I have been pretty impressed over the past few years by the many people that post their financial information and performance against their budgets as a way for all of us to see exactly how their goals and budget plans are doing. It’s always challenging, but it’s a great way to learn by comparing how you are doing versus others. Since I have always been a very private person, when it comes to my own income and expenses, I haven’t made my numbers very public despite the questions I get asked each month about my own spending habits and results of my budgeting. Today I’m breaking that silence to give you my annual expenses for the past 5 years, so alert the media!!
Where the Money Goes
Seriously, I have been tracking my numbers and budgeting very carefully for over 10 years now, long before I began to write this blog. If you have followed me a little bit you probably know that the biggest part of our expenses every year has been for medical care and insurance coverage. That’s because both my wife Suzanne and I are unfortunately ill and have some chronic conditions that make those expenses around 25-30% of our annual expenditures every year. The latest numbers on healthcare spending for the average American is about 8% of their total budget, and that’s up from the 6%, the number just 2 years ago.
So you can easily see how that expense, plus the expenses for owning our condo and its related costs like mortgage interest and taxes, make medical and housing easily the biggest numbers and biggest concerns in our budget. Those two categories combined represent about 70% of what we have spent on average over the past 5 years.
Our Annual Expenses
So today, as I usually do each year at this time (it being the end of the 3rd quarter of 2016), I thought I would look at how this year is going and compare it to the previous 4 years. I’m going to share my totals with you with some explanations so you can see if what I preach regularly has any reality attached to it. I hope it shows that it does.
|– Includes mortgage, taxes, utilities, maintenance, have been voluntarily increasing mortgage principal payments|
|Medical Expenses and Coverage||$19.8k||$17.4k||$18.6k||$15.2k||$14.5k|
|– Became eligible for Medicare in mid-2014, health improving|
|Groceries & Dining Out||$8.3k||$6.8k||$8.1k||$8.4k||$7.6k|
|– Includes cleaning and paper supplies, frugal shopping to offset rising costs|
|– Downsized to 1 car in late 2013, includes car insurance and gas|
|Entertainment & Travel||$4.1k||$2.9k||$2.9k||$2.6k||$2.7k|
|– Includes costs and savings of timeshare|
|– Costs rising as I age|
|Beauty, Grooming & Health||$1.6k||$2.6k||$2.3k||$1.8k||$2.9k|
|– Includes a lot of vitamins and supplements, plus Suzanne’s salon visits|
|Business & Computer Expenses||$1.3k||$0.8k||$0.3k||$2.8k||$0.6k|
|– Included FinCon in 2015, but sadly not this year|
|Gifts & Charity||$1.1k||$0.8k||$0.8k||$0.6k||$0.6k|
|Clothing & Shoes||$1.0k||$0.6k||$0.8k||$0.6k||$0.6k|
|– Do I need more t-shirts?|
How We’ve Done
As you can see, our expenses have actually come down in some areas and from the 2012 total it’s come down almost 18%. When you consider that the cost of living has been rising over those years by about 10% cumulatively, it really does prove that careful planning and spending can result in saving money. And for us, it is a necessity not just a good idea.
Some of that is due to careful spending habits that I practice and try and pass on to you. Almost everything I write about from seeking out a better deal on your car insurance to using coupons and stacking them with loyalty card deals for groceries and retail shopping is something that we practice every day. It definitely helps and it will work for you, too.
In some areas, it’s not possible to see any more dramatic savings, like the cost of our mortgage being already refinanced and the utilities that have been budgeted and reduced with careful maintenance and use. But real estate taxes go up almost every year (we have the highest real estate taxes in the country here in New Jersey), so that’s a good performance to have had even though it is an expense that is close to being even.
Our Report Card
Overall, I’m actually pretty proud that we are able to maintain our standard of living and have done so despite the fact that our income has declined dramatically since we both stopped working full-time in 2013 and are now both basically on a “fixed income”. So while there’s certainly more areas we could cut back, we’re doing pretty well and I give us a B+.
So there it is, our expense report card currently compared to the previous 4 years. Have you examined your expenses this way? Do you wonder why you have difficulty controlling your money? Do you track everything carefully, look at and revise your spending plans when necessary?
If you are having difficulties, then budgeting properly is your first line of defense. I promise that if you keep your eye every day on your spending, you’ll quickly determine where you need to adjust and what you can do to improve. Many people have already done so and you can take advantage of their good advice. If you do, you might just be able to move forward on the road to financial health.