Is our household budget crazy?

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Topic Author
bluejello
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Is our household budget crazy?

Post by bluejello » Thu Mar 28, 2019 1:45 pm

Hi Bogleheads,

When I look at our total spending I feel like it's a crazy high number, yet when I drill down into each individual expense it all makes sense and I can't figure out where we're being wasteful. Any help from a second pair of eyes would be appreciated!

Family: 2 adults, 2 kids (age 1 and 3)

Gross Income: highly variable as we own our own business but generally > $500k

Average Monthly Expenses for Past 3 Months (from Mint)
  • Mortgage / Rent: $0 (We own our home outright)
    Home Maintenance: $1,100
    Childcare: $3,100 (Nanny and preschool)
    Travel: $2150
    Food & Groceries: $1800 (About $1000 of this is groceries and $800 is eating out)
    Health: $1400 ($750 is for health insurance and rest is for out of pocket expenses)
    Utilities & Subscriptions: $580 (electricity, water, internet, mobile phone)
    Shopping: $560
    Car & Transport: $100 (We own our car outright so this is just gas, parking, and Uber)
    Uncategorized: $250 (Cash spending and a few miscellaneous items like presents for other people)
Total Monthly Spending = $11,040

The things on this budget that cannot be changed are: childcare, health, and utilities. I think the areas where we can be less wasteful are food, travel, and shopping.

Home Maintenance: We did a lot of necessary repairs that had piled up in the last few months. Moving forward, I project this to go down to less than $200 per month.

Travel: really expensive because in the past 3 months, we took two weekend trips with the grandparents (one with each set) and we paid for everyone. During the rest of the year, we'll probably take another 2-3 trips.

Health: We pay $750 per month for health insurance (reimbursable by our company), but our health insurance doesn't cover a lot of preventative things like dental cleaning or vaccines for the baby so we pay those out of pocket. I had some health issues in the past few months so there were quite a few expenses here. This also includes gym membership.

Here's the thing that gets me — I don't feel like we are big spenders, yet when I look at how much we spend it seems like a crazy high number. For example: in the past 3 months, the only things we've bought are toys and clothes for the kids, a bunch of tennis equipment for my husband as he's an avid tennis player, some books, and $26 worth of makeup for me. It's not like I'm going on high-end shopping sprees every week. We don't have cable TV (or any TV for that matter, as we have a no screentime rule in the house). We shop for groceries at Costco. We don't drink alcohol or smoke, both of which are expensive.

So what do you think: am I wildly overspending, or just need to readjust my expectations as to what things cost?
Last edited by bluejello on Thu Mar 28, 2019 2:35 pm, edited 2 times in total.

onourway
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Re: Is our household budget crazy?

Post by onourway » Thu Mar 28, 2019 1:50 pm

Yeah, some of the numbers are high, but in aggregate you are spending less than 1/4 of your gross income, so what's the problem?

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Darth Xanadu
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Re: Is our household budget crazy?

Post by Darth Xanadu » Thu Mar 28, 2019 1:52 pm

bluejello wrote:
Thu Mar 28, 2019 1:45 pm

The things on this budget that cannot be changed are: childcare, health, and utilities. I think the areas where we can be less wasteful are food, travel, and shopping.
This was my thought when first reading your post. Food costs just seem high. It sounds like you anticipate home repair costs and travel costs to come down throughout the remainder of the year.

I don't think you are wildly overspending, but I also think you can easily cut $2k out of your monthly spend.
"A courageous teacher, failure is."

Triple digit golfer
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Re: Is our household budget crazy?

Post by Triple digit golfer » Thu Mar 28, 2019 1:54 pm

$800 eating out can be brought down to zero if you choose.
What is in the $560 of shopping?
You're paying $1,400 on health and that's with $0 insurance cost?
You took two trips costing you $3,225 each on average.
How much in toys and clothes for the kids in the last 3 months? That can really add up.
How much is a "bunch" of tennis equipment?

You have thousands of dollars that you can cut, if you so choose. But you must be saving a ton of money with $500k income, so are you even concerned? By my math you're probably saving 50%+ of your gross income.

Topic Author
bluejello
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Re: Is our household budget crazy?

Post by bluejello » Thu Mar 28, 2019 1:56 pm

onourway wrote:
Thu Mar 28, 2019 1:50 pm
Yeah, some of the numbers are high, but in aggregate you are spending less than 1/4 of your gross income, so what's the problem?
You're right, it's not like we're living beyond our means. Yet I have this nagging feeling that we could cut our spending by a significant amount without reducing our quality of life in any noticeable way.

Food is one area of concern for me. I see other people with families of 2 or 3 kids posting that they spend $600 a month on food. I don't understand how that is possible. We go to Costco, we put normal things in our cart like milk eggs bread chicken apples etc., and somehow when we get to checkout the bill is $250 every week. How are you guys spending so much less on food?

robphoto
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Re: Is our household budget crazy?

Post by robphoto » Thu Mar 28, 2019 1:58 pm

Car insurance, life insurance, umbrella insurance, homeowner's insurance, retirement and education savings?

Taxes on income, home, car?

Will the kids go to public or private school?

You should add these in to see your actual total monthly spend.

Clearly, you're not living a minimal lifestyle, but nothing sticks out as unusual.

You could probably trim at the edges, like cheaper phone service, but these are small items.

runner3081
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Re: Is our household budget crazy?

Post by runner3081 » Thu Mar 28, 2019 2:03 pm

For your income = No. Compared to me and what I would be comfortable with = YES

In fact, I read this as more of a brag. Maybe that is just me!

bloom2708
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Re: Is our household budget crazy?

