Author Topic: Need advice on my budget  (Read 5177 times)

fb132

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Need advice on my budget
« on: May 04, 2015, 07:03:06 AM »
So I make after-tax income on average of 1894.54$ per month (according to YNAB) in which 674,25$ goes towards fixed expenses & contracts (ex: Rent, electricity bill, cell phone bill, etc...). That means I have 1220,29$ remaining once my fixed expenses have been paid.

Every month, I also put aside 8,69$ for my passport (once I have 200$ accumulated, that money will be used to renew my passport), 7,62$ goes towards my driver's licence fee (in my province, we pay around 100-120$ towards the driver licence fee every year), I put aside 25$ per month for next year's tax (this is to cover myself incase I am hit with a tax bill after income tax season), I put aside 15$ per month towards Repairs/Replacement emergencies (this is used just incase something breaks down or needs fixing now) and finally 10$ per month is put aside for taxi emergencies (I usually take the bus to go to work and it has happened in the past that we've had bus strikes,so the taxi emergencies would help me pay for my ride if I can't somehow use my bike or any other transportation to go to work). With all that money put aside, I am now left with 1153,98$.

So far, so good, I don't see the need to change in these 2 areas (my fixed expenses and my savings).

Where I have trouble allocating is in these following categories, here is what I usually put aside each month:

Variable Expenses:
-Groceries: 500$
-Personal Care & Hygiene (ex.: Toothpaste, Shampoo, Deodorant, etc...): 25$
-Restaurants: 15$
-Entertainment & Outings (going to a movie, going out with friends, etc..): 20$
-Gifts & Special events: 10$
-Clothes: 23.20$
-Miscellanous (Stuff I buy not on a regular basis like batteries or furnitures, it can be anything): 35$

Savings or planned expenses:
-Vacation (I put 4% per paycheck): 75.78$
-Emergency Fund: 50$
-Long Term Investments (this is where I save my money for FIRE and maybe a future house purchase): 400$
 

So like I said, I have 1153,98$ remaning, is my budget for variable expenses and savings. Should I stick with my current budget or should I modify something in order to higher up my savings? Is there an area in which I need to fix or should I keep things the way they are? By the way, I am from Canada, my grocery budget is in my opinion high (as you can see I put 500$ aside for groceries per month), but that is because I buy mainly organic and since I work out, I tend to eat alot more than the average person. Plus canadian food is expensive compared to the US.
« Last Edit: May 04, 2015, 07:05:46 AM by fb132 »

Stash Engineer

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Re: Need advice on my budget
« Reply #1 on: May 04, 2015, 01:18:29 PM »
Looks pretty solid to me.  I'd try to optimize (minimize) expenses wherever you see the opportunity to do so and keep at it. 

zolotiyeruki

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Re: Need advice on my budget
« Reply #2 on: May 05, 2015, 12:28:07 PM »
Is your grocery budget for only one person?  If so, you need a facepunch there.  You could be eating lavishly on $200/mo, and still have enough at $100/mo

norabird

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Re: Need advice on my budget
« Reply #3 on: May 05, 2015, 01:52:14 PM »
Groceries are definitely high for one person. Your restaurants and entertaining are super low, though! So while you could probably lower this I get your explanation.

tarheeldan

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Re: Need advice on my budget
« Reply #4 on: May 05, 2015, 02:05:48 PM »
Groceries should easily be slashed
$278.40/yr in clothes is an easy trim too

Big picture you are saving 23.75% of net income ($450/$1894.54)

thd7t

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Re: Need advice on my budget
« Reply #5 on: May 05, 2015, 03:06:50 PM »
Why don't you lay out your fixed expenses as well?  Cell phone bills, in particular are often higher than they need to be.  At $694, it looks like this is good, but at your income level, it's worth looking at.

fb132

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Re: Need advice on my budget
« Reply #6 on: May 05, 2015, 07:20:22 PM »
Yea I figured my groceries are high and yes my grocery is for 1 person.

I am not sure if it's because I buy organic or if it's because I eat 5-6 times a day. Like I said I work out, so I usually eat protein, carbs, healthy fats and veggies on every meal. I don't know if someone else is in my shoes, but I wouldn't mind having some suggestions on that. Also like I said, I live in Canada and food (especially healthy food) cost alot here and I like to eat clean (no pesticides or metal in my food). I am open for any suggestions on how to lower my food bill while respecting my planned meals criteria of proteins, carbs, healthy fats and veggies for each meal.

