Caveat: This is not a personal finance blog and I live in a 2-person, 2-income household with no debts. Frugal types, click your Back button now!
My spending has been out-of-sorts for a few months. I have been recording all my spending, but not trying desperately to stay on budget. I have some flexibility, so I am not being too hard on myself. However, “outgoings” have crept up, and I am now $2708 overspent for the first half of the year. I can imagine what Gail Vaz-Oxlade would say: “At this rate, you will be $5400 in the hole at the end of the year, and if you keep spending at this rate, you will owe $27,000 in five years!”
The good news is, I have borrowed against savings and I will have paid myself back by October. But how could this happen in Exacting Land?
I divided all my spending into household bills and discretionary spending, to see how much of it was avoidable. The answer:
- $733 extra household spending
- $1975 extra discretionary spending
Here is what the household bills looked like:
|Household Bills: Jan to June 2015 Actuals|
|6 Month Actuals||6 Month Budget||Over/Under Budget||Notes|
|Long Term Savings||6500||6500||0|
|Grocery||2608||3000||-392||Savings from Rom grocery takeover|
|Child||2193||1452||741||Agreed to cover additional expense|
|Property Tax Savings||1800||1800||0||Savings for annual bill|
|House Projects Savings||1500||1500||0||New project coming soon|
|Electric/Heat||1395||1500||-105||20% savings over last winter|
|Insurance Savings||1260||1260||0||Savings for annual bill|
|House Maintenance||861||600||261||Yet more furnace repairs|
|Internet/Phone||730||725||5||Dropped cable TV|
|Car – Service||633||200||433||First major service (3 years)|
|Car – Gas||326||420||-94||Hard winter, stayed in|
|Health & Dental||83||70||13|
|Haircuts||62||132||-70||Every other month|
|Car – Tolls & Parking||59||100||-41|
This includes everything except Rom’s car and bus costs which he pays out-of-pocket. As you see, I agreed to pay for an expense for Link, and if it weren’t for that, the budget would have balanced. Since I can make it up later in the year, I am 100% OK with that.
You will see that six months in, Rom has aced the grocery swap! I “assigned” him the grocery shopping starting in January. He has been saving us $65 a month. On top of that, I feel guilty buying my premium coffee and skincare products out of the grocery budget (as I used to do) so I have paid them myself. I will post later about how our grocery buying and meals have changed.
As far as bills go, I wasn’t sure how much to budget for heat now that we have heat pumps instead of the gas boiler, which is used only as a backup. My estimate was pretty close. I am pleased that the new system saved us 20% over last year, despite the winter feeling twice as long and cold. I was not happy that we needed another expensive boiler repair, but the last thing I want is to replace the whole unit, since it is now only a backup. If we have no more repairs in the next few years, we should easily start to save real money. (I am keeping in mind that if we didn’t install the heat pumps, we would have paid for the repair anyway, plus 20% more for heat).
Our next big household project is to replace the front and back doors of the house, including the hardware and framing, and add storm doors. Good for both energy efficiency in the winter and airflow in the summer. We have additional savings for that carried over from last year.
Our home and car insurance are very expensive. When Rom moved here from the UK, only one insurance company would take Rom’s UK driving experience into account. The others would have charged him as a new driver (we are talking $4500 annually!) So he is getting the Canadian rates, but we pay a lot more for home insurance as part of the bundle. By the end of 2016, he will have met the New Driver expiry period, and we can then switch insurers.
We cancelled cable TV in January, which we hadn’t watched in forever, saving $55 a month. You will see I am listing Internet and landline as a household bill because they “feel” essential to me even though I know otherwise.
I have listed haircuts as a necessary expense because I have to be presentable at work. I have been going to a no-frills place every 2 months, and Rom does his own hair with clippers.
Here is what my discretionary spending looked like:
|Discretionary spending: January to June 2015 Actuals|
|6 Month Actuals||6 Month Budget||Over/Under Budget||Notes|
|Vacation Savings||3300||3300||0||Not all spent, some for Fall travel|
|Entertain, Concerts, Dining Out||1166||960||206||Had extra from 2014 to cover|
|Xmas Gifts||1062||780||282||Will balance by year end|
|Gifts||975||1150||-175||I like buying gifts|
|Clothes||737||450||287||Separate post coming|
|Yard/Garden||188||100||88||Started feeding birds, bought wheelbarrow|
|Computer||149||0||149||Printer ink, blog expenses|
|Books & Mags||148||0||148||From vacation fund|
|CD & DVD||138||0||138||From vacation fund|
|Jewellery||133||0||133||Bought watch and amber earrings 🙂|
|Exercise machine repair||130||0||130||One time expense|
|Cell Phone||104||104||0||15/month plus tax|
|Postage & Stationery||92||0||92||Includes a courier fee|
|Fitness (Skating)||73||150||-77||Only skated half as much as intended|
|Unaccounted for||59||30||29||Included fees for currency exchange|
|Bank Charges||51||0||51||Need to switch account type|
|Misc – Mixer||40||0||40||Old mixer went kaput|
|Misc – Wine||28||0||28|
|Misc – Pillow cases||18||0||18|
|Totals||10304||8329||1975||< < overspent|
I am not concerned about vacation spending. I am continuing to set aside money for it until October when our planned travel is done for the year. I spent extra on books and DVDs for entertainment while we were in the UK, so I am charging them to the vacation budget! This fund will definitely not be overspent on an annual basis.
Rom and I set aside $160 a month for entertainment, including dining out and coffee shop snacks. We carried some forward from last December, so that is balanced.
I save money every month for gifts including Xmas, birthdays and “everything else” that crops up. In addition to what I saved, I spent money on Xmas gifts when I was travelling. I will skip some monthly payments to my gift fund until I catch up.
I am always joking that my cats are not members of the family, but just a hobby. I jest, but really, pets are a lifestyle choice. Obviously their well-being is not optional once you have them, but I don’t count their expenses as a household bill, the way I do utility payments. So cat food and litter are not in the grocery budget.
I shocked myself by having $59 unaccounted for in six months. My tolerance is about $5 a month 🙂 But most of that is £22 ($41) I lost track of at the end of our vacation. I am betting it went on food or subway passes.
The rest of the discretionary expenses will have to be paid back to myself by either spending less in those categories (such as charity and clothes) for the rest of the year, or cutting back elsewhere. One thing I have never done is to give myself a monthly personal spending allowance. I either spend as little as possible, or use creative accounting, like I just did with books and DVDs from the vacation budget. I can no longer play within the grocery budget like I used to, since Rom has it in cash! I do have annual expenses I could budget for, such as my $70 in optional WordPress fees, but that is a small amount I don’t need to “set aside” or worry about.
$1975 is a lot of money, and if I didn’t save throughout the year for all of my big annual bills, I would probably find myself unable to pay them by late Fall. There are loads of categories where I could cut back if I faced difficulty, but I’m glad I don’t have to.
Do you ever let your budget get away from you and play catch-up later?
New Reader? Some background on my financial situation is here.