8) beer - 4% - umm, let's not go there, ok?
(9) utilities - 3.5% - I can live with this.
(10) spending money - 3% - it makes us feel good to have our own discretionary cash in our pockets, which we seldom spend. So it's okay.

But these are somewhat entirely weird categories to have in the top 10. Either I need to get a better handle on my Quicken categories, or we need to.....I don't know. Quit drinking beer, for one thing. :)

Thanks Paul for the food for thought.

You are a brave woman to put your beer budget out there!

Wine--I throw that in with food and household supplies. I am really trying to keep at 2 bottles per week.

[redfox]

Mortgage.
Student loans (which are piling up to insurmountable amounts, though they are not being paid on due to cash flow issues).
Medical bills.
Car & insurance.
Food.
Utilities.
Eating out.
Tech stuff (spouse is a photographer).
Episodic work clothing expenses.

That's all we spend. We don't travel, we don't have cable, or go out for entertainment. Our hobbies are cheap, and our income is inadequate. Depresses the hell outta me.

[reader99]

"Our hobbies are cheap, and our income is inadequate."

There's something poetic about that, maybe because it's true for me also. Most of the time I succeed in thinking of it as an adventure. But the umpteenth time I don't go or do what my friends are doing it does cramp a little.

[goldensmom]

This is easy as I keep a itemized budget:
1. Farm expenses
2. Taxes, taxes and insurances
3. Farm mortgage
4. Heat and utilities
3. Transportation (gas/vehicle upkeep and repair)
4. Home upkeep and repair
5. Animal feed and care
6. Groceries
7. Entertainment
8. Personal
9. Minor misc. (includes gifts and things that don’t fit anywhere else)

[flowerseverywhere]

1. contribution to grandchildrens 529 accounts
2. travel
3. food, home and out
4. cable and phone
5. gas, vehicle upkeep
6. entertainment when we are not travelling
7. federal taxes
8. house and school taxes
9. other gifts
10. charity

The contributions to the grandkids 529 are optional in our budget, but since we used to give 20% to charity we decided to switch most of it to the grandkids. the parents know this could stop at any time and they are grateful for what we do. After reading about so many kids being saddled with huge school loans we thought this would be a good use of our money. We do volunteer at the local soup kitchen and for habitat for humanity now that we have time.

[catherine]

Number one through nine: husband. Have to think what ten would be.

:laff:

+1

[Florence]

1. Although our mortgage is paid off, I have a monthly fund for property taxes, homeowners insurance, & the HOA fee. That fund is our largest monthly expense.
2. Food and eating out combined are the second largest.
3. Gasoline (husband has a long commute to work but this will drop when he retires next February.)
4. Water. Man alive, they are killing us with conservation fees.
5. Electric. This is high in the summer but will go down for the next six months.
6. Phone. Ack, what can I say, we like to text.
7. Home and garden maintenance
8. Hobbies--quilting, books, succulents
9. Charity
10. Mad money

[catherine]

So I did a "fresh start" on my YNAB recently, so I can only track the last 3 months.

But I can say that:

Needs were 46% of income
Wants were 30%
Debt repayment:24% (recovery from the 2008-2012 MIL house/estate fiasco)

Of the Needs total:
51% was mortgage
26% was health insurance
7% was basic food

Of the Wants total:
Two categories were VERY high, unusual expenses:
--We did put really needed money into our house FINALLY after 30 years. Some would say that this was not the right time to do it given my debt load, but I felt it was the right time.
--It was DHs 60th birthday, and I threw him a party. We rarely have parties outside of family gatherings. I could count on one hand the number of parties we've had in our 36 years of marriage. Again, maybe not the right time, but DH is never going to be 60 again. Carpe diem.

So.. Home improvements ate up a whopping 59% of our "Wants" budget, and Entertainment was 17%. Next month, we go back to scaling back on Wants as much as we can so that we can get rid of this debt.

