So, I've been up since 5, I didn't sleep well, & I'm panicked about when I'm going to run today. . . Ahh, fun times. I have since (grouchily, I'll admit) come up with a revised plan. I'll squeeze in 3.5-4 miles while the kids are at karate, & then complete the other half of my run later in the day when M will hang with the crew. It's all about flexibility!
ETA: well, that was a lot of worrying about nothing. I finished my run & feel great. Why was I driving myself so crazy? Oh, I know. . . because I'm a planner & flexibility is not second nature to me. I still have a lot to learn. ;-)
It's been the longest short work week ever! Now, if only the rest of the year could model itself after these past four days, I'd be a super fast runner, at my goal weight, & fulfilling all of my financial goals. A girl can dream, right? :-)
Speaking of dreams. . . a little double rainbow action, from Hawaii. :-)
I was inspired by a post of Sharon's that broke down her family's variable expenses. It started me thinking on the topic of variable expenses, & what percentage of our income goes to fixed expenses vs variable.
A few things to note - this percentage of income only takes into account our standard salaries, bonuses & stock grants are not included, as we're shifting our budget to live off of just our salaries. (Bonus/stock grant money, should they come again, will be allocated towards mortgage pay down.) And, we intentionally chose to spend more on fixed expenses when we opted to buy our vacation house. Finally, this is our 2013 budget, and what we need to stick to. It is not the best picture of what we spent in 2012. ;-)
We spend 83% of our income on fixed expenses (we include savings & retirement in that calculation) & 17% on variable expenses.
For budgeting purposes, I consider the following to be fixed expenses, in ranked order:
- Mortgages (across both properties)
- Savings (retirement & other)
- Child care. Unless M or I stop working, we will need child care. We currently pay for one child in full-day kindergarten (the state only covers half day), plus two kids in after school care, & full-time care in the summer.
- Tax savings (we frequently owe over $10K, but it's hard to predict based on the unknown bonus/stock issues).
- Utilities (across both properties). Some of this is technically variable, but we've cut all of what we want to from this category & it would take ending contracts with fees, etc to lower this further. And/or living without power & water. ;-)
Here's how we spend our variable budget, on a monthly basis:
- Groceries - $540
- Gas - $275
- Boys college - $200
- Cleaning service - $200
- Dining out - $175
- Boys lessons/sports/activities - $150
- Clothes/shoes (for four of us, & any makeup for me) - $100
- Gifts - $100
- Household (covers everything from toilet paper to furniture) - $100
- Car - $100
- Christmas - $100 (save each month for yearly budget of $1200)
- Personal - $70 (includes hair cuts for everyone, plus the occasional pedicure for me)
- Boys (misc) - $25 (this is everything from taking them to the aquarium, to giving them $5 at the arcade near our beach house).
- Charitable contributions - $25 (this is for random, unplanned donations - i.e. a request from a friend, a sponsored event, donation for the schools, etc. This is not where the majority of our charitable contributions go - the majority is deducted out of our net pay via our employer & is considered a "fixed" expense.)
- Boys birthdays - $25. (Includes a gift & party. This is the monthly cost, but we save for the two birthdays/year)
- Liquor - $20. I think most people consider this under their grocery budget, but as we're trying to really lower our grocery budget, I wanted to line item this separately. Obviously, it's easily cut if we're over in other categories.
One of our big aims over the next 5-10 years, is to drastically reduce our fixed expenses. We have no debt, short of our mortgages, but they are a substantial amount. By doing this (we'd like to have the vacation property paid off very quickly & then move on to our primary residence), we will then allow ourselves the flexibility of taking different jobs that are more suited to what we want to do & provide more lifestyle flexibility.
Our retirement plan is to sell our primary residence (which should be fully paid off at that point) & move to Hawaii or another warm weather destination. We may keep our vacation home, so we have a local residence when visiting family, etc.
What are you up to this weekend? Any fun plans? How do you plan for variable vs fixed expenses?