Monthly Expenses – October 2016

The income you have coming in every month is the biggest wealth-building tool you have.  The more of it you keep and use to buy assets…the faster you build wealth, easy as that.  The problem a lot of us have is that we already have our next month’s paycheck spent before we even get it.  We were the same way not too long ago.  We already had next month’s income spent, we were just waiting on the bills to come in to make it official.

We started tracking everything we spent, and I listed all of the reoccurring bills on a sheet of paper, largest to smallest.  We then got to work figuring out how to reduce each and every one of them.  Some we have cut out completely like the car payment, cable, an email service, and house cleaning service… all very nice things to have (especially the house cleaning), but they were robbing us of future wealth building.  Some we had to call and ask for different terms like the mortgage, gas, and internet.  And then there were some we simply switched providers like our cell phones and life insurance policies.

Why go through the trouble?

Our GAP between our income and expenses continues to grow larger because of the steps we have taken.  It has allowed us to attack another one of our monthly income monsters…debt payments.  We have eliminated hospital/medical debt, business/advertising debt, taxes, and are very close to being finished with our credit card debt and student loan.  Taking the steps to set this monthly cash flow free has been amazing, we feel like we are constantly getting raises because more and more money stays in our account after it comes in.

Where did our money go in October?

These numbers represent the percentage of our take home pay that we spent in each category this month.

Mortgage (PITI) – 16%

Kids School – 18%

Food/House Supplies – 10%

Auto/Gas – 6%

Utilities – 4%

Miscellaneous – 10%

Savings – 33.5%

Debt Payments – 2.5%

 

Our Food/House Supplies expenses were down 4% this month most likely explained by keeping me out of Publix.  I’m telling you, I am the worst at going into the grocery store for a couple of things and coming out with a whole basket full of “must haves”.

Auto/Gas This is the category we have made the largest impact in lately.  Over the last few months we have turned in the leased car, paid cash for a new van, had it serviced and now we are down to 6% of our take home pay in this category.  This 6% also accounts for renewing our tags for our other car and camping trailer.  It sure is nice not having any car payments!

Utilities dropped to 4% this month mainly because of us not having to run our air conditioners as much as last month.  This category covers our cell phones, trash, gas, water, internet, and electricity.

Miscellaneous Down to 10% this month and includes things like my dry cleaning, hair cuts, charity donation, pharmacy, and kids doctor visits.  Also, included this month is the last payment on my old life insurance policy and new annual payment for the new policy (more about this in the next post).

Debt Our minimum due on our existing credit card and student loan is about 2.5% of our take home pay.

After all of this we were left with 33.5% of our take home pay for Savings.  Instead of keeping it in savings earning 1% we allocated all of it to our credit card,, getting it awfully close to being paid off.

**Update** We made our last credit card payment December 1st!

That is where our money went in October, do you know where yours went?

Hopefully, by now you have started tracking your expenses with Mint, Personal Capital, or the old fashion way with pencil and paper.  Whatever works best for you and your family…do it, give it a try.

I have updated our Monthly Budgets Page where you can see how our effective savings rate has changed over the months and allowing you to review any of the past updates.

Thank you for reading; and I hope this helps in some way.

If you have any questions please just fire away in the comments section.

-Chad

2 Comments

  1. Jeff

    Great article on budgeting and where your money is going! I’m going to retweet this one as a good example for those needing to budget, but aren’t sure how to get going on it. I like how you broke down the categories of your expenses and gave updates on each. Thanks for posting!! – Jeff

    Reply
    1. ourdimeourtime@gmail.com (Post author)

      I appreciate it Jeff, thanks for the kind words. We quickly realized that when you are intentional with your money good things start to happen!

      Reply

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