Also in Wants:
10% on DH "personal" which includes his smoking habit
7% on gifts
3% on my "personal" fund
2% on "Splurge food" which is convenience food, basically. Pizza on Friday night.

[dmc]

#1. Taxes
#2. Insurance, both health and property.
#3. Vehicles, the airplane is very expensive, plus two cars and a truck.
#4. golf club
#5. Travel
#6. Home, paid for, but utilities, upkeep, ect.
#7. Kids, they are grown, but are still expensive.
#8. Clothes and merchandise
#9. Food
#10. Charity, not sure where this falls as the wife is the big giver.

[pcooley]

Thank everyone, for sharing. At the very least, I don't feel like my expenses are extraordinarily weird.

[TMC]

1. contribution to grandchildrens 529 accounts
2. travel
3. food, home and out
4. cable and phone
5. gas, vehicle upkeep
6. entertainment when we are not travelling
7. federal taxes
8. house and school taxes
9. other gifts
10. charity

The contributions to the grandkids 529 are optional in our budget, but since we used to give 20% to charity we decided to switch most of it to the grandkids. the parents know this could stop at any time and they are grateful for what we do. After reading about so many kids being saddled with huge school loans we thought this would be a good use of our money. We do volunteer at the local soup kitchen and for habitat for humanity now that we have time.

Wow, contributing to your granchildrens 529 is such a kind and thoughtful thing to do.

[flowerseverywhere]

Wow, contributing to your granchildrens 529 is such a kind and thoughtful thing to do.

thank you. We could eat out more or buy more clothes or a fancier car but for what? We need nothing. We are lucky to be able to share. It was years of living below our means that got us here.

[ToomuchStuff]

I really wish you hadn't asked, PCooley. Running the graphs was something of an eye-opener for me. I don't track taxes nor health insurance, since it comes out of the top of my pension. Per Quicken, for 2013:

(1) "other" - 30% - haven't figured out how to drill this down further.
(2) home repair - 14% - but a unusual year, as we did some minorly extensive remodeling, which won't be repeated for many years.
(3) travel - 13% - again, something not to be repeated for many years. We took a big trip to see family we hadn't seen in 11 years.
(4) Visa - 9% - I would have to drill this down further. Generally, the cc bill is for minor household purchases, but why oh why is it #4 on the list?!!!


If you can break down the other one, then you should be able to break down the Visa one, although I would expect this is easier to do when setting the system up (categories), rather then after (script that looks at the item description).
I don't run Quicken, but use Gnucash. (couple of manuals on that to read yet) After I read them, I may start a new setting next year with different categories, right now, I am still trying to figure out how to do just one years since multiple years are together.

If you used your card, like I used to, I would expect the reason your card is higher then you expect, is some of the home repair expenses were charged and shows up in both categories.

[SteveinMN]

If you can break down the other one, then you should be able to break down the Visa one
The financial software we use allows us to split transactions into categories, so when I pay the credit card bill, I break the payment into appropriate categories. That helps make accounting for costs a little easier.

However, there's still a line to be straddled here. DW's CC bill can say "Target" and I may have an idea of what she bought, but I don't always see the receipt. And I don't want to make it look like I'm constantly checking on what she spends by asking to see the receipt. We account for withdrawals of spending money, but it becomes pretty much opaque after that; it's hard to identify whether that money was spent on groceries or a home-repair part or books at Goodwill, and, again, I don't want anyone feeling their spending is under the microscope. So I (we) allow for some ambiguity. And, as a result, categories like Miscellaneous and Spending Money may rise into the Top Ten, but diving deeper than that can be difficult.

[ToomuchStuff]

Steve, that is exactly one of the reasons I have been thinking of starting a new set of books. They are easier to keep that way, if you do that when you buy (end of each evening, book work for less then five minutes), rather then after the fact. I have no real tax need for that at this time (good chunk, if not most of my cc use is stuff for work that I asked and get reimbursed for, when the bill comes in), but I am needing to also do it with regular receipts (groceries and the pharmacy at the same store).

By the way, just using quick reply, doesn't seem to work.

