Sunday, March 4, 2007

2006 Expenses - A Telling Story

I've always been frustrated at how money is our society's final taboo. It keeps us in the dark about how others spend, which would be helpful (to me at least) in determining where I fit in the grand scheme of things. Is a $700 a month grocery bill reasonable, frugal or extravagant? How about spending a total, including gasoline, of $3,000 a year on my cars?

To this end, I've decided to post what I spent, by category, in 2006. Yes, I'm one of those semi-anal folks who keeps track of all my spending. Hey, at least I round to the nearest dollar instead of writing down every penny.....

So here goes. 2006 was a very good year for me. I'll be making about 50-60% of this in 2007.

Savings.............$67,000.....48%
Retirement......$22,000.....16%
Mortgage.........$15,400......11%
Groceries.........$ 8,000........5%
Health Care.....$ 6,000........4%
College..............$ 4,000.......3%
Utilities.............$ 4,000.......3%

1-2% for each of the following: Home & Religious Education, Home Maintenance, Child Care, Entertainment, Gasoline, Car Expenses (non-gasoline), Eating Out & Clothes

<1% for each of the following: Gym, Books & Magazines, Babysitting, Gifts & Dry Cleaning

Expenses (excluding savings & charitable contributions) totaled $4,200 per month or $50,000 a year.

This seems like a lot; the median household income is $46,000, and I probably need to make $75,000 just to cover the post-tax $50,000 in spending.

Now, I know that if you're from the East or West Coast, these expenses seem insanely low. Realize that I live in an average cost city in above-average but not exactly crazy housing: My 4 bed, 2 bath cul-de-sac, great school district house cost ~$200,000 when I bought it 4 years ago & is still worth less than $300,000.

On the other hand, I'm saving more than half of my Net Spendable Income (which I define as money left over after taxes & charity). Perhaps I should live it up a little more... but money for me really = financial security, so the more I can save & invest, the better.

1 comment:

Wilbrod The Gnome said...

Is a $700 a month grocery bill reasonable, frugal or extravagant?

For a family of 6, given the recent inflation, I would classify this as reasonable to slightly pricey, depending on:

1) Does your family cook and prepare all of its food from scratch?

2) What percentage of your grocery bill goes to processed foods that are easy to prepare, but not healthful?

3) Are you paying a ton for soft drinks, Starbucks, or other foods that are basically sugar, caffeine, or fat?

Paying money for good, healthy food is never extravagnant.

Buying a few bucks more for processed foods that adds considerable sugar, saturated fat, and insufficent nutrition doesn't make as much sense unless your family really lacks the time or motivation to cook.

Like everything in life it's a trade-off. It can be worth buying prepared food to save you the cost of going out or ordering out whenever you feel too tired to cook more than once or twice a month.

We pay a lot to save time at the stove, but sometimes what we pay for doesn't actually save us that much time. Fresh isn't always healthier than frozen, either.

I prefer to cook from scratch and use the extra cash for buying what I really like, but I like to cook, and don't do well with frozen dinners. After a while I stopped using my microwave altogether.

I often prepare then freeze food in small portions for later, or prepare food for quick cooking later. Crockpots and stirfries also are easy enough.

This summer we had a vegetable garden for the first time, under the tutelage of my grandmother, a farm girl.

It was so much work putting in soil, tilling, weeding... but best spinach, tomatoes, lettuce, rhubarb and cucumbers, ever. The spinach we ate all summer would have cost us over 100 dollars if we had bought them in bags. The fresh tomatoes were probably more. We had rhubarb jam and desserts all summer long, as well, and also traded vegetables with neighbors with gardens.

That was an investment that was worth it, even if the outlay for soil, tools (not including borrowed tools) was quite a bit, and the labor involved was considerable.