Back in 2008, I wrote a post about our monthly expenses. Since a lot has happened over the past 5 years or so, I thought it would be a good idea to provide an update.
So what has happened since 2008? To start, in 2008 we had our first child (expenses were not included in the previous post), and we built a new house. Fast forward to 2013, we now have 2 children, and we’re mortgage free. Even though the mortgage payments were eliminated, the kids have managed to tie up that extra cash flow and more! In fact, the “children” line item is the largest expense by a fair margin.
How so? To start, we maximize their RESP’s every year, so that’s $5,000 per year. Second, Mrs. FT has changed her job position which has allowed her to spend more time with the kids but at a cost of a reduced salary and reduced retirement benefits (forced change from a defined benefit pension to a defined contribution pension).
Even with Mrs. FT staying home more often, pre-school and activity costs are still high in the tune of $1,200 per month (plus clothing!) during the school year. While pre-school and activities are our biggest budget item, it will hopefully reduce once the kids finish kindergarten (only half day kindergarten here in NL).
Here are the numbers;
Housing Expenses: $10,020 ($835/month)
- Mortgage: $0
- Property tax: $3,500
- Maintenance/Furnishings/Upgrades: $2,800
- Utilities: $3,120
- Home Supplies: $600
Car Expenses (2 vehicles): $4,280 ($356.67/month)
- Car payments: $0
- Gasoline: $3,360
- Maintenance: $600
- Registration: $320
Home Essentials: $1,492 ($124.33/month)
- TV/Internet/Landline phone: $1,392
- Cell phones: $100 (one phone on prepaid plan)
Food and Booze: $12,300 ($1025/month)
- Groceries: $10,800
- Entertainment/Eating Out: $1,500
Insurance: $4,930 ($410.83/month)
- Home: $600
- 2 x Automobiles (for 2 people): $1,650 (how we save money on auto insurance)
- Life: $420
- Disability insurance (for 2 people): $2,260
Children: $17,000 ($1416.67/month)
- Preschool/Activities: $12,000
- RESP: $5,000
Spending: $3,600 ($300/month)
- Shopping/clothing/hair/gym/misc: $3,600
Other Expenses: $3,600 ($300/month)
- Charity: $2,400
- Gifts: $1,200
Total Annual Expense: $57,222 ($4,768.50/month)
Unfortunately our expenses increased about 13.5% since 2008, however, I suspect that as my kids get to grade school age the $12,000 line item should reduce to at least half. Our plan right now is for my take home salary to cover all expenses (close), and for the second salary (and business income) to add to savings. Note that the expenses listed above are mostly recurring expenses and does not include retirement contributions or other forms of savings. Savings are used to pay for lump sum items like retirement contributions, a major car/home repair or travel (can be challenging with young kids!).
Even though we try save money whenever possible, there is still work to be done. Specifically, the grocery line item. With an average of $900/month in food (although we cook almost all of our meals, and I take a hot lunch to work everyday), it could make a big difference annually if we shop and plan smarter.
So what does your budget look like compared to mine?