Our Monthly Budget – $75k Per Year

Let’s talk budgets

I am completely at awe of bloggers spending under $30-40k a year (with kids!) and still looking like they are living it up! For us, getting down from $100kish to that $75kish a year in expenses has been relatively easy (first year we hit that was last year), but I am not sure we can want to go any lower right now without crossing the ‘this is not that fun anymore’ territory.

Yes I know I sound like a whiny-pants, but I am going to go ahead and own that because this is how I want to live my life as long as I can afford it. There.

For those of you on a similar journey, I am sharing the average monthly budget we follow (some months is more or less on each bucket, but generally it ends like this on average), in case it is helpful to you.  Note that after following the below for a few more years, mainly to help us establish new spending habits from what we were used to, we will move to a budget that simply focuses on savings (first bucket), core fixed expenses (second bucket) and other (third bucket) to simplify things.  Maybe that works better for you already – whatever works, just make sure you are checking that you are staying on track!

So with that, here goes…

Category Amount Notes
Mortgage $1,600 Includes $350 extra for principal to pay off in 7 years
Utilities/cell phone $400 Includes pest control and cell phones
Groceries $550 Food outside restaurants
Restaurants $250 Self explanatory
Extra $600 Includes 1x month house cleaning, massage and netflix
Car expenses $650 Car payment (4 years to go), registration and maintenance
Medical expenses $50 Co-pays, my insurance is paid through employer pre tax
Insurance $200 Life (x2) and car insurance
Vacation/travel $1,000 The Travel Travel part of our life!
Kids $500 School lunches, extra curricular classes, summer camps
Dog $250 Vet, food and overnight stays when we vacation
Replacement fund $150 Household things (attic fan, heater, etc)
Charity $50 Excludes donations and time volunteering
Total Monthly $6,250
Yearly $75,000

 

Yes, this is a cushy budget but I am finding this to be OUR number to maintain our perfect family balance between early retirement saving and fully living  and enjoying the experiences we want today.

While last year we hit this budget for the first time (came a little under), this year we have already over spent a little, mainly because we added fancy stuff like massages and home cleaning 1x month (hey, don’t hate!), but also because of unfortunate things like our computer dying and need to cut some dangerous trees, and a few other random issues, boo!

If we continue at current spend levels we will end at around $78k – so let’s hope plan so that we can reign it in and finish strong and avoid admitting public defeat!

What about savings?

With this level of spending, assuming we are both employed at current salary levels, we get to max our 401ks and HSA, and still put away around $6k (give or take) per month for our post tax brokerage account. Keep in mind we already front-loaded our 529s for as much as we wanted to add as of last year, so that has allowed us to put more money into our brokerage account and even add a little to our replacement fund.

Speaking of replacement funds – in 2018 we need to really trim things down on lux categories a little more or earn more money so that we can add a replacement vehicle fund (goal under $12k Leaf or something comparable in about 2-4 years to replace our older car).

What’s next?

First, we need to keep that spending down as I stated. Now, if we do go down to one income in a few months, we will temporarily trim the extra mortgage, the cleaning fee and, GASP a little bit on travel (down to $8k vs $12k per year). This would also mean instead of saving so aggressively, we would only be able to put away about $1,500 to brokerage per month or less, until we are able to replace that second income, though I could still max my pre-tax accounts. Still, not bad!

We are going to be monitoring kids expenses as they get older and may be interested in more classes or experiences, which may push budget higher. As for the opportunity areas, we should pay off our car in 4 years ($450 per month- 0% interest), and be in a better position to save more once the house is paid off (currently about $100k left in mortgage – with extra principal pay off is 7 years).

And no, we are not getting rid of our lovely rescue dog. She enhances our life so much and pushes us to be even more active. Once she passes though, we shall not get a new pet so this is it!

Tell me your dirty little secrets – what does your budget look like? Where do you splurge and what is hardest to cut?

