Photo by PoPville flickr user Olaf Zerbock
Ed. Note: If others would be interested in, anonymously, sharing their budget diaries – I’ll be happy to make this a regular series.
I read a lot of the budget diary series on the website the Kitchn and only once or twice have they featured DC. Being furloughed these past few weeks has made us really scrutinize what we are spending, not just on food but on our mortgage, utilities and everything else. I’m curious to see how we compare to other households in the DC area. Here goes:
How my spending in 2018 has opened my eyes to the cost of living in the DMV.
As the new year approached, I wasn’t expecting to enter it being furloughed like many others in the DC metro area. Rather than focusing on the negative, I’ve taken the last few weeks to review and scrutinize my expenses from 2018 to use as a guide to reduce spending in 2019. We’re a family of two with three furbabies and are living a fairly financially conservative lifestyle, but after seeing our total for the year, I’m completely overwhelmed with our year end total.
Since purchasing our home a few years ago, we drastically changed our habits. We stopped going out to trendy restaurants and instead opted to only go for special occasions or when family is in town. Happy hours were replaced with meeting friends for a coffee or hosting a potluck at our home. I committed to packing lunch every day over purchasing a $12 turkey sandwich from that fantastic cafe across the street from the office. We cancelled that gym membership that we rarely ever used once the contract was up. We’re already living frugally, so how can we significantly reduce our cost of living without sacrificing the small pleasures that we splurge on every once in awhile?
First, let’s take a look at 2018’s breakdown. We spent just over $85,000 for the year, not including medical expenses or routine maintenance on our home.
Annual expenses totaled $8,120.
Our highest expense we save for is travel. I know this is a splurge. I know we could cut this out. Years ago, we chose not to exchange gifts throughout the year and opted for taking one or two short vacations alone or with family. With a little research, we’ve been able to find cheap flights overseas and stay in low-budget hotels across the world. We try to keep each trip under $1,500 therefore we stash away around $3,000 for our year of travel.
Gifts and clothing for the year comes in at second place totaling approximately $2,620. This includes our annual membership for Amazon, birthday and holiday gifts for family and friends and clothes for work. Majority of our friends have children, so there are a lot of birthday parties to attend and gifts to buy through the year.
The third highest amount we budget for is our personal property tax that is due annually to the county every October. It’s a non-negotiable fee of approximately $1,300 for two cars. We could reduce this by selling a car, but my car is fortunately paid in full and in good condition. I rarely use it, but I’d much prefer to pay the annual tax and insurance instead of having to buy a car in the future for when I need one. My husband uses his car as a work car, so it takes a lot of abuse and he doesn’t have the option of going car-free nor do I want him to use mine as his daily driver.
Next on the list is savings for our pet’s healthcare, medical bills, emergency vet visits. We typically stay under $700 a year.
Lastly, we splurge on tickets to sporting events as our “date night” or when we have family in town. We don’t purchase the least expensive tickets, but we do occasionally spend a bit more than what we realistically should, especially during hockey season (Go CAPS!). Last year we spent around $500 total for the few events we attended.
Quarterly expenses totaled $1,350.
I’m a lady of convenience and commitment, so ten years ago when I found an amazing stylist and a fabulous dry-cleaner, there was no need to keep searching. Even while living in the District, I commuted across the river for haircuts and dry cleaning. Full highlights and haircut run $150 including tip. Dry cleaning comes in or under $100.
The remainder of the budget is allotted to our quarterly Costco run. I have a love hate relationship with Costco and Costco’s parking lot, so we stick to the list to get in and get out. In the long run, I think this strategy saves us money because we are not splurging on items other than non-perishables such as coffee, canned goods, protein bars, paper products, beauty products and dog food.
Monthly expenses totaled $68,880.
Yes, that amount is accurate. I about had a heart-attacked and this is what triggered me to write this article. A few years ago, that exceeded my gross salary. Hell, it exceeds the current combined balance on both of our student-loans.
We left DC due to the cost of housing and if we ever decide to have children, we couldn’t afford either a neighborhood with high-rated schools or private school plus a mortgage. We figured we would buy in the ‘burbs in a good neighborhood while we are young and work as many OT hours as we can to afford the high, but lower than DC mortgage. With a substantial down-payment, our mortgage still runs us $3,100 a month.
Utilities fluctuate, but average $900. This includes electric, gas, water, sewage, trash removal, cell phone, cable and security monitoring services.
Student loans combined are $700. I remind myself that this is only a short term and temporary item. In five to ten years, it will all be over.
At the beginning of winter, our HVAC decided it no longer wanted to work. With few options, we shopped around and were able to take out a low-interest loan for a whopping $15,000 for the next five years to cover the installation and new units. This left us with a $450 per month payment in addition to all of the above.
Our car expenses including car note, gas, insurance and maintenance comes in at $490.
If we have anything leftover at the end of the month and I’m tired of cooking, we have $100 to splurge on take-out or going to our favorite local diner.
Weekly expenses totaled $7,280.
Every Sunday, I meal plan and prepare our lunches and dinners for the week. Our routine is boring and we don’t stray too far from our usual menus due to our $75 weekly allotment for groceries. I buy protein waffle mix in bulk and have been known to spend half the day baking dozens of waffles to freeze and reheat throughout the upcoming weeks. We attempt to stick to organic ingredients and shop in season or what’s on sale. We buy meat in bulk and freeze whatever we don’t consume that week. In addition to saving money, we’re not wasting food how we did in the past and we are not ordering take-out when we come home from an exhausting day at work.
Our final expense goes to hiring a dog-walker to come in for a mid-day walk three times a week for our pups. This is a non-negotiable for us. It’s costly, but we can’t keep our little guys stuck inside for nine to ten hours a day while we are at work nor do we want to come home to any accidents to clean up. We have a wonderful and trustworthy walker who walks them for $21 per walk or $63 per week.
So what did I learn from 2018 and how can I plan for 2019?
Honestly, I did not learn as much as I thought I would. When I calculated the year’s total, I thought for sure that we were tossing money out the window on unnecessary items and I would be able to reduce that amount at least by twenty or thirty percent for 2019. There’s definitely a few things we can forgo to save some, so I’ll continue to look into ways to do that. Maybe we’ll try a month or two of no take-out or restaurant dinners, I’ll avoid purchasing new clothes unless absolutely necessary, we’ll work on reducing our utility usage and I’ll finally cash in those hotel points to cover the cost of our annual vacations.
At the end of the day, we are always going to have something to splurge on or an emergency that will then throw our budget out the window no matter how well we plan. It’s part of life and part of living a high cost area.
How do your expenses compare? What are your budgeting tips and tricks?“