Here are the percentages of our take home pay that we spent in each category for the month of February. We believe that it is imperative that we track our spending in order to see where our money is going. We know where we want it to go based on our goals, so tracking it helps keep it from leaking out of our accounts like it used to.
You can use what ever method works best for you; old school budget, excel spreadsheet, apps, or software. We use a combination of a free software/app from Mint and a written spending plan on monthly calendar printouts, it’s extremely easy to use. I would highly recommend you start with Mint, using it to help track your spending.
Here’s the breakdown:
Debt Payments — 14%
Kids’ School — 22%
Mortgage (PITI) — 20%
Food/House Supplies — 3%
Autos/Gas — 6%
Utilities — 5%
Misc. — 9%
Savings — 14%
Carry Over to March — 7%
Total — 100% of February take home pay
February was another solid month for us. We are making progress on our goals and it feels great. We changed up our strategy a little this month by decreasing the amount we were paying on debt and adding that difference to our car fund. I will be turning in a lease in May and we want to buy another vehicle with cash. No more car payments for us!
School costs are still our highest regular monthly expense at 22% this month. We value education and quality care very highly in our house and are willing to make this sacrifice for our little ones. The good news though, is that my daughter will be starting kindergarten at our fabulous public elementary school in August. I am excited for her and I am excited to see how much that saves us per month, too.
Our housing costs (principle, interest, taxes, insurance) came in around the 20% mark this month. I am so thankful that we got a great house at a great price (short-sale) when we did. We have been in our current house for almost 5 years and have some tremendous equity built up already. We still have some work to do on it, but it should turn out to be a great asset for us.
Food and housing supplies were near nothing in February coming in at 3%….did I eat at all? My lovely wife was gone for 5 days visiting her family in California and saying goodbye to her wonderful Grandmother. I got to live the single dad life for a few days, sorry if you missed the raging parties we had. Big shout out to all of you single parents out there, I don’t know how you do it day in and day out. Kudos to you all! We ate a lot of pasta and cereal, haha.
Auto expenses came in at 6%, consisting of one lease payment, gas for three vehicles of which two are driven everyday, and insurance. Insurance costs this month on 2 vehicles was $82, we are members of USAA and if you can qualify (Military) for membership somehow I would highly recommend it. Like I said above, our lease is up in May, which will free up $296 in monthly cash flow. I can’t wait.
Utilities were still pretty low this month coming in at 5%. This includes electric, gas, water, internet/tv, and 2 cell phones. We have really worked hard to keep these costs down, including not turning our furnace on in the upstairs portion of our house. We have 4 bedrooms upstairs and if we used the furnace it would run constantly so instead we use little radiator heaters in the kids rooms and we have an electric blanket in our room. The coldest temp in our room so far was 41 degrees. We could see our breath! Note: we do not have a cable package, basic channels were included with our internet service.
9% of our budget ended up going to miscellaneous expenses this month with the biggest expense being $303 flight out to California. Also in this category is our life insurance, dry cleaning, haircuts, gifts for birthday parties, etc.
As I said earlier, we stashed 14% of our take home pay into savings for a car purchase in May when we turn in our lease. We will probably continue this practice until then.
7% was left over and followed us into March.
There we have it…11% of the 14% in debt payments was additional principal payments and if you add that to our car savings of 14% and then the 7% carry over, we had a savings rate of 32%. That number really excites me… one, because that was always my baseball number; two, it tells me we are living well below our means; and three, it lets me know that when we do get all of the debt paid for, car purchased, and the emergency fund in place, then we will be able to devote a large amount of cash monthly to our financial independence portfolio. That is all the motivation we need to make small sacrifices and smart decisions on spending.
If you are intentional with your money and tell it what to do, as opposed to letting it run around all crazy, you might see some positive things start happening. Wow, I’m still amazed at the 32% number…I had no idea we could even come close to saving that amount, who knew being responsible with money could be so fun and enlightening. It wasn’t too long ago that we were living paycheck to paycheck and barely making it, if we can turn it around so can you!
This does not account for the 6% of my wife’s pay she contributes to her 401(k) which is taken out of her pay before she receives her checks, or the 100% match she gets from her employer.
We are rocking and rolling with our plan, what are you guys doing to save extra money?
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