Author Topic: Case Study - Critique my Wasteful BigCity Budget  (Read 2704 times)

wasabisauce

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Case Study - Critique my Wasteful BigCity Budget
« on: December 31, 2014, 03:05:49 PM »
Hey there, I've spent a lot of my holiday poring over Mint, so I have a pretty good idea of where all my money went last year. My spending has grown as my income has grown, and I'd like to cut it back down, but am being petulant about giving things up. Tell me how to cut down my spending and where!

My goals are to retire as soon as possible with a piece of property free and clear (if I want to stay in this city which I'm fond of, it'd be ~400k for a 1BR with sub-45 minute commute). I'm currently 27, renting and working 40-60 hr weeks. In my ideal life, I'd work very little, remain in the city I'm in and make time for outdoor and intellectual activities. I'm not really sure how long it would take to reach these goals.

Income:  5,080$ in takehome, 1,460$ to my 401k each month.
Savings: ~300k total. Of that, 80k is in retirement accounts, the rest in Vanguard.
Debts: None.

Spending: Ok, now the embarrassing parts! The total is ~3k a month. :(
Figures below are from a year's worth of spending, averaged out by month.

HOUSE
Rent           $1,100.00   (unfortunately this will NOT get much lower in my city, maybe ~900$ min, and I already have good roomies where I am)

TRAVEL ($390)
Air Travel   $165.00                 (took two big trips this year to other countries for 3wks vacation, plus one family visit ... I just wonder, isn't this the point of having money finally? so I can see the world? =/ )
Vacation   $220                       (other bus, train, and some airbnb expenses in here. avg airbnb cost is ~40 a night when I travel)
Taxi           $7.58                      (not having a car, occasionally need a taxi to carry furniture from craigslist; although I admit I do take it to the airport sometimes instead of using 2 hrs on the bus)

FOOD ($570)
Groceries   $175                        (not sure how I spend so much on groceries, when the rest of my food budget is insane ... )
Restaurants$80                        (this is going out to see friends)
Takeout   $60                         (see explanation for "cash" below ... )
Cash (aka food) $250               (not all of this is food, but most cash-only places are food ... I'm sober, so no bars ... I do come home from work too tired to cook because it's 8-10pm, and I'll have a headache, and I dislike using the weekends for cooking when I'm tired from work / could be outside ... wah wah, I know)
 
SHOPPING ($280)
Clothing   $130                  (eeeegh, I also expect this line to freak people out ... I try to buy fewer, expensive durable things than cheap stuff that falls apart. I think MM's expectation that a clothing budget be zero is impossible, when, for instance, a pair of good boots on sale costs $150, and buying them once lasts you 5 years, versus $40 boots that fall apart by the end of the winter. =/ Or, for instance, I buy $200 jeans for $50 off ebay because they actually fit me instead of the $10 ones from goodwill. But unfortunately jeans have a lifespan of ~6 months before crotch holes. Also, thrift stores around here are really picked over -- once in a blue moon can you find something nice). Ok, enough ranting! I could definitely cut this expenditure, I admit!

Sporting Goods   $67                          (bought a bike and some camping gear this year ... next year I want a surfboard)
Home   $20                                  (paint, hardware, furnishings)
Books   $12                                  (buy about 1 kindle book / month, get many more from the library)
Misc Shopping   $50                          (those weird little things you always need? a bike light, a chopping board, wood to build a bookshelf, a desk to work at, plants for the windowsill?)

