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# Monthly Budget: Here’s Mine & the U.S. Average. What is Yours?

by on March 13, 201342 Comments

One of the most enlightening and beneficial personal finance exercises one can complete is to calculate your average monthly budget.

I say “monthly budget”, but for the purposes of this post, monthly budget is synonymous with monthly spending.

If you can calculate that, you’ll instantly surpass the majority of Americans, whose idea of personal finance is to close their eyes, spend away, and pray their heads stay above water – even without doing a bit of budgeting work.

When you figure out your monthly budget expenses, you can:

1. Calculate what it actually costs you to survive
2. Figure out where you can trim the fat
3. Figure out where your spending could be at an optimal low
4. Know what income level you need to avoid going in to debt
5. Calculate what income level you need to achieve saving goals
6. Get a rough idea of what kind of savings you’ll need hit your crossover point
7. Get a ballpark estimate of how many more years you’ll need to work to reach your crossover point and an eventual retirement savings goal

It all starts with that monthly spend level.

### My Monthly Budget

I just completed this exercise again, as I do every month when I add up my credit card statements.

My estimate for this year is a little over \$1,200 per month (excluding home, property tax, & insurance, which for the purposes of this exercise are heavily geo-dependent). That’s about \$15,000 per  year (for the two of us, 1 dog, and 2 cats), just a bit higher the U.S. poverty line of \$15,130 in earnings for a family of 2.

Here’s my monthly budget breakdown:

• Life Insurance: \$23
• Auto Insurance: \$79
• Student Loan (2%, so we happily keep it): \$126
• Cell Phone: \$16
• Internet/cable: \$97
• Gas & Electric: \$110
• Water & Sewer: \$30
• Groceries/Personal Care: \$500 (doesn’t factor in \$385 cash back I received)
• Fuel: \$50
• Restaurant: \$20
• Pets: \$50
• Random stuff: \$100

I’m being generous on the random stuff. It prob. isn’t that much. It would include clothing, entertainment, and random stuff off of Amazon. Even vacation would comfortably fit in the “random stuff” category, as it cost us \$346 total last year. We’ll probably make a similar trip this year.

I spend what I consider to be a lot on pricey organic food and could cut back further. I am considering selling my newer car and getting an older one to lower my auto insurance payments, if the right one comes along.

I may be spending near poverty levels, but I feel like I’m living like a king.

How does my spending compare to the average? The average monthly budget is \$4,804, or \$57,658 annually, in the U.S., for a husband/wife household (here are more data samples, if you want to compare your family size).

### What is your Monthly Budget?

I think it would be a fun and telling exercise for everyone to calculate their average monthly spending (here’s a fancy spreadsheet, if you need it) and share it here so we can all see where we’re at and clever ideas on how to get certain categories down. If you want to take it a step further, you could also share what you want to lower and how you plan to do it (a little accountability never hurts).

Related Posts:

I am G.E. Miller, & this is my story. My goal is financial independence ASAP. If you share that goal, join me & 7,500+ others by getting FREE email updates. You'll also find every post by category & every post in order.

• sarah says:

This is the most depressing post for me… no idea how you live on such a low budget. Completely impressed though. As always thanks for the tips mr. miller

• G.E. Miller says:

What do you mean no idea? I just shared exactly how I do it.

• Kim says:

I like the idea of the “crossover point” as a motivator, and while it’s relatively simple to get our monthly spending tracked & predicted while we’re young & gainfully employed, I still worry about the inevitable healthcare costs when we get older. It’s not something we even include as a line item in the budget now since it disappears from the paycheck before we see it (similar to retirement savings), but I know when we’re older this will not be the case. Any tips on reading a crystal ball?

• Tom says:

My wife and I honeymooned in the interior of Mexico (think mountain lake, not beach) and were surrounded by retired ex-pats from US and Canada there for the good weather, cheaper cost of living and most importantly, cheaper health care.

• Tom says:

Just out of curiosity, do you fit home/car maintenance and the more expensive “up-front” costs on things that will save you money all under random stuff? In my monthly budget, those things take up a good chunk. Granted I love to spend my time doing projects around the house/yard so I routinely drop money at Lowe’s/Home Depot and the like.

\$620 seems low to me for a food/restaurant budget, maybe my wife and I’ll have to try a month without eating out to see if its possible for us!

• Sarah says:

Two cell phones for \$16/month? Do tell.

• G.E. Miller says:

Only paying for one cell plan right now. It’s through Net10 – but I’ve considered moving to Tracfone to save even more. A search on the site will yield articles for both.

• Todd says:

Prepaid by T-Mobile is also pretty good. I can just about get by with 1000 minutes for 10-12 months for \$100.

