Hi all. I discovered the GRS forums recently and have been voraciously reading everyone's experiences and advice. My DH (35) and I (34) decided some time ago to get off the debt merry-go-round and start building our wealth. We paid off $21k of cc debt in 2010 and bought our first house in 2011.

Reading books such as "The Millionaire Next Door" and "How a Second Grader Beat Wall Street" has given me grandiose ideas for knocking out our remaining debt, investing, and building assets; however, I've recently realized we need to start at a much more basic level...spending. I know what I think we SHOULD BE spending in the categories of our household budget. I know what I THINK we are spending. But truthfully, I have no idea what we're actually shelling out.-

To get a handle on this, I've made a spending tracker spreadsheet, and intend to carefully log our actual expenses for the remainder of the year. My goals are twofold: (1) determine where we can improve our spending (play better "defense", as TMND calls it), and (2) develop a realistic monthly budget based on our improved spending that comes from goal 1.

I'm using the following categories to make up our spending plan for the month of July:

House (includes mortgage, taxes, insurance, maintenance fees and association fees)
Car (includes car payment and insurance)
Gas
Groceries
Electricity
Student Loan
Savings (used for our EF)
Household (general household needs such as TP, dog food, etc)
Investments (we're just learning, so we put aside a little each month to "play" with)
Entertainment
Dining Out
Medical (one medical copay expected in July)
Cell Phone
Misc (everything that doesn't fit in the above categories)

Any comments, suggestions, anecdotes, words of wisdom, etc., from the folks on this forum are greatly appreciated.

Sounds like you've made a lot of progress over the past couple of years!

I use mint.com to track spending...not as closely as I did at first, but I still keep an eye on it there. It automatically categorizes most transactions for you, so it's a lot less effort than tracking it on your own in Excel. Of course, there's a security risk to consider by having your info stored online.

Ditto on the kudos.

Getting a handle on your spending and tracking your expenses is definitely helpful, but personally I've never found budgeting much help except for monitoring "spending creep" where my spending goes up in areas that I think are wasteful or unnecessary.

Tracking my spending was key to getting myself out of debt about 12 years ago; I've never taken on any debt since then other than my mortgage. But the problem I've had with budgeting is that there are so many unplanned expenses that can put you over budget even though they're not really within your control: if friends or family come to visit, your grocery bill goes up that month. If it's a cold winter, your heating bills go up; or if it's an exceptionally hot summer your electricity costs go up due to A/C. I found myself setting budget targets and then exceeding them so often due to unforeseen events that I changed the budget targets so I wouldn't keep going into the red. But that kind of defeats the purpose of keeping a budget.

I've learned over time to know the few line items that I need to monitor in a budget to keep my spending under control, so my budget only contains four or five items. But I track all my expenses and income, every transaction, and have done so since the mid 1990s.

First of welcome to the forums! Second of all congratulations on gettin rid of your CC debt! You’re on the right track! Reducing expenses or increasing income is the way to go!

Regarding your first goal (1) See this thread for some good ideas to save money.

Did someone say monthly budget? Love those.

One way to look at budgets is to categorize what items are “Fixed Expenses” and which are “Variable Expenses.” It is just what it sounds like. Fixed Expenses are expenses you will have the same every month say your mortgage or insurance. Variable Expenses are everything else say groceries, eating out, etc. Fixed expenses are hard to reduce unless you eliminate them. Variable Expenses is where the fun is at.

In order to better help you we would need a little information:

What are the incomes of each person in the household?
What does your Emergency Fund look like?
What is the monthly payment & interest on the house note?
What are the monthly payments & interest on the car loans?

A few observations:
I’ve become somewhat obsessed with reducing costs. We have looked closely at our budget for about a year now. It is amazing how tracking everything helps you understand the bigger picture of your finances. We also used the envelope system and mint.com at the beginning. Now we use a spreadsheet I’ve made through excel. We keep all receipts and insert the data into excel usually once or twice a week. We are debt free.

Thanks!