BILLS & MEDICAL ($285)
Internet   $25                                   (standard, no frills)
Electricity   $35                                   
Gas           $5
Computer Backup Service    $5
Doctor   $150.00                             (couple of specialists, plus counselor -- these #s are after reimbursement from my medical plan)
Pharmacy   $35                                    (I have two medications for $20/month, rest is a bit murky)
Dentist, Eyedoc, Vitamins   $30.42       (I'll be charging these to an FSA next year, so this should be more like ~$10 for vitamins only)

OTHER ($230)
Sports   $60                                    (surfing lessons, rock climbing passes, yoga passes, bike repair parts)
Entertainment   $40.00                       (museum tickets, $10 monthly Spotify charge, occasional movie night)
Personal Care   $37                            (haircuts and laundromat costs)
Gifts & Donations   $25                    (bdays, christmas, charity)
Pets   $18                                            (kitty litter, wet food)
Taxes   $13                                    (averaged out amount I had to pay from last years taxes)
Fees & Charges   $3.75                         (got hit by some fx fees, and one stupid cc late charge)
Business Services   $2.72                 (bought a dumb piece of software for work and didn't get reimbursed)
Public transport    $30.00                       (my takehome pay listed above now includes pretax deductions for these, so next year this line should be $0)

Total Spending: $2,900

Ok, have at me!

Spondulix

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Re: Case Study - Critique my Wasteful BigCity Budget
« Reply #1 on: January 01, 2015, 01:38:13 AM »
I see a general underlying need to spend - whether it's clothes, hobbies, vacation, or things to do (sports, passes, etc). That, or you're a big Groupon spender. I'd start by just being aware of that, and building more of a filter as to when to spend (vs an attitude that "what good is money if you can't use it for activities?") I used to try to buy fun or experiences too until I realized that you have to balance it with free experiences (which can be just as fun or memorable)

Do you have friends who can teach you to surf, rock climb, etc (or can you make friends, find Meetup groups)? Can you barter for any of these activities, or find someone to share a surfboard with? Do the museums you spend money on have free or discount days?

When you say "wasteful bigcity"... Are in SoCal, by chance? Also, I'm curious what you're doing to get crotch holes in jeans, cause I have never had one (even in jeans I've had for years - and I rarely spend over $30 for a pair.)

rodrigojds

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Re: Case Study - Critique my Wasteful BigCity Budget
« Reply #2 on: January 01, 2015, 02:34:58 AM »
Do you know somebody who might cut your hair for a lower price - or for free even?
In my case my girlfriend's mother cuts my hair..it's much simpler than it seems :) and before that I would cut my hair myself with one of those electric hair clippers with the help of my sister.

kathrynd

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Re: Case Study - Critique my Wasteful BigCity Budget
« Reply #3 on: January 01, 2015, 02:44:40 AM »
That's a lot of money for food, for one person.
Everyone is tired when they come from work, or don't want to spend their weekend preparing food.
If you are honestly serious about reducing your expenses, you will do it.
If retiring early was easy, everyone would do it...but most find excuses why they can't.

Your rent is $1100 and that's with roomies?
To me, that is a lot....how many bedrooms/ roomies do you have?
how much is the rent?

What's more important...travelling or retirement?
no one can decide these things for you.

mm1970

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Re: Case Study - Critique my Wasteful BigCity Budget
« Reply #4 on: January 01, 2015, 10:08:24 AM »
Hey there, I've spent a lot of my holiday poring over Mint, so I have a pretty good idea of where all my money went last year. My spending has grown as my income has grown, and I'd like to cut it back down, but am being petulant about giving things up. Tell me how to cut down my spending and where!

My goals are to retire as soon as possible with a piece of property free and clear (if I want to stay in this city which I'm fond of, it'd be ~400k for a 1BR with sub-45 minute commute). I'm currently 27, renting and working 40-60 hr weeks. In my ideal life, I'd work very little, remain in the city I'm in and make time for outdoor and intellectual activities. I'm not really sure how long it would take to reach these goals.

Income:  5,080$ in takehome, 1,460$ to my 401k each month.
Savings: ~300k total. Of that, 80k is in retirement accounts, the rest in Vanguard.
Debts: None.

Spending: Ok, now the embarrassing parts! The total is ~3k a month. :(
Figures below are from a year's worth of spending, averaged out by month.