Post by bloom2708 » Thu Mar 28, 2019 2:04 pm

If you are saving "enough", your spending is likely fine.

How can you spend $800 eating out and $1,000 on groceries. That is ~$30 every day eating out.

I can see one or the other being out of whack, but both seem high. Are you throwing a lot of food away that doesn't last? Maybe that is 4 x $200 fancy meals out. Lots of ways to spend it on food.

Can you trim? Sure. Everyone spends on what they feel is "important".

"Important" may shift over the years as you hone in on things that make you happy. Spending and happiness are often not correlated at all.
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Tamarind
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Re: Is our household budget crazy?

Post by Tamarind » Thu Mar 28, 2019 2:04 pm

Most of it seems luxurious but probably not wasteful. For example the nanny which is completely discretionary spending but pretty reasonable relative to income and has significant utility to you both as business owners. Travel with grandparents and small children is expensive yet probably priceless.

Utilities are a stubborn expense but maybe not as fixed as you think. If you are paying more than about $40/line for cellphones, you are overpaying, period. You may be able to save significantly on heating/cooling by making changes to your thermostat settings without being uncomfortable. If you have a large home, that adds up.

If you like good food as much as I do and are eating at nice places when you eat out, then your restaurant budget, while higher than my total food budget, is not excessive.

The glaring exception is your grocery budget, which is absolutely nuts. Are you eating a paleo diet bought entirely at Whole Foods? :P If so, the good news is that you are paying far too much for a shiny shopping experience and can eat similarly for much less.

ETA: Seeing that you are shopping at Costco, how much of what you buy gets thrown out or is now in a freezer?

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goingup
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Re: Is our household budget crazy?

Post by goingup » Thu Mar 28, 2019 2:06 pm

How much are you saving? We always saved what we thought was needed and spent the rest.

runner540
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Re: Is our household budget crazy?

Post by runner540 » Thu Mar 28, 2019 2:07 pm

Tamarind wrote:
Thu Mar 28, 2019 2:04 pm
Most of it seems luxurious but probably not wasteful. For example the nanny which is completely discretionary spending but pretty reasonable relative to income and has significant utility to you both as business owners. Travel with grandparents and small children is expensive yet probably priceless.

Utilities are a stubborn expense but maybe not as fixed as you think. If you are paying more than about $40/line for cellphones, you are overpaying, period. You may be able to save significantly on heating/cooling by making changes to your thermostat settings without being uncomfortable. If you have a large home, that adds up.

If you like good food as much as I do and are eating at nice places when you eat out, then your restaurant budget, while higher than my total food budget, is not excessive.

The glaring exception is your grocery budget, which is absolutely nuts. Are you eating a paleo diet bought entirely at Whole Foods? :P If so, the good news is that you are paying far too much for a shiny shopping experience and can eat similarly for much less.

ETA: Seeing that you are shopping at Costco, how much of what you buy gets thrown out or is now in a freezer?
+1. How much prepared food are you buying vs ingredients that you cook?
Does your grocery budget include non-food items like detergent, paper goods, etc?

Texanbybirth
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Re: Is our household budget crazy?

Post by Texanbybirth » Thu Mar 28, 2019 2:17 pm

Your grocery and eating out budget seems insanely high, but otherwise your spending doesn't really seem crazy. I mean, you make so much money who really cares? I wouldn't lose sleep over it, unless you're throwing away a bunch of food each week. You probably either live in a HCOL area or eat at very fancy restaurants. We have 3 kids: 4, 2, and baby. We still buy the 4 & 2 year old one meal at restaurants because they don't finish the food separately, and usually will buy an extra kids drink. We spend than less than $800/mo on food TOTAL, and I think our eating situation is extravagant. We also entertain for probably 2 dinners out of the month, at least one or two other families.

I don't know how you don't know what you spent $560/mo on for "shopping". If we spent that much on average over a 3-month period, I better have a new iPhone or something to show for it. :D My wife is very frugal about kids clothing, and of course grandparents love to buy kids clothes.

I have no insight into childcare costs because my wife is a SAHM. Healthcare is expensive, and highly variable depending on your situation. Utilities and car seem in line. I wish we could spend that much each month on travel. :happy :beer
Last edited by Texanbybirth on Thu Mar 28, 2019 2:22 pm, edited 1 time in total.
Old Tom Bombadil is a merry fellow, | Bright blue his jacket is, and his boots are yellow. | None has ever caught him yet, for Tom, he is the master: | His songs are stronger songs, and his feet are faster.

Topic Author
bluejello
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Joined: Sun Sep 21, 2014 9:40 am

Re: Is our household budget crazy?

Post by bluejello » Thu Mar 28, 2019 2:20 pm

Tamarind wrote:
Thu Mar 28, 2019 2:04 pm
The glaring exception is your grocery budget, which is absolutely nuts. Are you eating a paleo diet bought entirely at Whole Foods? :P If so, the good news is that you are paying far too much for a shiny shopping experience and can eat similarly for much less.

ETA: Seeing that you are shopping at Costco, how much of what you buy gets thrown out or is now in a freezer?
As I posted earlier, I don't understand how our grocery bill is so high either! We definitely don't eat lobster and steak for every meal. It's normal stuff, like milk eggs yogurt bread broccoli. Some chicken and fish. Yet when we get to checkout, the bill is always $200 or more!

I don't think any of our food gets thrown out (aside from what our toddler tosses on the floor, which come to think of it is a pretty substantial amount of food).

We eat out lunch every day, which is about $10 per person per lunch or $400 total for the month. The other $400 in eating out is about one meal out per week. My husband LOVES eating out and he often complains that we don't eat out enough.

