Share your budget

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Xrayman69
Posts: 604
Joined: Fri Jun 01, 2018 8:52 pm

Re: Share your budget

Post by Xrayman69 »

novemberrain wrote: Thu Jul 02, 2020 3:43 pm Inspired by the super popular "Share your net worth progression" thread
viewtopic.php?f=2&t=139157
, here is a another topic I am curious about - annual budget. I think I am spending too much. So curious to compare. Thanks

Household situation - double income 2 kids
Residence Area : HCOL
Residence : paid off home
Ages - 40

820,000 - Annual household income (approximately)

400,000 - Annual total taxes (approximately)
39,000 - two 401ks
12,000 - two IRAs
28,000 - two 529 plan
7,000 - one HSA
170,000 - annual taxable brokerage account contributions
170,000 - Annual expenses

Breakdown of annual expenses (170,000 total from line just above)
15,000 - childcare / tuition
25,000 - housekeeper / babysitter
20,000 - vacations
18,000 - food (grocery + eating out)
10,000 - home repairs / remodeling
20,000 - car payments (was a one time purchase. So should go down in subsequent years)
9,000 - prop taxes
3,000 - car insurance
7,000 - utilities
43,000 - other
Primary home in VHCOL with mortgage about 75% equity and the home is probably 35% of NW
Second home in MCOL where business is located with 75% equity and About 5% of NW


Single income 1 child (no divorce family)

Your budget is similar to ours and seems reasonable for reasonable quality of life. Pay ourselves first and majority of income goes into building NW in some form of savings or equity accumulation in the real estate portion. Spending is well below our means and fortunately able to live comfortably

Your doing OK. Live responsibly and spend accordingly for QOL that’s reasonable. Comfort and time is a priority for spending. Does it save me time, does it make us comfortable at a reasonable cost, and does it make us happy.
Helo80
Posts: 1767
Joined: Sat Apr 29, 2017 8:47 pm

Re: Share your budget

Post by Helo80 »

huskerfan1414 wrote: Fri Jul 03, 2020 8:40 am Almost 50% in taxes, $400k? My goodness sakes, that's absolutely ludicrous.

Somebody has gotta pay for everything the baby boomer politicians are buying.
runner540
Posts: 1326
Joined: Sun Feb 26, 2017 5:43 pm

Re: Share your budget

Post by runner540 »

Helo80 wrote: Fri Jul 03, 2020 8:48 am
huskerfan1414 wrote: Fri Jul 03, 2020 8:40 am Almost 50% in taxes, $400k? My goodness sakes, that's absolutely ludicrous.

Somebody has gotta pay for everything the baby boomer politicians are buying.
See upthread - seems that OP overestimated this number by $70k
fortunefavored
Posts: 168
Joined: Tue Jun 02, 2015 8:18 pm

Re: Share your budget

Post by fortunefavored »

Similar income, mid-40s, paid off house, but no kids, using your categories:

Fed/State: 37.19% effective (plus social security, medicare, etc which I don't calculate)

15,000 - childcare / tuition - 0
25,000 - housekeeper / babysitter - 0
20,000 - vacations - 13K
18,000 - food (grocery + eating out) - 17K
10,000 - home repairs / remodeling - 5K
20,000 - car payments (was a one time purchase. So should go down in subsequent years) - 0
9,000 - prop taxes - 11K
3,000 - car insurance - 2.3K
7,000 - utilities - 4K
43,000 - other - 40K - but I actually know what is in this

"Other" categories for me include: family support/gifts, charity, car related (fuel, maint, sinking fund), HOA, hobbies, personal care, misc, other insurance, entertainment, clothing, medical.

For true "misc + unknown" - it is $1800 - mostly since I don't want to break it down further, but I track every dollar.

I don't think we are particularly frugal, but do try to enjoy the things we enjoy. Plus I plan to stop working as soon as COVID wraps up - so I stay on top of our expenses pretty closely.
User avatar
CyclingDuo
Posts: 3680
Joined: Fri Jan 06, 2017 9:07 am

Re: Share your budget

Post by CyclingDuo »

novemberrain wrote: Thu Jul 02, 2020 3:43 pm Inspired by the super popular "Share your net worth progression" thread
viewtopic.php?f=2&t=139157
, here is a another topic I am curious about - annual budget. I think I am spending too much. So curious to compare. Thanks

Household situation - double income 2 kids
Residence Area : HCOL
Residence : paid off home
Ages - 40

820,000 - Annual household income (approximately)

400,000 - Annual total taxes (approximately)
39,000 - two 401ks
12,000 - two IRAs
28,000 - two 529 plan
7,000 - one HSA
170,000 - annual taxable brokerage account contributions
170,000 - Annual expenses

Breakdown of annual expenses (170,000 total from line just above)
15,000 - childcare / tuition
25,000 - housekeeper / babysitter
20,000 - vacations
18,000 - food (grocery + eating out)
10,000 - home repairs / remodeling
20,000 - car payments (was a one time purchase. So should go down in subsequent years)
9,000 - prop taxes
3,000 - car insurance
7,000 - utilities
43,000 - other
Great job on your rate of savings being 31.2% (gross income)! You are spending $465 per day, but saving $701 per day. Well done! The company match is gravy on top of that. :moneybag

Your rate of savings puts you in the Super Saver category which is wonderful, no matter what level of income a household has to work with before and after the month begins. Adding your company match I'm sure firmly places you in the Advanced Super Saver category which is something we can all applaud! :beer

Image

It might be difficult to find an exact comparison in terms of household income for comparison at $820K, but plenty of data has been collected in terms of what percentage of household income goes towards the categories in households that are super savers vs those who don't save very well and fall into the category of average savers. Comparing your numbers to this might be the most appropriate due to your rate of savings if you can't find others that post up a similar income and budget.

Image

I don't like it when Bogleheads produce an attack on high income households, nor the opposite if an attack is made on a poster who comes from a very low income household. Ditto on portfolio values. The point is to work with each individual's situation no matter what the level of income happens to be. Some posters above reacted to your household and expenses due to the percentile you fall into, but that doesn't mean helpful discourse cannot take place. This chart, although from 2017-18 data, shows the percentile you fall into...

Image

Not trying to apologize for any poster that made an attack, but rather point out we can all do better with our responses as the full cross section of individual situations regarding income and assets post on this website. Technology, medicine, legal, sales, etc... on the high end of the household income spectrum, and plenty of other professions on the medium and lower end of the spectrum.

There was an article that received plenty of feedback a couple of years ago about a family with a household income of $500K in New York City and how they still felt average. Some of the numbers shown may be of interest to you in terms of comparison.

https://www.cnbc.com/2018/03/06/budget- ... -save.html

This data collection breaks the average annual spend down to another level of the average daily spend for each age demographic and is something I find interesting to compare our own particular annual budget - in daily form - to others in and out of our own age demographic.

Image

Image

The full data is available from the Bureau of Labor Statistics. https://www.bls.gov/cex/2017/combined/age.pdf

Anyway, well done on your rate of savings and keeping your expenses in check.

CyclingDuo

Edit: In addition to the 529's, have you considered an UTMA for each child? Even if the accounts build up to more than they will need for college, the money at age 21 (I think you can get it worded to age 25 if you live in California or Nevada) is turned over to them so they can begin their careers debt free with a nice little nest egg in a taxable account to begin their journey. At your income level, your children will not qualify for any financial aid, so having the UTMA in addition to the 529 is a potential additional option for you to consider.
Last edited by CyclingDuo on Fri Jul 03, 2020 10:08 am, edited 1 time in total.
"Save like a pessimist, invest like an optimist." - Morgan Housel
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Petrocelli
Posts: 2859
Joined: Mon Feb 19, 2007 6:29 pm
Location: Fenway Park, between 2nd and 3rd base

Re: Share your budget

Post by Petrocelli »

My budget:

Save about $100,000 a year.

