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That describes me exactly, although I suspect I've had a lifetime income a lot lower than yours. (High school teacher - how much lower than that can one get?) I've always lived within my means, i.e., spent less than I made, and I have continued to live that way since I retired.
Of course I do have a rough idea how much I spend per month, on average, in various categories. For example, I probably average about twice a month going to classical music concerts or the opera, but it's not on a strict schedule. In a given month, my entertainment costs might be double or triple the average, but I have a good sense of what it averages out to over the course of a year. Food is about $20 per day (for one person - I am divorced and live alone) but can vary widely. That's $600 per month for food, give or take.
I realize that I am in a small minority with my seat-of-the-pants approach to budgeting, hence I was a bit surprised (but quite pleased) to see I am not the only one.
Even as a Marine Corps private I didn't budget. I knew what I had and I didn't spend more than that. Like you, I just lived within my means.
living in a high COLA (bay area) I have budgeted following (12 years from now) . It's a little bit excessive and there will be adjustments, None the less it's better to budget and not use than have a need and no money.
(Tax is shown high as I have two houses )
Category Sub Category Cost/Month
Housing
Mortgage vari 0
Property Taxes fix 2500
HOA fix 300
Home Insurance fix 102.5
Rent vari 0
Utilities fix 400
Maintenance fix 835.95
home repair/maintenance fix 127.5066138
House cleaning services vari 150
painting fix 95
Food
Groceries fix 800
Dining Out vari 300
Transportation
Vehicle Maintenance fix 300
Fuel fix 500
fix
fix
Auto Insurance fix 162
Public Transportation vari 25
Health Care
long term care Insurance fix 200
Medigap Insurance fix 200
Medications and supplies fix 480
Health Insurance fix 250
Parental care vari 100
Personal Insurance
Life Insurance vari 0
Disability Insurance vari 0
Long Term care vari 100
Other Insurance vari 200
Personal Care
Clothing vari 50
Products and services vari 75
toys for hobby vari 100
Publications vari 20
Misc. Gym Membership vari 100
Loans/Credits cards vari 0
Entertainment vari 200
Class and activity fee vari 150
Cost of services fix 80
family visit to vari 833.3333333
vacation is different from india visit
vacation/travel vari 833.3333333
electronic services fix 345 (netflix, cable, phone, etc)
Hobbies vari 100
Gifts vari 100 (Kids, grand kids)
Education vari 150
Charitable Contributions vari 200
$1,417 monthly or $327 weekly for food, entertainment, clothes and emergencies. Is it doable in comfort?
My only question with your budget is have you factored in the rising costs of utilities, property taxes, etc.
This past year our property taxes increased by $25 a month, water $10, Heat $15, electric $7, and combined health insurance, dental, and vision by $30 which all combined totals $87. I expect next year that $87 increase in monthly expenses will turn into $100+. My sister who owns a condo one town over from me had a $25 a month increase in her HOA fees because landscaping and other complex costs have risen.
If you have factored into your budget those annually increasing costs great, but if not you may have to dip into that $1,417 reserved for food, entertainment, etc., and will that be sustainable over time especially since that income per your previous posts comes mostly from Social Security which has very uncertain COLA adjustments.
The budget thing has become interesting to me. All my life I have also just...lived within my means, keeping a vague idea of bills and income in my head. I always managed to live within my means when I didn't have much, later when I got more I just expanded my spending so that didn't work out for me then. I could have easily saved more and would better off now.
Now that I'm retired, on a fixed income and won't have the ability to recover from some money crises as easily as when young I have tried paying more attention to"budgeting". But its been hard because I'm not familiar or used to it, I tend to buy everything on a credit card which doesn't itemize, buy a lot of stuff at Meijers (a regional midwestern store based in Michigan. They are the original wal-mart superstore that wal-mart ripped that idea off from). I have no desire to pick through every receipt to figure out what I'm paying on cat food and clothes vs. groceries.
I did find a Pete the Planner (some guy with a podcast and all that, and a budget planning sheet) budget % pie chart that was put out by the Dept of Labor as helpful (dated 2010) and I didn't have to sign up for the guys weekly spam letters.