HOUSE
Rent           $1,100.00   (unfortunately this will NOT get much lower in my city, maybe ~900$ min, and I already have good roomies where I am)

TRAVEL ($390)
Air Travel   $165.00                 (took two big trips this year to other countries for 3wks vacation, plus one family visit ... I just wonder, isn't this the point of having money finally? so I can see the world? =/ )
Vacation   $220                       (other bus, train, and some airbnb expenses in here. avg airbnb cost is ~40 a night when I travel)
Taxi           $7.58                      (not having a car, occasionally need a taxi to carry furniture from craigslist; although I admit I do take it to the airport sometimes instead of using 2 hrs on the bus)

FOOD ($570)
Groceries   $175                        (not sure how I spend so much on groceries, when the rest of my food budget is insane ... )
Restaurants$80                        (this is going out to see friends)
Takeout   $60                         (see explanation for "cash" below ... )
Cash (aka food) $250               (not all of this is food, but most cash-only places are food ... I'm sober, so no bars ... I do come home from work too tired to cook because it's 8-10pm, and I'll have a headache, and I dislike using the weekends for cooking when I'm tired from work / could be outside ... wah wah, I know)
 
SHOPPING ($280)
Clothing   $130                  (eeeegh, I also expect this line to freak people out ... I try to buy fewer, expensive durable things than cheap stuff that falls apart. I think MM's expectation that a clothing budget be zero is impossible, when, for instance, a pair of good boots on sale costs $150, and buying them once lasts you 5 years, versus $40 boots that fall apart by the end of the winter. =/ Or, for instance, I buy $200 jeans for $50 off ebay because they actually fit me instead of the $10 ones from goodwill. But unfortunately jeans have a lifespan of ~6 months before crotch holes. Also, thrift stores around here are really picked over -- once in a blue moon can you find something nice). Ok, enough ranting! I could definitely cut this expenditure, I admit!

Sporting Goods   $67                          (bought a bike and some camping gear this year ... next year I want a surfboard)
Home   $20                                  (paint, hardware, furnishings)
Books   $12                                  (buy about 1 kindle book / month, get many more from the library)
Misc Shopping   $50                          (those weird little things you always need? a bike light, a chopping board, wood to build a bookshelf, a desk to work at, plants for the windowsill?)

BILLS & MEDICAL ($285)
Internet   $25                                   (standard, no frills)
Electricity   $35                                   
Gas           $5
Computer Backup Service    $5
Doctor   $150.00                             (couple of specialists, plus counselor -- these #s are after reimbursement from my medical plan)
Pharmacy   $35                                    (I have two medications for $20/month, rest is a bit murky)
Dentist, Eyedoc, Vitamins   $30.42       (I'll be charging these to an FSA next year, so this should be more like ~$10 for vitamins only)

OTHER ($230)
Sports   $60                                    (surfing lessons, rock climbing passes, yoga passes, bike repair parts)
Entertainment   $40.00                       (museum tickets, $10 monthly Spotify charge, occasional movie night)
Personal Care   $37                            (haircuts and laundromat costs)
Gifts & Donations   $25                    (bdays, christmas, charity)
Pets   $18                                            (kitty litter, wet food)
Taxes   $13                                    (averaged out amount I had to pay from last years taxes)
Fees & Charges   $3.75                         (got hit by some fx fees, and one stupid cc late charge)
Business Services   $2.72                 (bought a dumb piece of software for work and didn't get reimbursed)
Public transport    $30.00                       (my takehome pay listed above now includes pretax deductions for these, so next year this line should be $0)

Total Spending: $2,900

Ok, have at me!
I'm also wondering So Cal?  The high rent, surfboard, and camping gear are the clues.

So some questions: do you actually surf?  Because my family lives in Coastal So Cal, and we went kayaking recently with friends, and my husband expressed interest in buying a kayak.  And I thought that he wanted to be the kind of guy who actually kayaks, but we have 2 full time jobs and 2 kids and we just aren't.  We barely have time to do much of anything other than go to the YMCA pool after chores.  So for his birthday, instead of spending hundreds on a kayak, I spent $100 on 12 hours of rental (he has used one hour in 5 months).  So, do you surf, or do you want to surf?  Would it be cheaper to rent a board or take lessons?  Do you live somewhere that you need a wetsuit?  I had a period of time where I was doing triathlons (learned to swim), and bought the wetsuit, goggles, tri shorts, etc.  Now I've stopped using  much of it because triathlons are expensive.  I still swim at the Y regularly and use the goggles, and probably will use the suit to go in the ocean with the kids from time to time.