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6 thoughts on “Our Monthly Budget – $75k Per Year”

  1. I’m all for having a balance, and not cutting so much as to make life miserable. Here in Miami, my wife and I definitely spend a lot on housing (big house in a great school district for when we have kids), but have cut down dramatically on (1) food [rather than ordering so much delivery, making slow-cooker meals with ingredients bought at ALDI]; (2) alcohol [one drink at restaurants, more at home]; (3) restaurants [great cheap, local places vs fancy joints], and (4) travel [lots of credit card rewards and points and miles].

    What I refuse to cut is pool service ($95 per month), lawn care (~$160 per month), pest control (~$120 per month), and house cleaning (~$200 per month). Cutting any of those things would drain enough time and/or energy from my wife or I as to make us miserable.

    Liked by 1 person

    1. Thank you for your perspective, Miguel! When you wrote your comment on food, all I could think of was that I am dying to get a Cuban sandwich or some ropa vieja, which I will immediately get upon visiting Miami next time!

      I love hearing from different people about what they find most valuable and focus that spending accordingly. I know if I had to cut the travel much further I would be very unhappy. We too have been very big on the miles and points, but still, we are very guilty of super splurging in this category (for example next year we are going to Bali, and we have secured 2 business class tickets for a ton of miles on Cathay plus about $300 on taxes for both…. we still have a healthy budget beyond that!). But truly, nothing fulfills me more than a good travel experience so I can deal with driving a really old car, have a smaller house and do less shopping as long as I can keep this luxury.

      And I am not going to let my husband read your comment on the lawn care – he does that work and I made him get a manual machine to be eco friendly and help with exercise. He thought it was a great idea until the first time he had to do the actual work and was ready to kill me, hehe. Whatever, saves us extra on the gym as well (until he outsources this back to me, then we shall see how fast I change my tune) :).

      Oh and a pool – I am so very jealous!

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  2. This is pretty similar to what our yearly finances are – almost to the letter. Even the early payoff on the mortgage in 7 years and spending about $1k/month on travel. Nice to see higher numbers than the amazingly low ones that so many people seem to have to know I’m not the only one!

    Liked by 1 person

    1. Thank you for sharing with me! My husband and I had many conversations about the same thing and felt kind of alone in the world of FIRE with these numbers since it does not include extreme frugality at all. We also know we are incredible fortunate that we can do this, and that life throws many curves at you and so we want to enjoy this benefit now.

      We are very focused on hitting our bucket list https://traveltravelandretire.com/2017/07/08/bucket-list/ and that requires some $$, and that we are present in the moment enjoying the now (that part is harder!).

      We have a solid plan to spend at this level, and, if savings/ investment plan goes smoothly, retire in about 10-12 years at around 50 – 52 year old (after all we have already taken a few years off during our careers). If the plan does not go so well, we will adapt and either work longer or figure something else out (move abroad).

      Feels good to know there are others like us out there! Appreciate your input for sure.

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  3. Wow, this is impressive! I have a very different looking budget – as a young, single living in Chicago, but this is very inspiring! I love a good budget- but that includes things that make you happy/sane. For example I pay $275 a month to rent a parking spot but after a 1.5 hour commute in the Chicago winter it is so worth it not to have to circle for 30 mins/dig my spot out. Some people would think this is crazy and at some points I do feel frustrated because I could be saving that money, but my time/happiness/sanity is worth it.

    Liked by 1 person

    1. That’s just it – it is all about what is important to YOU and how you prioritize your budget. I often hear people say that spending money on X, Y or Z is absurd and a waste of money but really, it is all relative. For example if you LOVE LOVE cars but don’t care much for a vacation and splurge accordingly and can still meet other financial obligations then it is absolutely the right thing to do for you. A good parking spot in cities like Chicago – I get it!

      Keep working towards your goals – we have come a long way to get to this income level (here is the entire history of our combined earnings since getting out of college (combined salaries!) https://traveltravelandretire.com/starting-point/) and keep focusing on spending that extra on the things that matter to you and nobody else!

      Appreciate your perspective.

      Liked by 1 person

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