Spend the rest.
Petrocelli (not the real Rico, but just a fan)
shell921
Posts: 448
Joined: Fri Jul 06, 2018 5:13 pm

Re: Share your budget

Post by shell921 »

Just me - retired 72 yr old widow- San Diego
Monthly Expenses [ 'budgeted for' - not exact ! ]. No mortgage.
Budget does NOT include income taxes which are paid out of my savings. Health insurance
premium is deducted from my late husband's Federal employees pension amount. I pay only co-pays
when I see doctors.
................................................................
Property taxes : 467
Health co pays: 22
Groceries/Household Items: 460
Electricity: 50
Gas: 17
Vacations: 250
Restaurants: 250
Massages: 120
Manicures : 50
Internet/Land Line/Cable: 213
Water 200
Car Regis: 25
Misc 512
Gasoline for car : 100
Vitamins/supplements : 200
Rx co-pays : 30
Pet Care: 150
Cell: 35
Lotto ticket 25
Car Ins: 100
Charity: 65+
Swim Spa: 100
Haircuts: 20
Skincare : 100
Gardener 200
House Cleaner 100
Home Ins: 200
Brush clearing: 166
Christmas: 50
Clothes: 40
AAA: 12
Gifts : 55
Dental : 60
Health Club membership : 42
Car wash/maintenance : 100

TOTAL : $4,766

My income exceeds my expenses by about $3K a month.
Last edited by shell921 on Fri Jul 03, 2020 5:44 pm, edited 3 times in total.
smitcat
Posts: 6490
Joined: Mon Nov 07, 2016 10:51 am

Re: Share your budget

Post by smitcat »

Petrocelli wrote: Fri Jul 03, 2020 9:43 am My budget:

Save about $100,000 a year.

Spend the rest.
The simplest budgets are very often the best.
Topic Author
novemberrain
Posts: 491
Joined: Wed May 09, 2018 12:26 pm

Re: Share your budget

Post by novemberrain »

runner540 wrote: Fri Jul 03, 2020 8:02 am congrats on your and your spouse’s accomplishments. You’re earning a lot and saving a lot too.

Based on the round numbers, the $43k “other” and $70k “missing” from overestimating taxes, it sounds like you may need better data if you want to change your spending. YNAB is a great flexible tool for this.

Here are some common categories your budget doesn’t have that might all be in the $43 + 70k:
Health insurance
Life insurance
Home and umbrella insurance
Medical copays
Charity
Birthday/holiday Gifts
Gas for cars
Auto maintenance
Diapers/kid stuff
Household supplies
Decor
Lawn care
Fitness
Personal care (haircuts, spa, etc)
Thank you
vladd
Posts: 7
Joined: Tue Jan 23, 2018 9:57 am

Re: Share your budget

Post by vladd »

OP - what was useful for me (and then discussing with the significant other after I had the data summarized in a spreadsheet) was to "model" different future scenarios. That can be a discussion point about lifestyle choices now vs whatever future financial goals you have. In our situation perhaps like you, we have pre-elementary-school kids so this is also a way to show when all kids are in public vs private schools on expenses (and again... to open the discussion of what we would want to do, not to default to let's pick the lowest-expense approach)

I called those scenarios: "2019 lifestyle" "steadystate [2019 lifestyle] all kids in public schools" "steadystate, kids cheap private school" "steadystate, kids expensive private school" . Then I added two extremes, "cheaper lifestyle + public schools" and "splurge more + expensive private school"

Cheaper lifestyle for us would mean - cutting back dramatically on restaurants & merchandise, and cheaper or fewer vacations. More expensive lifestyle (of course there is no bounds, but we thought of what living it up could mean for us without going overboard) means more eating out, more nice stuff to buy, and splurging more on vacations

Not counting housing expenses for a comparison to you, the scenarios ranged from a spartan $42k/yr to $180k/yr - and we are currently at $120k/yr. This then was a good starting point for a discussion about if we want to make any changes to our lifestyle, plus seeing the end-result $$ of the private vs public school question

In case you are curious, that ~$120k/yr is comprised of:
- $45k nanny (for 2 kids)
- $15k preschool (1 kid)
- $17k merchandise / stuff / junk (includes big-ticket furniture, jewelry, gifts)
- $13k vacations (two international trips)
- $9k restaurants and $4k groceries
- $9k for cars (gas, insurance, maintenance; cars are all paid off)
- $4k utilities
- $4k other (various things not worth breaking out)
We also spend $80k/yr on housing. Didn't include other very spiky spending, like charitable giving which every now and then goes from appreciated stocks to a DAF, but t hen goes out of the DAF regularly

Like the other posters mentioned, this really is a question for you & your spouse to think about your short-term and long-term goals in life, including financially. By framing the problem correctly, hopefully you can either see that you are doing what you want to be doing, or you can adjust in either direction. It can also expose where you should focus your energy -- in our case, we should really be thinking now about schooling
eagleeyes
Posts: 230
Joined: Sat Dec 28, 2013 2:49 pm

Re: Share your budget

Post by eagleeyes »

Sorry if I missed it

Things to consider adding.

Umbrella insurance
Life insurance
Disability insurance
User avatar
MrBobcat
Posts: 460
Joined: Fri Jan 11, 2019 5:19 pm

Re: Share your budget

Post by MrBobcat »

smitcat wrote: Fri Jul 03, 2020 10:00 am
Petrocelli wrote: Fri Jul 03, 2020 9:43 am My budget:

Save about $100,000 a year.

Spend the rest.
The simplest budgets are very often the best.
+1

I've found "pay yourself" first, spend the rest works much better than trying to save what's left after spending. Unfortunately that's not always possible when one's income is lower and one is trying to raise a family as there just isn't enough to fully fund one's savings goals/needs and survive.
Topic Author
novemberrain
Posts: 491
Joined: Wed May 09, 2018 12:26 pm

Re: Share your budget

Post by novemberrain »

fortunefavored wrote: Fri Jul 03, 2020 9:19 am Similar income, mid-40s, paid off house, but no kids, using your categories:
Xrayman69 wrote: Fri Jul 03, 2020 8:45 am Your budget is similar to ours and seems reasonable for reasonable quality of life.
CyclingDuo wrote: Fri Jul 03, 2020 9:38 am Great job on your rate of savings being 31.2% (gross income)! You are spending $465 per day, but saving $701 per day. Well done! The company match is gravy on top of that. :moneybag
shell921 wrote: Fri Jul 03, 2020 10:00 am Just me - retired 72 yr old widow- San Diego
vladd wrote: Fri Jul 03, 2020 10:52 am OP - what was useful for me (and then discussing with the significant other after I had the data summarized in a spreadsheet) was to "model" different future scenarios.
Thank you guys. Much appreciated.
Last edited by novemberrain on Fri Jul 03, 2020 12:27 pm, edited 1 time in total.
smitcat
Posts: 6490
Joined: Mon Nov 07, 2016 10:51 am

Re: Share your budget

Post by smitcat »

MrBobcat wrote: Fri Jul 03, 2020 11:00 am
smitcat wrote: Fri Jul 03, 2020 10:00 am
Petrocelli wrote: Fri Jul 03, 2020 9:43 am My budget:

Save about $100,000 a year.

Spend the rest.
The simplest budgets are very often the best.
+1

I've found "pay yourself" first, spend the rest works much better than trying to save what's left after spending. Unfortunately that's not always possible when one's income is lower and one is trying to raise a family as there just isn't enough to fully fund one's savings goals/needs and survive.
"Unfortunately that's not always possible when one's income is lower and one is trying to raise a family as there just isn't enough to fully fund one's savings goals/needs and survive."
We utilized side gigs and second jobs to ensure savings when we were younger.
User avatar
MrBobcat
Posts: 460
Joined: Fri Jan 11, 2019 5:19 pm

Re: Share your budget

Post by MrBobcat »

smitcat wrote: Fri Jul 03, 2020 11:47 am
MrBobcat wrote: Fri Jul 03, 2020 11:00 am
smitcat wrote: Fri Jul 03, 2020 10:00 am
Petrocelli wrote: Fri Jul 03, 2020 9:43 am My budget:

Save about $100,000 a year.

Spend the rest.
The simplest budgets are very often the best.
+1

I've found "pay yourself" first, spend the rest works much better than trying to save what's left after spending. Unfortunately that's not always possible when one's income is lower and one is trying to raise a family as there just isn't enough to fully fund one's savings goals/needs and survive.
"Unfortunately that's not always possible when one's income is lower and one is trying to raise a family as there just isn't enough to fully fund one's savings goals/needs and survive."
We utilized side gigs and second jobs to ensure savings when we were younger.
We had 3 kids under the age of 5 so mrs. was a sahm and my employment contract actually prohibited moonlighting (yes they called it that, none of this side hustle/gig stuff, lol). My salary at the time (in 2020 dollars) was around $45k, there was no wiggle room in our budget which I think is pretty common for most folks.
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Tim_in_GA
Posts: 420
Joined: Wed Jun 08, 2011 9:42 am
Location: O-HI-O

Re: Share your budget

Post by Tim_in_GA »

This is the first year we have tried to set a budget and stick to it. I've been tracking all our expenses for 20 years, so I know what we typically spend. No kids, just my wife & I, and I am the only income (low 6 figure salary). I plan to retire in 7 years so this will be good practice.

