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Discussion Starter #1 (Edited)
Another thread got me thinking about how much do other people budget for items compared to what we do as a couple people said it was easy to save 4-5k /month if you make just over 100k Try to keep your numbers in the same order so that we can compare easier.

House income after tax - around 72k or 6k/month

Mortgage & property tax - $1600
Utilities - $150

Car payment - $425 (financed, no warranty)
Car & Life & critical illness insurance ( 2 cars + bike) - $550
- cars - 03 civic, 07 torrent, + 05 dual sport + house insurance = $390/mth, the bike is only like $50 of that
- 250k term Life each + 50k critical illness(w/ return of premium option*see bottom note for explanation) each - $157

Car Maintenance - ~$200

Cable, Phone (home & 2 cells), internet - $275 bundled for a discount.
- cable - ~$115 we watch A LOT of tv, so I justify getting the movie network...
- phones - ~ $110, I don't have a phone at work, we both use them a ton.
- internet - ~$50/mth not the highest package, but not the lowest. I'm a geek, if my internet is slow... I'd probably throw things.

Groceries - $360
Home supplies - $250
(cleaners, decorations, general house stuff, lawn care)
- Not cleaning service, this is more for cleaning supplies (soap, Windex, laundry detergent.. etc)
- decorations - 2.5 years after moving into a house, this hopefully will start slowing down as I don't think there is much untouched wall space left.
- lawn care - not a lawn care service, but fertilizer, lawn mower maintenance, gas..
- general house stuff - new vacuum/ fan/ wood to build some more shelving/ replacement blender / etc...

Pets(food & vet bills) - $150
- 70lb dog ~70/mth in food
- cat - $30/mth food
- vet on average $50, one month is $200, then its nothing for a few

Total = $3960 / ~$6000(after tax) = 2000

$2000 is a long ways from 4 or 5k


* You pay a bit more, but if we don't use the critical illness insurance, after 15 years of the 20yr policy we can get rid of the policy and get the entire premiums back that we have paid on that part of the insurance.
IE you pay 40/mth vs 30/mth, but at 15years you get a cheque for $7200. If you did $30/mth and $10 to an investment @4% you would have about $2500 in that investment, and would have paid $5400 to your insurance which you don't get back.
 

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I think your car and phone/internet expenses are a touch high. But, if you're satisfied with your budget and you're achieving your financial goals, ignore what other people say.
 

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I've actually just embarked on a budgeting exercise for the first time in years as it has become apparent to me that I'm experiencing lifestyle inflation and I'd like to rein in the spending a bit.

My approach to budgeting is to ignore the fixed costs and unavoidables, and just hone in on the variable expenses that I can control: food, clothing, travel, entertainment, that sort of thing.

I set myself a limit of $400 for food in my first month of living under a budget, and I blew it after three weeks. I bumped the budget ceiling to $450 and will gradually try to bring us back down to $400 but it won't be easy: we like to use good ingredients, including lots of organic produce. But we're virtually vegetarian, eating meat or chicken just a couple of times per month, so I'm surprised we spend so much on food. We only eat out maybe three times per month.

I think of myself as a person who only buys clothes two or three times a year, but my budget has proved me a liar, and this is one area where I can easily cut back.

Looking at your expenses, it feels like your car insurance is high: granted I have just one car but it only costs me $800/year to insure. If I had two cars that would be $1600, which works out to $133/month. Maybe your critical illness insurance is raising the total you're reporting here for insurance? Do neither of you have disability/critical illness insurance coverage at work?

Home supplies also seems a little high to me, but a good chunk of that is probably the lawn service. My "household" budget is usually just $50/month or so, although I just finished having a new shower installed and that threw everything off.
 

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I didn't understand that other comment said about saving $4k-$5k per month on $100k income per year (even with 2 people). You would need very low expenses to accomplish that.

A few points:

If the $100k is from 2 people making $50k each, then I think the net pay should be more than $72k per year. Probably high $70k's, so the monthly net would be ~$6,500 per month.

