Thursday, January 10, 2008

2007 Expenses vs. Budget

2007 was a weird year for expenses. Not as weird as last year, when I went from being a renter to a homeowner (with a phase of quasi-homelessness in between). But this year, I still had some adjusting to do, and it will probably come as no surprise to anyone that I went well over budget!
Here's the data:

Category Actual Budget Variance % Var
Taxes $29,070 $24,504 $4,566 19%
Housing $19,241 $16,812 $2,429 14%
Dining $7,984 $7,200 $784 11%
Household $7,980 $600 $7,380 1230%
Travel $3,354 $4,032 -$678 -17%
Clothing $2,940 $1,800 $1,140 63%
Misc $2,478 $1,500 $978 65%
Utilities $2,445 $2,400 $45 2%
Gifts Given $2,300 $1,200 $1,100 92%
Gym & Fitness $1,199 $1,200 -$1 0%
Medical $1,029 $1,227 -$198 -16%
Subscriptions $969 $924 $45 5%
Education $421 $540 -$119 -22%
Charity $343 $300 $43 14%
Home Insurance $320 $400 -$80 -20%
Entertainment $291 $600 -$309 -51%
Home Repair $290 $0 $290 n/a
Bank charge $78 $72 $6 8%
Total Expenses $82,622 $65,311 $17,311 26%

A few notes:
  • Taxes: My income went up slightly, and I got a bigger bonus than expected, so taxes were higher.
  • Housing: As I've mentioned before, my property taxes were out of whack as a 421a abatement hadn't kicked in yet. Also, this figure does not include the portion of my housing costs that goes towards my mortgage principal, as at least by some reckonings, that is money that I still have in my net worth in the form of home equity. I do include this part of my housing cost when I am looking at monthly spending budgets, though, since I do have to make sure I have the cash to pay it!
  • Dining: Always my bête noire, dining continued to be a big expense this year. I am happy to report that I do not weigh 14% more than last year, though.
  • Household: As you can see, I was still buying furniture and various items for my new home. The biggies were a bed and mattress, a bookcase, and DIY custom closet shelving. This category also tracks little things like laundry.
  • Travel: My big New Zealand trip was actually not that expensive, since I used frequent flyer miles for my ticket.
  • Clothing: I really needed some new ones, considering I didn't spend much on clothes last year. Also, I became single again and needed to start thinking about more colorful feathers with which to attract a mate.
  • Miscellaneous: This was mainly thrown off by my purchase of a new Treo and some related accessories.
  • Gifts Given: This includes a $1,000 savings bond purchased for my nephew, which won't be an annual occurrence.
  • Entertainment: Funny, I didn't spend much but I haven't felt the least bit bored this year! I think I budgeted higher after buying theater tickets last year, but this year I didn't do anything that expensive and mainly entertained myself by reading free books!
  • Subscriptions: I subscribed to a couple new magazines in order to get some decorating ideas, but I've let them expire without renewing, as I didn't find them that valuable. One of them was Martha Stewart's Blueprint magazine, which I just heard has folded anyway-- good thing I didn't renew! The person who told me this said they would have substituted another Martha Stewart magazine for the rest of the subscription. I had to laugh at the idea of getting a forced subscription to Martha Stewart Weddings! What would my mother say if she came to visit again!?!?
  • Charity: I had wanted to increase my giving a bit, and did so. (This doesn't include the donations I do with all the proceeds from this website.) I still don't feel like I'm giving a huge amount, but I think I'll be in a position to prioritize that more later in life.
  • Home Repair: You're probably thinking "huh? She lives in a brand-new home, what could possibly need to be repaired already?" This category might overlap somewhat with Household, but I had intended to use it to track things that would go towards the cost basis of my home if I were to sell it. These are supposed to be things that permanently increase the value of your home, that can't be taken with you when you move. The IRS doesn't seem to give any more specific guidelines, but I may have to go back over my receipts from Lowe's and Home Depot, etc. to see what really counts and maybe recategorize some things.
  • Bank charge: I thought that seemed high until I remembered that I pay an annual fee for my credit card, which is now $60. That seems kind of annoying but I do earn a ton of frequent flyer miles on that card, and use them for things like tickets to New Zealand which cost way more than $60.

Stay tuned for some further analysis on how my spending changed from 2006 to 2007, and how I'll finalize my budget and goals for 2008.


Noel Larson said...

If you take out Household, you did really well!

Everyone underestimates what it will take to run and be in a new house.

Good job!

Anonymous said...

I laughed at your gym budget. You estimated perfectly!!

I also like your comment about colorful feathers. In the animal kingdom the male always has more colorful "feathers" than the female, but as humans, the females are always the ones being colorful.

Thanks for sharing your income/expenses.

Anonymous said...

Wow, thanks for sharing this. Its really great work and gives me some insights into my own budgeting tasks.

One comment though...I don't think you are budgeting enough for household and home repair. Even if your place is new now, there are always things that will need to update/replace. You've got a total of $600 for the year for both categories...unless you beef up that budget you're always going to overspend (as the previous poster mentioned...everyone underestimates these things when they buy their home...but its also one of the joys of owning vs. renting, getting to change stuff to how YOU want it vs how the landlord wants it!) I usually budget $1000 for misc home repairs, and think of one or two upgrades/home projects I want to do, and budget the costs for them in as well. For example, this year I want to replace the interior doors of my condo with paneled doors, and get new shutters made for the windows. I've got at least a rough budget in there to cover these. Any other projects, will wait for 2009!

Madame X said...

Yes, I did know my household budget was going to be way off-- I guess I sort of mentally budgeted for having to buy more furniture, and I did have some money left over from last year's budget, but I never actually committed to it in Quicken! Which is sort of a dumb way to handle things, I guess!
And yes, the gym budget was a fluke! It includes things beyond my annual gym membership so it's not like I knew it would be a specific amount.

Anonymous said...

What falls into the subscriptions category? It seems impossible that you could spend $969 on magazines alone!

Madame X said...

Subscriptions includes delivery of the New York Times every day, which is about $40 a month. Internet access also goes in there, at $20 a month. Then I get the New Yorker and TimeOutNY, which I think I may have renewed for 2-year periods this year, and I tried subscriptions to Blueprint, Domino, and Real Simple that I just let expire. And I bought maybe 2 or 3 random magazines on news stands, and occasionally the Wall St. Journal. It all adds up fast!

Andrew Stevens said...

I have a very minor complaint. I'm a statistician and the word variance has a very particular meaning in statistics which doesn't apply here. A better word for what you're calculating here is "difference." This is purely cosmetic and you should feel free to ignore me if you have a strong preference for the word variance for some reason.

Anonymous said...

that's a very detailed list. I wonder how could a Filipino afford to the same budgetting. Or if we can have the same budget as yours to manage.

Thanks anyways, I learned a lot from just understanding the importance of which should come first to my budget list.

Anonymous said...

$343 to charity on a 90k salary is mighty low. How much to donate to charity is a personal decision

Still, at 90k/year you are making more than most people if not most households, yet may be donating a lot less than them. It just appears troubling that on your list of expenses, charity is scraping bottom. Food for thought.

Anonymous said...

Wow your tax rate is great! $29,070 on $126k of taxable income is 23%. I just checked my pay stub and I also made $126k of taxable income but I'm paying $36.5k in taxes (29%). Congrats sending less of your money to the govt. than me.