• Chris says:

Do you have full coverage on Auto Ins? If so, have you thought about liability only, for older cars?

• G.E. Miller says:

Yes. Full coverage b/c it is a 2012. Luckily/unluckily – it saved me \$4k last year as my wife got in an accident. I am considering moving to an older model just to be able to drop the pricey full coverage.

• Is “Fuel” gasoline for your car. In my house, we have two vehicles and with gas prices in New York, we are probably spending close to \$400/month on gasoline. There is no way to really lower that expense.

I’m curious how you reconcile that “fuel” expense. Also curious about the cell phones.

I think I will sit down with my wife tonight and do something similar.

• I have only recently started using a nice spreadsheet to track my budget and spending as a whole. I always had a decent grasp on it but its the “everything else” category where I used to lose track.

• BF says:

I track my expenses every month, and my spending is a good amount more than yours. I think we all have different ideas of what it means to “live like a king.” For me, eating out a couple of times each week, spending money on museums, movies, and parking (which adds up) at beaches/parks/etc, makes life a lot better now, rather than focusing so much on saving for the future.

After moving from low-cost TX to super high-cost Los Angeles, it’s even more important right now to come in under my extra-stretched budget. That has meant cooking at home a lot more, planning meals better to spend less at the grocery store, less clothes shopping, and less spending on books, home stuff, and other miscellaneous things.

• AF says:

I live in a high COL area, making my spending rather high. In addition, I insure a sports car and motorcycle, making those payments higher than I’d like. Like you, G.E., I spend a lot of money on organic/local food. I plan on purchasing a home this year, which will greatly increase my housing expense. Right now I estimate my projected monthly spending/budget to be a about \$3,300 every month. My average over the last 6 months was about \$4,500, but I was paying down my auto loan, which is now gone.

Housing: \$800
Student loans: \$300
Food/dining: \$550
Pet: \$150
Car/moto ins.: \$255
Cell phone (for 2): \$70
Cable: \$70
Entertainment: \$300
Shopping/travel: \$550
Other: \$100

• AF says:

I just realized you excluded housing. With that excluded, my budget comes in at about \$2,500/month.

• Rick says:

What about housing? I don’t see rent or mortgage or home owners insurance or interest?

Maybe it’s been covered in a prior post but that seems like a big expense to be missing.

• BT says:

With the cost of rent my budget is \$1,335 a month. At 23 I feel that this is high considering I have no debt and that my bachelors degree does not provide year-round employment in my field of work. I also was wondering what your budget is when you add the cost of housing in?

• Jessie says:

I don’t think it’s fair to intentionally omit the price of housing on one hand, then compare your expenses to the national poverty level on the other. Those families at or around the poverty line must be able to pay for housing as well within that budget, regardless of where they live. Also, there are local poverty levels depending on your location within the U.S. that are adjusted for COL.

I currently make around \$11,000 a year working full-time as an AmeriCorps member (local poverty line for 1 person I believe, I’m in California)and live on a budget of around \$850 a month, including rent, utilities, car insurance, a dog, and food. I share a room, don’t spend frivolously, and split all expenses evenly with my partner. It’s tough sometimes but we manage and I don’t feel like I’m lacking in anything.

• Irina says:

I agree. Most of the income of those in the low-income bracket goes toward housing. In your other post about the poverty line, you say that you feel like you live “far above the poverty line.” But do you really think that’s a fair thing to say, GE? I doubt those living at the poverty line would be able to afford the luxuries you already own (eg. backpacking gear).

• PD says:

Here’s how my expenses are broken down on mint.com
Living in downtown Seattle. Here it goes:

Mortgage: 900
Property taxes: 175
HOA dues: 450 (includes master insurance, gas, cable, internet)
Car insurance: 78
Condo insurance: 16
Food: 350
Everything else (electricity, cell phone, gas, netflix, random splurges, gym, misc): 350

Comes to a total of \$2320/mo (~25% going into equity)

Basically what I save on gas by living downtown is going into equity.

• PD says:

Without the home expenses, it comes to \$780/mo… \$9350/yr

• Erin says:

Great article and insight. It’s always helpful to compare budgets with other twenty-somethings in similar financial situations. Like you, I probably spend way too much money on organic produce. I spend about \$100 a week on leafy greens. Come spring, the first practical purchases I make will be on my own garden. Oh, and I’m interested in how you manage to keep your fuel expenses so low..

• Ryan says:

The average national monthly budget number includes housing. So to do a like for like comparison, it would be \$3,277 not \$4,804.

