Wednesday, October 1, 2008

Spending categories, explained

BOOZE: I think this category is entirely self explanatory, but that won't stop me from talking about it some more. My favorite thing to drink after a long day of wiping ass and taking names is Wyder's Pear Cider. I love it. Aside from JenB, it's probably my favorite thing about Canada. It's not too sweet like a wine cooler and not too sour like a beer. It's also $8 a six pack. Dave's favorite beer is Widmer Hefeweizen, which we buy at Costco for around $30 a case. Still not cheap. If we each drink ONE BEVERAGE per night, we're at $60 per month and that doesn't count my weekend cocktails or Dave's love of Cabernet Sauvignon (Three buck Chuck from TJ's!) and expensive Scotch (The Glenlivet). And honestly WHO DRINKS ONLY ONE BEER? REDUX: Dave and I like to party. It's $100 per month you can rip from our cold, dead hands. AMEN.

CLOTHES: This one's pretty obvious, but I lump all of our clothes/shoes/underpants into a single category. Aside from Dave's clothes (suits, shirts, etc, which we normally get at the Men's Wearhouse), I'm EXTREMELY cheap about clothing. For the kids, I try to stick to a strict $7 limit per item (but often find things for half that amount) and for myself the limit is more like $25. I don't buy anything designer EVER. I'm an Old Navy, Kohl's, JC Penny's, Macy's SALE RACK kind of girl. I wash my clothes A LOT, so it doesn't make sense to me to spend a lot of money for things that rarely last longer than a year. Anyway, sometimes $200 is more than enough and sometimes we need to spend way more than that to meet our needs.

DINING OUT: I separate dining out from entertainment mainly because it's always a trouble-spot for us. Have I mentioned that Dave and I like to eat? And drink? Because we do. The $150 I have budgeted here is meant to be enough for Dave and I to have at least ONE nice dinner out per month, plus eat out some lunches and take the kids out for pizza once or twice. It involves an incredible amount of restraint for us to stay under that amount!

ENTERTAINMENT: This category is mostly dedicated to the second amendment. Dave likes to go to the gun range on the weekends and unfortunately the price of ammo has gone up something like 50% over the past year. It can be an expensive hobby, especially after you add in range fees, etc, but Dude, the man works six days a week, let's not begrudge him his firearms! I also include movie rentals, actual movies (you know all THREE MOVIES we go to every year) and any other fun things we do that cost money (like local events, air shows, etc) as entertainment. $100 is usually enough for Dave to go shooting at least twice and for us to rent some extra movies.

FOOD: This is the infamous $700 grocery budget. I shop mostly at Costco, Winco, Wal-Mart and Fred Meyer. I'm Cheap with a capital "C" and I do just about everything I can to save us a penny. We just eat A LOT of food and we usually have friends over to eat (or cook for friends) at least a few times a month. This is obviously our biggest discretionary expense.

GAS/AUTO: We have two Nissan Xterras. I realize this is ridiculous, but it's the second time Dave and I have had the same cars at the same time. We used to both drive VW Jettas. Great minds think alike you know, except for the whole gas guzzling thing. We only get about 16 miles to the gallon. We do our best to save gas where we can, but gas is 'spensive! $350 is about our average monthly spending, not including oil changes. If I could exchange my Xterra for a minivan, I'd do it in a heartbeat!

HOUSEHOLD: This $300 is the catch-all category for pretty much anything you'd buy at Target or Wal-Mart that ain't food. Toilet paper, paper towels (my roll-a-day addiction), cleaning supplies, toothpaste, BEAUTY items (I buy my makeup at Target and my hair goop at Ulta with 20% off coupons), shampoo, Astroglide, you name it, it goes into this category. It also includes just about anything I buy to make the house look pretty, like pillows or art or awesome velvet ottomans from the church rummage sale like I got last month for $8. I'm also attempting to start a plate collection so I can beautify the giant empty wall in our entry way, so this category also includes antiques.

KIDS: This is the place where I put toy purchases or general stuff that is for the kids only. $50 seems like a lot to me now that we aren't buying diapers anymore! Last month it included a new booster car seat for Alex and a bunch of princess crap from the dollar store for Genoa. That was money well-spent because now she's staying in her bed all night! It doesn't include the kids' activities, though, I'll get to that in a minute.

