Got a reality check this week

Husband and I realized this week that we are basically spending $1000 each month more than we are bringing in
We earn around $7000 in pay but after itemizing what we spent in January, we spent over $8000. We were both shocked because our bank account is always between $15000-$19000 depending on what bills are still due and whose payckeck will be deposited.

We itemized where we spent our money last month and realized we need to curb our spending in some areas. Can't really change food, electric, water, etc as those are in the normal range. But I need to curb my Amazon addiction. No more buying because I want something because those frequent small purchases added up to quite a bit. That shouldn't be a problem because it was just "wants" and I can obviously do without those items.

What really shocked me was how much I spent on cat food. I knew that I fed my cats a more expensive brand of food than Fancy Feast or Blue Buffalo but didn't realize how much a month's worth of food cost because I would buy it in small amounts as we ran out of a certain flavor. I was spening over $300 a month on cat food!!!! Holy crap!! So like it or not, my cats are no longer getting that brand and I will be switching them to a much cheaper one as soon as my stock runs out.

Hopefully when we go through February's expenses, we won't be spending nearly as much and will have bring home more money than what was going out.

Good for you for doing this work--I am working on this, too, to try to live within my retirement income, only, rather than counting on my work, which keeps dwindling. It's hard, with groceries going up so much, and everything else.

My husband makes our dog food and only supplements with salmon kibble because they are prone to allergies. Could you make your own catfood? I found this site with recipe:

10 Homemade Cat Food Recipes Every Cat Will Love | Hepper

I am in your camp, Klunick!! We are trying to minimize expenses because eventually I want to retire, and I'm shooting for living off SS only. But, like you, we tend to overrun our budget by $1000/month! Our landmine tends to be on "entertainment"--when kids come up, we go out and buy stuff that they like; when birthdays come around, we are probably more generous than we need to be; DH is an entertainer at heart. If the neighbors come over, where the neighborhood culture is to just bring what you want to drink and no one eats anything, DH has to be Host with the Most, making sure our liquor cabinet is stocked, and he always has one "presentation" food that he usually makes, and if he doesn't he buys homemade desserts from town, which tend to be expensive--like $20 for a pie.

My "gazing us pins" are the same as yours: Amazon--I usually treat myself to a book once a week. Then of course there are the other random purchases that one-click can magically manifest for you... I also tend to subscribe to reading matter than I don't read much but I forget to unsubscribe.

I am determined not to overrun our budget in 2023. Because I'm self-employed, and every financial splurge or misstep means I have to take on another project before I retire, "your money or your life" is taking on greater relevance for me.

I could try to make it but honestly, I am not that type of person. Haha!! Retirement is part of the reason we wanted to get serious about our finances. Granted, when the kids are gone and we won't be paying for their tuition, car insurance, etc we will have more money staying put in our bank account. But that is a few years away. We need to start trimming the excess where we can now.

Yes, the price of everything is ridiculous.Weekly grocery bill was $200. Same food but now costs $300. Also didn't help that we added a car payment to the mix but that was unavoidable. We are making double payments to get that expense out of the way quicker. It was interesting to see how all those small purchases were killing us though.

My budget is $1542 per month and I will allow myself to go over that three months out of the year due to large expenses like when I pay my auto insurance for the whole year, which gets me a discount. Last year I wanted to stay on budget 8 months and I did it, so this year I am aiming a little higher.

$1542 is my projected retirement benefit at age 62 so if I can get to the point where I stay on budget every month of the year theoretically I could retire then, medical insurance being the big unknown.

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Originally Posted by Yppej

My budget is $1542 per month and I will allow myself to go over that three months out of the year due to large expenses like when I pay my auto insurance for the whole year, which gets me a discount. Last year I wanted to stay on budget 8 months and I did it, so this year I am aiming a little higher.

$1542 is my projected retirement benefit at age 62 so if I can get to the point where I stay on budget every month of the year theoretically I could retire then, medical insurance being the big unknown.

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That's great!!!

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Originally Posted by Klunick

That's great!!!

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I agree!

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Originally Posted by Yppej

My budget is $1542 per month and I will allow myself to go over that three months out of the year due to large expenses like when I pay my auto insurance for the whole year, which gets me a discount. Last year I wanted to stay on budget 8 months and I did it, so this year I am aiming a little higher.

$1542 is my projected retirement benefit at age 62 so if I can get to the point where I stay on budget every month of the year theoretically I could retire then, medical insurance being the big unknown.

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I pay right around 400 a month for Medicare B, a supplement Plan G, and a bare bones cheap prescription drug plan.

Between my retirement and age 65, at which time I could access medicare, I paid around $400 a month for a bare-bones high deductible health care plan. Now that I on Medicare, I pay $163.00 per month for an advantage plan with Aetna. That made a huge difference in our budget.

Even Fancy Feast cat food has gone up .20 a can. I have a finicky cat who prefers fresh meat so I buy chicken when it is on sale, boil it up, and freeze small portions to supplement his canned food. At 1.27 lb, the chicken is actually cheaper than the canned food. I keep monthly logs of category expenses and see that our average monthly cost for two cats last year was $36. They are getting old so I will be adding more vet bills to that line item no doubt.

I paid $120 for 6 months of tick protection for doggo.

we did not treat him for ticks in the city, but here in Hermann ticks are plentiful.

I probably spend close to $400 a month on commuting costs - about $250 a month on gas (was $300 earlier this year) and more maintenance/repairs on the car plus having to replace vehicles more often. So that would wash the medical, except medical inflation is out of control in the US.