Gufomel
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Re: Is our household budget crazy?

Post by Gufomel » Thu Mar 28, 2019 2:24 pm

Childcare and travel make up almost half the total expenses you posted. But those amounts don’t seem out of whack for your income.

While your expenses are certainly higher than ours, you also make more than 5x as much as us!

As you mentioned, and as most posters have focused on, food is your biggest area for opportunity to cut. We budget $550/month for groceries and $135/month for eating out with 2 kids (under 4 years old, so if yours are teenagers then that’s going to make a difference). Food budgets vary wildly (I see posts here and elsewhere of families of 4 spending less than $400/month total on food and I wonder how that’s possible), and you certainly don’t need to set a goal to be under $600 groceries per month. You have plenty of wiggle room with your income, and have room to splurge some (or a lot). As far as “how” we do it? The credit all goes to my wife, but for quite a while now she’s been using Walmart grocery pickup. She plans the meals for the week, orders the groceries online, and picks up the next day. Mostly Walmart’s Great Value brand (I literally can’t tell the difference from name brand, and I like my food). By ordering online, you know exactly what your getting and how much you’re spending before checking out. I suspect when shopping at Costco, you’re probably getting more than you need and it may be going to waste.

I will also add that I feel like you may be leaving some stuff out of your posted expenses. Maybe things that are quarterly/semi-annual/annual that you didn’t capture.

JGoneRiding
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Re: Is our household budget crazy?

Post by JGoneRiding » Thu Mar 28, 2019 2:27 pm

bluejello wrote:
Thu Mar 28, 2019 1:56 pm
onourway wrote:
Thu Mar 28, 2019 1:50 pm
Yeah, some of the numbers are high, but in aggregate you are spending less than 1/4 of your gross income, so what's the problem?
You're right, it's not like we're living beyond our means. Yet I have this nagging feeling that we could cut our spending by a significant amount without reducing our quality of life in any noticeable way.

Food is one area of concern for me. I see other people with families of 2 or 3 kids posting that they spend $600 a month on food. I don't understand how that is possible. We go to Costco, we put normal things in our cart like milk eggs bread chicken apples etc., and somehow when we get to checkout the bill is $250 every week. How are you guys spending so much less on food?
I don't go to Costco weekly ? :? I agree go there and if you leave less then $300 you are doing good! So it is at most an every other month thing for us. We spend between $500 and $600 on grocery stuff.

The travel seems crazy high to me but maybe needs to be looked at as a yearly expense.

What type of insurance do you have that doesn't cover well child and vaccine??? This is mandated by ACA so maybe you need to buy better insurance (though $700 for a family of four seems dirt cheap so maybe you are coming out ahead)

Gufomel
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Re: Is our household budget crazy?

Post by Gufomel » Thu Mar 28, 2019 2:27 pm

bluejello wrote:
Thu Mar 28, 2019 2:20 pm
Tamarind wrote:
Thu Mar 28, 2019 2:04 pm
The glaring exception is your grocery budget, which is absolutely nuts. Are you eating a paleo diet bought entirely at Whole Foods? :P If so, the good news is that you are paying far too much for a shiny shopping experience and can eat similarly for much less.

ETA: Seeing that you are shopping at Costco, how much of what you buy gets thrown out or is now in a freezer?
As I posted earlier, I don't understand how our grocery bill is so high either! We definitely don't eat lobster and steak for every meal. It's normal stuff, like milk eggs yogurt bread broccoli. Some chicken and fish. Yet when we get to checkout, the bill is always $200 or more!

I don't think any of our food gets thrown out (aside from what our toddler tosses on the floor, which come to think of it is a pretty substantial amount of food).

We eat out lunch every day, which is about $10 per person per lunch or $400 total for the month. The other $400 in eating out is about one meal out per week. My husband LOVES eating out and he often complains that we don't eat out enough.
$200-250 per week for groceries is not unreasonable (even if you might be able to cut out some here and there). But that’s $800-1000 per month. Your OP said $1800 per month. Find the missing $800, and that’s probably where you have room to cut.

Although your budget for eating out is higher than our total food budget, you have room to splurge on your income. If it’s worth it to you, I don’t think it’s unreasonable. If it’s not worth it to you, find a way to cut (especially lunch at work).

Edit: never mind, your OP was $1800 total between groceries and eating out. Maybe you could find a way to cut back from $1000 to $600-800 per month on groceries, but it’s probably not a major deal on $500k income. Eating out could definitely be cut, but again if it’s something that’s worth it to you then it’s not excessive on $500k income.
Last edited by Gufomel on Thu Mar 28, 2019 2:32 pm, edited 1 time in total.

Topic Author
bluejello
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Re: Is our household budget crazy?

Post by bluejello » Thu Mar 28, 2019 2:31 pm

Texanbybirth wrote:
Thu Mar 28, 2019 2:17 pm
I don't know how you don't know what you spent $560/mo on for "shopping". If we spent that much on average over a 3-month period, I better have a new iPhone or something to show for it. :D My wife is very frugal about kids clothing, and of course grandparents love to buy kids clothes.
Sigh. This is exactly the problem. I feel like we spend a lot and don't get much value out of our spending. Here's what the "shopping" budget went to:
  • $440 tennis equipment
    $227 books. we read a lot of books.
    $220 kids toys
    $115 home stuff (to replace things the toddler broke)
    $105 clothes for us (to replace things that have worn out)
    $80 kids clothes
    $26 makeup
This doesn't quite add up to what Mint showed me for the shopping category, I don't know why.

robphoto
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Re: Is our household budget crazy?

