Sunday, January 08, 2012

Money priorities

The reality is that no matter how much money we bring in, there has to be a priority of spending. Like the Andy Warhol painting, putting together this list can be hair raising- if not intimidating.

This is what we came up with after tracking expenses for a year.

1. We do not have a mortgage. That was a plan we made when my husband turned 40.
                By his 50th birthday we were mortgage free.
       We do have taxes and insurance.
Kansas does not lower taxes on property when you turn 60.
We have a house tax and insurance bill that is, currently, 15% of our income.
If you add taxes and insurance for our cars and boat it goes up to 22%.
         Those bills come twice a year.
In order to be ready, we save 22% off the top of every income check.
It goes into a "touch it and you might die" account at the bank.

2. Our food allowance is pretty substantial.
        We choose to eat well. We don't eat LOADS, but we don't skimp.
         Our food allowance for both eating in and out is about 18% of our income.
         Food prices are soaring here. Our last bill was 10% more than normal.
         We may have to start cutting fun foods out for a while until it stabilizes again

3. Utilities are becoming more and more unpredictable.
         Cable, phone, internet and water are stable at 6%.
         Electricity is very unstable at 8% right now---and ever growing.
         If it grows much more- cable will disappear.
         Netflix comes out of our allowances....which will be discussed later.

4. We travel ALOT.
          We only travel on money we make outside of our normal income.
          That will probably begin to change this year.
           I am thinking 5% of our income will go to travel.
           This does not include the gas for around here-
             which is currently about 5% of our income.

5. House repairs, car upkeep and fixes are staying steady at 7% of income.
           Including the tools to snow blow or cut grass.
There is another fund that has 5% of the income
     for major !ow! expenses- like a roof or a stove.
            We just bought a car.
            I don't think we will need a new one
            before my husband is on Social Security in 3-5 years.

6. Charity is about 5% right now.
      I am looking at ways to tithe my time and talent so I can feel closer  
          to the amount that I feel we should be giving.

7. Poochies are about 3%. Darn, those vet bills certainly rack up!

8. Presents and family "things" are about 3%.

9. The last 13% has always been our allowance. The allowance is given every two weeks. I usually use mine for clothes, hair and travel.  He uses his for wood and tools.   Nexflix is evenly divided.

We are considering cutting back to 10% of our income for allowance so we can save 3%. My husband makes a good argument for not doing that since we have a good nest egg and have not touched it... That nest egg has only made about  50 cents in the last month....so we are not keeping up with inflation there. I don't see us using our nest egg for many, many years.

Decisions, decisions!
I still have my hair
although it often looks like Andy's these days!

7 comments:

ancient one said...

I don't know if I said this before... but I just love your header!!

I admire the way you have everything all worked out with the money. I was always bad at math and it hurts my brain just to imagine myself figuring out all those per cents.

Kimberly said...

I am so impressed at your budgeting and accountability! That should be my resolution for this year. I am so knee deep in to-dos that I've not yet solidified them. Luckily I have been tracking expenses for the last few years, so the historical data is there - I just need to do something with it.

Kelly said...

Hi,

I came across this blog from due to the interesting title.

Now that I have relocated to Hong Kong, I love reading blogs from the US.

I am also trying to learn about budgeting as I am a newly wed and we currently spend everything we make.

Cheers,

Kelly

Janette said...

Welcome Kelly!
We lived in Pok Fu Lam many years ago. I worked, and the kids attended HKIS.
Budgeting in Hong Kong is so different because eating out in a healthy style used to be just as economical as eating in. We took public transportation everywhere- but contended with some huge snakes waiting for the bus.
Still, I loved the vitality of the territory.
Percent is an easy way to look at your budget. When we were your age 10% went to an account we didn't touch for anything. That os our nest egg now. Otherwise my percents will probably work for anyone.

Renee said...

Once upon a time I took an informal DAve RAmsey course and learned about the envelope system. I never did actual envelopes but instead kept track on paper and later on a computer program. Then we moved overseas and using two currencies made it too confusing.... thankfully we've never had a problem financially since it was already instilled in our brains. And now we are fortunate to live off our regular paycheck (although some still goes to TSP) and save the retirement check.... of course that 'savings' is being spent on college and a storm shelter... but thankful that we have the money for such needs

Janette said...

Saving the retirement check became the nest egg. Worth every month of saving.

Renee said...

Thankfully we've saved in IRAs, mutual funds and now TSP as well.... so we have the retirement nest egg and then some....
I did make dh take out the insurance so that if he goes first I still get his retirement check