Our Budget

Alright folks. I have found a way to share our budget… without sharing our budget.

Since I am no longer anonymous and my coworkers, friends and family read my blog (hi guys!), I had to forgo the luxury of sharing all the nitty-gritty numbers sitting in my bank account. Personal finance was the initial purpose for starting this blog, so it’s been hard not sharing these details.

So I decided to share what our budget looks like on a percentage basis. That’s okay, right? :) Here is a chart that shows what we pay each month and some details on how we decided on these allocations:

Categories explained, from largest to smallest:

Savings/Pay off debt: 30.18%
I am so happy that this is our largest category! It hasn’t always been the biggest, but thankfully we are able to save or pay off debt with 30% of our budget. Right now this amount includes paying down debt (we are working through J’s student loans, which should be paid off in a few months!), beefing up our emergency fund, and a portion goes to save for our car insurance and renter’s insurance, which is paid every six months. This is the only category that really changes our net worth for the positive, so we try to keep this category as high as possible.

Rent: 23.13%
Unfortunately our rent takes a huge chunk of our budget each month, but I doubt that will change anytime soon as we plan to live in this same location until we save for a house. This amount also includes water, charged by the rental company.

Food & Dining: 13.93%
This category is for any food or drinks we buy – whether it’s groceries, coffee, alcohol, restaurants, or fast food. Most people separate this category into two: Groceries and Dining Out. We started out our marriage separating them too, but we found that we constantly needed to adjust our budget amounts based on what kind of month we were having. For example, May of last year we were out of town almost every weekend, so we ended up being waaaay over in our Dining Out budget and under budget on our Groceries. And in June, the opposite was true – we hosted friends and spent more of our money on groceries rather than eating out.  It was getting to be discouraging to always be over budget in one category, so we decided to call the whole thing off and keep a simple one-budget amount and live our lives in peace. Our only goal is to not exceed the overall Food & Dining amount.

Everything Else: 11.61%
This is another category where we probably differ from many people! We started our first married budget micromanaging every single thing we spent. We had a budget for haircuts, entertainment, clothing, office supplies, home décor/improvement, travel, gifts, parking, etc. But the thing is, we don’t get our haircut every month. We don’t pay for parking or go to the movies on a regular basis Some months I spend a lot on makeup and personal care, and other months we have healthcare co-pays. It’s always different and we’ve never had a consistent month with any of these smaller categories.

So that’s where the “Everything Else” category came up. Every month is different, so we always talk about what kinds of things we’ll be buying from this category. Like last month I got a haircut, and next month we’ll buy a wedding gift. Communicating these things to each other and making sure we’re on board with our goals is key in making this category work.

I don’t recommend this for everyone. When you first start making a budget I think it’s good to micromanage the little things so you know where you’re spending and where you can afford to cut back on. I also think this category is the very last one you should make. The amount we have in this category is basically leftover after we save, tithe, and pay our bills.

Charity: 10.45%
Each month we give away roughly 10% of our income to charity, which includes tithing to our church and a few missionaries that we support. Sometimes this amount will increase if there is a one-off charity or fundraiser we want to give to.

Gasoline: 4.64%
Our gasoline budget fluctuates by month, but we steadily spend about 5% on gas. We add to this category (from Everything Else) if we go on big or many road trips.

Mobile Phone: 3.3%
We have fancy phones with a set fee, so they have their own category. We also pay for roadside assistance through our cell phone company (a service I highly recommend! We’ve used it maybe four times since getting married — remember those old unreliable cars we had to replace?:)

Bills & Utilities: 2.65%
Bills & Utilities includes all monthly bills that we receive, including electric, cable  and Internet. This category increases in the summer when air conditioning cools down our hot Raleigh apartment.

Bank Fee: 0.12%
To protect our money, we have an identity theft protection placed on our bank accounts and a small bank fee to our credit union. This amount is so small (.12%!) but it’s still something that is a guaranteed expense each month so that’s why it’s in our budget.

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Whew! Lots of information, eh? Any questions? Comments? :)