Post by robphoto » Thu Mar 28, 2019 2:36 pm

To see what you actually spent in the month, you might have to go to your credit card and bank statements, and add up all the spending in the time period you're looking at. As with the shopping category, you might not be including all the items, or all the categories.

Workable Goblin
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Re: Is our household budget crazy?

Post by Workable Goblin » Thu Mar 28, 2019 2:36 pm

Tamarind wrote:
Thu Mar 28, 2019 2:04 pm
The glaring exception is your grocery budget, which is absolutely nuts. Are you eating a paleo diet bought entirely at Whole Foods? :P If so, the good news is that you are paying far too much for a shiny shopping experience and can eat similarly for much less.
Or they could be in a very HCOL area. Here in Hawaii, the USDA figures that a family of four ought to be spending nearly $1 200 a month on groceries with their thrifty food plan, i.e. the one they use to set food stamp benefits, and I can testify that I personally spend about $300 a month on groceries for just me despite eating mostly beans and rice and oatmeal. I suppose the OP probably does not live in Hawaii or Alaska (a less eye-watering $760/month for a family of four), but I could well imagine that they're in the Bay Area or Los Angeles or New York and even "cheap" food is expensive. If they're having any luxuries like meat or snacks or anything of that sort in their groceries (which with a monthly spend of $800 on eating out they probably are), that could easily account for the cost.

Texanbybirth
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Re: Is our household budget crazy?

Post by Texanbybirth » Thu Mar 28, 2019 2:42 pm

bluejello wrote:
Thu Mar 28, 2019 2:31 pm
Texanbybirth wrote:
Thu Mar 28, 2019 2:17 pm
I don't know how you don't know what you spent $560/mo on for "shopping". If we spent that much on average over a 3-month period, I better have a new iPhone or something to show for it. :D My wife is very frugal about kids clothing, and of course grandparents love to buy kids clothes.
Sigh. This is exactly the problem. I feel like we spend a lot and don't get much value out of our spending. Here's what the "shopping" budget went to:
  • $440 tennis equipment
    $227 books. we read a lot of books.
    $220 kids toys
    $115 home stuff (to replace things the toddler broke)
    $105 clothes for us (to replace things that have worn out)
    $80 kids clothes
    $26 makeup
This doesn't quite add up to what Mint showed me for the shopping category, I don't know why.
So if I were you, I'd probably be upset that I don't "know" where my grocery budget goes. 3 (and 1) year olds waste food. It sucks, but I think it's an okay reality. They don't waste that much food though, so you've got to figure out where you're spending all that grocery money. Since you've started your own business, you (or your husband) are probably inquisitive and motivated people. Take it as a challenge to yourselves. I also would want to know if my family were really wasting/throwing away a bunch of food. My wife would want to know, too. That's being a bit moralistic on my part, though, so take it with a grain of salt. If you like eating out, no problemo. Y'all have the money for it. I wouldn't stress about, or change, that.

We read a lot of books. A LOT. We don't spend even $100/mo. Thriftbooks.com and half price books are great, so is the library, especially for the hundreds of kids books. "kids toys" also seems high for such young kiddos, but maybe that was two birthdays? :happy I always thought tennis was a cheap sport to play, but maybe your husband is really into it?

If you can't track your spending accurately with Mint, then it might also be a good idea to just log everything into a spreadsheet. Or maybe you're not spending as much as you thought. Again, if I were you I probably wouldn't be stressing too much. Hopefully since you're only spending 25% of your income you're able to save a ton of money, too. :beer
Old Tom Bombadil is a merry fellow, | Bright blue his jacket is, and his boots are yellow. | None has ever caught him yet, for Tom, he is the master: | His songs are stronger songs, and his feet are faster.

mega317
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Re: Is our household budget crazy?

Post by mega317 » Thu Mar 28, 2019 2:42 pm

Well 440 tennis equipment is not going to be recurrent is it? Balls are like a dollar each and what does it cost to replace strings like 30-40? You could even get a stringing machine for a few hundred which would pay for itself after a few years if you're a serious player. It's also a rather relaxing activity.

200 dollars in books is bonkers. Every month? Go to the library or buy used online. Also 200 in kids toys. If you don't mind sending me the boxes from those toys, my kids will have at least as much fun.

But none of this matters. If you truly spend 11k a month on a 500k income you are fabulously weathly.

Gufomel
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Re: Is our household budget crazy?

Post by Gufomel » Thu Mar 28, 2019 2:43 pm

bluejello wrote:
Thu Mar 28, 2019 2:31 pm
Texanbybirth wrote:
Thu Mar 28, 2019 2:17 pm
I don't know how you don't know what you spent $560/mo on for "shopping". If we spent that much on average over a 3-month period, I better have a new iPhone or something to show for it. :D My wife is very frugal about kids clothing, and of course grandparents love to buy kids clothes.
Sigh. This is exactly the problem. I feel like we spend a lot and don't get much value out of our spending. Here's what the "shopping" budget went to:
  • $440 tennis equipment
    $227 books. we read a lot of books.
    $220 kids toys
    $115 home stuff (to replace things the toddler broke)
    $105 clothes for us (to replace things that have worn out)
    $80 kids clothes
    $26 makeup
This doesn't quite add up to what Mint showed me for the shopping category, I don't know why.
Again, not excessive on $500k income if it’s worth it to you, but if you want to cut then:

- Tennis equipment - not sure how to cut this other than not getting it (some or all) or getting it used
- Books - used books, library, or Kindle and use your library’s app (this is what we do and have an almost unlimited selection of books for free)
- Kid’s toys - frankly grandparents buy our kids so much stuff or friends/neighbors drop their kid’s old junk (haha) off at our house that we rarely buy toys for our kids other than birthdays/Christmas (our kids are 1.5 and 3.5 yo). But larger purchases like hover board and stuff as your kids get older can add up quick. Not sure what types of toys are included in your number.
- Home stuff - stuff breaks and usually needs to be replaced
- Clothes and makeup - is the $105, $80, and $26 the total for 3 months, or average per month? If for 3 months, you might actually be underestimating here. If per month, it’s high but again doesn’t seem unreasonable.

quantAndHold
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Re: Is our household budget crazy?