Travel.  Well, this seems high at nearly $5000 for one person (as a comparison, our vacation budget is less than that for four).  However, is it something you do every  year, and how fancy are your trips?  I found that pre-kid, we vacationed a lot more (2 trips per year), but we kept them "budget" - air fare to visit family, and one trip a year to someplace fun, but we generally stayed at condos and cooked our own food.  I think that's important for us - I've seen other people go from budget travel to hotels to resorts to...well, now their vacation standards are VERY high and that gets VERY expensive.  Same as I really would never consider staying anywhere "lower" than a Hampton Inn when I travel, friends of mine are more 4-star people.  Is there a way to cut your travel expenses?   Maybe one trip with airfare a year, or figuring out how to get cheaper tickets with miles, or subbing one airfare trip with a train, car, or camping trip.  (We keep our budget lower now by having one airfare trip every 2 years and the rest car trips - and half the car trips are camping).

Food, wah wah you know you are getting it for this one.  But I do understand.  I didn't really learn to cook until in my 30's, and only then because I got fat.  So my 20's involved a lot of takeout, and I couldn't imagine cooking on the weekend.  But here's a tip: don't be me.  I found an old credit card statement when we moved into our house.  I was 34 at the time and the CC statement was from when I was 26 or 27.  And it was $1000 a month, and so much of that was takeout.  It's funny that when you have kids, all of a sudden you have no time but you make time for cooking.  So you don't have to spend HOURS on the weekend cooking, there are stages.

Stage 1: pre-prepared meals from the grocery store.  Frozen pizza, chicken tenders, frozen stir fries and pasta, noodle bowls, burritos, stuff that you just microwave or toss in the oven, serve with bagged salad or microwaved vegetable.  Easily will save you 1/3 the cost of eating out.

Stage 2: scrambled eggs, grilled cheese, burritos from canned beans and pre-shredded cheese.  These things literally take 10 minutes or less, but at least are a tiny bit harder than stage 1.  But way cheaper (and when you realize that you are saving time by not getting takeout...)

Stage 3:  Prepping ahead of time.  This may be as simple as making pasta one night, but enough for two nights.

Stage 4: planning ahead.  There was a period of time after my second kid where I literally spent one hour on Sunday making a dish for lunch.  It may be salad, stir fry, pasta, beans and rice, whatever.  But then my spouse and I had that every single day for 5 days straight.  I also made one meal for dinner, and one crock pot meal for mid week.

Stage 5: learn to use the crockpot for mid-week.

It's a lot tougher for one person, you can get sick of the same food really fast.  When my spouse travels, food lasts a lot longer.  After day 3, it goes into the freezer to live another day.


Clothing and home.  Here I say: consider just - not buying.  Would it be nice to have?  Sure.  You can live without it probably.

GeneralJinjur

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Re: Case Study - Critique my Wasteful BigCity Budget
« Reply #5 on: January 01, 2015, 12:25:14 PM »
Kudos on the savings!  Definitely take a look at the Budgetbytes blog for cooking ideas.  I love the way she pre-portions her dishes for future meals.  I have started doing this and will keep one fresh leftover for lunch in the next day or two, then freeze all the rest so I don't get sick of it.  Also, your food budget is greater than what I use to feed myself and 3 kids, two of whom are teenagers and all on growth spurts, and yes, I work full time.

Since you now have camping gear, why not kick up your low-cost camping weekends this year?  You could go once a month and really experience the area around where you live. 

A lot of your incidentals (bike lights, wood, plants, etc.) could be hunted for on Craigslist or Freecycle.  It doesn't get the instant results of buying at full price, but it reduces impulse spending.

Jeans should not be wearing out in 6 months unless you are doing heavy outdoor work and then you would not be wearing the expensive ones.  I would be looking for another well-fitting variety or learn to sew.