Forgive me while I stay on the numbers game for a minute here. This is the time of year I spend a healthy portion of time evaluating our finances from the previous one.
I must say, I feel like a bit of a schmo as I browse all my favorite personal finance blogs. Many of which are posting their yearly budgets. Mr. Money Mustache famously spends $25K per year, the 1500’s are shooting for a cool million to support their $30K of yearly expenses and Justin at Root of Good published his $32K retirement budget.
So who the heck are we that we need $50K? I’m not sure, so let’s dig into this a bit.
Below is my pie-in-the-sky yearly spending goals once financially independent and represents the type of spending that is driving the numbers behind The Goal.
Just to level-set, we are a family of four that includes two, primary school aged kids.
Our $50,000 Spending Plan
|Auto Expenses||$200||1 car - registration, oil changes, and cleaning|
|Auto Fuel||$670||Assumes ~5,000 miles|
|Charitable Giving||$5,000||10% of spending|
|Clothing / Shoes||$1,200||$100 / month|
|Entertainment||$400||Occasional movie, waterpark or other attraction|
|Groceries / Household Consumables||$8,200|
|Healthcare / Medical||$6,000||Quotes on healthcare.gov ~$500 / month|
|Hobbies||$4,000||Includes playing sports, sporting events, and things like camping, outdoor activities and gear|
|Home Maintenance||$500||Includes Homeowners Association fee ($120) and other maintenance|
|Insurance||$1000||1 car + House|
|Internet Connectivity||$660||$55 / month|
|Personal Care||$250||Mainly periodic haircuts for entire family|
|Restaurants / Dining||$1,800||$150 / month|
|Telephone Services||$400||Straight Talk (x1) + some Skype|
|Travel||$9,200||Includes transportation, food, lodging, and activities for all travel away from home|
|Utilities||$2,000||Includes electricity, gas, and water|
The Good News
- The biggest differences in our plans seem to be in the costs associated with Charitable Giving, Healthcare / Medical, and Property Taxes. Those 3 line items alone account for $12K in differences when compared to those other budgets.
- This budget still leaves plenty of room for those boulders in our lives that I deem are the most important. We have a huge extended family that we like to visit all over the country (and globe). We also love to participate in organized sports which explains why the Hobbies and Travel buckets are so prominent.
- There is still plenty of fat within these guidelines from which we can cut expenses further. We’re on a never-ending journey to becoming more efficient with our spending.
The Bad News
- Our current spending is quite a bit greater than this and we haven’t been as low as $50K since our boys were born. It is obviously higher these days paying for operation of two cars, one long work commute, work clothes, and child care costs associated with two full-time working parents.
- This plan assumes no mortgage payment.
- I have not included any state or federal taxes.
- I have no idea what our spending will be while in Spain.
After going through this exercise, I don’t think we’re as bloated as I originally thought. We spend significantly more in property taxes but that is the price we pay for living where we do.
So loyal readers of mine, where does your yearly spending lie? A trim $25K per year or maybe a more plump $100K? Any suggestions for sprucing up our spending?