Avg Monthly Expenses
Mortgage: $1686
Autos + Umbrella Insurance: $69
Gas for car: $60 (but will be much lower going forward)
Electricity: $125
Natural Gas: $50
Water: $30
Sewer: $35
Garbage: $18
HOA: $138 (includes all lawn care)
Internet: $69
Cell Phones: $28
Netflix: $13
Food: $650
Misc: $750 (home improvement, Amazon stuff, hobbies)

So about $44K/year. For the first 6 months of this year we are $2K under budget. So far, so good! Saving a lot right now.
iamblessed
Posts: 736
Joined: Sat Jun 09, 2018 11:52 am

Re: Share your budget

Post by iamblessed »

Two people

9k food (grocery + eating out) gas for car, personal care items
200 - home repairs / remodeling
2200 - prop taxes
1540 - house and car insurance
3000 - utilities
1200 charity
200 income taxes
ACA covers health care

Total $1445 a month or $17,340
Topic Author
novemberrain
Posts: 491
Joined: Wed May 09, 2018 12:26 pm

Re: Share your budget

Post by novemberrain »

CyclingDuo wrote: Fri Jul 03, 2020 9:38 am
Edit: In addition to the 529's, have you considered an UTMA for each child? Even if the accounts build up to more than they will need for college, the money at age 21 (I think you can get it worded to age 25 if you live in California or Nevada) is turned over to them so they can begin their careers debt free with a nice little nest egg in a taxable account to begin their journey. At your income level, your children will not qualify for any financial aid, so having the UTMA in addition to the 529 is a potential additional option for you to consider.

Thank you for bringing that up. I will look into it. The reason I didn't pay too much attention to college funds is that I am planning to UNDER-fund kids college for a couple of separate reasons.
smitcat
Posts: 6490
Joined: Mon Nov 07, 2016 10:51 am

Re: Share your budget

Post by smitcat »

MrBobcat wrote: Fri Jul 03, 2020 12:11 pm
smitcat wrote: Fri Jul 03, 2020 11:47 am
MrBobcat wrote: Fri Jul 03, 2020 11:00 am
smitcat wrote: Fri Jul 03, 2020 10:00 am
Petrocelli wrote: Fri Jul 03, 2020 9:43 am My budget:

Save about $100,000 a year.

Spend the rest.
The simplest budgets are very often the best.
+1

I've found "pay yourself" first, spend the rest works much better than trying to save what's left after spending. Unfortunately that's not always possible when one's income is lower and one is trying to raise a family as there just isn't enough to fully fund one's savings goals/needs and survive.
"Unfortunately that's not always possible when one's income is lower and one is trying to raise a family as there just isn't enough to fully fund one's savings goals/needs and survive."
We utilized side gigs and second jobs to ensure savings when we were younger.
We had 3 kids under the age of 5 so mrs. was a sahm and my employment contract actually prohibited moonlighting (yes they called it that, none of this side hustle/gig stuff, lol). My salary at the time (in 2020 dollars) was around $45k, there was no wiggle room in our budget which I think is pretty common for most folks.
"my employment contract actually prohibited moonlighting (yes they called it that, none of this side hustle/gig stuff, lol)"
I had a job that once told me that in the 90's - I left that job.
Topic Author
novemberrain
Posts: 491
Joined: Wed May 09, 2018 12:26 pm

Re: Share your budget

Post by novemberrain »

iamblessed wrote: Fri Jul 03, 2020 12:28 pm Two people
Total $1445 a month or $17,340
Wowww ! Most Impressive
oldfort
Posts: 1753
Joined: Mon Mar 02, 2020 8:45 pm

Re: Share your budget

Post by oldfort »

CyclingDuo wrote: Fri Jul 03, 2020 9:38 am
novemberrain wrote: Thu Jul 02, 2020 3:43 pm Inspired by the super popular "Share your net worth progression" thread
viewtopic.php?f=2&t=139157
, here is a another topic I am curious about - annual budget. I think I am spending too much. So curious to compare. Thanks

Household situation - double income 2 kids
Residence Area : HCOL
Residence : paid off home
Ages - 40

820,000 - Annual household income (approximately)

400,000 - Annual total taxes (approximately)
39,000 - two 401ks
12,000 - two IRAs
28,000 - two 529 plan
7,000 - one HSA
170,000 - annual taxable brokerage account contributions
170,000 - Annual expenses

Breakdown of annual expenses (170,000 total from line just above)
15,000 - childcare / tuition
25,000 - housekeeper / babysitter
20,000 - vacations
18,000 - food (grocery + eating out)
10,000 - home repairs / remodeling
20,000 - car payments (was a one time purchase. So should go down in subsequent years)
9,000 - prop taxes
3,000 - car insurance
7,000 - utilities
43,000 - other
Great job on your rate of savings being 31.2% (gross income)! You are spending $465 per day, but saving $701 per day. Well done! The company match is gravy on top of that. :moneybag

Your rate of savings puts you in the Super Saver category which is wonderful, no matter what level of income a household has to work with before and after the month begins. Adding your company match I'm sure firmly places you in the Advanced Super Saver category which is something we can all applaud! :beer

Image

It might be difficult to find an exact comparison in terms of household income for comparison at $820K, but plenty of data has been collected in terms of what percentage of household income goes towards the categories in households that are super savers vs those who don't save very well and fall into the category of average savers. Comparing your numbers to this might be the most appropriate due to your rate of savings if you can't find others that post up a similar income and budget.

Image

I don't like it when Bogleheads produce an attack on high income households, nor the opposite if an attack is made on a poster who comes from a very low income household. Ditto on portfolio values. The point is to work with each individual's situation no matter what the level of income happens to be. Some posters above reacted to your household and expenses due to the percentile you fall into, but that doesn't mean helpful discourse cannot take place. This chart, although from 2017-18 data, shows the percentile you fall into...

Image

Not trying to apologize for any poster that made an attack, but rather point out we can all do better with our responses as the full cross section of individual situations regarding income and assets post on this website. Technology, medicine, legal, sales, etc... on the high end of the household income spectrum, and plenty of other professions on the medium and lower end of the spectrum.

There was an article that received plenty of feedback a couple of years ago about a family with a household income of $500K in New York City and how they still felt average. Some of the numbers shown may be of interest to you in terms of comparison.

https://www.cnbc.com/2018/03/06/budget- ... -save.html

This data collection breaks the average annual spend down to another level of the average daily spend for each age demographic and is something I find interesting to compare our own particular annual budget - in daily form - to others in and out of our own age demographic.

Image

Image

The full data is available from the Bureau of Labor Statistics. https://www.bls.gov/cex/2017/combined/age.pdf

Anyway, well done on your rate of savings and keeping your expenses in check.

CyclingDuo

Edit: In addition to the 529's, have you considered an UTMA for each child? Even if the accounts build up to more than they will need for college, the money at age 21 (I think you can get it worded to age 25 if you live in California or Nevada) is turned over to them so they can begin their careers debt free with a nice little nest egg in a taxable account to begin their journey. At your income level, your children will not qualify for any financial aid, so having the UTMA in addition to the 529 is a potential additional option for you to consider.
Is there a point to all these statistics? Is there some weird goal of trying to get your budget to match some population average on what percent goes to each category?
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geerhardusvos
Posts: 1145
Joined: Wed Oct 23, 2019 10:20 pm
Location: heavenlies

Re: Share your budget

Post by geerhardusvos »

novemberrain wrote: Thu Jul 02, 2020 3:43 pm Inspired by the super popular "Share your net worth progression" thread
viewtopic.php?f=2&t=139157
, here is a another topic I am curious about - annual budget. I think I am spending too much. So curious to compare. Thanks

Household situation - double income 2 kids
Residence Area : HCOL
Residence : paid off home
Ages - 40

820,000 - Annual household income (approximately)

400,000 - Annual total taxes (approximately)
39,000 - two 401ks
12,000 - two IRAs
28,000 - two 529 plan
7,000 - one HSA
170,000 - annual taxable brokerage account contributions
170,000 - Annual expenses

Breakdown of annual expenses (170,000 total from line just above)
15,000 - childcare / tuition
25,000 - housekeeper / babysitter
20,000 - vacations
18,000 - food (grocery + eating out)
10,000 - home repairs / remodeling
20,000 - car payments (was a one time purchase. So should go down in subsequent years)
9,000 - prop taxes
3,000 - car insurance
7,000 - utilities
43,000 - other
Well, I don’t think you really framed this correctly as a sister thread to share your net worth progression. If we are to do this right, it should be a share your budget/living expenses progression. Here’s mine below starting my first year after graduating:

2009: 24k
2010: 26k
2011: 39k (Included paying for some of our wedding)
2012: 35k
2013: 39k
2014: 41k
2015: 87k (purchased home, does not include the ~$80k down payment)
2016: 84k
2017: 88k
2018: 81k
2019: 98k (sold home, does not include the costs associated with that transaction like taxes and realtor fees (~$60k), but i did include the house prep and moving costs)
2020: on track to spend 63K this year, we now rent a beautiful home

Not related to the OP's post since his house is paid off, but the moral the of the story with my progression, is houses cost a ton of money. It cost money to fix them, fill them up with crap, build a shed in the backyard, fill the shed up with crap, buy the new roof, etc. And then it cost a ton of money to get them ready for sale, and then the transaction cost of selling is insane.