Post by quantAndHold » Thu Mar 28, 2019 2:46 pm

I don’t see anything terrible, especially given your income. One thing to note is that the things that do seem high to me (home maintenance and travel) are not year round expenses. In the budget, I would only count 1/12 of the yearly total.

For comparison, we own our home outright as well, and I budget $1000/month for everything home related, including insurance, taxes, utilities, and maintenance. It’s a 2500 sqft house in California. We spend about double what you do on our 15 year old cars, so I don’t know how you manage to keep that so low.

If you really wanted to clip coupons and cut eating out, you could probably cut your food spending in half, but with your income and savings level, that’s a choice for you to make or not.

$400 on tennis gear is perfectly reasonable if it’s occasional, not every month.

The book costs are high if you have a local library. We read a lot too, but our book costs are less than $100 for the whole year, mostly for reference materials (cookbooks, etc), and things the library doesn’t have.

stoptothink
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Re: Is our household budget crazy?

Post by stoptothink » Thu Mar 28, 2019 2:47 pm

bluejello wrote:
Thu Mar 28, 2019 1:45 pm

Utilities & Subscriptions: $580 (electricity, water, internet, mobile phone)

The things on this budget that cannot be changed are: childcare, health, and utilities.
How exactly can't utilities/subscriptions be cut? Same size family and we literally spend <20% of what you do on utilities and subscriptions. I think you know that the "shopping" and food spending is way out there. But, you certainly have the income to afford it all. There's a lot of fat you could cut, but if you have a high quality of life and are meeting savings goals, why fix what isn't broken?

EnjoyIt
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Re: Is our household budget crazy?

Post by EnjoyIt » Thu Mar 28, 2019 2:49 pm

If you eat out so much, why do you need $1k/month on groceries. Something isn’t adding up or you are throwing away food.

Although eating out is fun, it is tough to do so and still eat healthy. I really would consider packing food for lunch. That should save you $300/month easy and your body will thank you 20 years from now.

kaudrey
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Re: Is our household budget crazy?

Post by kaudrey » Thu Mar 28, 2019 3:07 pm

Stop eating lunch out every day - that's just wasting money.

And use the library - it is a great resource, especially with kids.

I like buying books too - but I buy them in bulk at library book sales. I get bags of books for $20 a few times a year....

trustquestioner
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Re: Is our household budget crazy?

Post by trustquestioner » Thu Mar 28, 2019 3:19 pm

This board is insane sometimes.

You’re spending less than a quarter of your gross income. Saving is abundant and more than sufficient.

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Tamarind
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Re: Is our household budget crazy?

Post by Tamarind » Thu Mar 28, 2019 3:23 pm

trustquestioner wrote:
Thu Mar 28, 2019 3:19 pm
This board is insane sometimes.

You’re spending less than a quarter of your gross income. Saving is abundant and more than sufficient.
I actually agree, but OP asked because it was bugging them.

WorkToLive
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Re: Is our household budget crazy?

Post by WorkToLive » Thu Mar 28, 2019 3:30 pm

Mortgage / Rent: $0 (We own our home outright)
Home Maintenance: $1,100
Childcare: $3,100 (Nanny and preschool)
Travel: $2150
Food & Groceries: $1800 (About $1000 of this is groceries and $800 is eating out)
Health: $1400 ($750 is for health insurance and rest is for out of pocket expenses)
Utilities & Subscriptions: $580 (electricity, water, internet, mobile phone)
Shopping: $560
Car & Transport: $100 (We own our car outright so this is just gas, parking, and Uber)
Uncategorized: $250 (Cash spending and a few miscellaneous items like presents for other people)

$440 tennis equipment
$227 books. we read a lot of books.
$220 kids toys
$115 home stuff (to replace things the toddler broke)
$105 clothes for us (to replace things that have worn out)
$80 kids clothes
$26 makeup
--Agree home maintenance can come down unless you are saving for a specific project. I'd target $4-5k/year.
--Groceries seems OK, but eating out is a place you can cut if you like. That's a lifestyle choice, but keep in mind restaurant food is much more expensive and much less healthy.
--If you get reimbursed for health insurance, is that included in your income? Can you place your expenses in an HSA?
--Utilities seem high. For us, water/sewer/trash is $100/mo, electricity/gas is $150/mo, internet is $80/mo, and phone is $100/mo with paid-off phones. We are frugal with water and energy usage and try not to be on our phones all the time.
--Car seems very low. You only spend $100 on transport each month? That can't be right.
--Shopping is a lifestyle choice. Remember stuff all ends up in the landfill eventually. Can you encourage your family to only buy what they truly value and require? Books should come from the library until there is a favorite that can be purchased. Children's clothing can very often be received for free from friends and relatives.

Missing categories may include:
Insurance--auto, home, umbrella
Entertainment--tickets, shows, fairs

Your spending is your business, which is why it's called Personal Finance. If you want to spend less, you have plenty of things to look at. Whether you do that is up to you. For us, we spend on experiences like activities, trips, instrument lessons, family dinners. We do not purchase much stuff without long consideration.

keith6014
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Re: Is our household budget crazy?

