Where the money went in 2010: Part 3 – Life

Life is an awfully big piece of my pie. Good thing I like pie.

The Life slice of one’s financial pie is to include everything from groceries and entertainment, to medical. It is, in fact, supposed to be everything that isn’t housing, transportation, debt repayment or savings. Perhaps we have too much life ’round here?

For my house, “Life” would have to include: Cable TV, phone(s), groceries, booze, garden/lawn care, home decor, hair/cosmetics, dining out, entertainment, vacations, gifts, books/subscriptions/music, school expenses, vet bills, clothing, medical expenses, charitable giving, life insurance, disability insurance and home office expenditures. I’m exhausted just typing it.

Our “Life” rang in at $34,680 or 34%. It’s a shocking number.The recommendation is 25%. Since you know I’m already under the housing & transportation budget by 3%, you gotta presume in the days to come, I’ll be reporting that I’ve under spent the categories of savings and debt repayment as well.

Here’s the deets:

  • Cable TV – $606; I actually reduced my cable package at some point in 2010, funny, the rate didn’t really go down. I hate that I can’t bring myself to cancel it all together.
  • Phone(s) (one landline, one cell phone) $868; The home phone, and my youngest daughter’s cell both come in just under $40/month. (The eldest pays for her own cell phone).
  • Groceries – $6385; This is where keeping money in a jar/envelope saved me this year. I managed to stay on budget in this area for the first time in my life.
  • Booze- $262; I’m actually shocked I didn’t spend more. I think I must have buried some in the grocery budget  😉
  • Garden/Lawn care – $556; Not one single cent of regret here. I intend to stage a repeat for 2011.
  • Home Decor – $1910; Okay, I stopped in my tracks on this one. I had to go back to my spreadsheet to see if I had an error in my formula. Nope, everything added up correctly. Over half of this expenditure was attributed to January 2010. I had just finished recovering from a split from my ex. I’m not talking about an emotional recovery, I mean a recovery in the budget world. Specifically meaning that I had a final installment due on some furniture I had purchased to replace stuff that went out the front door in a moving truck. My attitude when I replaced stuff was “get what you want (within reason), and pay it off diligently.” I was also under an impression I could buy an old antique chair on Craigslist for dirt cheap, and have it reupholstered and save a bundle. Chair was dirt cheap, I refinished the wood myself – still dirt cheap. Reupholstery – nasty expensive, but gorgeous. The biggest chunk of the remainder for this category were planned purchases of a new set of dishes that I strategically bought a few pieces of each month. I now have a complete set, and they were purchased month, by month, by month. Yep, they all add up here!
  • Hair/Cosmetics – $465; For a woman who only got her hair cut once at a discount shop, this sure seems like a lot. There was a month I gave the girls money to get their hair cut, and we purchased gobs of sunscreen (necessary around here), and the other usual things you’d expect three gals to have. Nothing too elaborate, it just added up.
  • Dining Out – $828; This was more than I had budgeted for, but I realize, eating out is part of staying sane.
  • Entertainment – $754; We didn’t do any big events this year, at least not with big price tags. We did enjoy a number of local fringe festival shows ($10 each – honestly), and I joined a few clubs, like a Garden Club and a Drawing Class. For 2011, we’ll have to be sure to budget for some inexpensive local stuff, like festivals.
  • Vacations – $356; I had to look this one up too. This was a hangover from our Christmas vacation 2009. Charges on my VISA bill for baggage fees (forgot how nasty they are), lunch at an airport and a cab home.
  • Gifts – $887; I’m proud of that number.
  • Books/Subscriptions/Music – $106; There’s a lot of thrift store/yard sale novels and iTunes downloads in there!
  • School expense (includes drama daycamp) – $908; The Daycamp was a killer at the time, but no regrets. One has to have balance. My daughter learned a great deal from the experience.
  • Vet bills – $1818; Ouch. You’d think a woman with a 15 year old cat would have budgeted differently for vet bills. I didn’t. Nor did I project the adoption of three new fur babies. I have to admit the pets have had a significant impact on my budget (remember the laptop?). At risk of sounding like a crazy-old-cat-lady in training, the value add I get from sharing a house with them is really priceless. Even when they’re driving me mental. I suspect my bill in 2011 will look similar – the spaying and neutering will land on my credit card for the year ahead. Maybe I am a crazy cat lady already.
  • Clothing – $2050; At first I thought this seemed like quite a bit. For most of the year, I was responsible for clothing all of three us. In hindsight, I guess it’s not so bad. I suspect in my past life it was much, much worse.
  • Medical Expenses (non reimbursed) – $5574; There is precious little I can do about this one. This is about 1% of my total spending. In 2011, I’m looking forward to this going way down with the eldest being covered for medical expenses through her new, full-time job.
  • Charitable Giving – $400; I’m not proud of this. It’s not where my values are. I realized, however, I didn’t have the cashflow to be charitable with in 2010. Let’s hope we get our life more in line with our values in the year(s) ahead. I would like to see this significantly higher.
  • Life Insurance – $968; What can I say, I have no benefits and I have two homes, mortgages, debt and children who depend on me. Gotta have it.
  • Disability Insurance – $3,279: (see above).
  • Home Office Expenditures (claimable on my taxes) $5,700. This would have looked more reasonable had I not replaced my laptop this year.