If we had rented the whole time we could have kept it below $60,000 per year and invested the difference and would be a year or two away from financial independence. We were also saving for a down payment for the house between 2011 and 2014. If we had just been investing that down payment money in VTSAX, we would be FI.

Don’t buy the house.
Last edited by geerhardusvos on Fri Jul 03, 2020 2:16 pm, edited 2 times in total.
VTSAX and chill
smitcat
Posts: 6490
Joined: Mon Nov 07, 2016 10:51 am

Re: Share your budget

Post by smitcat »

geerhardusvos wrote: Fri Jul 03, 2020 12:54 pm
novemberrain wrote: Thu Jul 02, 2020 3:43 pm Inspired by the super popular "Share your net worth progression" thread
viewtopic.php?f=2&t=139157
, here is a another topic I am curious about - annual budget. I think I am spending too much. So curious to compare. Thanks

Household situation - double income 2 kids
Residence Area : HCOL
Residence : paid off home
Ages - 40

820,000 - Annual household income (approximately)

400,000 - Annual total taxes (approximately)
39,000 - two 401ks
12,000 - two IRAs
28,000 - two 529 plan
7,000 - one HSA
170,000 - annual taxable brokerage account contributions
170,000 - Annual expenses

Breakdown of annual expenses (170,000 total from line just above)
15,000 - childcare / tuition
25,000 - housekeeper / babysitter
20,000 - vacations
18,000 - food (grocery + eating out)
10,000 - home repairs / remodeling
20,000 - car payments (was a one time purchase. So should go down in subsequent years)
9,000 - prop taxes
3,000 - car insurance
7,000 - utilities
43,000 - other
Well, I don’t think you really framed this correctly as a sister thread to share your net worth progression. If we are to do this right, it should be a share your budget/living expenses progression. Here’s mine below starting my first year after graduating:

2009: 24k
2010: 26k
2011: 39k (Included paying for some of our wedding)
2012: 35k
2013: 39k
2014: 41k
2015: 87k (purchased home, does not include the ~$80k down payment)
2016: 84k
2017: 88k
2018: 81k
2019: 98k (sold home, does not include the costs associated with that transaction except for the moving costs)
2020: on track to spend 63K this year, we now rent a beautiful home

The moral of the story with my progression, is houses cost a ton of money. It cost money to fix them, fill them up with crap, build a shed in the backyard, fill the shed up with crap, buy the new roof, etc. And then it cost a ton of money to get them ready for sale, and then the transaction cost of selling is insane.

If we had rented the whole time we could have kept it below $60,000 per year and invested the difference and would be a year or two away from financial independence. We were also saving for a down payment for the house between 2011 and 2014. If we had just been investing that down payment money in VTSAX, we would be FI.

Don’t buy the house.
Post #1 - OP says "residence - paid off home"
I am sorry the house did not work out for you - in our case the home has risen in value in excess of $300K since 2009. Now that we are selling all of the increase will be tax free for us to use as we please.
Big Worm
Posts: 201
Joined: Thu Apr 18, 2013 10:20 am

Re: Share your budget

Post by Big Worm »

I make money.

My wife spends it.
User avatar
geerhardusvos
Posts: 1145
Joined: Wed Oct 23, 2019 10:20 pm
Location: heavenlies

Re: Share your budget

Post by geerhardusvos »

smitcat wrote: Fri Jul 03, 2020 1:30 pm
geerhardusvos wrote: Fri Jul 03, 2020 12:54 pm
novemberrain wrote: Thu Jul 02, 2020 3:43 pm Inspired by the super popular "Share your net worth progression" thread
viewtopic.php?f=2&t=139157
, here is a another topic I am curious about - annual budget. I think I am spending too much. So curious to compare. Thanks

Household situation - double income 2 kids
Residence Area : HCOL
Residence : paid off home
Ages - 40

820,000 - Annual household income (approximately)

400,000 - Annual total taxes (approximately)
39,000 - two 401ks
12,000 - two IRAs
28,000 - two 529 plan
7,000 - one HSA
170,000 - annual taxable brokerage account contributions
170,000 - Annual expenses

Breakdown of annual expenses (170,000 total from line just above)
15,000 - childcare / tuition
25,000 - housekeeper / babysitter
20,000 - vacations
18,000 - food (grocery + eating out)
10,000 - home repairs / remodeling
20,000 - car payments (was a one time purchase. So should go down in subsequent years)
9,000 - prop taxes
3,000 - car insurance
7,000 - utilities
43,000 - other
Well, I don’t think you really framed this correctly as a sister thread to share your net worth progression. If we are to do this right, it should be a share your budget/living expenses progression. Here’s mine below starting my first year after graduating:

2009: 24k
2010: 26k
2011: 39k (Included paying for some of our wedding)
2012: 35k
2013: 39k
2014: 41k
2015: 87k (purchased home, does not include the ~$80k down payment)
2016: 84k
2017: 88k
2018: 81k
2019: 98k (sold home, does not include the costs associated with that transaction except for the moving costs)
2020: on track to spend 63K this year, we now rent a beautiful home

The moral of the story with my progression, is houses cost a ton of money. It cost money to fix them, fill them up with crap, build a shed in the backyard, fill the shed up with crap, buy the new roof, etc. And then it cost a ton of money to get them ready for sale, and then the transaction cost of selling is insane.

If we had rented the whole time we could have kept it below $60,000 per year and invested the difference and would be a year or two away from financial independence. We were also saving for a down payment for the house between 2011 and 2014. If we had just been investing that down payment money in VTSAX, we would be FI.

Don’t buy the house.
Post #1 - OP says "residence - paid off home"
I am sorry the house did not work out for you - in our case the home has risen in value in excess of $300K since 2009. Now that we are selling all of the increase will be tax free for us to use as we please.
Our home value rose $300k+ as well. Owning still didn’t come out ahead when comparing with investing and renting option

Main thrust of my post above is that we should share our budget progression for this to be interesting and related to net worth progression
VTSAX and chill
Ron Ronnerson
Posts: 1721
Joined: Sat Oct 26, 2013 6:53 pm
Location: Bay Area

Re: Share your budget

Post by Ron Ronnerson »

OP, I will use your format.

Household Situation: single income, 1 kid (I’m a teacher and my wife is a stay-at-home parent; we work a combined 30 hours per week on average)
Residence Area: VHCOL (Bay Area)
Residence: House value is $850k and we owe $345k on it (4 bedroom/4 bathroom townhouse, 2150 sq. ft, excellent neighborhood and schools)
Ages: 45 (daughter is 6 years old)

$125,000 – annual household income; $110k from my job, $5k interest (from churning bank accounts) + $10k untaxed “income” (credit card points and gifts received)

$1,500 - Annual Total Income Taxes ($1500 for Federal and $0 for California; I don’t contribute to social security)
$19,500 - 403b
$19,500 – 457b
$11,500 – pension contributions (expecting a six-figure pension around age 60)
$2k – IRA
$0 – 529 Plan
$48/year for Silver Plan health insurance after federal and state subsidies
$0 – Taxable Brokerage Account
$73k – Annual expenses (including all taxes)

Breakdown of annual expenses
$17k – mortgage
$0 - childcare
$0 – housekeeper/babysitter
$1k - vacations (churn credit cards for travel points/miles)
$15k – food (groceries + eating out)
$3k – home repairs and cleaning
$0 – car payments (two Corollas purchased with cash and plan to keep for 15-20 years each)
$10,500 – property taxes
$1500 – car insurance
$5k – utilities, TV/Internet, cell phones
$20k – other (includes items such as HOA dues, life insurance, gas and car maintenance, gadgets, clothes, pets, entertainment, Medicare, union dues)
smitcat
Posts: 6490
Joined: Mon Nov 07, 2016 10:51 am

