I understand that revealing our net worth is not enough to fully explain our entire financial picture. That is by design; I like keeping the picture fuzzy. Blogs are very hard to keep anonymous, and I’ve been doing this since 2004. This is why I continue not to share our respective salaries, occupations, employers, and geographical location. Besides, I am not here to be better than you, or the next dude. Anyone out there could earn more than me, save more than me, or spend less than me. I’m only trying to track our progress, and to consistently try to make our situation a little bit better each day.

But I’ll give in a little bit. I think tracking expenditures is a good idea for everyone, so I might as well share what I have discovered. Besides, I’ve already revealed that our goal for an Emergency Fund is 6 months of expenses, or $30,000. That means my wife and I spend $5,000 a month? How? Here’s the lovely pie chart:

Housing: We spend $3,500 a month housing, 70% of our total monthly expenses. (Note that this is not the same as 70% of income!) This includes principal, interest, taxes, and insurance (PITI). Yes, it is obscenely high. The median price of a home in our area is over $500,000, so don’t go thinking we live in a multi-acre 5,000 square foot estate. At the same time, incomes here are also a lot higher, especially in certain fields. So there is a give and take.

Given that this one area skews the graph so much, I made another graph of all non-housing expenses:

Food: $450/month includes both groceries and dining out. This is where the “fat” is in our spending, and we know it. We love food and do our best to “consciously spend” and enjoy every dollar put into this pleasure. I’m okay with making many simple foods at home, but I still go out when I want to eat freshly baked naan, perfectly seasoned pad thai, authentic pizza, or hand-wrapped tamales.

Insurance: $200/month includes two cars and umbrella liability insurance policies. Our deductibles are $1,000 to keep costs low, but our liability limits are high ($250,000/$500,000) due to the requirements of the umbrella policy.

Utilities: $200/month includes electric, gas, sewer, and water. Gasoline: $200/month. Cable TV + Internet: $80/month. Cell Phones: $75/month for two lines.

Gifts: $100/month. This might be somewhat unique to us, but given our big family events like birthdays, weddings, graduations, usually end up costing us $100 per month.

Other: $200/month usually covers the other smaller categories including clothing, entertainment, and pet expenses.

That ends up with the total being $5,005 per month. $3,500 to housing, $1,505 to everything else. Health insurance is provided by our employers. Non-monthly expenses like home improvement projects, travel, charity, car purchases/depreciation, or medical procedures are not included.

Last month one of our credit card statements spanned two pages because we had eaten out so often. Not only is it more expensive, I’m pretty sure it’s less healthy. So now we’re trying to limit ourselves to 2-3 times a week (minus the cafeteria at work), and making one of our outings to a new restaurant that we haven’t tried before.

This means more grocery shopping. But did you know that grocery food prices jumped 5.3% in 2007? Milk, eggs, and bread all cost from 10-30% more than last year. This year looks to be even worse, especially with rising oil prices making transportation more expensive. In last weekend’s WSJ Sunday edition, there was an article titled Savvy Grocery Shopping that had some good money-saving tips. Here are a few of them along with some others I’ve also picked up elsewhere.

Stockpile and Hoard
Grocery stores constantly rotate the stuff that they have on sale, so that at any one time there is something new to attract you into their store. Then, while you’re already there, they expect you to buy other things at full price. The key is to know when something is at a great price, and then stockpile staples at that price. That way all your pasta, canned veggies, soups, broths, sugar, and all non-perishables are all bought 20-50% off retail.

Keep Track of Prices
The problem: How do you know what is a good price? I forget all the time. Some people keep what is called a “price book”, where you track the price of your commonly bought items so you can start to see the cycles and pricing patterns. There is even a website called TheGroceryGame that will track prices for you and let you know when to buy – for $10 every 8 weeks.

I’ve also noticed that you can also start to learn when they mark down meat, usually a day or so before the legal sell-by date. The meat is still good, I just stick it in the freezer right away until I need it.

Be a Coupon Ninja
There is an entire subculture of “couponers” out there that I call “coupon ninjas”. They find good coupons, then get 20 duplicates of them, go to a store that doubles them (instead of 25 cents off you’d get 50 cents off) and then stockpile like crazy. I’ve seen scans of grocery receipts that show $150 of food bought for $23.47. Sometimes they actually get negative! While I admire their drive, I just stink at using coupons. I’ll clip them, but I always forget to bring them along, or I wait until they are expired. My new store doesn’t double coupons anymore, so the incentive is also less. TheGroceryGame also helps point out good deals.

Buy Frozen and/or Generic
Many times frozen fruits and vegetables are even more nutritious or tasty when you buy them frozen, because they can wait longer before picking them. Also, there’s always store-brand or generics. The article shares that the manufacturer of Birds’ Eye veggies also makes store-label veggies. I love my Safeway frozen mixed vegetables! 🙂 Did you know that produce even has brands now? I didn’t even notice. I like to buy generic on many things, but not all of them.

Since the Sunrocket demise in July, we have been living with just a cell phone – no landline or VoIP – and it’s actually worked out pretty well. I like the simplicity. We haven’t had any overage problems, but I did tend to check a lot in the beginning to make sure. Here are some easy ways to to check your remaining minutes for several cell phone providers:

AT&T (Cingular)
Dial *MIN# (*646#)
AT&T Firefox plugin (might currently be broken)

Verizon
Dial #MIN (#646)
Verizon Firefox plugin

T-Mobile
Dial #MIN# (#646#) or dial 611 + say “minutes”
T-Mobile Firefox plugin

Sprint Nextel
Dial *4 or dial *2 + say “minutes used”
Sprint Firefox plugin (not currently working for me)

Then there is the Windows desktop application WatchMyCell, which logs into your online account page for you and tracks how many minutes you have left. It will even send you an text message or e-mail whenever you’ve reached your chosen threshold.

Now, all of these automatic methods will require your username and password. Although I’ve done some digging and found nothing obvious, I can’t be sure none of them are doing anything shady. I would at least change your password to something unique to the site. Personally, I just program the number as a contact. Let me know if I missed anything.

Several readers shared their own spending breakdowns in the comments of my previous post, so that inspired me to dig up the numbers for ourselves. I don’t have exact stats, and our income varies each month, but I did the best I could by averaging everything over the last 12 months. The percentages are taken from after-tax, or “take home”, income.

Quick explanations for each category:

Food is both eating out and groceries. Car means gas, maintenance, and insurance. Insurance means everything but car insurance: Health, Dental, Disability, Renter’s, and Umbrella. Utilities are all monthly recurring expenses like natural gas, electricity, trash, cell phone, VoIP, and water. Travel includes both visiting family and sightseeing. Savings includes both short-term savings for a house downpayment and putting away for retirement. Other is everything else – pet-related, clothes, gifts, donations, etc.

Things look pretty manageable for us right now, but soon our housing slice will probably double or more in size, and we have no kids right now, so the pie will definitely evolve over time. Of course, hopefully we’ll be earning more too. I also want to add life insurance and maybe better disability insurance to the mix soon.

This was an interesting exercise, perhaps just as illuminating as tracking your expenses for a month. Even if you guesstimate, you’ll likely end up with something that may inspire some change or simply reinforce your efforts so far.

Just like with my net worth tracking, I’m not here to compete with anyone else, I think we all have our own goals to work towards. However, feel free to comment with your own numbers.