As for my fixed expenses (for those who asked):
Rent: 300$ per month (I live with my parents until I am no longer single or able to purchase a condo without having a mortgage, this part is the major reason why my fixed expenses is pretty low)
Cell Phone: 21.85$ per month (That's the lowest plan I can find)
Bus Pass: 77$/month
My prescription: 45$/month
Electricity Bill: 189.54$/month (I can't lower this as I live with parents who are not mustachians at all, they use up the heaters hardcore in winter)
Gym Membership: 36.77$/month
« Last Edit: May 06, 2015, 05:33:50 AM by fb132 »

thd7t

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Re: Need advice on my budget
« Reply #7 on: May 06, 2015, 06:36:05 AM »
Your fixed costs seem reasonable, which is great!  I respect that you're pulling your weight in your parents' house, while accepting their conditions.  You're still coming out ahead, there.  Regarding food, do you cook your own food or do you buy pre-made (frozen or otherwise)?  Organic options on pre-made food tend to have the most egregious mark-ups, but otherwise, it shouldn't add too much to your costs.  Because you have a work out regimen, do you track calories (and other nutrients)?  You could probably start to analyze the caloric breakdown and start to optimize your food budget based on your requirements, that way.

fb132

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Re: Need advice on my budget
« Reply #8 on: May 06, 2015, 02:05:15 PM »
I buy frozen organic vegetables, I don't have time to cook them...with the frozen vegetables, I can simply put it in the microwave, it's quick and convenient. I only have 15-20 minutes per break to eat at work, so i can't eat food that takes time to heat up.

ShoulderThingThatGoesUp

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Re: Need advice on my budget
« Reply #9 on: May 06, 2015, 02:13:53 PM »
There is no good evidence that I have seen that "organic" food is healthier to eat than regular food. This is a self-imposed cost of yours.

fb132

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Re: Need advice on my budget
« Reply #10 on: May 06, 2015, 07:05:20 PM »
I am going to try lowering my budget for groceries to 350$ and every month, my goal will be to lower it even more. By saving at least 150$ a month on groceries, I can apply it towards my Emergency Fund which is a little low (50$). My goal is that my EF hits 25K$. Once I hit that mark, I simply put everything in my investments...sounds like a good plan,right?

thd7t

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Re: Need advice on my budget
« Reply #11 on: May 07, 2015, 06:38:50 AM »
I am going to try lowering my budget for groceries to 350$ and every month, my goal will be to lower it even more. By saving at least 150$ a month on groceries, I can apply it towards my Emergency Fund which is a little low (50$). My goal is that my EF hits 25K$. Once I hit that mark, I simply put everything in my investments...sounds like a good plan,right?
You spend about $1500/month, excluding long term savings.  $25,000 is almost a year and a half of EF.  That's more than you need.  Go with a more conventional EF amount (3-6 months is typical).  You should still get savings together, but there's really little possibility that you'll need over a year of Emergency Funds.  Funding your EF is important, as you say, but long-term, you should invest sooner.

fb132

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Re: Need advice on my budget
« Reply #12 on: May 07, 2015, 08:09:27 AM »
According to YNAB, since January 2015, I have spent 1302,07$ (excluding savings). So you are saying, my EF should be 1300$ X 6 months = 7800$ ??? I currently have 11 752,14$ in EF, so I guess I should stop,right? Whatever money I make goes towards my investments.
« Last Edit: May 07, 2015, 08:11:27 AM by fb132 »

thd7t

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Re: Need advice on my budget
« Reply #13 on: May 07, 2015, 08:20:56 AM »
According to YNAB, since January 2015, I have spent 1302,07$ (excluding savings). So you are saying, my EF should be 1300$ X 6 months = 7800$ ??? I currently have 11 752,14$ in EF, so I guess I should stop,right? Whatever money I make goes towards my investments.
You are understanding me correctly.  The only exception to this would be if you have inconsistent income or your job appears to be at risk.  I'm pretty conservative on EF's, so I think that yours is okay even though it's bigger than most people would advise.  However, you are in a really good position to increase your investments and you are young enough that small amounts will make the biggest difference.

fb132

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Re: Need advice on my budget
« Reply #14 on: May 07, 2015, 08:26:40 AM »
Thanks, I decided today to leave my Emergency Fund at 7800$ and the difference will go directly towards my TFSA long term investments. You all have been very helpfull, it is not all over, I still have to firgure out a way to lower my grocery bill, but I am more confident now that it can be done. That was I guess my biggest weakness in my budget, the rest seems pretty good overall.
« Last Edit: May 07, 2015, 08:29:08 AM by fb132 »