Re: Share your budget

Post by smitcat »

geerhardusvos wrote: Fri Jul 03, 2020 1:35 pm
smitcat wrote: Fri Jul 03, 2020 1:30 pm
geerhardusvos wrote: Fri Jul 03, 2020 12:54 pm
novemberrain wrote: Thu Jul 02, 2020 3:43 pm Inspired by the super popular "Share your net worth progression" thread
viewtopic.php?f=2&t=139157
, here is a another topic I am curious about - annual budget. I think I am spending too much. So curious to compare. Thanks

Household situation - double income 2 kids
Residence Area : HCOL
Residence : paid off home
Ages - 40

820,000 - Annual household income (approximately)

400,000 - Annual total taxes (approximately)
39,000 - two 401ks
12,000 - two IRAs
28,000 - two 529 plan
7,000 - one HSA
170,000 - annual taxable brokerage account contributions
170,000 - Annual expenses

Breakdown of annual expenses (170,000 total from line just above)
15,000 - childcare / tuition
25,000 - housekeeper / babysitter
20,000 - vacations
18,000 - food (grocery + eating out)
10,000 - home repairs / remodeling
20,000 - car payments (was a one time purchase. So should go down in subsequent years)
9,000 - prop taxes
3,000 - car insurance
7,000 - utilities
43,000 - other
Well, I don’t think you really framed this correctly as a sister thread to share your net worth progression. If we are to do this right, it should be a share your budget/living expenses progression. Here’s mine below starting my first year after graduating:

2009: 24k
2010: 26k
2011: 39k (Included paying for some of our wedding)
2012: 35k
2013: 39k
2014: 41k
2015: 87k (purchased home, does not include the ~$80k down payment)
2016: 84k
2017: 88k
2018: 81k
2019: 98k (sold home, does not include the costs associated with that transaction except for the moving costs)
2020: on track to spend 63K this year, we now rent a beautiful home

The moral of the story with my progression, is houses cost a ton of money. It cost money to fix them, fill them up with crap, build a shed in the backyard, fill the shed up with crap, buy the new roof, etc. And then it cost a ton of money to get them ready for sale, and then the transaction cost of selling is insane.

If we had rented the whole time we could have kept it below $60,000 per year and invested the difference and would be a year or two away from financial independence. We were also saving for a down payment for the house between 2011 and 2014. If we had just been investing that down payment money in VTSAX, we would be FI.

Don’t buy the house.
Post #1 - OP says "residence - paid off home"
I am sorry the house did not work out for you - in our case the home has risen in value in excess of $300K since 2009. Now that we are selling all of the increase will be tax free for us to use as we please.
Our home value rose $300k+ as well. Owning still didn’t come out ahead when comparing with investing and renting option

Main thrust of my post above is that we should share our budget progression for this to be interesting and related to net worth progression
He has stated that he already owns a home outright and is looking for budgeting help forward.
User avatar
CyclingDuo
Posts: 3680
Joined: Fri Jan 06, 2017 9:07 am

Re: Share your budget

Post by CyclingDuo »

oldfort wrote: Fri Jul 03, 2020 12:47 pmIs there a point to all these statistics? Is there some weird goal of trying to get your budget to match some population average on what percent goes to each category?
Sure, there's always a point. When it comes to spending and what we actually spend it on regarding needs, wants and variables - we're all not as individual as one might like to think. :mrgreen:

The OP asked for the budgets of others, and I was simply pointing out some data had already been collected by the Bureau of Labor Statistics. It's always an interesting release every year.

https://www.bls.gov/news.release/cesan.nr0.htm

Or if the OP wanted to compare his expenditures to others in the top 20 percentile of income earners in the US, he could see how his percentages spent on the various items compare to other top income earners:

Image
https://www.statista.com/statistics/247 ... quintiles/

The highest 20% of income earners spend....

29.9% on housing
15.5% on transportation
11.2% on food
16.9% on personal insurance and pensions
6.8% on healthcare
5.5% on entertainment
3.8% on cash contributions to charity
3.1% on apparel and services

oldfort - do you budget? Do you know where your expenditures go each and every day/month/year?
"Save like a pessimist, invest like an optimist." - Morgan Housel
MarkerFM
Posts: 424
Joined: Fri Nov 30, 2018 4:18 pm

Re: Share your budget

Post by MarkerFM »

huskerfan1414 wrote: Fri Jul 03, 2020 8:40 am Almost 50% in taxes, $400k? My goodness sakes, that's absolutely ludicrous.
That was my first thought. Our average income over the last five years has been a bit higher than OP. We paid an average of "only" $100K/year. But, we're not working, so our income comes from muni bonds, dividends and capital gains. We live in MCOL and a VHCOL areas (two seasonal places). No state income taxes. My advice would be to do all you can to reduce your tax bill (you probably already are) and save as much as you possibly can so you can get to the point where your money is working for you instead of you working for your money.
njdealguy
Posts: 163
Joined: Wed Jul 26, 2017 8:15 am

Re: Share your budget

Post by njdealguy »

Here's ours annually, for myself and spouse as well as a toddler, both in mid 30s, and combined income of $320k. I'm sure this would get flamed big time on the MMM forum and theres plenty to cut back on, but at same time we live rather well and still think to be on track for financial independence in next 10-15 yrs.

Mortgage including escrow: 45k
Utilities: 2.5k (Have solar panels covering electricity, so only Gas, Water, and Trash Pickup)
My 401k: 19k
My HSA: 5.5k (Company kicks in the rest of the 7k total contribution)
Spouse 401k: 8k (Doesnt want to maximize it, we have differing opinions on "locking" part of paycheck till old age)
Car Lease Payments: 5.58k (Got better deal in leasing than outright purchase, plan to buy the Lexus suv in cash after end of lease)
Cell phones: 2.88k (Paying for a family plan including a sibling and parent who doesnt stay with us)
Cable TV/Internet/Landline VOIP phone: 2.16k (And another sibling pays for Netflix/Disney Plus with whom we share and dont pay for)
Groceries/Shopping/Gifts/Car Fuel/Car Maintenance/Eating Out: 33.8k (Based on allocating a flat $650 per week across these categories that we try to strictly not exceed)
Dependent care FSA: 5k
Day care for toddler: 9k (Actually 14k and subtracted 5k for the FSA contribution)
Vacations: 12k (Which is 0 this year)
Big ticket purchases such as home improvements, new electronic gadgets, furniture, etc: 12k

=162.42k

Am not estimating the outlay in income taxes, and anything remaining after these expenses we try to maintain the emergency fund and irregular transfers to taxable brokerage accounts to buy stocks and index funds.
smitcat
Posts: 6490
Joined: Mon Nov 07, 2016 10:51 am

Re: Share your budget

Post by smitcat »

MarkerFM wrote: Fri Jul 03, 2020 1:41 pm
huskerfan1414 wrote: Fri Jul 03, 2020 8:40 am Almost 50% in taxes, $400k? My goodness sakes, that's absolutely ludicrous.
That was my first thought. Our average income over the last five years has been a bit higher than OP. We paid an average of "only" $100K/year. But, we're not working, so our income comes from muni bonds, dividends and capital gains. We live in MCOL and a VHCOL areas (two seasonal places). No state income taxes. My advice would be to do all you can to reduce your tax bill (you probably already are) and save as much as you possibly can so you can get to the point where your money is working for you instead of you working for your money.
This is from the previous page on this thread....
novemberrain wrote: Thu Jul 02, 2020 8:18 pm
smitcat wrote: Thu Jul 02, 2020 7:47 pm
I do not see how you can get to $400K in taxes with that income and deductions, even in Calif. with the marginal rate at 11.3% the effective rate falls far short of those numbers.
Hmm, you are right. www.smartasset.com shows the effective take home pay should be $490,000 & not $420,000 as I posted. Thanks. I think I should change my W4 to get more money deposited per paycheck. The reason I set my withholdings so high was because last year I got hit with a huge tax bill on Apr 15 because of under-payment. But last year was also special since I had a windfall.
[ quote fixed by admin LadyGeek]
oldfort
Posts: 1753
Joined: Mon Mar 02, 2020 8:45 pm

Re: Share your budget

Post by oldfort »

CyclingDuo wrote: Fri Jul 03, 2020 1:40 pm
oldfort wrote: Fri Jul 03, 2020 12:47 pmIs there a point to all these statistics? Is there some weird goal of trying to get your budget to match some population average on what percent goes to each category?
Sure, there's always a point. When it comes to spending and what we actually spend it on regarding needs, wants and variables - we're all not as individual as one might like to think. :mrgreen:

The OP asked for the budgets of others, and I was simply pointing out some data had already been collected by the Bureau of Labor Statistics. It's always an interesting release every year.

https://www.bls.gov/news.release/cesan.nr0.htm

Or if the OP wanted to compare his expenditures to others in the top 20 percentile of income earners in the US, he could see how his percentages spent on the various items compare to other top income earners:

Image
https://www.statista.com/statistics/247 ... quintiles/

The highest 20% of income earners spend....