Housing 25%, transportation 15%, Groceries and Dining 12%, Savings 10%, Utilities and Phone 10%, Charity 5%, Clothing 5%, Entertaininment 5%, Medical 5%, Holiday and Gifts 5%, Misc 3%.
When I take what I get in income each month and put it in this I can see where I live a bit differently but it gives me a nice mental visual of my monthly budget. I seem to spend more on groceries that most people although I don't know how or why as I don't feel I'm buying anything particularly expensive. Cat food does add up though.
Also when I plug in my budge it seems to work out fine although it feels tighter and harder in real life. 15% for transportation - I spend about 50 a month for gas but the budget comes to about 600, so where is that 550 going?
So I still don't have a budget per se, but I keep this little sheet and in thinking about my next move, buying a house (I rent now) any changes I'm making I use the sheet to bump numbers up against although I haven't actually changed or made decisions based on it yet.
I need to work with it more and make decisions using it. Like I feel like I should reevaluate my cable/entertainment bill. I have netflix and amazon, for the shipping and Acorn. Of course netflix and Acorn come up to about 200 a year so I feel like no big deal, but all those no big deals add up.
As to 1417 a month for entertainment, well.....if thats what you have isn't that what you have? Don't you have to fit your entertainment desires into the amount not the other way around?
Many people seem to feel obligated to deny themselves pleasures and experiences. For some of course, there is financial necessity to point to, but for most, that doesn't really apply. My partner and I are in the latter category. Like a few others at least, we don't budget for anything discretionary. We just do what we want to do when we want to do it. We have a realistic sense of what our wealth and income situation is, and we proceed through life on the basis of that understanding.
about 50% of our budget is discretionary spending . we planned it that way . we could have planned a more costlier lifestyle in manhattan but that would have increased our non discretionary spending to an uncomfortable level .
I don't have a budget. I never did even when I worked. My pension (like my paycheck was) is direct deposited (I would have to look up the amount), my bills (rent, telephone, cable) are auto-paid, my bank electronically transfers the same amount of money every month from checking to savings (I have 3 forms of savings) so I don't get involved with monthly "saving decisions," I lead a boring lifestyle (Who do you know that vacations in Delaware that doesn't already live there? ) by choice not necessity, I own my car (I bought it outright), have no loans and my credit card (only one, by choice) is paid in full every month. I don't drink, I don't fly, I get my hair cut once or twice a year, I never wore jewelry (except a cheap watch) and I don't own any clothes that can't be thrown in the washing machine. I have 3 kinds of health insurance and no kids (therefore no grandchildren - also an expense). I skip a lot of meals (when I'm not hungry) and get take out more than eat out (which would add up) or cook. I buy books, software, music and camera stuff and get a bazillion cable channels (my expenses) none of which requires me to dress up. Someone cleans for me due to health issues. The point is, this was always me, not just retirement me so I didn't have to make an adjustment when I retired although I did have more expenses (gasoline, dry cleaning, work clothes, eating out, higher rent, etc.) when I worked.
So far, no stress so I think I'll stick with this messy financial methodology.
I believe that if I didn't have a pension (regular amount every month) and a regular amount paycheck, I would have had to have developed some kind of budget methodology over the years.
As to 1417 a month for entertainment, well.....if thats what you have isn't that what you have? Don't you have to fit your entertainment desires into the amount not the other way around?
Just a minor quibble with your long post. The $1417 a month some people were discussing wasn't just for entertainment but also included food, clothes, and emergencies. Why those categories were lumped together I don't know.
we actually lump everything that is not a fixed cost together and call it discretionary spending . food ,clothes ,gifts , travel ,etc are all on our discretionary side .
we can always cut back on these if push came to shove . but i must pay the rent ,the utilities , the insurance and everything we prefer not to without . my gym is in that category since i need that to stay off my meds .
I've seen VERY low food budgets ($100-$150/month or so) on various fora over the years and do not understand how people get by on so little. I don't "pick like a bird" or eat like a king, but I'd eat what I'd consider is a fairly standard American diet. I also live in an area with high grocery prices, but even when I lived where food was cheaper, I never could get the budget that low for just me.