$550 for insurance is a lot. I don't think ours is more than $200/month.

Groceries - we spend more like $800/900 per month.

I don't think your expenses are out of wack at all. If you can save $2k/month then that's great.
 

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House income after tax - around 52k or 4350/month

Mortgage & property tax - $50
Utilities - $200 (we live in Winnipeg, winter heat is expensive)

Car payment - $0 (10 yr old van, no payments, rarely drive it)
Car & Life & critical illness insurance - $125
Car Maintenance - ~$200

Cable, Phone (home & 2 cells), internet - $175

Groceries - $400
Home supplies - $50 = 240/m for house cleaner = 290/m
(cleaners, decorations, general house stuff, lawn care)

Pets(food & vet bills) - $0

Total = $1200 / ~$4350(after tax) = 2910

My husband also has a contracting business but he only works seasonally and even then, only occasionally (electrician) so that also adds to our pot of savings. We also put all our $ from our daughter (193/m in child tax money) into her RESP.
 

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I generally don't see a huge issue with your expenses. But IMO I would do things a bit differently.

I for one think cell phones are nothing but a big money drain on your wallet and are grossly un-necessary. I've never had a cell phone. I sit beside a phone all day at work and all evening at home. For the few times I am not near a phone, they can leave a message. No need to be reachable 24-7. That right there would save you $100-200 a month. Then you must be spending a lot of money for luxury grade internet and cable TV service. Again, reduce these to basic cable and slower Internet. I spend about $100 a month for unlimited (slow) internet, phone with unlimited LD Canada/US/24-7 and basic IPTV.

I find your insurance to be quite high. But then you have 2 cars plus a bike. Does the bike have to be insured year-round? Is the bike even necessary?

Lastly, the home supplies thing is quite high. Can you not clean it yourself? You're spending almost $3K a year on that. Seems too high.

The main drains as I see them are these aformentioned luxuries. They hold the key to reducing your expenses, if that is what you want to do.
 

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Discussion Starter #8
I didn't understand that other comment said about saving $4k-$5k per month on $100k income per year (even with 2 people). You would need very low expenses to accomplish that.
I saw two separate people post that statement in the last couple days so it got me wondering.

A few points:

If the $100k is from 2 people making $50k each, then I think the net pay should be more than $72k per year. Probably high $70k's, so the monthly net would be ~$6,500 per month.
Yes, we're actually more like $78k/yr, however right now my wife is on mat leave and we're closer to $65k/yr


$550 for insurance is a lot. I don't think ours is more than $200/month.

Groceries - we spend more like $800/900 per month.
For both car and life?
You spend a lot on groceries, but depending on family size and needs, might not be that crazy.
 

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My view is that the proper approach to this issue is to start with the basics..... your age , gross salary, planned retirement age, loans and the current size of your nest egg... preferably differentiated by type (reg/nonreg/tfsa/realestate) and split by spouse.

Then you will be in a position to determine your spending/lifestyle. If you are just starting out, it is entirely possible that you might not need to be saving much, if anything. Or the reverse could be true.

Get a handle on your cash flow basics.... are you planning to leave an estate? die-broke? expect a future windfall? live a low key retirement or splurge? future lump sum spending needs?

Once you have a cash flow projection based on reasonable tax, rate and inflation estimates, then start analyzing the details of your current spending, and whether you need to cut back (save more) or relax and save less.

Itemizing spending is not financial planning, IMHO.
 

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Discussion Starter #10
My view is that the proper approach to this issue is to start with the basics..... your age , gross salary, planned retirement age, loans and the current size of your nest egg... preferably differentiated by type (reg/nonreg/tfsa/realestate) and split by spouse.

Then you will be in a position to determine your spending/lifestyle. If you are just starting out, it is entirely possible that you might not need to be saving much, if anything. Or the reverse could be true.

Get a handle on your cash flow basics.... are you planning to leave an estate? die-broke? expect a future windfall? live a low key retirement or splurge? future lump sum spending needs?