• Nicholas says:

My student loans: \$175
Wifes student loans: \$275
Wifes car: \$305
Mortgage: \$1450
HOA Fee: \$100
Energy costs: \$108
Cell Phones: \$90
Car Insurance (2 cars): \$125
Internet/Cable: \$60

We dont really have a set budget for food. Food prices are pretty unstable, so it varies.

• Nicholas says:

Forgot to mention charitable giving. It’s down to \$80 a month. Weve had to cut back with the payroll tax increase and my wife moving to part time. Last year we gave \$210 a month…

• Jason says:

GM,

Seems like you have to be missing some things. Health insurance(assuming your article meant homeowner’s insurance since you said geo-dependant)? Family related trips? Buying your absolutely tolerant wife a birthday/anniversary gift? Your house never has anything break? Buy any plants for spring? Cars need oil changes? I know you have a bike, those things even need service from time to time. Chain lube is \$10/bottle. I would say price of a book, but I don’t even buy those so library late fees? How is your gas and electric average in MI \$110? Your wife is freezing in the winter. Even Macklemore spends \$0.99 on clothes from time to time. Zecco isn’t free anymore so you have to pay to buy and sell stocks/mutual funds.

So when does life come in? The crossover point is a cool idea and I hope to hit is years before I plan to retire, but hitting it when you are 40? 45? I.M.H.O it seems like you are short changing some things.

At some point, like minded, really smart people helping each other is the best way to get ahead. Be smart, work on getting into reputable companies/careers and grow your income. Networking hard to grow income may be the best ROI on time spent doing any one activity any of us have.

Jason

• Jacob says:

Including rent, season tickets to my local soccer team, car/bike maintenance and insurance, groceries, and a trip to Ireland for 2 weeks, materials for building myself a new dresser (using a family member’s workshop and replacing used parts on tools), building myself a new computer for \$800, and getting my wonderful live-in girlfriend flowers on occasion and little gifts here and there, I still only spend approx. \$1800/month over the course of a year.

My life is wonderful, fulfilling, and happy. And I’m secure for the future with all the extra I put away, so losing my job or having a large expense thrown my way isn’t scary or stressful in the least. Good place to be at 26 years old.

And…I’m still living NOW!!! Yes, it’s possible. Every problem should be examined as a challenge to overcome with enthusiasm, rather than a roadblock to complain about.

• Jacob says:

“So when does life come in? The crossover point is a cool idea and I hope to hit is years before I plan to retire, but hitting it when you are 40? 45? I.M.H.O it seems like you are short changing some things.”

I think this sort of statement is common. “Don’t forget to live life! Don’t make yourself miserable now!” etc. I get it from my family occasionally when I talk about how I saved money on a certain bill, or how I’m putting off buying a house to save up, etc.

Yet I live a great life on \$1800/month (2012 total budget) including a 2-week trip to Ireland later this year (paid in full), a computer I built for myself for \$800 (which will last a good 5 years or so), season tickets to my local soccer team’s games, weekly paid piano lessons, insurance, car/bike maintenance, rent, phone, groceries, etc. (my entire life’s spending, basically). I’m happy, fulfilled, have multiple hobbies, and save a big chunk of money each month which will lead to early financial independence (stop work? change careers? volunteer?). I’m 26 and living a great life on what many would consider to be WAY to little to be happy.

• TC says:

If you own your house outright (like GM does) then you don’t need to factor rent or a mortgage into your monthly budget. Also, if you are employed by an employer who pays your monthly premium/it is directly paid from your paycheck (like I am sure GM does) then you don’t have to factor in healthcare costs for your monthly spending either.

• CJ says:

Live with my GF, so some housing costs are split. But these are my individual budget renting an apartment:

Apartment Rent: 520
Power/Water/Renter’s Ins: 63
Internet: 19
Cell Phone: 99 (ouch… hard to get rid of internet on phone though)
Car Insurance: 80
Gas: 152 (downsides of living in a large sprawling city and working far from where my gf lives/works, even with 36 MPG)
Groceries: 238 (I eat only fresh foods, half organic, and fish/chicken)
Fun/Misc expenses: 562 (This goes for anything outside my regular budget – Pets, personal care, repairs to car, etc)
Car Payment – 379 (\$21k car bought last year, 1.9% interest, keeping this thing for 200+ thousand miles/12 years until she’s dead).
Vacation – 250 (Set high until I’m 30, taking advantage of not having a family and being free to travel for weeks on end right now)
Horseback riding lessons – 180

• CJ says:

However, if I cut out some of the high end items I’ve identified that are bloating my budget (vacation, horseback riding, cell phone), I’m only earning \$24k extra over 20 years of saving for my retirement. I’m willing to give that up for things that make me happy: Working with horses (which I think of as investment, as I’d like to quit my full time job and work with them in 20 years) and travelling the world. I really should look into ditching the phone though…

• Jennifer says:

First off, WOW, I am trying to get on a low budget for at least a year so I can get used to living a thrifty life style. I am looking for suggestions to improve my spending/saving lifestyle. I am a single woman with 2 full time jobs, no student loan debt but still going to school and paying as I go. My \$1000/mo credit card payment hurts but I can’t wait for it to be debt free and put the \$1000 towards more 401k and emergency saving fund.

