I know it's only the 16th of December, but budget is on my mind.
We keep a family budget, which I track in excel. We break our life down into the following categories, and I've stuck the yearly percentages next to them. We don't really track our income, but just ensure that it is less than our budget. We do periodically review our budget to make sure it's realistic.
I know excel isn't the most advanced budgeting software there is, but it works for us. I also like recording our spending line by line because it helps me remember where money went, and sometimes I get to doubly enjoy something. For instance, when recording my chocolate hazelnut hot chocolate, I momentarily re-enjoyed the memory of my chocolate hazelnut hot chocolate. It was a good hot chocolate.
Also, this doesn't include retirement as that comes directly out of our pay checks. Here is what we spent in 2024:
Grocery (11.5%) - This is usually our weekly grocery delivery, and then other one off purchases like bulk flour. It includes any food we buy to prep and eat at home, but does not include anything we buy while out and about (which would be dining out)
Alcohol (1%) If andy and I go out for a drink together or get beer to drink in the house then this goes into the Alcohol budget. if we buy alcohol separately or buy a beer to drink with friends then this goes into our own hobbies budget. Sometimes a bottle of wine slips into the grocery budget though. Perhaps next year I will put alcohol into grocery and add a "rachel and andy fun" budget which could include drinks together?
Bills (30%) This includes Mortgage Water, Gas, Electric, Council Tax, Car Insurance, Home insurance. Mortgage is about 70% of the bills budget.
Dining Out (2.2%) This is for when members of our family go out to eat together. It doesn't include us going out alone or with our own friends (that goes under our own hobbies budget)
House (6.75%) I can't really think of our big house expenses this year. Andy gets some plants for the garden. We had two rooms painted.
Clothes (2%) We realized recently that most of our clothes were from living in the US, which meant they are approaching 10 years old, so we've tried to upgrade our wardrobes a bit this year
Misc (1.8%) The bane of my existence category?! Includes the kids photo albums and family photo albums. Christmas cards. Donations to charity. What is misc?
Transport (2.75%) this one is low this year because I wasn't commuting to work while on maternity leave. My commute is £35 a day. This is one reason I don't go into the office much
Rachel & Andy Hobbies (9.5%) I mean, it's our hobbies. We keep it seperate on the spreadsheet. Mine covers my gym membership, Peloton, massages, getting my nails done.. my things. Andy spends his on bike stuff and beer. It works out.
Entertainment (1%) This covers local memberships (for instance the castle memberships) and also any TV (we have Disney+ at the moment)
Kids (4.5%) Many kids expenses. Isaac's scouts membership. Kids bikes if needed. Some kids clothes? Swim lessons. Gymnastics classes. One-off trips to soft play.
Childcare (24%) This was low this year because I was on mat leave. Next year it's closer to 45%. Childcare basically feels like college - an investment in my future earnings. It's slightly less fun than college, but about the same amount of crying.
Gifts (2%) all gifts. Also sometimes if we buy someone else food it can go on gifts. Things that are nice for other people.
Health (1%) Dentist appointments, misc medicines. Physio. the NHS is free at point of service but sometimes it's better to pay for health care than wait for healthcare
And that's our year in money stuff. I guess real numbers might be more interesting than percentages? We are lucky that we don't worry about our spending, but we also don't have any big spending goals right now. We are not going on any holidays. We are not moving house. We have no major home projects coming up. We cancel Disney+ periodically to see if we still use it. Our kids are in a not-very-expensive phase of life (except childcare), and we are in a somewhat housebound phase of life, so thankfully money is not the thing keeping us from doing stuff. Our life set-up is the thing keeping us from doing stuff.
Do you budget? Do you track income or spending or both? Are you saving for anything big?
Gosh childcare is expensive. Back when my daughter was little (she's 28 now) her pre-school was $750 a month, which covered 6 hours. If we had her there longer it was more, but we were able to work our schedules so she was only there 6 hours a day. That seemed like a lot at the time, and it was. But not like now. The inflation calculator tells me that that's almost $1,500 now. I guess this is when it's cheaper to have an only child. (HA. I'm sure it's ALWAYS cheaper to have an only child.)