Good for you all trying to spend less.

I always thought of getting another dog in retirement but it's definitely an expense.

I have a 120 mile round trip commute and spend almost $500 on gas each month and I have a very good gas efficient car so I can't imagine what it would be if I had a gas guzzler.

I basically haven’t bought gas for the past 3 years after picking up pre-pandemic an inexpensive used electric car. It’s already paid for itself in fuel and maintenance costs.

We did some major work since I posted this and it shows. Last month, we had about $9200 coming in and only $3900 going out.

Wow, Klunick, great job! We need to work on this. We're retired with about 6K monthly income. Not much in savings/investments. And we spend most of what we get, which is not a good thing. Because sooner or later, something big is going to need repair. Downsizing isn't really on the table for many many reasons. At least we have no debt!!

Klunick, that is a huge success! Good job.

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Originally Posted by early morning

Wow, Klunick, great job! We need to work on this. We're retired with about 6K monthly income. Not much in savings/investments. And we spend most of what we get, which is not a good thing. Because sooner or later, something big is going to need repair. Downsizing isn't really on the table for many many reasons. At least we have no debt!!

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My husband is planning on retiring in less than two years so we had to get things under control. I still have 8 years until I hit 62. We paid off the house 10-15 years ago and also have zero debt.

Nice job!!! Yes, getting things under control before retirement is a biggie.

Klunick, that is amazing! Can you tell me some of your successful strategies for identifying the money sucks and reducing them? Going from 7000+ to 3900/month is amazing!!

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Originally Posted by catherine

Klunick, that is amazing! Can you tell me some of your successful strategies for identifying the money sucks and reducing them? Going from 7000+ to 3900/month is amazing!!

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Husband took one of our bank statements and did an Excel spreadsheet itemizing each category. That showed what things were items that were non-negotiable like water, electric, auto insurance, etc. Then there were the things we had control over like Amazon, eating out, groceries, etc. Once we saw what items were unnecessarily sucking money each month, we were able to correct it. Nothing too drastic like buying store brand instead of name brand, packing lunches instead of buying lunch, and even changing the brand of cat food we were feeding our cats. Simple changes that didn't cause too much of a disturbance in our lives so we barely noticed the difference.

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Originally Posted by Klunick

Husband took one of our bank statements and did an Excel spreadsheet itemizing each category. That showed what things were items that were non-negotiable like water, electric, auto insurance, etc. Then there were the things we had control over like Amazon, eating out, groceries, etc. Once we saw what items were unnecessarily sucking money each month, we were able to correct it. Nothing too drastic like buying store brand instead of name brand, packing lunches instead of buying lunch, and even changing the brand of cat food we were feeding our cats. Simple changes that didn't cause too much of a disturbance in our lives so we barely noticed the difference.

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i’m glad to revisit the theme of this forum, simple living. Buy the things that you need but not the endless crap that you want or THINK you need.

Your success is a refreshing reminder of why we all gathered here to begin with.

I agree with il. You are motivating me to take a closer look at our expenditures. I, personally, think I've gotten a bit frivolous the last month or so. Time to rein it in. Thanks for sharing, Klunick.

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Originally Posted by happystuff

I agree with il. You are motivating me to take a closer look at our expenditures. I, personally, think I've gotten a bit frivolous the last month or so. Time to rein it in. Thanks for sharing, Klunick.

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I also agree with IL. It's great to be reminded with real-life success stories.

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Originally Posted by catherine

I also agree with IL. It's great to be reminded with real-life success stories.

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Absolutely! I find it very motivating to hear of other people's successing... and even failures!

Seeing the improvement in our bank account was slow going at first and then really took off. We have a nice cushion now which is good because we will need to spend $18000 getting a new septic system in the next few months. We don't use credit cards usually so we don't make a big purchase until we have enough in the bank to cover it without causing too much of a strain. I am just glad my husband isn't accusing me of stealing money like he was two years ago. He swore that the "missing money" was in some secret bank account set up by me because our joint bank account kept staying around the same amount each month.

So far we are able to do the same, Klunick - to something when we actually have the money to pay for it. Right now, it is updating the Radon system. Current system was in the house at the time of purchase - 35+ years ago! Always something... sigh.

Getting our finances in order has provided us the opportunity to start buying silver as an investment as well as planning to create a $100,000 investment portfolio for each of our sons when they turn 30. Hopefully if the market cooperates, it will net over $1M by the time it's time for them to retire. "Experts" say by then, it would take $2M in retirement to live comfortably so they will be halfway there and also be able to create generational wealth for their kids as well.

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Originally Posted by Klunick

Getting our finances in order has provided us the opportunity to start buying silver as an investment as well as planning to create a $100,000 investment portfolio for each of our sons when they turn 30. Hopefully if the market cooperates, it will net over $1M by the time it's time for them to retire. "Experts" say by then, it would take $2M in retirement to live comfortably so they will be halfway there and also be able to create generational wealth for their kids as well.

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This is a good goal. Are you going to tell your sons about the money before they are 30?

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Originally Posted by iris lilies

This is a good goal. Are you going to tell your sons about the money before they are 30?

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Yes. It won't be a secret.

Did you consider a family trust instead, if you are interested in building generational wealth?

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Originally Posted by Tybee

Did you consider a family trust instead, if you are interested in building generational wealth?

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Not interested in that type of set up.