The Budget Breakdown aims to broaden the conversation on money and offer insights into various approaches to spending, saving, and investing.
✨ Want to share your monthly budget breakdown with us? Please fill out this form here and we will get back to you (can be posted anonymously like this one 😉).
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💰 Income
Monthly Gross Income: $47,080
Monthly Net Income: $27,639
Dependants: Two children, one fur baby
🏡 Monthly Fixed Expenses
Rent: N/A - we live in a single-family home that we own
Mortgage: $5,483 (split equally between me and partner)
Utilities (Electricity, Water, Gas): $341 (split equally between me and partner)
Internet: $94 (split equally between me and partner)
Car Fuel: $50
Health Insurance: $134 (me and kids)
Long-term Disability Insurance: $15
Life Insurance: $51
Car Insurance: $200
Umbrella Insurance: $29
Pet Insurance: $100
Debt: $N/A - No loan except mortgage and I have credit cards paid in full each month
Subscriptions: $52 (Online learning resources such as O'Reilly)
ChatGPT: $20
Museum Memberships: $45
Cell Phone: $63
Trash & Recycling Service: $114 (split equally between me and partner)
Property Tax & Home Insurance: $2,000 (split equally between me and partner)
Bi-weekly Cleaning Service: $376
Car Registration: $48
🛒 Monthly Variable Expenses
Groceries: $800 (split equally between me and partner)
Eating Out (Restaurants, Bars): $750
Entertainment (Movies, Events, Hobbies): $50
Clothing: $100
Personal Care: $65
Travel:
$1,000 (~10 - 15 days of family vacations each year; split between me and partner)
$200 (weekend day trips)
Kids (after school, clothes, toys etc.): $400
💸 Monthly Savings and Investments
Emergency Fund Contributions: $0 (we already have an emergency fund that can cover 6 months of living expenses)
401k: $1,916
IRA: $583
529 College Savings Plan: $1,500
Investments (Stocks, Bonds, Mutual Funds, Real Estate): $11,000
🎁 Monthly Miscellaneous
Gifts and Donations: $400
Childcare/Education: $7,550 (One kid in daycare and one nanny; split equally between me and partner)
Pet Care: $70
Gym Membership/Classes: $50
Health: $165 (Copays, prescriptions, etc.)
Home Maintenance: $500
⚖️ Final Balance
Total income: $27,639
Total expenses: $12,624
Final balance: $15,015
💭 Money Reflections
1. How much does tracking your personal finances influence your spending, saving, and investing habits?
Tracking does not really affect how we allocate money yet, but it provides concrete data points that my partner and I could use when we talk about our long-term career and financial goals (more on that below).
2. Is there anything you wish you would spend less money on?
I wish we could spend less on childcare and housing, but that's just the market price around where we live.
3. What do you consider important to spend money on?
Three things: self care / improvement, experiences (esp. travel and dining), and enrichment for the kids. Experience would probably be the first thing that we cut down on though if we need to decrease our expenses.
4. Do you have any short-term or long-term financial goals?
Financial independence. My partner and I both have stressful jobs, and now that we have two young kids, we have been talking from time to time about how one or both of us can scale back and spend more time with the kids. We are still trying to work out a plan, but it would probably involve 1) rebalancing our investment to generate stable passive income and 2) cutting back on the expenses (and that's one place where the budget breakdown really comes in handy).
5. Are there any specific saving or investment strategies you follow?
I more or less follow the Bogleheads three-fund portfolio approach and just invest in broad market index funds (e.g. VTI for the US market and VXUS for the international market).
6. What was your relationship with money like growing up? Did you talk about it with your parents/caregivers?
Money is a topic that we rarely talked about within the family when I grew up. Both of my parents had jobs that paid modestly but were very stable. We always had more than enough for the necessities - food, clothing, medical needs etc., but were fairly frugal otherwise. We all had inexpensive hobbies (reading, gardening etc.) and rarely felt the need for more money than we had.
7. Did you receive any formal or informal financial education growing up? If yes, where did you learn to manage your personal finances?
Nope. I knew and thought little about finances until I started working.
8. Do you feel well-versed in personal finance? What resources have you used to educate yourself?
I have been feeling fairly comfortable about personal finance, although I'm realizing I need to either learn more or seek some professional guidance as we work on our plan towards financial independence. I’m always on the lookout for new strategies to optimize how I invest (e.g. I just recently learnt that Fidelity has a few zero-expense-ratio index funds that’s worth looking into for index investors like me). I've learnt a lot over the years from podcasts, blogs, and online communities (in particular Reddit). In addition to resources on personal finances, I've found resources on economics helpful as well for establishing a more holistic view about money.
9. What advice about money would you give to your younger self?
Make your money work for you. Before getting my first real job, I spent six years obtaining my PhD degree and saved up about 20k from my stipend. That was well beyond the 6-month emergency fund that I would need back then, and I just left all of it in a checking account. Looking back, I could have opened an IRA from the very beginning, invested in the broad market, and let time in the market do its magic.