Post by keith6014 » Thu Mar 28, 2019 3:32 pm

groceries are a bit high.
n.jersey/3 adults + 2 kinders. We spent $1200 per month on restaurants & groceries. 30% less combined income.
hope this helps.

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Tamarind
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Re: Is our household budget crazy?

Post by Tamarind » Thu Mar 28, 2019 3:33 pm

bluejello wrote:
Thu Mar 28, 2019 2:20 pm
Tamarind wrote:
Thu Mar 28, 2019 2:04 pm
The glaring exception is your grocery budget, which is absolutely nuts. Are you eating a paleo diet bought entirely at Whole Foods? :P If so, the good news is that you are paying far too much for a shiny shopping experience and can eat similarly for much less.

ETA: Seeing that you are shopping at Costco, how much of what you buy gets thrown out or is now in a freezer?
As I posted earlier, I don't understand how our grocery bill is so high either! We definitely don't eat lobster and steak for every meal. It's normal stuff, like milk eggs yogurt bread broccoli. Some chicken and fish. Yet when we get to checkout, the bill is always $200 or more!

I don't think any of our food gets thrown out (aside from what our toddler tosses on the floor, which come to think of it is a pretty substantial amount of food).

We eat out lunch every day, which is about $10 per person per lunch or $400 total for the month. The other $400 in eating out is about one meal out per week. My husband LOVES eating out and he often complains that we don't eat out enough.
You could save a lot by cooking workday lunches at home and spend the difference in more nice dinners out.

Why not see if you can do a cash flow statement for groceries? For a couple of weeks, record every thing you buy at the grocery store and what happens to it: cooked, eaten, tossed on floor by toddler, went bad, still in the freezer, buried in the back of the pantry or fridge etc.

It occurs to me to ask, are you feeding the nanny all day too? Because an extra adult might change the math.

Rather than Costco, maybe you could try shopping somewhere that doesn't sell in bulk? Trader Joe's? Publix? Whatever is considered a typical grocery store in your area - not fancy, not cheap. See if the same grocery list gets a smaller bill.

Topic Author
bluejello
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Re: Is our household budget crazy?

Post by bluejello » Thu Mar 28, 2019 3:58 pm

Thanks for everyone's feedback. It's good to know that I'm not crazy and that we do spend a lot.

To answer a few questions asked earlier:

Car costs are very low because we barely use the car. Our neighborhood is very walkable and we walk to work, so we mostly just use it on weekends to take the kids somewhere or to go get groceries. Probably < 20 miles driving total each week.

Yes, we feed the nanny so it's really a food budget for 3 adults + 2 kids. Yes, our "groceries" budget includes lots of non-food things like paper towels and diapers. Still, it seems like the general consensus is we spend a crazy amount on groceries.

The nearest public library is 30 minutes drive away and it's a crappy library. I do love public libraries but unfortunately that's not an option for us.

It's funny because I think of myself as minimalist and as buying very little stuff... clearly that's not true though!

fru-gal
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Location: New England

Re: Is our household budget crazy?

Post by fru-gal » Thu Mar 28, 2019 4:04 pm

bluejello wrote:
Thu Mar 28, 2019 2:31 pm
$227 books. we read a lot of books.
I buy ebooks, at let's say $5 apiece. That would be 45 books a month at your rate. Not counting library ebooks, which are free. I find also that once I accumulated 1000 ebooks over the course of several years, I can start reading them over again and my book expenses go to nearly zero. I read a lot, because I am retired, but you folks are working, so you have presumably less time to read.

NOTE: you don't have to set foot in a library to borrow ebooks. This can generally be done via their website. In my state one can access all the ebooks any library has purchased if you belong to any library. Then just download them to your computer.

stoptothink
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Re: Is our household budget crazy?

Post by stoptothink » Thu Mar 28, 2019 4:14 pm

fru-gal wrote:
Thu Mar 28, 2019 4:04 pm
bluejello wrote:
Thu Mar 28, 2019 2:31 pm
$227 books. we read a lot of books.
I buy ebooks, at let's say $5 apiece. That would be 45 books a month at your rate. Not counting library ebooks, which are free. I find also that once I accumulated 1000 ebooks over the course of several years, I can start reading them over again and my book expenses go to nearly zero. I read a lot, because I am retired, but you folks are working, so you have presumably less time to read.

NOTE: you don't have to set foot in a library to borrow ebooks. This can generally be done via their website. In my state one can access all the ebooks any library has purchased if you belong to any library. Then just download them to your computer.
There are so many ways to get cheap (physical) books, even free books. There are a million book swap sites out there and, again, ebooks is an amazing option. My wife never sets foot in a library and reads quite a bit.

Regattamom
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Re: Is our household budget crazy?

Post by Regattamom » Thu Mar 28, 2019 4:23 pm

Your food budget is really high, as you know. But if it does include diapers, paper towels, toilet paper, etc. it's not as high as it seems. Your eating out budget is crazy high, but you can afford it.

I break down my receipts from Costco and the grocery store. I have a category strictly for groceries and the other items go into a household category. If you try that, it might make you feel better about the perceived high cost of your groceries.

Cheers!

GT99
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Re: Is our household budget crazy?

Post by GT99 » Thu Mar 28, 2019 4:38 pm

I thought we had a pretty outrageous food budget, but you have us beat by a lot (we average around $1200).

If you have both nanny and preschool costs for 2 kids at $3100 per month, that's really good IMO. That's less than what we would pay for full time preschool for both with no nanny and nanny is more generally more expensive.

Shallowpockets
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Re: Is our household budget crazy?

