The Balanced Spreadsheet-Financial News, Budget Advice, Debt help, Financial Tips, and other advice

June 20, 2009

First Budget

Filed under: Personal Finance, Real Example — Tags: , — thebalancedspreadsheet @ 10:09 pm

One of the first things my wife and I did when we got back from our honeymoon last month, well except do lots of laundry, was the monthly household budget.  Now for me who has been doing my monthly spreadsheet budgeting for almost five years this was something I really was looking forward to.  I had formed what I thought our budget would look like based taking my budget as a single and making a few adjustments here and there.  She had her thoughts as well.  In the end we came up with a budget that we BOTH could agree upon.  During our engagement my then Fiancée and I decided to live entirely off of my income, due to the fact that we are planning on her to be a stay-at-home mommy in the future.  All of her income right now is going to extra savings, making additional mortgage payments, and investing in Retirement accounts.  Below is our budget based on my paycheck alone with the % of income devoted to each category

  Necessities Mortgage 26.63%
    Groceries 4.63%
    Utilities 4.63%
    Condo Dues 3.94%
    Gas 3.47%
 Necessities Total   43.30%
  Fixed Taxes 17.09%
    Tithe 10.00%
    Extra Giving 2.78%
    401K 9.00%
    Car Insurance 3.05%
    Health Insurance 3.01%
    Phone 2.55%
    Parking 0.69%
  Fixed Total   48.17%
  Luxuries Misc 2.40%
    Eating out 2.32%
    Blow Money 1.16%
    Clothes 1.16%
    Entertainment 0.93%
    Friends 0.58%
  Luxuries Total 8.53%
Grand Total   100.00%

We divided our budget into three categories; necessities, fixed expenses that are known every month, and luxuries.

Necessities: Our necessities are the basic needs in life: Food, lights, water, shelter, and transportation.  The two big areas we looked at were the mortgage payment and the grocery budget.  The mortgage payment represents is about a quarter of our pre-tax income.  Our goal would be for it to be a quarter of our net income after taxes, which right now is 31%.  The grocery budget is the one that we are keeping our eye on the most.  We simply doubled the budget that I used when I was single.  My wife and I are pretty simple eaters, nothing extravagant or anything like that except we do like to have a bowl of ice cream every now or then.  Overall though our necessities only make up 43% of our monthly budget, which we are pretty happy about.

Fixed: This category had the most changes to it.  The taxes actually decreased due to being withheld at a married status.  The tithe and 401(K) contributions remained the same.  The three main things that increased were car insurance, health insurance, and cell phone bill.  Combined our car insurance actually decreased but when compared to just my income it increased by about a point.  Health insurance went up mostly due to increase in HSA contributions.  Our health insurance is a high deductible HSA.  The deductible is $5,000 so we’re really only covered for catastrophic events.  We’re trying to put as much as possible into the HSA while we are able to and hopefully have enough to cover our entire deductible if needed.  Finally the phone budget increased mostly due to us not yet being on a single phone plan.  We don’t have a land line just our own individual cell phone.  I think once we combine into one plan this should decrease some.  All in all the fixed category is about 50% of our budget which might seem high but to me that is a good thing as I like predictability in the budget.

Luxuries: Although being the smallest category, we naturally had the most discussion over our luxuries items.  For us, we had to remind ourselves what really is a necessity and what is a luxury.  While eating out and buying new clothes are fun and something we enjoy, they truly are luxuries.  In the end after some discussion we came up with amounts that are pretty conservative but yet allow us to enjoy things that we like from time to time.  However we will continually need to monitor these amounts as they can fluctuate from month to month.

It was good to get together with my wife and develop our budget.  We had some minor disagreements but ultimately came to a budget that we all could agree on which is very important.   I am sure that over the months and years that our budget will have some major changes with it, but it’s good to know that for now we can have a balanced spreadsheet.

So what about you?  How does your budget compared to ours?  Anything we think we are spending too high or too low on?



  1. It looks like you and your wife put a lot of thought into your budget. I especially like how you figured it out together instead of one of you making a unilateral decision.

    Comment by Lisa — June 25, 2009 @ 9:08 am

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