Once you have a cash flow projection based on reasonable tax, rate and inflation estimates, then start analyzing the details of your current spending, and whether you need to cut back (save more) or relax and save less.

Itemizing spending is not financial planning, IMHO.
I feel the same, however in terms of the original concept behind this thread was to get an idea where I stand on specific spending items as compared to others. If I'm spending $360 on groceries a month but the common seems to be closer to $200, it should through a red flag as a good area to possibly trim back a bit.
 

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But doesn't that assume the same level of resources? Someone spending $200/month on cellphones and Internet (for example) with an after-tax income of $45,000 (for example) is in a very different position than you are.

Even food costs - which may sound relatively fixed - can vary tremendously depending on how many people you are feeding, whether you are including all meals, whether meals are made in the home or not, whether someone has particular dietary tastes or preferences, etc.

(I know you know this; I'm not trying to be ... what is that word? pedantic, or patronizing.)

Elizabeth Warren - a smart cookie if there ever was one - wrote a book on personal finance with her daughter, called All Your Worth. (This is a follow-up to their earlier book, The Two-Income Trap.)

In All Your Worth, Warren and her co-author daughter provide a simple metric for understanding how to measure your spending against your current and future needs. (Their reasoning is quite similar to the field of lifecycle economics, which is one of my areas of interest.) In a nutshell: they believe you should spend no more than 50% of your household income on essentials, you should save 20%, and the remaining 30% can be spent on non-essential items. There's much more to it, but their argument is very simple and compelling - and there's no need to compare your spending against anyone else's.

Anyways. Another library recommendation. :)
 

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But honestly: what I want to know is what everybody does to have household incomes (or even individual incomes) over $100K! That's an astoundingly small sliver of the Canadian population. Perhaps this site just aggregates that population effectively?
 

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Discussion Starter #13
But honestly: what I want to know is what everybody does to have household incomes (or even individual incomes) over $100K! That's an astoundingly small sliver of the Canadian population. Perhaps this site just aggregates that population effectively?
I would agree with your aggregate theory.
My addition: Lower incomes may not feel they have the capacity to save or invest and therefore never find the forum as they don't care to look.
 

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That's an astoundingly small sliver of the Canadian population. Perhaps this site just aggregates that population effectively?
I think most people become focused on money in two situations: 1) when they don't have enough, and 2) when they have more than they need. So probably this forum is missing the silent majority of people who are aren't suffering but don't have a lot left over either. :)
 

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I guess. My feeling is that everyone is different. Who cares whether you spend 50% of your paycheck on designer drugs, caviar or give it to charity? It is the total amount of after tax/after inflation spending which concerns me, not the discrete allocation.
 

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In a nutshell: they believe you should spend no more than 50% of your household income on essentials, you should save 20%, and the remaining 30% can be spent on non-essential items.
I still think percentage-based rules of thumb only work for a certain income range. If you're earning $10K/year you're probably spending way more than 50% of your household income on essentials and probably saving close to 0%. If you earn $1 million/year and you're spending 50% of your household income on essentials, then your definition of essentials probably encompasses things like caviar and rare bottles of wine.
 

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I feel the same, however in terms of the original concept behind this thread was to get an idea where I stand on specific spending items as compared to others. If I'm spending $360 on groceries a month but the common seems to be closer to $200, it should through a red flag as a good area to possibly trim back a bit.
I did provide this type of feedback.
 

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Brad - yes. This is why I think you need to marry (something like) Warren's work with lifecycle economics, particularly the idea of smoothing consumption over your lifetime. My go-to book for that concept is Kotlikoff's "Spend 'Til The End."
 

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OK, new question, and back onto budgeting: how come I am not seeing gym memberships in peoples' monthly spending? Is it because the original poster didn't ask, or is it that few people have gym memberships?

I spend $125/month on my membership in a local martial arts club. I've also been a member at the athletic facility on the university campus where I work, which can add another $40/month.
 
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