Corey from 20s Finances recently challenged members of the Yakezie Challenge (personal finance bloggers) to publically show where we spend all of our money as a percentage of their income in his “The Dollar Challenge“. I typically hate these kinds of posts that show how much personal finance bloggers’ net worth increases every month or how much they spend every week. I’ve written disparaging things about J. Money’s monthly net worth updates. But, nevertheless, I decided to write down exactly where all of my family’s expenses went by category for the past month. The results were more interesting than I thought that they would be. They shed some lights on some great income allocation, where all your money goes, and also some areas where I spend my money that may not be in my family’s best interest. Here is where my monthly spending ended up breaking out…
Note: Unlike some other bloggers who have taken Corey’s challenge, my percentages are gross amounts before taxes.
My Expenses For October 2011
- Taxes: 10.7%
- Car Payments: 9.1%
- Investing In Retirement Accounts (Roth IRAs & 401k): 10.9%
- Mortgage: 20.1%
- Insurance: 3.6%
- 529 Plans: 4.1%
- Taxable Investing: 3.1%
- Debt Payments: 2.7%
- Boosting Emergency Fund Savings: 2.0%
- Eating Out & Entertainment: 8.8%
- Groceries: 6.2%
- Gas: 4.7%
- Household Expenses (electric, water, garbage, cable, cell phone, etc.): 9.9%
- Hobbies: 1.2%
A Few Thoughts On Where My Money Goes
I look at this list and just see tons of places where I can and should cut costs in my monthly budgets. I have two car payments that eat up over 9% of my income. I am still paying almost 3% of my income on other debts.
My family and I love to eat out. While we know that this is a big expense in our monthly budget, it is something that we love. And, so we have allocated a good portion to this area. Some people collect things, and we just happen to love not cooking for ourselves. It is a conscious decision that we have made and a space that we have allocated in our budget.