Credit Card Debt: \$1000/mo (\$7k balance to pay off in 8 months)
Mortgage: \$1300/mo
HOA: \$315/mo
Leased Vehicle: \$515/mo
Gas: \$150/mo
Insurance HOME & CAR: \$125/mo
Cable & Internet: \$100/mo
Electricity: \$30/mo
Groceries: \$300/mo
Restaurant: \$200/mo
Personal Care: \$75/mo
Shopping: \$300/mo
Education: \$150/mo

Total:\$4560/mo

• Jennifer says:

I don’t have a cell phone bill because the company I work for pays for it.

• CJ says:

Ouch, that vehicle fee seems like a lot. I bought a brand new car and am paying \$379 a month on it. In hindsight, I wish I bought used. I could’ve probably paid \$300 a month and had it paid off in 4 years. Seems like that and your shopping are pretty high for someone so in debt and looking to get out.

I’m jealous about the cell phone bill =].

• R W says:

Never ever ever should you lease a car, get rid of it immediately. Purchase a smaller new car at 0% APR, you’ll be paying at least \$100 less a month and it’s yours to keep! Good job paying down the CC though, keep it up, then move that money to savings.

• Diane says:

We are approaching 40 and have no debt including our primary home and 2 rental homes. We do a zero based budget that dictates what we will spend each month ahead of time.
Family of four with 3 and 5 yr old
Food \$500
Eating out \$180
Entertainment \$150
House goods \$185
Home repairs \$185
Gas \$250
Travel \$400
Extra \$180
Beauty \$30
Party \$40
Holiday fund \$60
Kids activities \$60
Babysitting \$180
Clothes \$106
Car repair suspended bc it’s balance is \$1500
Medical \$70
Taxes \$450
Life insurance \$59
Car/home insurance \$200
Charity \$500
Savings \$3000
Internet \$25
Cell phone \$145
Water \$70
Gas/electric \$330
We’ve saved and sacrificed for decades and since we have no debt we can spend and save comfortably. One of us now works full time and the other is home with the kids and works a small amount from home. We used to spend \$235 to feed a family of four a month and \$43 to clothe all of us.

• Siobhan says:

Diane, your comment means so much to me. My husband and I are in our mid-twenties and we are trying to live very frugally and avoid debt like the plague. We watch friends our age live in beautiful houses and take exotic vacations and it’s very discouraging at times. Sometimes we wonder if we’re being stupid and if living this way now will really make a difference. But your story gives me hope that sacrificing early will prove worth it later on. Thank you so much for showing me what’s possible!

• SG says:

Family of 3 in HCOL. 4 if you count our old lady of a lab. 1200sq ft house with one bathroom, no debt except mortgage, expensive chronic illness, well insured. This excludes medical insurance premiums withheld from my paycheck and retirement/college/general savings.
Daycare is a killer, but it is not something to cheap out on. What we pay is on the lower end for our area. It’ll be cut in half in 2 more years and gone in 6.

PITI 1850.00
daycare 950.00
life/disabilty 145.00
car ins 170.00
medical exceeding FSA 150.00
gas 300.00
cable 80.00
elec/trash/water 245.00
cell 150.00
groceries 700.00
dog 75.00
clothing 100.00
toys/entertainment 75.00
travel 300.00
household 250.00

• romsdeals says:

Make sure you allocate all your monthly expenses to credit cards so you can get cash back and bonuses.

• Christine says:

I would also like to know how you can keep random so low. It seems like things not included in your budget would eat that up rather quickly, car registration, oil changes, health care deductibles, home repair, and all of the things that come up in life. Part of the reason I ask is that I have always grouped these things under misc. and I am now trying to be more specific in my budget and prepare for some things that before could put me over at times.

• Kristen says:

Hi G.E. (email message more than comment),

I really enjoy your blog and your ability to share good information in a way that invites your readers in without overwhelming the main points. I work in the financial field and what commonly happens is what we call the shoemaker syndrome in which the shoemakers’ children go shoeless. I often put my financial picture on the back burner while taking care of other peoples as a career. I was wondering if you would possibly be interested in taking my financial picture and essentially “rip it apart” as an article where you use all the real figures (not my real name) and show how I/readers could do it differently and where my main mistakes are… Please let me know if you would be interested!

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