OTHER: Anything that doesn't fit in the above categories. There's always something! $50 is an arbitrary number I pulled out of the sky.

These categories are noticeably devoid of things like BILLS. Because honestly? Those are personal and Dave and I need to have SOME level of privacy. I mentioned that I consider preschool MANDATORY and that's mainly because I've agreed to send my child to school this year and I intend to pay that school for his spot. It's only $145 per month, but it's a fixed cost and thus, not something I would ever label as "discretionary." Alex also does karate and soccer and swimming and sports camps, etc, but those are mainly one-time expenses, so they are not included in our monthly discretionary spending.

Speaking of savings, we DO save. We DO invest for both our retirement and so that we can someday help our children go to college. We do not live paycheck to paycheck and we keep our savings account well padded for emergencies. We don't have any credit card debt. (Although we do have student loans, a mortgage and a single car payment). Our credit scores are over 800. We give to charity. And we do all this on a single income. Some day soon, I'll go back to work and do my best to save 100% of what I earn for the next 40 years. My point is, we have a PLAN. A HEALTHY plan. We can afford to spend $2000 a month on our discretionary spending without it being a problem for us.

Our lifestyle is OUR lifestyle and we enjoy it. We give up a lot to be able to relax about our monthly spending. We don't vacation. Dave doesn't golf. The only club membership we pay for is the one at Blockbuster Video. Our kids will go to public school. Financial planning is about trade offs and this blog is not so much a "budgeting" blog as it is an illustration of one family's spending.

Do you have different categories than I do? If so, I'd love to hear what they are!

14 comments:

Patty said...

I'm curious about the clothing. I do a load of lundry every day - sometimes two, so we wash clothes a lot, but I can go months without buying clothes for myself or my husband or son. We clean closets every season and see what fits and needs to be replaced. Am not being rude at all, just curious as to what in your wardrobe needs purchasing and refreshing monthly.
And, where does dry cleaning fit in - household? My husband and I both work out of the house in professional jobs and I feel like we are drowning in dry clean bilsl some months.

Astarte said...

I totally understand the clothing thing. With things so expensive now, and the changing seasons, there's a lot to be dealt with, especially where there are children involved. Heck, I went to Walmart yesterday and bought myself some cheap socks (I was literally out of socks!!!) and a lightweight jersey jacket for Josie and it came to $30!!! Plus, I usually can't find secondhand clothes for the kids anymore that are in decent shape. It was easy when they were little, but now that they're older, their clothes are worn longer and take a beating, so it's slim pickin's out there for good stuff.

I think we have about the same categories, although we don't have a liquor one, and I line-item 'leisure', which is piano lessons, any weekend day trips we might want to take, etc, and 'allowance', which is what we take individually from each paycheck for our own wants / what the kids earn. I don't have a kids' line item, other than their allowance, because they earn and use their own money now. Oh, and I have a 'gift' line item, too, since there's always someone I have to buy something for.

Elizabeth said...

I'm just so fascinated by these people who say they only spend $400 a month to feed nine people or whatever. What do they eat?

It also annoys the you know what out of me that no one who is all up in arms over your grocery budget ever considers that maybe you guys just eat more. Is that not allowed? My husband eats at least three times more than I do, we never have left overs, and we have to buy a ton of food to keep him fed (and he's also very skinny, not that it matters). So sometimes I wonder if people just don't realize that shocker! some people eat more! and that costs more money!
Sorry to hijack your comments with another food budget rant. I'm just wondering...am I missing something? I want a $400 food budget too, but I don't see how it's possible.

Ali said...

A little off topic, but here goes. I am SO not a makeup person, but I found this website last year on recommendations from multiple friends and it's great. Almost every item is only $1! I really loving all the lip gloss I got there. Even Walmart can't beat their prices.

And I think I've mentioned to you before about Old Navy online. I stock up on the kids clothes - and hubby's, too - for the next year when stuff goes on season-ending sales.

I'm just being lazy here, I could look for myself, but I'm interested in the fact that you buy all your paper goods not at Costco. I always assumed most things in bulk are cheaper, but maybe i need to start price shopping.

Ali said...

Oops, the makeup website is www.eyeslipsface.com

kheatherg said...

HEY! My mom and i purchase our make up from there too. it's cheap and its pretty good!