As I look at the list, and I realize that I’m spending too much in this area (which causes me to under save, or not put enough toward debt reduction), I wonder what I could do differently in the future. There are some big expenses in here. On one hand, the financial experts want to ensure that you have your “house in order”, which means stuff like Life Insurance and Disability Insurance. This is particularly true for a single parent. If I lose my job, there is no spouse that has my back. If I get hit by a bus, I want my children to inherit my real estate and posessions without any accompanying debt. I also want to be able to provide for them some of the things that I would have provided if I were still around, like post-secondary education.  If my two girls were left now with my properties, they would have to hire somebody to help them manage their affairs.

My Disability Insurance is steep because I earn a good living, and I have the kind of insurance that would cover me in the event that I am unable to do MY job, not just ANY job. Many people have been burned by this because their disability leaves them able to pour coffee at Tims or greet folks at WalMart. That’s not the kind of income I earn. I want to be able to insure my income. So, being responsible adds to my life pie.

The whole phone and cable TV thing really gets to me. I think the Telecommunications companies are just earning money hand over fist, and I’m ticked off that I’m reliant on them. I’m unlikely to cut my own cable as long as the girls are home. Who knows if I would when they go. (Hey, think of how liquid I’ll be then!).

The whole issue with pets is a choice I’ve made. A classic example of “just because they’re free, doesn’t mean they don’t cost anything!” I really can’t imagine being petless.

The vacation budget will go way up in 2011, that’s what I’ll be saving for. I suspect my life pie will be as big next year as it was this year. Down with medical expenses (hopefully), up with vacation expenses!

One would hope there will be no more emergencies with laptops, and the Home Office budget will be a bit more reasonable.

What do you see in my “Life” pie that you would advise me to do differently?

Tomorrow:  Part 4 – Savings

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8 responses to this post.

  1. The two spots I did a double take at were “vet fees” and “clothing”. But then I remind myself this is for an entire year. So when you look at it monthly the vet fees were about $150/month and clothing $171/month – not so bad. As the mother of a 20 year old girl I know how much a pair of jeans costs – yikes!Girls are EXPENSIVE!! Now she makes enough to pay all of her own bills – cell phone, clothing, tuition, cosmetics etc. About the only bill I cover now is car insurance ($600 year for her as an occasional driver), cable TV & food. Your expenses will drop drop drop as your girls pay more of their own expenses, but for now I would say you are holding your own.

    Reply

    • Hey Jane, I think I’m expensive too! I think I could likely try and trim the clothing budget. With the eldest working FT, she can get her own stuff now. It makes a difference, doesn’t it? Now if I could just wean her off hair conditioner! The youngest has been saving for a trip to France for 2011, so she’s putting all her money there. She’s saved up $1800 already. I try and have mercy on her and bail her out clothing wise. Yep, I see things at their apex now, and from here, it should be downhill (as far as expenses go) and uphill for flexibility!

