My Household Budget (Nov '17 Edition)
Following up from the most recent budget update in August, it's time for the quarterly check-in to see where things now stand in route to tidying up the monthly living expenses.
The objective here is to highlight the year's household expenses. To help analyze these expenses, I calculate a rolling average of monthly outflows to get an assessment of whether or not expenditures are steadily moving higher or lower. I am not accounting for miscellaneous expenses (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. By going this route, I can evaluate where there is room for a reliable budgeting improvement.
Here are the updated numbers:
When I first started tracking these expenses (at the end of May), the fixed household expenditures were $3,249/month. 6 months later, we are now at $3,112/month. Although this is a move in the right direction, I have been a bit disappointed in the progress. As noted below, the goal was to get to a $2,900/month rolling average by the end of the year, which will not happen (bummer).
Healthcare costs jumped up a bit in November. This is because we had to make an up-front premium payment for our new medical insurance provider going into 2018, Medi-Share (more on that below). Going forward, our health insurance costs will be reduced (non-bummer).
Bring the rolling monthly spending average to under $2,900 by the end of 2017
Eliminate our parking lease ($214/month) by May of 2018
Reduce our rent/mortgage expense at least 10% by May of 2018
Despite being off track for the 2017 year-end goal, I have been inspired to step up my expense cutting game as of late. Beginning in 2018, my wife and I will be using a Medi-Share plan for medical insurance (we utilized the services of Take Command Health to find this plan). Our monthly premium will soon be $172, which is a big savings from the $429/month we are paying now (so long UPMC). Also, we will be switching to Total Wireless (from Verizon) in December, which should save us another $60/month. Lastly, I finally called Fios with my big boy pants on and had our internet bill reduced by $20/month. Total expected savings going into 2018 should be $337/month!
It's amazing what happens once you score a couple of expense savings victories like this. The momentum is addictive, as it inspires you to cut the fat everywhere you can. And what's not to like about the results? Lower fixed expenses mean more financial flexibility and freedom, less financial stress, and more savings that can be allocated towards growing your investments. Win, win, and win.
Try it for yourself and see!
Still have yet to start budgeting for your own household? I encourage you to take action on that, as there are many good reasons why you should be tracking your expenses. Here is a blank version of my Excel budgeting template if you would like to get started today.