It can also disappear faster than I can say OFCOURSEIWOULDLIKETOORDERDESSERT. (Well. Maybe not that fast.)
Case in point, I came across Kasey's interesting post about their household budget and thought you might be amused to see how we divvy up our expenses each month. Not really?
Hear me out. It's only mostly boring.
All of our dough is lumped together and put through a meat grinder where we add half a teaspoon of oregano and a dash of cinnamon. When it's spewed out the other end it goes into this.
MISCELLANEOUS LIVING EXPENSES 1%
grooming, medical, gifts, donations, entertainment
MONTHLY EXPENSES 5%
transportation, insurance, phones, gym memberships
FOOD 3%
HOUSING 4%
RENTAL PROPERTIES 43%
(NON REAL ESTATE RELATED) RETIREMENT 18%
STUDENT LOANS 4%
EXTRA MORTGAGE PAYMENTS 22%
Those harmless little percentages are what keep me up until all hours of the night writing financial plans in stacks of notebooks. Scribbled with sketches of floor plans in the margins. And bubble hearts with my name linked to Johnny Depp's.
But back to the point. We have no money left at the end of the month because we use all of it to make extra mortgage payments on various properties. And we really spend more than 22% of our income doing that, because these numbers are based on a budget from last year, and we brought in almost 50% more than we'd originally hoped to earn. So we threw that toward the mortgages, too. Because it seemed like a mildly better idea than a pet cheetah. Or fifty five thousand thread count sheets.
Still, even though I know that we have a fairly strict budget, I have to admit that I was a bit taken back when I actually figured out the percentages a little while ago.
I had no idea that we look that insipid on paper.
p.s. I'm usually against paying off mortgages at our age, but it makes the most sense for us right now for a number of reasons. When a good opportunity comes along at the right time (hopefully soon!), we'll be investing that money instead.
UPDATE: Things to note based on various questions: 1. We already have an emergency fund in place, though it's probably too small according to our income. 2. The 18% does not include the employee match Andrew's company offers (though we do take advantage of it).
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9 people chimed in:
Wow, you can really whip up a post quickly! I do think that this is a really interesting topic because each family does their divvying differently. There's the recommended way and then there's reality :).
I had just settled in to write about something completely different (the bathrooms! finally!) but your post caught my eye. I haven't read the other comments yet, but I will later.
OMG. I just designed a detailed (and quite beautiful) pie chart for my finances! I'm going to post it later this week. I'm only a little bit ashamed that my 5th largest expense is alcohol. Lovely.
And thank you as always for talking about money. I think it's so helpful and important for us ladies to discuss it so we can make more of it.
I want a beautiful pie chart...
And alcohol...
It's always interesting to see other people's budgets, because budgets do vary depending on income and interests! We have a specific budget for all of our expenses - the categories include: his and her spending-for-fun budget, house improvement budget, going-out budget... can you tell we don't have kids yet? :)
Ditto that. I'm not sure how our budget would change with kids. But they can't be more expensive than our dogs. SERIOUSLY.
Fascinating. I love seeing how others allocate their money. I only know ours by the dollar. I need to see how its done by percentage. You and Kasey have inspired me.
Paying off the mortgage(s) is the best thing you can do isn't it? Not all financial wizards would agree..then again, they don't live our lives, do they.
Finances are such a personal thing aren't they, Ruth? But, no, I don't always think it's the best thing to do. Invest!
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