29.9% on housing
15.5% on transportation
11.2% on food
16.9% on personal insurance and pensions
6.8% on healthcare
5.5% on entertainment
3.8% on cash contributions to charity
3.1% on apparel and services

oldfort - do you budget? Do you know where your expenditures go each and every day/month/year?
Personal finance threads are supposed to be actionable, not an academic research project on the spending habits of the top 20%. In terms of an actionable recommendation, is the implication the OP needs to buy a larger house to get his housing expenses up to 29.9% of his spending or may need to buy nicer cars to keep transportation at 15.5% in future years?
smitcat
Posts: 6490
Joined: Mon Nov 07, 2016 10:51 am

Re: Share your budget

Post by smitcat »

oldfort wrote: Fri Jul 03, 2020 2:05 pm
CyclingDuo wrote: Fri Jul 03, 2020 1:40 pm
oldfort wrote: Fri Jul 03, 2020 12:47 pmIs there a point to all these statistics? Is there some weird goal of trying to get your budget to match some population average on what percent goes to each category?
Sure, there's always a point. When it comes to spending and what we actually spend it on regarding needs, wants and variables - we're all not as individual as one might like to think. :mrgreen:

The OP asked for the budgets of others, and I was simply pointing out some data had already been collected by the Bureau of Labor Statistics. It's always an interesting release every year.

https://www.bls.gov/news.release/cesan.nr0.htm

Or if the OP wanted to compare his expenditures to others in the top 20 percentile of income earners in the US, he could see how his percentages spent on the various items compare to other top income earners:

Image
https://www.statista.com/statistics/247 ... quintiles/

The highest 20% of income earners spend....

29.9% on housing
15.5% on transportation
11.2% on food
16.9% on personal insurance and pensions
6.8% on healthcare
5.5% on entertainment
3.8% on cash contributions to charity
3.1% on apparel and services

oldfort - do you budget? Do you know where your expenditures go each and every day/month/year?
Personal finance threads are supposed to be actionable, not an academic research project on the spending habits of the top 20%. In terms of an actionable recommendation, is the implication the OP needs to buy a larger house to get his housing expenses up to 29.9% of his spending or may need to buy nicer cars to keep transportation at 15.5% in future years?
I believe the purpose of this thread is to answer the OP's question as best we can in his opening post here:
"here is a another topic I am curious about - annual budget. I think I am spending too much. So curious to compare. Thanks"

Knowing about others methods and averages would seem to always help that question.
Topic Author
novemberrain
Posts: 491
Joined: Wed May 09, 2018 12:26 pm

Re: Share your budget

Post by novemberrain »

oldfort wrote: Fri Jul 03, 2020 2:05 pm
CyclingDuo wrote: Fri Jul 03, 2020 1:40 pm
oldfort wrote: Fri Jul 03, 2020 12:47 pmIs there a point to all these statistics? Is there some weird goal of trying to get your budget to match some population average on what percent goes to each category?
Sure, there's always a point. When it comes to spending and what we actually spend it on regarding needs, wants and variables - we're all not as individual as one might like to think. :mrgreen:

The OP asked for the budgets of others, and I was simply pointing out some data had already been collected by the Bureau of Labor Statistics. It's always an interesting release every year.

https://www.bls.gov/news.release/cesan.nr0.htm

Or if the OP wanted to compare his expenditures to others in the top 20 percentile of income earners in the US, he could see how his percentages spent on the various items compare to other top income earners:

Image
https://www.statista.com/statistics/247 ... quintiles/

The highest 20% of income earners spend....

29.9% on housing
15.5% on transportation
11.2% on food
16.9% on personal insurance and pensions
6.8% on healthcare
5.5% on entertainment
3.8% on cash contributions to charity
3.1% on apparel and services

oldfort - do you budget? Do you know where your expenditures go each and every day/month/year?
Personal finance threads are supposed to be actionable, not an academic research project on the spending habits of the top 20%. In terms of an actionable recommendation, is the implication the OP needs to buy a larger house to get his housing expenses up to 29.9% of his spending or may need to buy nicer cars to keep transportation at 15.5% in future years?
I found CyclingDuo’s post very helpful . Thanks
stoptothink
Posts: 8345
Joined: Fri Dec 31, 2010 9:53 am

Re: Share your budget

Post by stoptothink »

Ron Ronnerson wrote: Fri Jul 03, 2020 1:37 pm OP, I will use your format.

Household Situation: single income, 1 kid (I’m a teacher and my wife is a stay-at-home parent; we work a combined 30 hours per week on average)
Residence Area: VHCOL (Bay Area)
Residence: House value is $850k and we owe $345k on it (4 bedroom/4 bathroom townhouse, 2150 sq. ft, excellent neighborhood and schools)
Ages: 45 (daughter is 6 years old)

$125,000 – annual household income; $110k from my job, $5k interest (from churning bank accounts) + $10k untaxed “income” (credit card points and gifts received)

$1,500 - Annual Total Income Taxes ($1500 for Federal and $0 for California; I don’t contribute to social security)
$19,500 - 403b
$19,500 – 457b
$11,500 – pension contributions (expecting a six-figure pension around age 60)
$2k – IRA
$0 – 529 Plan
$48/year for Silver Plan health insurance after federal and state subsidies
$0 – Taxable Brokerage Account
$73k – Annual expenses (including all taxes)

Breakdown of annual expenses
$17k – mortgage
$0 - childcare
$0 – housekeeper/babysitter
$1k - vacations (churn credit cards for travel points/miles)
$15k – food (groceries + eating out)
$3k – home repairs and cleaning
$0 – car payments (two Corollas purchased with cash and plan to keep for 15-20 years each)
$10,500 – property taxes
$1500 – car insurance
$5k – utilities, TV/Internet, cell phones
$20k – other (includes items such as HOA dues, life insurance, gas and car maintenance, gadgets, clothes, pets, entertainment, Medicare, union dues)
I think we are a bit more frugal (well, stingy) than your family is, but you have the game down. Always enjoy your posts.

I'll give it a shot. Dual income household, 2 kids (8 and 5), ~$230k/yr, MCOL area:

Housing - $5.5k (mortgage paid off this year, this is property tax, HOA, insurance).
Childcare - was ~$16k/yr but will be less than half that this year and $0 starting next year
Wife's education - $7k/yr (yes, all in) but we just paid for fall and she is taking her last 3 classes, so $0 starting next year
Food - $5k/yr, it's actually usually under this and I have dictated how we are able to make this happen
Car - maybe $2k, have one (late model) car and it is driven ~10k miles a year - this is gas, insurance, maintenance
Utilities (including phones) - ~$1500/yr (energy is cheap here and we have a small home)
Vacations - $3k/yr, this includes several camping trips and one long (~10 day trip to SoCal to visit family)
Other - $5k (wife's "buy whatever she wants" fund, gifts, entertainment, healthcare costs)

Taxes - I don't want to look.

401ks - pair of $19,500+ match (~$4,500 each)
Roth IRA's - pair of $6k
HSA - $7,100
529 - pair of $4k (up to state tax deduction)
-Everything else to HYS for EF and so we can frontload 401ks, Roths, 529s at beginning of each year. Will be starting taxable account soon (when EF hits "comfortable" level).
Topic Author
novemberrain
Posts: 491
Joined: Wed May 09, 2018 12:26 pm

Re: Share your budget

Post by novemberrain »

Ron Ronnerson wrote: Fri Jul 03, 2020 1:37 pm

$125,000 – annual household income; $110k from my job, $5k interest (from churning bank accounts) + $10k untaxed “income” (credit card points and gifts received)

$1,500 - Annual Total Income Taxes ($1500 for Federal and $0 for California; I don’t contribute to social security)
Hello, could you please let me know how you were able to get income taxes low? Thank you
MDfan
Posts: 379
Joined: Tue Oct 18, 2016 7:32 am

Re: Share your budget

Post by MDfan »

runner3081 wrote: Thu Jul 02, 2020 8:11 pm
mortfree wrote: Thu Jul 02, 2020 5:13 pm The true barometer of a good budget is the cell phone bill?

I pay $30 per month.

