A Look Back At Expenses This Year

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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  1. Sustainable PF on December 20, 2010 at 7:41 am

    This is a very interesting thing to do! I think we’ll do this exact same thing w/ our budget next year. Now that we’re settled in the new house and our wedding is paid for (and the car) we really want to keep a close eye on our budget.

    • Echo on December 20, 2010 at 8:46 am

      @Sustainable PF
      Thanks for the comment, that sounds like a great time in your life to start looking at your budget this way and see where you can save money. Any ideas where you want to redirect your wedding and car payments?

  2. The Passive Income Earner on December 20, 2010 at 11:08 am

    I have not but I agree with SustainablePF that it sounds good. I probably can derive it easily from Quicken. There may be a report that does that already. I am afraid to look now … I should to find some optimization though.

  3. youngandthrifty on December 20, 2010 at 11:24 pm

    I like how you break everything down into percentages. I’ll try and do that for next year too.

    Wow- living only 5km from work sounds great. I am at about 7km. I could not do the 15-30km commuting…

    Your baby and your pet cost about the same! 🙂 What kind of pet do you have?

    My pet is pretty expensive what with his vet bills and expensive dog food. I’d be interested to see how he compares to a baby! (In the future if I have one).

    • Echo on December 20, 2010 at 11:48 pm

      My wife is a cat lover, and so we have three of them! She used to work at a vet clinic too, and we’ve had our share of large bills (not fun).

      We’re in the toddler stage now with our daughter, so definitely not as expensive as a new born.

  4. Sandy @ yesiamcheap on December 21, 2010 at 4:52 pm

    I need to take the initiative to do something like this next year. You really controlled your housing expenses. Close to 20% is very impressive. I mean seriously good.

    • Echo on December 21, 2010 at 9:40 pm

      Thanks for your comment. Since this was the first year we did this I wasn’t sure what to expect, but I can tell you it was totally worth it. I’m still finding efficiencies that I would have never thought of if I didn’t drill down further.

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