I am wary of sites like mint.com due to the security risk. Also, my bank categorizes spending as well for me, but there's an issue with that. Some of the stores we use are multiple-category stores. For instance, we buy certain groceries at COSTCO (it's the only place on island we can get milk for less than $5/gallon), so that would fall under my groceries category. We also buy paper goods (TP, paper towels) and cleaning supplies there, which would fall under household goods. Recently, they had a deal on motor oil where we purchased 4.5 oil changes worth of fully synthetic oil for the price of one oil change at Jiffy Lube, so that would go under car maintenance. Since household goods and groceries are two of the categories I suspect we can do better with our spending, I think a spreadsheet makes more sense for now.



Thanks for the kudos as well. I understand what you mean that sometimes getting into the weeds of budgeting can be tedious and unnecessary. Starting out with six months, I want to get a baseline and also see if there are places we can cut back. From there, I can determine whether I need to continue with the minute detail or if we do well with a more generalized budget that doesn't track every single penny.



LOL Eagle. I don't get too excited about the idea of a monthly budget, but the idea of building awesome spreadsheets sends my heart aflutter. I am a little uncomfortable posting such personal information like salary and such, but I've seen your budget breakdowns on other threads and can definitely use those as a starting point. Also, thank you for the link on saving money.

You make a great point about fixed vs. variable expenses. Regarding our fixed expenses, I'm pretty comfortable with those the way they are. I'm currently at least a year ahead on paying off the car. If I only pay the monthly amount due from here on out, I'll knock out that loan a year early (this Dec). My goal, though, is to have it paid off by the end of the summer (16 months early).

I think our three main categories of variable expenses in which we can improve are groceries, eating out, and household goods. Once I can get a handle on what we're actually spending, I'll be able to determine how we can be more efficient with our money.

E komo mai Alohabear! Which island do you live on?

Mahalo nui loa, DoingHomework! I'm on O'ahu.

Cool!


By the way, $5 for a gallon of milk is a bargain! I've seen it at $13 a gallon in a Foodland in Maui a few years ago and it's usually about $6 a half gallon on the Big Island. It's just one price of living in paradise.

I don't know what your circumstances are, and Oahu is a lot different, but you can probably save a ton of money if you buy local fruit and produce and avoid packaged stuff that has to be brought in as much as possible.

Excuse the pun, but holy cow! $13/gallon for milk? I'd just drink water and take calcium supplements for that! LOL.

We're getting good at finding locally-grown produce for cheaper than the imported stuff. There's a great farmer's market in Kapolei, and I've been wanting to get up to the Haleiwa one as well. Honestly, I suspect our biggest problem is we don't plan our meals, so we take multiple trips to the grocery, plus we impulse buy. ("Ooh, those steaks look good!" LOL) Tracking our expenditures over the next six months should help confirm that.

This is not specific to Hawaii but is especially relevant there. If you do two things you will likely save a lot on eating.

First, if you either plan your meals or if you learn to cook like you're on "Chopped" you will cut way down on waste. Basically, instead of going to the store to buy what you don't have to make something you decide to make, let what you HAVE determine what you make. That way you'll be using more of what you have, will not go to the store as often, and will cut down on waste. You can extend that idea by letting your shopping be determined by what is available rather than some plan. That's teh way everyone did it before we had mass preservation. You can usually get extremely low prices at local/farmers markets on stuff if you are a little flexible and adventurous. We got papayas at 5 for $1 recently and had breakfast for a week for 2 people for $2. You'll pay way more for a package of spinach at Safeway than you will for fresh morning glory greens or similar at a farmer's market. Don't be afraid to try something new! You can do that anywhere but Hawaii is especially great for that because you have so many different cultures coming together that the selection of foods is truly unbelievable. I talk to the ladies running the stands and ask about everything I don't recognize. They will tell you how to cook the things you are unfamiliar with.

Second, buy as little prepared food as possible and stay out of those aisles in the grocery store. I'm not a fanatic about this but it really can help you save money. You won't buy those steaks if you don't see them and you won't see them if you don't shop in the beef section. Besides, you are in Hawaii - you can get all kinds of cheap fish! Heck, it's free if you want to spend an hour or so fishing every week or so. (Incidentally, I have been told but have not confirmed, that there are no slaughterhouses in Hawaii. Beef is raised there, shipped to the mainland, butchered, then shipped back. So you cannot get fresh beef there!)

