How is it already November! I feel like October completely flew by! I remember starting the month with a checklist of activities I wanted to do. Somehow I let the month get away from me, and I accomplished maybe half of them. Guess I’ll be waiting another year to carve a pumpkin, visit a haunted corn maze, and watch “Hocus Pocus”. I need to stop letting my adulting get in the way of my fun. October was pretty laid back as far as activities, and it definitely reflected in the budget actuals. But before I get into a review of the October budget v. actuals, here’s a quick explanation of how I budget each month.
How I Budget
The first iteration of my budget was developed on an Excel spreadsheet with rows for each expense category and columns for each month’s budgeted versus actual expenses. The main categories are Essentials, Lifestyle, and Goals. These three categories are then broken down into sub-categories. Each main category as its own general percentage of my household income that I have determined should be put towards that expense. Current subcategories under the main categories and expense percentages are as follows:
Essentials (no more than 50% of income)
gas & fuel
auto service & parts
utilities (electric & water)
home supplies (cleaning supplies)
baby expenses (diapers, wipes)
basic personal care products (soap, toothpaste)
pet costs (veterinary, dog food)
Lifestyle (no more than 30% of income)
entertainment (media subscriptions, books, event tickets)
prepared foods – restaurants, fast food, coffee, alcohol
gifts & donations
home improvement goods (furniture, decor)
spa services or luxury personal care products (hair cuts, make up)
clothing & accessories
Goals (no less than 20% of income)
Each subcategory has its own budgeted amount, but it’s more of guideline they a hard fast rule. As long as the main category stays with in it’s recommended allotment, then the goal has been met. I’ve been following this general budgeting method since starting college. I’ve been using Mint to track my expenses for the last four years. Prior to that I used Bank of America’s portfolio app when it first launched years back. I’m a huge fan of Mint, but I’ve also heard good things about Learnvest’s budget system and YNAB. If you’re not already tracking your expenses closely, I encourage you to start immediately. There is nothing more empowering than knowing exactly how much your assets are worth, exactly how much debt you have, and exactly what you need to do to improve your net worth.
And now without further ado, here’s how we did last month:
October 2015 Budget Review
Essentials (46% of budgeted 50%)
These expenses don’t change too drastically from month to month. The largest fluctuation is in the grocery bill, which was actually the lowest amount since the move. We spent $731 at the grocery store in October versus $982 in September. The 9% sales tax on food in our county has been an adjustment from no sales tax on food in Florida. Regardless of this explanation, I feel like our grocery costs are a little outrageous. I have a few shopping experiments in the works to compare which stores provide better deals. I know we are also paying a premium to buy gluten-free and organic foods. The question is how much more? While I’m not enjoying the increased food cost, I am loving how much less we spend on utilities. Our average utility bill in our 800 sq ft apartment was over $200/month. It was ALWAYS hot in that apartment, the thermostat was set to 80 degrees for most of the day, and then maybe pushed down to 78 degrees when we were home. The average utility bill in our 1400 sq ft apartment is $130/month. We have the thermostat set to 75 degrees, and it’s between 70 and 75 at all times. I’m loving it! We also saved a little by not spending any money on gas this month. All three vehicles were filled up at the end of September, and we didn’t drive enough for any to be on empty. I think we will continue to see this trend of only needing gas every 40 days until the trek out to Missouri after Christmas. Every other essential expense category was exactly as budgeted.
Lifestyle (20% of budgeted 13%)
These expenses tend to see a lot of fluctuation. This month had a few unnecessary, albeit, fully enjoyed lifestyle purchases. With the weather cooling down plus the babies growing like babies are known to do, it was time to purchase some new clothing. I’ve tried going the budget route to purchase new baby clothing (second-hand stores, the clearance rack), but I never find anything I like. But between coupons and sales at Carter’s and Old Navy, I purchased a total of 4 pairs of jammies, 8 tops, 8 bottoms, 5 pairs of shoes, 9 pairs of socks, and 2 winter hat/mitten sets for $164. Other winter prep items included a space heater and 2 humidifiers. Now comes the unnecessary – 2 new movies (we have Netflix and HBO so we’re already paying for entertainment), 3 fast food lunches, 3 takeout dinners, and 4 Starbucks coffees. That’s over $200 that could have gone towards savings. One of these lunches was associated with socializing; I’m in desperate need of some local friends so I’m not going to put a kibosh on those types of expenses. But I feel really guilty about the other purchases. So I will be using some of that guilt to guide my decision-making this month when I get the urge to swing by Chick-Fil-A after a grocery run or ask Ryan to pick up Zoë’s Kitchen on the way home from work.
Goals (34% of budgeted 37%)
This percentage may look like a good junk of change, but (1) it includes our car loan payments and (2) it projects out to another 21 months of apartment living before we can afford a 20% down payment on a house and closing costs. If you don’t own a home, you may be asking “why 20% down?” and the answer, my friends, is PMI. Getting a mortgage already means you’re paying more than the home is worth over time to own it, but PMI (Private Mortgage Insurance) means you’re paying even more per month. I could talk about PMI all day, and probably will in a later post, but, for now, I’ll just say I don’t want PMI so I’m saving up the 20%. And I’m making it my focus as a stay-at-home-mom (you know, besides wrangling twin babies) to find ways for us to save money faster so we can be homeowners before I’m 30.
And that is the budget review for October 2015! I would love love LOVE to hear everyone’s thoughts on how you think we’re doing, comparisons of what you spend each money in some categories, and, frankly, your criticisms. Old ACC bosses, if you’re out there reading my blog, PLEASE give me your criticisms. I MISS your criticisms. Yes, I that’s an odd request, but, to quote my father-in-law, I don’t need people to tell me I’m a “special little snowflake”. I prefer your (constructive) critiques and commentaries. Thanks for reading!