ReplyDeleteTHe UK is surprisingly bad for childcare costs. There are lots of different options for childcare and it gets a lot cheaper when they're older but currently the price at our local nursery is £88 a day per child... which is why we have a nanny. There's a local montessori school which does 6 hours a day and would be only £700 a month once they turn 2. $750 is a lot 28 years ago!
DeleteWhile it's probably *always* cheaper to have one child we also get more use out of things so for instance our £200 high chair is split across 4 kids so it's only really a £50 high chair. I'm not 100% sure that's how money works though :-D
Yep, childcare+aftercare+activities. Kids are dang expensive!!!Here I am mulling over if I can spend $100 per month on yoga membership, and with kids: jiu jitsu? No problem! Gymnastics? Sure. Skates? You got it. Ugh. And piano..
ReplyDeleteI had NEVER thought about this before but you are so right!I drop £32 a month on swim lessons for the kids and yet I keep thinking I should cancel my £18 a month gym membership. Blah!
DeleteYes, I view childcare costs are exactly as you are - an investment into my earnings. We payed roughly 120k for daycare for two kids: approximately $1,000 per month x 60 months (till they started kindergarten at the age of 5). It was more expensive for infants and cheaper after they turned 3 years old, so it is a rough estimate. But this is a reality of having no family help and two full-time working parents.
ReplyDeleteMy biggest illusion was that these costs would disappear when the kids get older, but they now take music (both), Spanish (both), and sport activities (both). I "kind of" got used of getting my paycheck and giving it away to daycare, so after daycare payments were over, I am now catching up with the retirement contributions, and still dreaming of a new wardrobe ;)
Oh thanks for the warning about costs! I have realized that different things will get more expensive as the kids get older. Last weekend my husband suggested soft play for the kids and I realized it would be £40 to take my family to a play center for 2 hours! No thank you! Activities definitely get more expensive, as does travel and anythign that needs a ticket. I was suprised I had to buy my son a bus ticket last week - trains are free to age 11 but busses apparently charge at. 5. Anyways, I am trying to ride this wave of epxensive childcare but don't expect to have a sudden windfall when they go to school.
DeleteI hope you get your wardrobe!
I was gasping at your 88 per day per kid, but then calculated the cost here and it is just as bad. I don't know if you could calendar days or weekdays but my friend paid about $2000 per month per kid, so that would be $100 a day if it is just weekdays or $66 per day if it is calendar days, and she had two kids, so basically $48k a year for daycare. She was SO HAPPY when they went to school, although she still has to pay for after school care for the elementary school, but it was a lot less. I mean, now she is probably only paying $12k a year, which is still a lot!
ReplyDeleteAlso, when I lived in London, I ran out of money SO FAST because taking the train was not cheap. In San Francisco at that time, we could get a monthy transport pass for about $30, so when I went to London I was floored by how much it cost! I am currently in Dijon and I did a day trip to a town about 45 minutes away by train and it cost 20 euros RT.
Oh and misc. My spending review is coming out on Monday, but what I put in misc. is gifts, haircuts, education fees for myself (CFA), shipping fees.. I used to put credit card fees there but now that category has grown so I moved them over to another.
Trains are crazy expensive here! FYI when you visit the Cardiff-London train has to be booked in advance otherwise it's over £100! It's actually cheaper to fly somewhere from Cardiff than take the train. Crazy.
DeleteWhen you say $48k/year for daycare that seems insanely expensive - that's basically college tuition. I can't imagine... and yet I can. It's so weird to me that at the time which we want women to excel in their careers we make it such a huge financial penalty to do so with kids. I mean not every woman has kids of course, but how many *more* women would we see at the top of business/industry if the country was subsidizing pre-school childcare.
I am looking forward to your spending review!
Dang it, I also meant to say that I find pivot tables very helpful. I put a subcategory on each category, so that my dining out for example has breakfast, lunch, coffee...but you could do that and add beer, kids meals, or whatever so that when you run it you can see where each of the dining out items falls. It only takes a couple extra minutes and I find that the extra details are very helpful to me.
ReplyDeleteOooh subcategory, I like it! Also, I love a comment about pivot tables.
Delete