And stock up when prices are good. I doubt it works quite like this on Oahu or in large cities. But on the BI it's not at all usual for someone's cousin's friend's sister to have caught a huge ahi or marlin and is trying to give much of it away because they don't have the room to freeze it. Hello! I'll take 10 pounds or so in exchange for $20 or just helping move something. Anyway, you get the idea. The same thing happens in small towns when someone gets an elk, catches a bunch of fish, or has too many tomatoes from their garden. Take advantage of it. It's a way of life in Hawaii - ever heard of kokua?

We don't live there full time but we spend around a month a year there right now. We'll retire there in a few years. In spite of the high food prices we actually end up spending very little on groceries there by going to the farmer's market and eating whatever fish is cheap that day. We can get veggies for a week of dinners for less than $10.

A useful book on this approach to cooking and meal planning is "An Everlasting Meal," by Tamar Adler. It's inspired by the classic "How to Cook a Wolf," by MFK Fisher; my only complaint with this book is that Adler adopts Fisher's tone and writing style and it comes off sounding fake and overly mannered. But if you can get past the unfortunate writing there's a lot of good advice in this book.

Well, I get excited about spreadsheets too lol. Maybe I didn't express myself well. But I really enjoy budgets as well. I have a spreadsheet specifically for helping me make budgets for people on this site. And then a word document that allows me to organize it to where it looks somewhat coherent with the [ ] on the forums. I love the idea of people wanting to get their finances under control.

Welcome on the link for savings. Feel free to add any good ideas. I understand about posting the info. No worries was just going to draw up a sample budget for you. But if you've looked in on threads you get the idea then Sounds like you know what you're doing.

Definitely track the expenses. Once you get in the habit it's not hard to do. Keep up the good work!

So, here we are at the end of the month, and the results are pretty much what I suspected. I'll post the amounts after the I do the final tally tonight, but it looks like we spent about 3x the budgeted amount on eating out for the month. The good news is we spent less than the budgeted amount for groceries since we ate out so much.

The biggest issue was lack of planning; for instance, several times we forgot to thaw anything out for dinner. Some of the other factors were lack of time on our busiest days (it's quicker to grab dinner on the go than to cook) and lack of discipline (neither of us wanting to cook, so we compromise by eating out).

So, a couple ideas for the upcoming month:

- We're going to work on a meal plan so we know what we're having for dinner most nights. This should help make dinner more automatic (and avoid the "What do you want for dinner? I don't know, what do you want for dinner?" routine).

- I think we also need to figure out some really quick dinner ideas for the nights we don't have time to cook a full meal or the nights we just don't feel like cooking. (Sandwiches? Ramen? Any ideas are welcome.)

- Finally, we may just have to accept that our chosen lifestyle includes a higher instance of eating out than we currently budget for, and we should adjust our budget accordingly. We certainly have the room in our budget to do so. I'm not sure I want to make a routine of spending as much as we did in July every month, but maybe adjusting the budget to 2x of what it is now (instead of the 3x we spent) will be more realistic with our lifestyle while still changing our habits enough to save some money in this area.

Microwave...


Veggie burgers, tilapia fillets (bought in huge bags), even premade burgers that can be cooked directly from a frozen state. Also, keep lots of veggies around and you can always through a bunch in a steamer with rice and let it cook while you relax from the day. Microwave baked potatoes are quick and easy. Quinoa can be done that way too and saved for a few days.



Don't beat yourself up over it. We eat out a fair amount, though it is usually not very expensive, Chipotle or takeout from a couple of different neighborhood restaurants. We definitely end up doing it more when we're busy, which is predictably in specific months of the year. Nothing says you can't recognize that and set a higher budget for those months if you expect it in advance. I never bought into the whole idea of trying to have the same budget every month since many expenses are only paid once or twice a year for example.

My favorite quick meal is pasta with....anything.
Sometimes I make macaroni and tuna salad, other times it's linguine and scallops. Most things that go into the pasta are quick and easy, and if I spend the 15 minutes boiling the water, I'm always happy in the end because I have a delicious, quick meal and plenty of it for leftovers for lunch. I'm not a big vegetable eater, but those steamed vegetables are always quick and tasty if I'm STARVING. hee hee.