[iris lilies]

I edited mine. Really we don't spend that much on gardening, but when I threw out my categories I was thinking of my $250 iris bill and $100+ I'd just dropped on lilies, plus our short vacation this year that was centered around gardening stuff, plus repairs on the properties we maintain for the sole purpose of gardening.

I forgot to add in charitable giving, and that's funny because just this week we were guests at a dinner at one of those creepily private clubs (we couldn't find the damned place, it was so secretive) for being in the inner circle of gifting for this particular historic house.

I don't track expenses which is why my list is so casual, but I do plan to start that when I'm 2 years away from retirement. I"ll need to bring down spending then.

[Blackdog Lin]

You are a brave woman to put your beer budget out there!

Wine--I throw that in with food and household supplies. I am really trying to keep at 2 bottles per week.

I am a lucky woman - the beer budget is his, but the wine budget is more negligible, as he makes it homemade for me. Delicious stuff to which I have become fairly addicted. Now that I think of it, I do track the wine-ingredient expenses, but since they're not on the top ten, obviously I spend much less money on my drinking than he does.

A coincidentally funny thing from tonight : we had casual friends over earlier this evening, I offered the woman a glass of DH's wine, and she later asked if he would sell some, she liked it so well. I said "NO!" he can't keep production up with what I can drink" and it got laughs all around the table.

When I can think better (soberer.....) I want to ask y'all how I can drill down my categories, or make them more accurate, on our spending.....

[jennipurrr]

Historically, mine is...

mortgage (paid off one, got another :/ )
grocery (food and household...does include the occasional adult beverage, but cheap beer/wine suits us)
utilities (which I lump in cable/internet...not exactly utilities)
gasoline

I've been in the gut job on the new house, school, and work and since there are only 24 hours in the day, we've not been tracking expenses except to the penny for the renovation. With the new house we will start tracking them again once things calm down and we get moved in. Fortunately we've been being really frugal due to being to tired to eat out (my biggest vice), and knowing we need all our extra funds to go to the new house.

Paul, to me everything in your list looks reasonable if you are living within your values. I imagine the clothing is probably a pretty high quarter with back to school, and will slack off the other quarters and I remember your wife's supplements being an ongoing issue. Do you have enough in the budget to say she can spend $100 on "whatever" and you can do the same? That way maybe there's not the judgement/discord with the supplements?

Having your mortgage paid off in a few months is a HUGE deal! That is almost 40% of your spending. How old are your kids? What is the college savings plan?

[Gardenarian]

This is great. I've been avoiding budgeting and have no idea what the top ten items are (health insurance, $20,000 last year, would be number one, not sure what comes next.)
I hate dealing with paperwork (or anything else that forces me indoors) but I will get a handle on this. Thanks for starting this thread.

[Florence]

Thank everyone, for sharing. At the very least, I don't feel like my expenses are extraordinarily weird.

You are quite welcome. That's what we're here for--to keep each other from feeling extraordinarily weird!

[Spartana]

I don't track expenses any longer but I'd say my top 10 would be:
1): travel
2): food
3 to 6): household stuff like utilities, taxes, insurance, and maintenance'
7 to 9): car stuff like gas, insurance and registration
10): would be stuff like cell phone (only $100/year) and some occasional clothes, gifts, and personal sundries.

Actually, since I'm mortgage and debt free, low enough income to be in the zero percent income tax bracket, dropped my health insurance to use the VA for free/low cost healthcare, don't buy things like books, magazines, cds, dvds (free from library), don't have cable or home internet (use free Wi-Fi like I am doing now at the library), don't do arts or crafts or projecty kinds of stuff, and have free or inexpensive hobbies those are pretty much ALL my expenses.

