At the end of 2012, I resolved to track all of my spending for the coming year using my nifty expense tracker (Google Spreadsheet). As suspected, it had an immediate effect on my spending level – the looming and ever-present task of having to manually write down each purchase made me think twice before whipping out my credit card. As a result, I feel confident that we spent less than if we weren’t tracking our spending at all. I encourage you to give it a shot, even for just a month.
Without further ado, here are the numbers.
|Utilities||$645*||Artificially high since I pre-paid water.|
|Mortgage + Escrow||$1,014|
|Cell Phones||$93||Two Sprint SERO plans|
|Rental House||$779||Mortgage, Escrow, and yardwork|
|General Merchandise||$218||Costco, Amazon, Lowes|
|Life Insurance||$62||Two term policies|
|Restaurants||$32||One meal; one pizza|
|Other||$80||One yearly membership related to career|
* Augh! Six-hundred and forty-five dollars for utilities???!!! Who am I, Al Gore? Seeing a figure like this would normally make me start running in circles as if my hair were on fire. In actuality, that figure is artificially inflated for this month as I took advantage of a promotional offer for my Barclay’s Extra Points credit card. Basically, they offered a total of six points per dollar spent on a few spending categories, and Utilities was one of them. So, I pre-paid my water bill by $500, meeting the spending threshold required to maximize the bonus points and netting an extra $30 cashback. I won’t need to pay another water bill for the next 9-12 months.
Concerning our regular spending, the most striking part of our expenses is that unbelievably low grocery bill! While I’d love to chalk it up to our frugal badassity, that’s not entirely the case. What IS true is that my wife and I only eat two meals a day on average, and we cook most meals from scratch. That still doesn’t explain how we only spent $59 at the grocery store for the entire month. Here’s the truth: We bought several grocery items in bulk at Costco, and I count Costco purchases as General Merchandise in my expense tracker. The Grocery category in successive months will be higher.
Money spent on gasoline is more than I’d like. I’m strongly considering getting a scooter for my commute to work. To be continued….
Our former house in Kansas is now a rental (see A Tale of Two Mortgages). The rent checks that I cash cover all regular expenses with a little buffer, so that house pays for itself. Still, it makes my total expenses look higher than I’d prefer. Removing my $500 water pre-payment, in January we spent just over $2,600. If the rental house were not in the picture, our monthly spending would have dropped down near $1,800 – a very reasonable number.
Here’s the income side of the equation:
|Salary||$3,749||After taxes, health insurance, and 403(b)|
My salary took a small hit from prior months since we had a baby last November and I now pay a little extra for health insurance. Unfortunately, my wife did not receive a paycheck in the month of January since she works part time and just had a new contract begin a few weeks ago. On the other hand, her part-time work means that we don’t have to pay for day-care, so everything is working out just fine for now.
January was a modest month for dividends, as I only had some bank interest, a payout from GE, and a dividend from my muni-bond fund. I’m hoping for an average of $100 monthly in taxable dividends for the year, so it looks like I need to make up some ground. The end of the first quarter (March) should provide a nice boost in dividend income.
Note: I don’t count dividends in my retirement accounts for the Income chart above, even though my Roth IRA and 403(b) have lots of bonds in them. The way I see it, since I can’t touch that money until roughly age 60, there’s not much point in dwelling on it now.
My savings rate was not good during January 2013, considering my wife’s lost income and my hefty water bill pre-payment. Using the figures above, I only mustered a measly 36% savings rate. If I add in my automatic 403(b) contribution (plus employer match), it bumps my savings rate up to 43%. For February, I’m shooting to break the 50% mark since my wife will have some income again.
Here’s to a healthy and prosperous February!