Post by Shallowpockets » Thu Mar 28, 2019 4:53 pm

You make a lot of money, so you spend a lot of money. No way could the average household afford 11K a month. And those people have to still pay for their cars and their mortgages. You could cut, but would you want to? How much are you looking to save? Are you looking to save? Your budget is only crazy to a frugal guy like me. Why should it be to you?
There are plenty of suggestions posted here. Perhaps you should examine your motive for this attitude. Too much time reading about the frugal, the savers, and the other BH sorts of money approaches?
SO.
You want to eat well and not even think about wasted food. Not think about bargains when shopping.
You want your other shopping unhindered, tennis rackets and books.
You want to be magnanimous with vacations for your in-laws and parents.

If you want it all, you have to pay for it all. There is your budget.

SoonerD
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Joined: Tue Jul 21, 2015 8:28 pm

Re: Is our household budget crazy?

Post by SoonerD » Thu Mar 28, 2019 5:12 pm

Tamarind wrote:
Thu Mar 28, 2019 3:23 pm
trustquestioner wrote:
Thu Mar 28, 2019 3:19 pm
This board is insane sometimes.

You’re spending less than a quarter of your gross income. Saving is abundant and more than sufficient.
I actually agree, but OP asked because it was bugging them.
TrustQ, you might have missed it (or may it was a late edit) but the OP asked “So what do you think: am I wildly overspending, or just need to readjust my expectations as to what things cost?”

The replies have acknowledged she has lots of room for significant investment contributions. So she’s in great shape and has areas that can reasonably be trimmed if she wishes.

Tamarind, the OP is female and seems to be seeking input on her concern (not them). The husband seems to want to spend more on food and is the cause of the tennis expense.

OP, if I were in your shoes I would set a saving/investment and tax budget then spend the rest according to the family’s priorities. I wouldn’t sweat it.

Trader Joe
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Re: Is our household budget crazy?

Post by Trader Joe » Thu Mar 28, 2019 5:14 pm

bluejello wrote:
Thu Mar 28, 2019 1:45 pm
Hi Bogleheads,

When I look at our total spending I feel like it's a crazy high number, yet when I drill down into each individual expense it all makes sense and I can't figure out where we're being wasteful. Any help from a second pair of eyes would be appreciated!

Family: 2 adults, 2 kids (age 1 and 3)

Gross Income: highly variable as we own our own business but generally > $500k

Average Monthly Expenses for Past 3 Months (from Mint)
  • Mortgage / Rent: $0 (We own our home outright)
    Home Maintenance: $1,100
    Childcare: $3,100 (Nanny and preschool)
    Travel: $2150
    Food & Groceries: $1800 (About $1000 of this is groceries and $800 is eating out)
    Health: $1400 ($750 is for health insurance and rest is for out of pocket expenses)
    Utilities & Subscriptions: $580 (electricity, water, internet, mobile phone)
    Shopping: $560
    Car & Transport: $100 (We own our car outright so this is just gas, parking, and Uber)
    Uncategorized: $250 (Cash spending and a few miscellaneous items like presents for other people)
Total Monthly Spending = $11,040

The things on this budget that cannot be changed are: childcare, health, and utilities. I think the areas where we can be less wasteful are food, travel, and shopping.

Home Maintenance: We did a lot of necessary repairs that had piled up in the last few months. Moving forward, I project this to go down to less than $200 per month.

Travel: really expensive because in the past 3 months, we took two weekend trips with the grandparents (one with each set) and we paid for everyone. During the rest of the year, we'll probably take another 2-3 trips.

Health: We pay $750 per month for health insurance (reimbursable by our company), but our health insurance doesn't cover a lot of preventative things like dental cleaning or vaccines for the baby so we pay those out of pocket. I had some health issues in the past few months so there were quite a few expenses here. This also includes gym membership.

Here's the thing that gets me — I don't feel like we are big spenders, yet when I look at how much we spend it seems like a crazy high number. For example: in the past 3 months, the only things we've bought are toys and clothes for the kids, a bunch of tennis equipment for my husband as he's an avid tennis player, some books, and $26 worth of makeup for me. It's not like I'm going on high-end shopping sprees every week. We don't have cable TV (or any TV for that matter, as we have a no screentime rule in the house). We shop for groceries at Costco. We don't drink alcohol or smoke, both of which are expensive.

So what do you think: am I wildly overspending, or just need to readjust my expectations as to what things cost?
No, I do not think you are overspending. I think you are doing fantastic!

LiterallyIronic
Posts: 1336
Joined: Sat Dec 05, 2015 10:36 am

Re: Is our household budget crazy?

Post by LiterallyIronic » Thu Mar 28, 2019 5:18 pm

You have a huge income and you're spending like 25% of it. You don't have a reason to cut your budget, but if you really want to, I'm your man. I'm notoriously cheap. You have $250 in "uncategorized" while I'd flip out if I had $2.50 in "uncategorized." I track literally every cent. We cancelled Netflix because it was too expensive (and we only had the one SD stream $7.99 version ($8.54 after tax)).

I would tear your budget apart, if you wanted me to. But you don't want me to. Because your income is so high. Why live like a pauper for a tomorrow that may never come if you don't have to? However, if it's causing you stress or something, then, sure, strip it down to some degree. You can "trim the fat" or "go to barebones" or anything in between.

But if you do want me to, I can tell you how I feed a family of three on $225/month and how our entire monthly budget (including mortgage) is less than your travel budget. But why would you want to live like me when you have seven times my income? :beer

annebert
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Re: Is our household budget crazy?

Post by annebert » Thu Mar 28, 2019 5:23 pm

You are spending less than 5% of your income on food (including dining out). US average is about 10%, which pales in comparison to the rest of the world. In the developing world, it can be 50%. I think that you have nothing to be concerned about.

majiaknight
Posts: 114
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Re: Is our household budget crazy?

