My Household Budget (May '17 Edition)
If you have never thoughtfully (and somewhat brutally) taken a scalpel to your budget, I highly recommend you make an effort at some point in the near future to do so. In 2015, my wife and I really paired down our necessary living expenses, which was a refreshing and freeing experience. However, since then, I have let things slip and our expenses bloat. So, in an effort to get back on track and hold myself accountable, I will begin posting my household budget here. No further ignorance. No further excuses.
I started with a rundown of this year's expenses, broken down by month. Each month I have also calculated a rolling average of monthly expenses to get an assessment of whether or not expenditures are steadily moving higher or lower. I am not accounting for miscellaneous expenditures (clothes, travel, meals out, etc.) as they are rather discretionary and personal. Instead, I want to hone in those necessary items that are somewhat fixed and more predictable, so that I can honestly evaluate where there is room for a reliable budgeting improvement. Upon first review, it appears there is definitely room for efficiency. Here is what I found.
- Through May, total household expenditures have averaged almost $3,250 per month. This is a bit higher than I would have guessed, but not too far out of range. We opted for a nicer apartment in the city last year which upped our rent and parking expenses.
- Insurance expenses for April were higher due to payment of an annual life insurance premium. Total costs should remain around $500 for the remainder of the year which will put downward pressure on the rolling monthly average.
- Automobile expenses will decrease in June, as we made our final car payment in May (hooray!). I highly doubt we will ever finance a vehicle again, as ongoing payments for a depreciating asset really annoy me. The spike in auto expenses for February was due to an auto insurance payment.
- Another irritation is that our internet bill has been slowly rising. We are now paying over $100 for internet and local TV, which seems high. I will be finding a way to trim that back.
- Bring the rolling monthly spending average to under $2,900 by the end of the year
- Eliminate our parking lease ($214/mo) by this time next year (May 2017)
- Reduce our rent/mortgage expense by at least 10% by this time next year (May 2017)
If all targets are met, this should result in nearly $700/mo of savings from our current rolling average of $3,250/mo. The rent/mortgage savings might even be a conservative target, assuming I can land a property to house hack. The key will be to find a lender who isn't weary of a self-employed household (lenders really like a W-2). I have already been denied once, but the search will and shall go on.
Bonus: Here is a blank version of the Excel budgeting template if you would like to track expenses for your own household!