You?
3 phones here and $9.00 per month.
3 phone lines, too. But I pay about 12-15 times $9.
User avatar
CyclingDuo
Posts: 3680
Joined: Fri Jan 06, 2017 9:07 am

Re: Share your budget

Post by CyclingDuo »

oldfort wrote: Fri Jul 03, 2020 2:05 pm
CyclingDuo wrote: Fri Jul 03, 2020 1:40 pm
oldfort wrote: Fri Jul 03, 2020 12:47 pmIs there a point to all these statistics? Is there some weird goal of trying to get your budget to match some population average on what percent goes to each category?
Sure, there's always a point. When it comes to spending and what we actually spend it on regarding needs, wants and variables - we're all not as individual as one might like to think. :mrgreen:

The OP asked for the budgets of others, and I was simply pointing out some data had already been collected by the Bureau of Labor Statistics. It's always an interesting release every year.

https://www.bls.gov/news.release/cesan.nr0.htm

Or if the OP wanted to compare his expenditures to others in the top 20 percentile of income earners in the US, he could see how his percentages spent on the various items compare to other top income earners:

Image
https://www.statista.com/statistics/247 ... quintiles/

The highest 20% of income earners spend....

29.9% on housing
15.5% on transportation
11.2% on food
16.9% on personal insurance and pensions
6.8% on healthcare
5.5% on entertainment
3.8% on cash contributions to charity
3.1% on apparel and services

oldfort - do you budget? Do you know where your expenditures go each and every day/month/year?
Personal finance threads are supposed to be actionable, not an academic research project on the spending habits of the top 20%. In terms of an actionable recommendation, is the implication the OP needs to buy a larger house to get his housing expenses up to 29.9% of his spending or may need to buy nicer cars to keep transportation at 15.5% in future years?
I would disagree with you on this, oldfort.

Suppose that the OP found he was spending a very high percentage of his income on one category or more (say food/groceries, transportation, vacation, health care, or utilities) compared to others in his income category, age demographic, cost of living area, etc... ? In looking for actionable items to perhaps fix or tweak his budget if needed, if things seemed out of whack he could use the "academic" data to review each category to see how and why there might be such a gap in any difference.

Not that any of us are unaware that eating out - especially with a family of 4 - costs a lot of money, one might take pause if they saw that they were spending 15-20% more in the food/groceries department compared to another family of four who also lives in a HCOL area. If that was preventing the OP from having enough to cover another category in as adequate of a way that he could, it would at least give him a starting point to consider any actionable adjustments. Or, it could also confirm that one's spend in a particular category is well in tune with others in his age demographic, income level, cost of living area, etc... and maybe his budget was functioning well enough that no tweaking was needed.

CyclingDuo
"Save like a pessimist, invest like an optimist." - Morgan Housel
HettyGreenIsMyHero
Posts: 20
Joined: Tue Mar 10, 2020 4:00 pm

Re: Share your budget

Post by HettyGreenIsMyHero »

2 adults 2 teens family. Husband makes majority of income. Think Kentucky is considered low cost of living. Don't budget per se but I do keep track of everything we spend each month. Save/invest $110-120K a year. Spending $3500-4000 a month.
House paid for, property taxes $3400/year. Free health insurance for life. Cars all paid for. Parents pay for kids private school. I clean the house.

Your misc category is concerning since that's about what we spend all year. Perhaps keep a log for a few months or a year of all money spent? At your income and paid off house, I would think a saving rate of 50% would be reasonable. At any rate, you're about my age so as long as your income stays high, you will have no retirement worries :)
jharkin
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Location: Boston suburbs

Re: Share your budget

Post by jharkin »

Ummm.. your “other” category alone could cover more than our total annual non-housing spend. So I’m not sure anything I could say/share would be comparable. You are in an order of magnitude different league than us.
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SmileyFace
Posts: 5724
Joined: Wed Feb 19, 2014 10:11 am

Re: Share your budget

Post by SmileyFace »

You seem to be doing fine but if really concerned about spending upack the $43K - spend a few hours doing additional categorization on it.
If I was in your shoes I would certainly bump up the 529s. If you plan on funding colleges why not get more tax free growth going.
Ron Ronnerson
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Joined: Sat Oct 26, 2013 6:53 pm
Location: Bay Area

Re: Share your budget

Post by Ron Ronnerson »

stoptothink wrote: Fri Jul 03, 2020 2:28 pm
Ron Ronnerson wrote: Fri Jul 03, 2020 1:37 pm OP, I will use your format.

Household Situation: single income, 1 kid (I’m a teacher and my wife is a stay-at-home parent; we work a combined 30 hours per week on average)
Residence Area: VHCOL (Bay Area)
Residence: House value is $850k and we owe $345k on it (4 bedroom/4 bathroom townhouse, 2150 sq. ft, excellent neighborhood and schools)
Ages: 45 (daughter is 6 years old)

$125,000 – annual household income; $110k from my job, $5k interest (from churning bank accounts) + $10k untaxed “income” (credit card points and gifts received)

$1,500 - Annual Total Income Taxes ($1500 for Federal and $0 for California; I don’t contribute to social security)
$19,500 - 403b
$19,500 – 457b
$11,500 – pension contributions (expecting a six-figure pension around age 60)
$2k – IRA
$0 – 529 Plan
$48/year for Silver Plan health insurance after federal and state subsidies
$0 – Taxable Brokerage Account
$73k – Annual expenses (including all taxes)

Breakdown of annual expenses
$17k – mortgage
$0 - childcare
$0 – housekeeper/babysitter
$1k - vacations (churn credit cards for travel points/miles)
$15k – food (groceries + eating out)
$3k – home repairs and cleaning
$0 – car payments (two Corollas purchased with cash and plan to keep for 15-20 years each)
$10,500 – property taxes
$1500 – car insurance
$5k – utilities, TV/Internet, cell phones
$20k – other (includes items such as HOA dues, life insurance, gas and car maintenance, gadgets, clothes, pets, entertainment, Medicare, union dues)
I think we are a bit more frugal (well, stingy) than your family is, but you have the game down. Always enjoy your posts.

I'll give it a shot. Dual income household, 2 kids (8 and 5), ~$230k/yr, MCOL area:

Housing - $5.5k (mortgage paid off this year, this is property tax, HOA, insurance).
Childcare - was ~$16k/yr but will be less than half that this year and $0 starting next year
Wife's education - $7k/yr (yes, all in) but we just paid for fall and she is taking her last 3 classes, so $0 starting next year
Food - $5k/yr, it's actually usually under this and I have dictated how we are able to make this happen
Car - maybe $2k, have one (late model) car and it is driven ~10k miles a year - this is gas, insurance, maintenance
Utilities (including phones) - ~$1500/yr (energy is cheap here and we have a small home)
Vacations - $3k/yr, this includes several camping trips and one long (~10 day trip to SoCal to visit family)
Other - $5k (wife's "buy whatever she wants" fund, gifts, entertainment, healthcare costs)

Taxes - I don't want to look.

401ks - pair of $19,500+ match (~$4,500 each)
Roth IRA's - pair of $6k
HSA - $7,100
529 - pair of $4k (up to state tax deduction)
-Everything else to HYS for EF and so we can frontload 401ks, Roths, 529s at beginning of each year. Will be starting taxable account soon (when EF hits "comfortable" level).
Thanks for the kind words. It sounds like you could ease up on saving so much and then some with your income and expenses being what they are. However, if you're comfortable and enjoying life as is, no need to mess with a winning formula. There is a lot to be said for having security and options and a good savings rate certainly helps provide that.
Ron Ronnerson
Posts: 1721
Joined: Sat Oct 26, 2013 6:53 pm
Location: Bay Area

Re: Share your budget

Post by Ron Ronnerson »

novemberrain wrote: Fri Jul 03, 2020 2:45 pm
Ron Ronnerson wrote: Fri Jul 03, 2020 1:37 pm

$125,000 – annual household income; $110k from my job, $5k interest (from churning bank accounts) + $10k untaxed “income” (credit card points and gifts received)

$1,500 - Annual Total Income Taxes ($1500 for Federal and $0 for California; I don’t contribute to social security)
Hello, could you please let me know how you were able to get income taxes low? Thank you
Federal
Gross Income: $115k
Above-line deductions: $55.7k ($11.5k for pension contributions, $2k for dental premiums taken from paycheck, $19.5k for 457b, $19.5k for 403b, $1.2k for health FSA, $2k for traditional IRA)
AGI: $59.3k
Standard Deduction: $24.8k
Taxable Income: $34.5k
Tax Before Credits: $3740
Child Tax Credit (one child) and Saver's Credit (two people): $2400
Tax After Credits: $1340

California
AGI: $59.3k
Itemized Deductions: $21.5k ($10.5k property tax and $11k mortgage interest)
Taxable Income: $37.8k
Tax Before Exemptions: $600
Exemptions for 2 adults and 1 child: $600
Tax After Exemptions: $0

Our goal is to maximize time rather than money. With summers off along with a break during winter and spring, I average working around 30 hours a week at a job I greatly enjoy. I don’t tutor, teach summer schools, or work any side jobs. My wife wants to be a stay-at-home parent at the moment and controlling our expenses allows this. We are able to lead a comfortable life in a VHCOL area with a 50% savings rate (this includes mortgage principal) on my salary as a public-school teacher.

