Spending By Category
There’s no question that God has blessed our family financially. We know how fortunate we are to be able to have Mr. Sense be a stay at home dad, to live in a beautiful home in a safe neighborhood, and to save for our goals.
I’m sure you’ve come across the same articles I have about how even some upper middle class families these days say they’re living paycheck to paycheck, always one bad month away from disaster. We shouldn’t look down on others for not knowing everything about personal finance. But I think it’s worthwhile to explore how easy it is to spend all of even a relatively high income on a seemingly normal lifestyle, not realizing how your family could have an almost identical level of comfort (and even material possessions and societal approval, if you care about those things!) for roughly half the cost.
To illustrate this, I’ve put together this rather unscientific comparison featuring the Sense family’s actual average monthly spending (Jan-Sept 2024) versus a hypothetical family at a similar income level that’s not aiming for financial independence or concerned with tithing. Some of the numbers for the hypothetical family are estimates based on anecdotal evidence from my friends, as well as estimates from the USDA on food spending and recent studies on average car payments. This isn’t supposed to be exact, but it illustrates how easy it is for a household making a good income of $150k or so a year to still feel financially stressed when the car breaks down or you have to pay your health insurance deductible.
Groceries
Sense family: 450
We do most of our shopping at Aldi (plus we pick up treats every month or so at Sharp Shopper). We buy almost all meat on sale. If we’re planning on something for dinner but we don’t like the deals at the store, we figure out a new plan. No alcohol and almost no brand names.
We don’t buy a lot of snack foods besides apples and bananas. We’ve gotten used to looking in the fridge for leftovers for most snacks.
Hypothetical family: 1000
This is the round number I hear from many of my friends for what they spend on groceries. I don’t think they’re buying much more or better stuff than we are, but it’s easy to spend more than $200 at the grocery store every week if you get stuck in the cycle of buying the exact same items each time, regardless of pricing.
Dining
Sense family: 221
Most of our dining spending is for our weekly lunch dates, which usually run between $30-$50. (Staunton readers: this is easily doable if you rotate between Gloria’s Pupuseria, Taste of India, and Wright’s Dairy Rite). We rarely take the kids out to eat because of cost and food waste concerns.
Hypothetical family: 600
Do most couples go on more than one date out every week? Nah– I’m convinced most of the extra spending is 1) fast food lunches, 2) food for kids, much of which is wasted, and 3) overpriced alcoholic beverages.
Kids
Sense family: 672
We are so proud of Kid Sense for earning a full tuition scholarship, and she also qualified for additional financial aid as a former foster youth. Much of the spending in this category is for community college classes and textbooks. Other kid expenses are recreational activities (horse riding, kendo lessons, flag football registration), allowances, and special rewards (ice cream after a good report card). We added a new family member over the summer, so we bought a few things for his bedroom and a small back to school shopping trip, too.
Hypothetical family: 1000
There are a zillion articles out there about how raising a kid to adulthood costs $300k+. I’m not sure how that’s possible, considering how many people don’t make much more than that over eighteen years and still seem to have perfectly fine kids. Of course we all want the best for our children, but isn’t spending time with them more valuable than just buying them whatever they want?
Bills
Sense family: 2214
This includes the interest/tax/insurance portion of our mortgage, utilities, and auto insurance. We were fortunate to purchase our home in 2020, when interest rates were historically low. We shop around for insurance and keep costs low by not being too particular about climate control in the house (no AC!).
Hypothetical family: 3000
Many people consider their bills to be a non-negotiable part of life. Not so! But if you don’t compare rates from time to time, you end up spending way more than necessary on boring things like homeowner’s insurance. Yeah, you need it, but you can often save thousands of dollars per year just by taking a couple hours to shop around.
Transport
Sense family: 99
We share one car and don’t have a loan. This cost is trending down since Kid Sense finished high school in May. Lately, we’ve been filling up the car twice a month at around $26 per trip.
Hypothetical family: 1500
On a percentage basis, this is certainly the biggest difference between our family and most of our friends. Cars are awesome, but car payments (and the associated costs of gas, maintenance, personal property tax) are high. You can get a very nice ebike for the price of one or two months of car payments.
Entertainment
Sense family: 205
We’ve already exceeded our annual budgeted amount in this category, mostly because of running related costs. Mr. Sense has gotten into running and has his first half marathon in November! Most costs are running shoes and race registrations. Other expenditures include getting our piano tuned ($200), our YMCA membership, and occasional books and movies when we can’t get them at the library.
Hypothetical family: 600
It’s popular to say that spending on experiences is better than spending on stuff– fair enough. But the price of experiences should still be taken into account. Concerts, professional sporting events, and hobby classes can get ridiculous fast. Once you get used to spending on these things, it’s easy to feel deprived when you take a step back.
Don’t even get me started on lottery tickets and sports betting, which seem to be the money destroyer of choice for many of my friends. Why?!
Miscellaneous
Sense family: 142
Squarespace for this blog, cat food/litter, chicken supplies. Most toiletries are under grocery spending.
Hypothetical family: 400
This category is a mystery for many people– the money just seems to disappear. Online shopping is a possible suspect.
Gifts
Sense family: 92
Mr. Sense and I agreed not to buy each other birthday gifts this year. For his birthday, I made him a coupon book of treats that don’t cost anything. We do buy gifts for other peoples’ birthdays though! Kid gifts fall under the Kid category.
Wonderful husband alert: Mr. Sense has already gotten a jump on our Christmas shopping!
Hypothetical family: 200
I totally get it; no one wants to seem cheap when it comes to friends and family. The key is planning ahead; if you take the time to come up with a thoughtful gift, you don’t have to spend as much to compensate for not having good ideas or deal with rush shipping charges.
Home Improvement
Sense family: 302
We had some unexpected plumbing issues this year. Fortunately, we avoided disaster in this category by handling some minor mold issues in the basement crawlspace ourselves.
Hypothetical family: 400
Stuff happens. Whenever possible, take a deep breath before reacting by hiring the first person who can fix the problem. Get multiple quotes for bigger jobs and consider if you can do the work yourself (or even if it actually needs doing).
Vacations
Sense family: 210
The Sense family went to England this summer with our church choir! Some of the costs were paid last year (airfare, AirBNB deposit), so this year is pretty low. I plan to use my remaining vacation days for a frugal staycation.
Hypothetical family: 500
Vacation spending can get out of hand quickly– it’s essential to plan ahead to avoid ridiculous flight and hotel costs. We don’t want to worry about the little things while we’re relaxing, but we still skip the airport Starbucks and its $8 coffee.
Oops
Sense family: 5
We created this category to cover mistakes and poor planning (parking tickets, forced to buy snacks because we didn’t pack). So far, we’ve avoided significant spending here.
Hypothetical family: 26
Late fees, subscriptions you forgot you have, stuff you forgot to return.
Total
Sense family: 4613
Hypothetical family: 9226
Conclusion
Whether you’re trying to retire at forty or trying to scrape together a month of expenses in case of emergency, tracking your spending by category can make a big difference. While I made up the numbers for the hypothetical household, the figures for the Sense family (currently two parents, one kid at college and one at home) are our actual average monthly spending in the first nine months of this year. According to the Bureau of Labor Statistics, our household spending is roughly $20,000 less than the average household spending in the United States, which means that combined with our higher than average income, we can expect to quickly make significant progress towards our financial goals.