I eat about a pack of turkey sausage and organic breakfast bars a week. Those are about $4 each, so let's make that $9 after tax (food is taxed 5.5% here). I usually drink a gallon of milk a week. Basic house brand milk here is $4/gallon. I'll usually go through a box of raspberries or blackberries or some other fruit a week at breakfast, so assume $5 here for a large container at Sam's. We're up to basically $20/week, $80/month for basic breakfast stuff.
Lunch is usually cold cuts/sandwiches, sometimes leftover meals, some fruit or veggies, and a dessert thing like a cup of yogurt or fat free pudding. Something light. Other than prepackaged stuff like Oscar Meyer, you're not going to find any cold cuts here for under $8/lb or so, and that's for cheaper cuts like bologna/pepperoni. Turkey/chicken/ham will be about $10/lb, good roast beef is a buck or two a pound more. I like veggies on my sandwich, so I will get an onion, spring mix, Mt. Olive banana/jalapeno peppers, etc. - the veggies get expensive.
About the only meat you can get for under $5/lb here are dark meat chicken pieces (drumsticks, thighs, etc.), 75/25 ground beef, and whole pork loin from Sam's (you cut it up). A can of vegetables range $.50-$1 a piece, bags of healthier frozen vegetables are about $2/10 oz (get two meals from these). Fresh vegetables are much more expensive - corn in shuck is about $1/ear here, sometimes on sale for $.50.
Lean ground beef (90/10 +) is about $7/lb here. Steak is a bit more. Boneless chicken breasts are $5-$7/lb. Almost all of my meat comes from Sam's - they're notably cheaper than local grocery stores.
We have high grocery prices and comparatively low restaurant prices. I can go over to McAllister's Deli and get a sandwich and chips/applesauce/mashed potatoes with water (same thing for Jersey Mike's with a soda) for a little under $8 with tax. If I try to make that same sandwich at home with the vegetables and all, it will probably come near to that by the time I buy all the toppings and bread, and a lot of those fresh toppings just get wasted. I'm eating the same thing every day just to get through the food I bought vs. variety at the restaurants.
I probably eat lunch out about half the time, especially during the later half of the week. I cooked tenderloin, mashed potatoes, and green beans yesterday for lunch, and spaghetti for dinner, so I have two leftovers for Monday/Tuesday. By the middle of the week, I'm usually at the deli as I don't like to come home and make a large meal during the week. I'll often go to the gym and get some salad and a steak or something I can cook quickly. I'm not much for huge meals and huge cleanups, except maybe on Sundays.
I think a lot of people underestimate, sometimes considerably, their food budget. You have all your condiments and garnishes - just in my fridge, I have A-1, Heinz 57, Worcestershire sauce, Tennessee Sunshine (mild hot sauce), two salad dressings, three BBQ sauces. Some of that goes bad before you use it all. You have "base" type items - flour, sugars, lard, oils, etc. Any sort of beverage - prepackaged beverages like sodas, or even stuff made on site like loose leaf tea. A 36 pack of Coke Zero is about $10 at Sam's, green team is about $16 for a 24 pack, Snapple is about the same, and Costco flavored water is like $9 for an 18 pack. I don't go through each one of those a month, but I'm probably spending $30-$40 in beverages. That's not counting spices, alcohol, and the litany of other items people use.
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what is ypur total yearly budget?
) by choice not necessity, I own my car (I bought it outright), have no loans and my credit card (only one, by choice) is paid in full every month. I don't drink, I don't fly, I get my hair cut once or twice a year, I never wore jewelry (except a cheap watch) and I don't own any clothes that can't be thrown in the washing machine. I have 3 kinds of health insurance and no kids (therefore no grandchildren - also an expense). I skip a lot of meals (when I'm not hungry) and get take out more than eat out (which would add up) or cook. I buy books, software, music and camera stuff and get a bazillion cable channels (my expenses) none of which requires me to dress up. Someone cleans for me due to health issues. The point is, this was always me, not just retirement me so I didn't have to make an adjustment when I retired although I did have more expenses (gasoline, dry cleaning, work clothes, eating out, higher rent, etc.) when I worked.