[Rogar]

I haven't tracked expenses for a while, either. In the first couple of years after leaving the traditional workforce I kept some detailed records of expenses and income. Now things just seem to be working out and I am pretty much living below my means. I would add one thing that I'd not anticipated in my projects, and that is home repair expenses. I live in a 1950's house that is not exactly a fixerupper, but just has things that wear out. For the past several years I've spent anywhere from a couple of thousand to several thousand dollars a year on home repairs and improvement. Last year it was a new furnace and water heater. The previous year a new driveway to replace crumbling concrete. Window, electrical, or door upgrades. It has been something every year. I am certain this is one of my top five and one I'd not anticipated in a future budget.

[Gregg]

We also don't really track expenses any more since our patterns are fairly well established and it's pretty rare to get a surprise. We did refinance our house so there's no doubt its the #1 expense right now. It was paid off, but we got a 75% LTV, 15 year fixed at 3.16% with no closing costs from our local bank. We only had to pay the required recordings and the appraisal cost, about $550 total. That's just stupid cheap money so we figured it was time to put the equity to work for us. Since we downsized tremendously the payments still fall in that reverse sticker shock category and our liquidity is high so if anything were to head south we will just pay off the loan, but for now the equity markets are way outperforming simple equity.

[ljevtich]

Wondering if the numbers have changed for folks as we get close to the end of the year?

Here is mine with only 20 days left of 2013:

1) Transport:::: $6,890.03: **** 23.54%
2) Food::::: $6,041.30: **** 20.64%
3) Health:::: $4,610.46: **** 15.75%
4) Commun:::: $3,847.84: **** 13.15%
5) Travel:::::: $3,642.57: **** 12.45%
6) Shelter::::: $1,420.63: **** 4.85%
7) Household:::: $1,086.34: **** 3.71%
8) Recreation:::: $868.59: **** 2.97%
9) Taxes:::: $638.14: **** 2.18%
10) Clothing::::: $220.21: **** 0.75%

totals $29,266.10

I am hoping this year we will be under $30K. This is for two people full timing in an RV.
1) Transport is transportation: Our Truck, Jeep (only had for three months this year) and a motorcycle and a scooter. This includes everything - insurance, diesel, gasoline, upgrades, and maintenance.
2) Food is everything - going out to eat and anything bought in a grocery store that has to do with the item going in our mouth or preparing the food.
3) Health is insurance, membership, eye and dental exams and care
4) Comm is communication - online and off, including hardware and software
5) Travel - since we travel I mean campgrounds and hotels. We spent a bit this year with campgrounds but we hope that the winter will be warmer so we don't have to be connected to electricity as much.
6) Shelter is our RV's insurance, maintenance, and upgrades. We own it free and clear
7) Household is Rent/Storage, Laundry, Propane, and Tools
8) Recreation is fun stuff, books, classes, gifts and donations
9) Taxes are federal and state, plus fees (like Costco or Sam's Club, an accountant this year, and gambling)
10) Clothing is for the two of us. We usually get clothes from thrift stores.

Maybe we will be lucky next year and get the expenses down even more. We shall see.

[Bethers]

I'm curious how other family's top ten expenses look...



Here's my year-to-date (Jan-Dec 2013) top 10. I keep track with Quicken.

1. Housing (rent) 28%
2. Tax 17%
3. Recreation 15%
4. Food 11.5%
5. Household items 8.4%
6. Car 7%
7. Medical 4%
8. Utilities 4%
9. Clothing 2.5%
10. Gifts 1%

[softweave]

I track expenses, but don't usually look at them this way. Here are my year-to-date top 10:

Income Taxes 16%
Heating System Replacement 15%
Computer 7%
Medical Insurance 7%
Groceries 6%
Utilities (Water, Electricity, Natural Gas) 5%
Real Estate Tax 3.5%
Other Insurance (Home, Auto, Liability) 3%
Travel 3%
Telecommunications (Landline, Cell and Internet) 3%

This mix is unusual for me, but this has been an unusual year.

High heating oil expenses and a rebate offer convinced me to switch to gas heat this year.
The computer expenses included replacing old desktop with a high end laptop system.
Being unemployed much of the year accounts for the high medical insurance expense.
My home is paid off, so largest fixed housing expense is RE Tax.