Here is a breakdown of my expenses for January.
| Household | $406.98 |
| Transportation | $10.95 |
| Food | $37.23 |
| Entertainment | $74.46 |
| Debt/Education | $173.06 |
| Phone | $34.27 |
| Medical/Dental | $69.71 |
| Total | $806.66 |
I’m happy with this total. It puts me on track to have my expenses below $10,000 for the year. This month’s total should be about the same. I’ll probably spend a little more in the household and entertainment categories and less in the education category.
Here is a breakdown of my expenses for December 2008.
| Household | $414.69 |
| Transportation | $27.18 |
| Food | $38.73 |
| Entertainment | $103.19 |
| Debt/Education | $90 |
| Phone | $33.76 |
| Total | $707.55 |
I’m quite happy with my expenses for December. This is the level I’d like my expenses to be at every month. They will be somewhat higher this month because I have to pay for my health insurance. My new health insurance is payable every six months rather than quarterly as my previous health insurance was. I’ve decided I’m going to list my pro-rated monthly expense for health insurance rather than list it as a lump sum expense every six months to give a more accurate view of my average monthly expenses. The food expense is for lunches out and snacks only, the rest of my food expense is included in either the entertainment or household expenses.
I’m also considering paying $600 to sign up for my school’s bar prep course. That will obviously cause a serious increase in my monthly expenses for this month. Bar registration fees and bar prep fees will raise my average monthly expenses for the first part of the year but the last part of the year I should have very low expenses. Hopefully those will offset each other and I’ll meet my goal of having less than $10,000 in expenses for the year.
Jacob at Early Retirement Extreme is having a 30 Day Early Retirement Extreme Makeover. One of the goals of this makeover is cut your expense level to $10,000 or less a year. I thought I was close to this goal already since I try to keep my monthly expenses at $1000 a month or less and I knew I was below that level a few months this year. After reviewing my expenses for the year I realize I’m farther away from the $10,000 goal than I thought. Although I did have some months below the $1000 level I had more months above the $1000 level. I’m estimating that my total expenses will be about $15,000 for this year and my total income at about $12,000. This is not as good as I thought but that is part of the reason why I track my income and expenses; so I can review them and tell how I’m doing.
Looking at my expenses my budget busters are transportation and entertainment. The transportation category is somewhat misleading because I drove my car delivering pizza most of the year. Some of that expense should really be a deduction from income. Still there is plenty of room for improvement in the transportation category and I will be making some major changes there. Some of the increase in my entertainment expenditure is from having a GF but most of it was just the result of stupid decisions on my part. This expenditure can easily be reduced just by choosing more free or low-cost options for entertainment.
Since the new year is almost here I’ll go ahead and set a couple goals now. The first is to have my expenses under $10,000 next year. The next is to have my income higher than my expenses. These are reasonable goals and I will be planning specific measures to achieve them.