- Capital projects/home maintenance: This seems really high. The general rule of thumb is 1% of the property value per year (probably $300-350/month for your house). So is the rest "capital projects"? I'm not really sure what that would be, is it a permanent ongoing expense?
We were planning to build a covered patio. I haven't worked out the costs yet, but I am estimating $10k, which I am expecting to spend a couple years saving for. However, the more I think about it, the more I would rather invest that money. As far as maintenance, it is new construction, so it might take a while before any major maintenance is needed that isn't covered by warranties.
- Fuel: This is nearly triple what we spent last year. How long are your commutes and what vehicles do you drive?
Wife and I each commute ~10 miles each way for work. She will also be dropping off/picking up our child at the babysitter, which adds another ~15 miles daily. Add 10 miles/week for errands, visiting her parents for dinner once per week (20 miles each way) and one trip per month to Nashville (25 miles each way). She has a crossover that probably gets 25 mpg, and I have a sedan that gets 30 mpg. Quick math puts us at about 1,450 miles per month at a cost of $117 (assuming $2.20/gallon). It does look like we can reduce this by about $30 per month, so I'm going to have to monitor our miles and see where the extra is coming from.
Edit: wife is a teacher and doesn’t work in the summer, so I should also cut out her driving for the two months of summer.
- Car insurance: This is more than we're paying for two cars (including a Porsche). You may want to shop around.
I have started shopping it around. We have comprehensive & collision as well, since the cost/benefit of dropping them came to about a 10 year payback. I think it's likely enough that one of us will have an accident in a 10 year time frame that I'm not willing to drop those until our vehicles are less valuable.
I am also shopping around my life insurance, so hopefully I can reduce life, home, & auto insurance costs.
- Eating out: Definitely room for improvement here.
Agreed. While we both hate cooking, I think I am going to try to drop this to $60/month and make my wife use her discretionary money if she wants to eat out more.
- Pet expenses: How much grooming is required? Is it a significant part of this expense category?
$50/month. I'm not willing to groom my own dogs, so this is something I get value out of. Honestly though, I want to re-home one of the dogs, but there are definite moral considerations here.
- Discretionary: You have a ton of discretionary spending across multiple categories. $3,060 per year which is ~6% of your total expenses. You should either cut back on this or if it is necessary spending then split it out into appropriate categories for better tracking. I didn't see a clothes category, for example.
I have been working to gradually reduce the discretionary spending. It's a struggle though. I do keep good track of what is spent in those three categories through a budgeting app.
My wife's discretionary is largely spent on fast food. I have tried to fight this battle, but to no avail. It's something I just have to live with. I thought about showing her just how much she spent in 2018, but she thinks of my desire for early retirement as deprivation already. I don't want to push her too far.
I seldom spend all of my discretionary. Sometimes I get clothes, a haircut ($20 every other month- yes, I read the blog on doing it yourself), or an ice cream, but since my son has been born, I've been trying to save extra bits of this to add to his 529.
Family discretionary ranges from the occasional movie ticket to Amazon purchases that we decide add value to our lives (bought a board game this month), or to items that don't have a good spot in budgeting (like the fact that I'm planning to draft a will now that we have a child). One of our biggest expenses in this category is hockey games/memorabilia. I am actually planning to stop buying the memorabilia and sell quite a bit of what we already have, so I do hope to have lower expenses in this category than I am currently budgeting.