Our AGI is low enough that we are able to qualify for benefits such as the premium tax credit (worth $16k this year toward health insurance), the Saver’s Credit, a 1% effective federal tax rate, and we pay no California income tax. I have a fair amount of tax-deferred space available and I try to optimize its usage. We are deferring federal income taxes, not necessarily avoiding them.
Count of Notre Dame
Posts: 224
Joined: Fri Oct 11, 2013 1:08 pm

Re: Share your budget

Post by Count of Notre Dame »

Here is our monthly budget in a HCOL. The net cash flow per month does not include bonuses (we save 100% of those).

Monthly budget
After-tax cash flow - $35,000
Credit card spend - $12,000
Mortgage - $6,450
Private school for two kids - $2,500
Supporting my sister - $2,000
Utilities / repairs - $2,000 (our house is 5,500 square feet with landscaping)
Property taxes - $1,650
529 plans - $1,500 (saving for our state's flagship public school)
Car / home insurance - $700
Tesla lease payment - $600 (listed at gross technically this is a deduction on my wife's work expenses)

The credit card spending includes food and travel as two larger items, but also some other large "non recurring" expenses that always seem to be recurring each year! Combining our 401k, taxable, mortgage principal, backdoor IRAs and HSA's we are increasing our net worth by about $300k per year via brute force savings, excluding market gains and losses. Our income was not always this high so we would cut back on the credit card spending and supporting my sister if we needed to.
Topic Author
novemberrain
Posts: 491
Joined: Wed May 09, 2018 12:26 pm

Re: Share your budget

Post by novemberrain »

Count of Notre Dame wrote: Tue Jul 07, 2020 10:50 am The net cash flow per month does not include bonuses (we save 100% of those).
Monthly budget
After-tax cash flow - $35,000
Credit card spend - $12,000
but also some other large "non recurring" expenses that always seem to be recurring each year! Combining our 401k, taxable, mortgage principal, backdoor IRAs and HSA's we are increasing our net worth by about $300k per year via brute force savings, excluding market gains and losses. Our income was not always this high so we would cut back on the credit card spending and supporting my sister if we needed to.
Thank you. Very similar numbers as mine. And a good one to compare to.

Agree that there always seems to be "non recurring" expenses that are "recurring" every year. As others pointed out, I am going to track those a bit more carefully and think over them 2-3 times before spending.

And yes, we too got into this bracket only recently. So I can't still believe my numbers are going to be there for the long terms or even the medium term. So trying to be mentally prepared in case my income becomes 25% of current.
Maverick3320
Posts: 629
Joined: Tue May 12, 2015 2:59 pm

Re: Share your budget

Post by Maverick3320 »

Helo80 wrote: Fri Jul 03, 2020 8:48 am
huskerfan1414 wrote: Fri Jul 03, 2020 8:40 am Almost 50% in taxes, $400k? My goodness sakes, that's absolutely ludicrous.

Somebody has gotta pay for everything the baby boomer politicians are buying.
The baby boomer politicians are buying...but which age groups are doing the demanding?
Maverick3320
Posts: 629
Joined: Tue May 12, 2015 2:59 pm

Re: Share your budget

Post by Maverick3320 »

Ron Ronnerson wrote: Fri Jul 03, 2020 1:37 pm OP, I will use your format.

Household Situation: single income, 1 kid (I’m a teacher and my wife is a stay-at-home parent; we work a combined 30 hours per week on average)
Residence Area: VHCOL (Bay Area)
Residence: House value is $850k and we owe $345k on it (4 bedroom/4 bathroom townhouse, 2150 sq. ft, excellent neighborhood and schools)
Ages: 45 (daughter is 6 years old)

$125,000 – annual household income; $110k from my job, $5k interest (from churning bank accounts) + $10k untaxed “income” (credit card points and gifts received)

$1,500 - Annual Total Income Taxes ($1500 for Federal and $0 for California; I don’t contribute to social security)
$19,500 - 403b
$19,500 – 457b
$11,500 – pension contributions (expecting a six-figure pension around age 60)
$2k – IRA
$0 – 529 Plan
$48/year for Silver Plan health insurance after federal and state subsidies
$0 – Taxable Brokerage Account
$73k – Annual expenses (including all taxes)

Breakdown of annual expenses
$17k – mortgage
$0 - childcare
$0 – housekeeper/babysitter
$1k - vacations (churn credit cards for travel points/miles)
$15k – food (groceries + eating out)
$3k – home repairs and cleaning
$0 – car payments (two Corollas purchased with cash and plan to keep for 15-20 years each)
$10,500 – property taxes
$1500 – car insurance
$5k – utilities, TV/Internet, cell phones
$20k – other (includes items such as HOA dues, life insurance, gas and car maintenance, gadgets, clothes, pets, entertainment, Medicare, union dues)
How long ago did you purchase that 850K house to only have a 17K/year mortgage? That's pretty impressive.

Based on your posts here, it seems like you have it pretty well. Working 30 hours a week for only 9 months out of the year, highly subsidized healthcare, basically no taxes, a six-figure pension and a six-figure salary. Do you teach at a private school, or are all the articles I'm reading about struggling public school teachers way off base?
RocketShipTech
Posts: 679
Joined: Sat Jun 13, 2020 10:08 pm

Re: Share your budget

Post by RocketShipTech »

OP, I have a comp for you:

Two working adults (mid-30s), two toddlers
SF Bay Area

Annually:

Income: $700k

Income taxes: $220k

Non-discretionary spending: $183k
$53k childcare
$58k rent
$3k insurance
$3k utilities
$10k medical
$24k food
$32k charity

Tax-advantaged savings: $87k

Remaining for taxable savings and discretionary spending: $210k
Topic Author
novemberrain
Posts: 491
Joined: Wed May 09, 2018 12:26 pm

Re: Share your budget

Post by novemberrain »

RocketShipTech wrote: Wed Jul 08, 2020 1:22 pm Two working adults (mid-30s), two toddlers
SF Bay Area
Income: $700k
Income taxes: $220k

Non-discretionary spending: $183k
$53k childcare
$58k rent
$3k insurance
$3k utilities
$10k medical
$24k food
$32k charity

Tax-advantaged savings: $87k

Remaining for taxable savings and discretionary spending: $210k
Thank you. Yes, very appropriate comp for me personally,

Couple of questions.

1. CA state income taxes should be 60k, right ? Did I miss it somewhere in your description ?
2. Out of the remaining $210k, is it possible to share how much you actually save approximately ? ("Remaining for taxable savings and discretionary spending: $210k"). Your and my annual TC is similar; so am curious.

Thank you.
RocketShipTech
Posts: 679
Joined: Sat Jun 13, 2020 10:08 pm

Re: Share your budget

Post by RocketShipTech »

novemberrain wrote: Wed Jul 08, 2020 1:40 pm
RocketShipTech wrote: Wed Jul 08, 2020 1:22 pm Two working adults (mid-30s), two toddlers
SF Bay Area
Income: $700k
Income taxes: $220k

Non-discretionary spending: $183k
$53k childcare
$58k rent
$3k insurance
$3k utilities
$10k medical
$24k food
$32k charity

Tax-advantaged savings: $87k

Remaining for taxable savings and discretionary spending: $210k
Thank you. Yes, very appropriate comp for me personally,

Couple of questions.

1. CA state income taxes should be 60k, right ? Did I miss it somewhere in your description ?
2. Out of the remaining $210k, is it possible to share how much you actually save approximately ? ("Remaining for taxable savings and discretionary spending: $210k"). Your and my annual TC is similar; so am curious.

Thank you.
CA taxes are included in my 220k figure. I should note that my taxable income is close to 500k, we have a lot of deferred income (that ends up in the taxable savings/discretionary bucket).

During COVID almost all of the $210k is going into taxable accounts. Otherwise we would spend on travel/vacations.
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