Regarding patty's comment....
"I'm curious about the clothing. I do a load of lundry every day - sometimes two, so we wash clothes a lot, but I can go months without buying clothes for myself or my husband or son. We clean closets every season and see what fits and needs to be replaced. Am not being rude at all, just curious as to what in your wardrobe needs purchasing and refreshing monthly."

I have to admit, i was actually thinking the same thing....

I'm not judging because i could care less how others spend thier money but truth be told, that did interest me. I simply read because i like to see how it compares to mine and with you being a financial planner, i'm hoping to pick up tips.

Frankly, i wish i could develop a managable budget that i could find time to manage. It seems like it takes time and work. But i suppose the best things always do....

Average Mom (Average Canadian Family) said...

I've just recently figured out a way to keep our cupboards well stocked with food...it only took 17 years of marriage, but it's working for us. We have a $750 monthly budget for food (and $100 extra on a five week month as I get paid weekly) for our family of five. At the beginning of the month I spend $350 at Costco, Superstore (discount grocery in Canada) and the meat shop. I buy all of the month's non perishable/freezable bulk food like meat, cheese, cereal, crackers, bagels, canned food AND I stock up on household items like toilet paper (30 rolls...we go through one a day at our house), paper towels, dishwasher soap, detergent, etc. Then each week throughout the month I have $100 on a Friday to spend on fruit, veggies, deli meat, milk, bread and any odd things I need for whatever dinners are on the menu that week. I keep a running list on the fridge of whatever bulk items we need for the following month. We've been doing this for about four months now and it's working really well for us.

HeatherK said...

The only thing I think I differ on is spending on clothes as I tend to do it in two large chunks as the seasons change and buy ahead on clearance in the next size up and then only find myself shopping for a few items of in-season stuff at TCP or Target.

PA sucks. Wish we could be alchohol at Costco or TJ's!

I think the thing that works best about your budget is that you know where there is wiggle room. I get the sense that you know how much over 2K you can go and still be responsible to the overall budget. That's the thing I think people miss who cut the budget too close and don't have that padding for savings or overages.

Now you're really making me want to crunch my numbers--I'm guessing I'd probably come out w/ similar ratios for those categories.

Anonymous said...

Just curious--why do you list food as a discretionary item? Is this the amount you spend above/beyond some amount for staples? I know you wouldn't want to live without alcohol, but you *can't* live without food....

TamiC said...

This is so interesting!! We've never had an actual budget. We spend what we have left after bills for all of the discretionary stuff. Last March, I saved all our receipts for the month, to try to find out where the $ goes, but by the end of the month, I lost interest and thru them all out! How do you set up a budget when you get paid on commission and the amount changes every month?
Also, I'm wondering how you feel about a 'personal allowance'? My husband would prefer a spending allowance, (in cash!) mostly because his hobby is restoring old cars, (expensive!) but if the money isn't there after the bills, then he pouts! Any ideas?

ktjrdn said...

My categories are kids, groceries, health (cause we have a medical flexible spending account - havnig a separate category helps me remember to get reimursed for them), household, vehicles, photos, restaurant, work food, and other. I separate out the work food form the restaurant because we have a cafeteria in our building, and it's really easy to use up all the eating out money at work, and then not have enough room in the budget to have a nice dinner.

I never meet my budget. But every month I know how much I do over. sigh

Nancy R said...

I too wondered where you put gifts - not necessarily just for your own kids, but for birthday parties, nieces & nephews, etc.

1hottiredmama said...

In our budget, we also include a line item for "gifts" and also one for "personal care." Personal care is things like hair cuts, my occasional pedicure, etc. We lump alcohol in the grocery budget.

As for clothes, our budget is the same. This is a revolving line item for us, as I don't always spend it. Some months I spend more.

Monica said...

The only real difference in our budget is that we have a pets category and our household category is combined with "Other" I use it as kind of a catchall. Gifts, paper products, cleaners etc.

We also have an allowance for both my husband and myself which is large enough for us to eat lunch at work every day if we choose to, and if we choose not to it's guilt free spending money. Really makes the "making lunches" a personal motivation.

I used to have a books category but since I'm completely out of space for new books I've eliminated that for a while. That doesn't mean I've stopped buying them though, thank god for the allowance and packed lunches :)