Mama and the mountain man spent a lot of time working on creating a budget for ourselves. We tried to get every expense category on our list, and to make the budget for each item the goal for us to stay within for each month.
Some things are not factored into the budget – like health insurance and taxes, because we’re working with take-home pay. In my version there are dollar amounts for each budget item. We just figured out what dollar amounts worked for us in each category. You see percentages. Even without the “real” numbers, you’ll see relative spending goals.
This is by no means a “standard” budget, or how you should budget. This is what works for my family, figured out over months of trial and error and re-budgeting. Sometimes we spend a little more in one area and a little less in others, but this is our plan for each month’s spending.
% Take -home income
|Rent/ Mortgage||33%||Hooo-wee! We’re not spending quite this much right now, but when we buy a house we may be. This is reflective of the most we would pay. Right now the extra from this budget item is going directly into savings.|
|Groceries||13%||We eat well. And a lot. We don’t coupon much, since we eat mostly fresh, whole foods, which I can rarely find coupons for. If you know how to find ‘em, let me know!|
|Savings - automatic||9%||No questions asked, right into savings.|
|Student Loan||6.5%||Only 8,472 months left… just kidding.|
|Entertainment||3.2%||Trips, dates, eating out together. This one’s all about fun spending that we do together.|
|Mountain Man gas||1.8%||This includes only necessary driving, like gas to get to work, a 100 mile/day commute.|
|Mama gas||1.5%||Mama does all the errands and does a 100-mile commute about once a week. This amount is usually generous.|
|Baby Pie||3.6%||Diapering, clothes, gear, constantly printing pictures|
|Mountain Man hobby||2.7%||For hiking, biking, mountain biking, motorcycling – gear, repairs, transportation|
|Mama hobby||1.8%||Crafting, books, shiny things|
|Car insurance||1.8%||Yay! We have excellent insurance that’s cheap!|
|Vehicles||<1%||Amount is cumulated monthly for repairs, licensing, maintenance, etc.|
|Cell phones||<1%||Cheap plans, free phones|
|Internet||1.3%||Fast internet is a necessity!|
|Miscellaneous||1.7%||clothes, pet expenses, gifts, memberships|
|Retirement||5.5%||We probably should put more into retirement…|
|Household||4.5%||Repairs, maintenance, upgrades (mostly will be when we own)|
|Leftover||6.5%||Used for emergencies, necessary overages, or (usually) saving|
|TOTAL Monthly SAVINGS||21%||This is flexible and changes – sometimes more, sometimes a little less. But the retirement & automatic savings are non-negotiables.|
Things this budget also doesn’t take into consideration:
- Mama’s income – it’s small, and variable. It usually gets saved, but it will also cover mama’s certification course to become a doula.
- Mountain Man’s annual bonus. It’s variable, so we don’t budget for it. We spend some on fun (trip!) some will be spent on house improvements (when we own) and some goes into savings.
- We’re not currently putting money into a flexible spending account, since we so rarely even meet our deductibles. If we do have a major medical expense we have our savings accounts.
- Taxes at the end of the year – since we’ve had such variable incomes the past few years, we just save knowing that some of that savings will go toward taxes.
- Our cars & motorcycle are paid for, but some day Mama will need a new car. We will buy used, and hopefully can find one that will last - I drive a 16-year-old car, and have had it for 14 years. I think I’m going to drive this one right into its grave, though.
- We have no consumer debt. Our credit cards, if used at all, get paid off monthly within our budget items. Our only debt right now is student loans. If you have debt, you need a plan and a budget item to pay it off.
I’m sure there are budget items that could be here that are not, but these are the regular expenses. Any special things come out of our miscellaneous or hobby budgets.
It can take some serious time and effort to create a budget. We created one and decided it wasn’t really working for us, so made alterations. You may need some items to be more flexible, and some to be absolutes.
When we’re budgeting, we take into consideration the past few months of expenses for every budget item. We budget conservatively (don’t short-change budget items, or you’ll feel like your budget is too strict or failing) and absolutely plan for savings. We track our spending using Mint.com or even just a spreadsheet.
Occasionally I get upset when see people buying nice things, new homes, new cars, fancy clothes, going on trips, whatever. It seems unfair – we’re working hard and don’t have those things, and I think “what’s wrong with us that we can’t afford that? What are we doing wrong? How can they afford all this stuff?”
And then I realize that in many cases, those people are not affording them. They’re purchasing on credit, they have things they don’t actually own. We choose what we can afford. We choose to not spend our money on those things, but the feelings of inadequacy creep back in every once in a while. We could afford those things, if that was what we valued.
How we spend our money and our time is the best indicator of what we value. We live within our means and we love it.