      Reply

  2. Posted by Freckles on December 30, 2010 at 12:34 pm

    I don’t really have any advice, but some comments …. I agree with you about the telecommunications rip-off!! Out west we have “Shaw Communications”, and guess what, one of the Top 10 richest Canadians is Mr. Shaw himself. Not a coincidence. I’m pretty sure I’m going to cancel my cable TV altogether this year, what I have started to do is sign out DVDs from the library (movies and TV series). I also picked up a TV antenna on Freecycle that will allow me to have at least the 3 local channels. I can also watch some other “must watch” shows (ie. Til Debt Do Us Part) on the Internet.

    Regarding your medical expenses, it always makes me roll my eyes when non-Canadians say that we have ‘free’ healthcare. By the way, can you claim some of those non-reimbursable expenses as a credit on your tax return?

    Lastly, regarding clothing expenses, in the past year I have tried shopping at the Salvation Army and Value Village, something I never would have considered before (most don’t). But I tell you, once I got past the ‘stigma’ I don’t plan to ever buy new again (except for underwear, of course). I have seen brand new clothes (with tags still on) at the Salvation Army; sometimes stores will offload their surplus clothes to the Sally Ann. I’ve picked up many brand name clothes (J. Crew, The Gap, etc.). About 3-4 times per year Value Village has a 50% off sale on their clothes and I’ve gotten J. Crew tops for under $4.00 each. Perfect condition. If you sign up for the Value Village emails they’ll send you a reminder for their 50% off sales.

    Reply

    • Hi Freckles, thanks for stopping by. You’re right, I can claim those medical expenses on my taxes. I appreciate the heads-up!

      Believe it or not, I do quite a bit of thrift-store shopping. My Mom actually volunteers at a couple, and I often get some cool stuff for free. I find with stuff like footware and some dressier stuff, if I don’t have the time (or energy) to wade through the thrift store, I’d prefer to go to a regular store. My favourite jeans come from Value Village. They were $5! I like them as much as my $80 jeans. (Yep, I paid that, it was a couple years ago though).

      Reply

  3. The number that really shocked me was for Disability Insurance. I am self-employed, and have purchased D.I. for *my* income. I also don’t want to get stuck serving coffee if something should happen. Maybe you could look at reducing this number by speaking with an Insurance Broker? Just a suggestion. I deal with My Insurance Broker (the actual name of the company). They were able to get me a great deal with The Edge Benefits for my D. I.

    Reply

    • Hey Eboo, thanks for stopping by. I’ve actually dealt with the same broker for about 20-odd years. I get a better rate (if you can believe it) because of my history with this company. I did shop around, and nobody could beat the rate I have. I believe that on the third anniversary of my policy (which will be January 2012), I can look at a reduction, as they’ll have a history on me, and realize that I’m not going to suddenly go mad, or anything like that. The older my kids get, and the fewer debt responsibilities I have, the less insurance I’ll need. I’m looking forward to that!

      Reply

  4. Sadly, you probably make too much to claim all the medical expenses, but maybe some! 😦

    GRS had a good post today on the long-term price of cable etc. As usual, sometimes people take these things too literally. Personally, I don’t get too excited about those $50/month things, but I would if I was paying for a 28% credit card.
    http://www.getrichslowly.org/blog/2010/12/30/my-132683-comcast-bill/

    You’re defeating me on the “life” category. 🙂 We won’t even go there on the booze costs! 😛 I came in around $20k for just the last 6 months. Lots was renovations, so I don’t feel bad, but there’s still so much left to do!

    Reply

    • Wow, I didn’t think I’d defeat anybody on the Life category. Especially you, Jacq! The only thing I’ll say about the booze is that I gave up drinking for about half of 2010. I already have committed $65 to 2011 from a trip to the Liquor Store pre-Christmas (VISA). So I’m off and running for 2011 🙂 Sounds like your ‘life’ is going to some great renos. Hope we get to see some pics!

      Thanks for the link to the GRS article. I’ve certainly read about this kind of logic before. Of course the key to success in these areas is to not only cancel/reduce those services, but then use that money to invest, rather than spend it on something else. Good advice!

      Reply

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