Post by majiaknight » Thu Mar 28, 2019 5:37 pm

Compared to my family's budget in VHCOL areas I'd say you may need to adjust your expectation. Grocery/food/shopping are a little bit high but IMO still in a reasonable range. I guess you didn't add the house property tax and home insurance into your home maintenance bucket which cost >$1K/m in my case excluding HOA and house repairs/clean. About half of your expenses go to 2 kids and travel, and you will soon find kids will cost more when they grow up counting the annual steady increase of private school tuition (in my case), after-school programs and weekend classes. My family did much less long travels w/ the preschool kid (~ twice a year w/ visiting grandparents), and bought 5-6 annual family membership/passes for theme parks, museums, zoos, aquariums, etc within 1.5h's drive, so we managed to control the travel budget to ~$10K/y. You could also learn how to use travel credit card pts and benefits wisely which could easily save a couple of thousand $ per year.

Also check the following thread:
Anyone want to share their monthly budget? Here's ours
viewtopic.php?f=2&t=239182
Last edited by majiaknight on Thu Mar 28, 2019 5:43 pm, edited 1 time in total.

Dottie57
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Location: Earth Northern Hemisphere

Re: Is our household budget crazy?

Post by Dottie57 » Thu Mar 28, 2019 5:41 pm

Yes your budget is crazy. But you can afford it so enjoy.

MarkRoulo
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Re: Is our household budget crazy?

Post by MarkRoulo » Thu Mar 28, 2019 6:04 pm

fru-gal wrote:
Thu Mar 28, 2019 4:04 pm
bluejello wrote:
Thu Mar 28, 2019 2:31 pm
$227 books. we read a lot of books.
I buy ebooks, at let's say $5 apiece. That would be 45 books a month at your rate. Not counting library ebooks, which are free. I find also that once I accumulated 1000 ebooks over the course of several years, I can start reading them over again and my book expenses go to nearly zero. I read a lot, because I am retired, but you folks are working, so you have presumably less time to read.
"A lot of books" isn't necessarily what gets someone to $227/month. It is the exact books.

As one example, I went out an purchased "Triumph of the Optimists" a number of years ago. I highly recommend the book. But is was $100 new and I didn't find any used copies. I clearly didn't *need* the book, and if money had been tight I wouldn't have purchased it, but I had the money and wanted that book, not some other much more cheaply available book.

Not everything one might want to read is available at $5/book.

And for the kids you might want them to be reading physical books rather than staring at a screen. Library book sales are great, as are used book stores (both physical and online), but, again, not all the books you might want will be available for $5/book.

It is a lot, but OP can afford it and OP isn't alone!

Triple digit golfer
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Joined: Mon May 18, 2009 5:57 pm

Re: Is our household budget crazy?

Post by Triple digit golfer » Thu Mar 28, 2019 6:06 pm

LiterallyIronic wrote:
Thu Mar 28, 2019 5:18 pm
But if you do want me to, I can tell you how I feed a family of three on $225/month...
Can you share? I'd love to trim even $100 off our monthly food budget so even if I can use a few of your tricks, maybe we'll benefit!

nolesrule
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Re: Is our household budget crazy?

Post by nolesrule » Thu Mar 28, 2019 6:16 pm

If you break out those diaper costs, the groceries probably aren't as much as you think. The high food spending is from the daily eating out for lunches.

SQRT
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Joined: Sat Feb 05, 2011 9:44 am

Re: Is our household budget crazy?

Post by SQRT » Thu Mar 28, 2019 6:24 pm

I’m not sure why you are concerned? Somebody criticizing you? Looks quite reasonable to me given your means. Didn’t disclose your tax expense or what your savings budget is, That would complete the picture. The more you make, the more you can spend (if you wish). Not a sin, well maybe around here it might be?

Bobby206
Posts: 157
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Re: Is our household budget crazy?

Post by Bobby206 » Thu Mar 28, 2019 6:26 pm

Looks cheap to me. Keep up the good work! Watch for lifestyle creep.

oldmotos
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Joined: Fri Aug 04, 2017 9:37 pm

Re: Is our household budget crazy?

Post by oldmotos » Thu Mar 28, 2019 8:03 pm

I don't see anything for property taxes. What is that number?

Glockenspiel
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Re: Is our household budget crazy?

Post by Glockenspiel » Thu Mar 28, 2019 8:30 pm

stoptothink wrote:
Thu Mar 28, 2019 4:14 pm
fru-gal wrote:
Thu Mar 28, 2019 4:04 pm
bluejello wrote:
Thu Mar 28, 2019 2:31 pm
$227 books. we read a lot of books.
I buy ebooks, at let's say $5 apiece. That would be 45 books a month at your rate. Not counting library ebooks, which are free. I find also that once I accumulated 1000 ebooks over the course of several years, I can start reading them over again and my book expenses go to nearly zero. I read a lot, because I am retired, but you folks are working, so you have presumably less time to read.

NOTE: you don't have to set foot in a library to borrow ebooks. This can generally be done via their website. In my state one can access all the ebooks any library has purchased if you belong to any library. Then just download them to your computer.
There are so many ways to get cheap (physical) books, even free books. There are a million book swap sites out there and, again, ebooks is an amazing option. My wife never sets foot in a library and reads quite a bit.
This. I think most library systems have easy to use e-book programs and mine makes it just as easy to check out an e-book as it would be to go on your kindle and purchase an e-book. I can check out almost any book I’d ever want (including new releases) as an ebook from the library without ever stepping foot in one.

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