One of the benefits of setting up a monthly budget as well as forecasting income and expenses is that at the end of the year I can review expenses in each of the areas where we spent our money and make improvements for the future.

Reducing our expenses was definitely top of mind as we adjusted to single-income living earlier this year.  Since we had never used a personal budget before, I wasn’t sure what to expect.  Looking back, I am extremely pleased with how we were able to control our expenses this year.

Review Expenses: Home

  • Mortgage & Property Taxes – 21% of gross income
  • Extra Mortgage Payments – 8.5% of gross income
  • Utilities (Power/Gas/Water) – 3.25% of gross income
  • Cable/Phone/Internet – 2.5% of gross income
  • Furniture & Improvements – 1% of gross income

Overall we spent just over 36% of our gross income on our housing expenses, but a large portion of that was extra payments we were applying to our mortgage as we try to reduce our total balance before upgrading our house next year.  We also managed to save on cable and internet bills.

Daily Living Expenses

  • Groceries – 9% of gross income
  • Baby Supplies – 1.5% of gross income
  • Pet Food & Supplies – 1.5% of gross income
  • Miscellaneous Spending – 1.5% of gross income
  • Dining Out – 1% of gross income
  • Alcohol – 0.5% of gross income

I’m really impressed with the way we controlled our daily living expenses, as this can be the largest variable expense in your monthly budget.  We did a great job creating a meal plan and sticking to it, which saved us a lot of money on groceries and dining out.

Since we have a small child to look after we didn’t go out very much this year, just for special occasions like birthdays, our anniversary, and Harry Potter movies 🙂

Transportation Expenses

  • Car payment – 5.5% of gross income
  • Insurance & Registration – 1.5% of gross income
  • Gas – 1% of gross income
  • Parking & Maintenance – 0.5% of gross income

We were able to save a lot of money in this category this year.  I work less than 5 KM from our house, which helps to save on auto insurance and gas expenses.  We also redeemed our Air Miles rewards for gas certificates to Shell, which saved us $300 in fuel charges this year.

The remainder of our expenses go towards my defined benefit plan (11%), federal and provincial taxes (15%), TFSA and RESP contributions (6%), CPP and EI (4%), and then a lot of miscellaneous expenses under 1% of gross income.  We also had a modest vacation this summer out in Kelowna as well as camping in the interior BC.

All in all I am happy that we started a budget this year and I like that we were able to save money, control expenses, and still maintain a good quality of living on just one income.

For next year, I’d like to continue to save some extra money each month until we move into our new house.  At that point, I’ll need to re-evaluate our monthly budget until we get a good handle on what some of our new monthly expenses will be.

Do you look back and review expenses each year?  How much of your gross income are you spending on each category?

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