“A Mark, a Yen, a Buck, or a Pound”

The art is not in making money, but in keeping it. –Proverb

My astute friend, Danosaur, recently observed that I apparently have an obsession with money and what people do with it.

I will not try to dispute it.  It’s totally true.  Along with discovering obsessions for cooking and gardening, I’ve also come to be extremely interested in finances during the past two years–especially family finances.  The everyday, the monthly pay checks, the grocery bills, the percent saved; that’s what really interests me.

I’ve figured out our own family finances down to the penny and I did that pretty quickly seeing as we don’t really have many of them.   Convenient, that student poverty thing.  Then, I turned my focus to other homes.

Anyway, I have noticed, to my chagrin, that discussing family finances isn’t really what is done, if you get my drift.  You can be humming along at a nice clip talking about low-risk mutual funds, but as soon as I ask, “So, now, what percentage of your income do you spend on housing?” it shuts down pretty quick.  A lot of vague vocabulary rather than dollars, to tell you the truth.  “We’re doing alright.”  “Oh, it works out.”  Pish posh.

Americans–we’re weird like that.

Anyway, I just wanted to give a snapshot of my own family finances for anyone out there who may be as curious as I am about the whole thing.  I find I’m noticeably less squeamish about “outing” myself.  Meh.  So it goes.

So far, in 2010, Atticus and I have an:

Income of approx. $25,000

And from our income, we’ve been spending:

27% on Tuition

22% on Auto expenses (We’ve been paying double/triple car payments each month to pay it off faster.)

21% on Rent

14% on Food

10% on Tithing/Donations

4% on Cell phone and utilities

2% on Misc.

As you can see, that last 2% is where our “disposable income” resides.  Well, that’s not totally true.  That 2% is where we pull our insurance from too.  It’s also the only place we can save from.   All other categories are “needs.”  Yeup, we sail a tight ship around here.

Isn’t it interesting to think about though! I mean, maybe it’s the cultural historian in me, but a list like this says so much about the people it’s linked to.  It says so much about a lifestyle and priorities and how people “made do.”  It reminds me of the summer I got paid to analyze the tax records of a tiny village in 1800’s Pennsylvania.  Best job ever.

This is the person I am.  I’m crrrrazy.

So hey, here’s an offer.  We’re all floating in the possible anonymity that is the internet right now.  I want to hear about all your finances–and I won’t even have to know who the heck you are!

You can give me a fake name and a fake e-mail address.  Totally cool.  I just love seeing how others are managing their money, what they’re trying, what’s working, what isn’t…anything!

The only rule is–no vaguery allowed.  We’re talking dollars and cents today.

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20 Comments

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20 responses to ““A Mark, a Yen, a Buck, or a Pound”

  1. I think I could guess better on a month-by-month breakdown rather than a yearly breakdown, but my numbers will still be super inaccurate since Mike takes care of most of this stuff. (Not a gender thing: I’m super cheap and money stresses me out. Mike finds financial planning fascinating.)

    I bring home about $3600 a month. Mike brings home…I’m not sure, but somewhere about $3300 a month. My monthly income varies depending on how much I work, since I’m hourly and eligible for bonus shifts; I’ll bring home probably $4500 in September, but the average month is definitely more like the number cited above. Now I’ll make guesses at the categories. Actual expenses are easier for me than percentages; sorry.

    Tithing: 10%. The only actual percentage:)

    Rent/Utilities $1255/month on rent. (We’re thinking about moving to a cheaper place soon, but that’s not even so bad for Berkeley.) $25/month on utilities, and another $25/month on phone and internet. (I think; I pay the rent check and the utilities, but Mike pays the phone bill.)

    Food: We spend somewhere in the neighborhood of $150-$200 on actual groceries each month. I eat breakfast and lunch at work and usually just snack for dinner, and Mike usually eats out for lunch. I’m honestly not sure how much his daily eating out costs. If I had to estimate, I’d say he probably spends $5/day on lunch…so $100/month? We also order takeout or go out to eat occasionally, to the tune of another $25-30ish per time, maybe twice a month.

    Laundry: We do maybe 2-3 loads of laundry a month and I take the rest in to work. Maybe $10/month?

    Transportation: I spent, on average, $120/month on BART tickets for my commute into the city. I never drive or fill up the car (gosh this is starting to sound like the most anti-feminist thing ever) and I wasn’t really heavily involved in the auto insurance decision, so…I think we pay $100/month in auto insurance and maybe another $100ish on gas? Mike fully owns his car, so that’s not an expense there, and I fully own my bike:) I wish I didn’t spend so much on BART tickets, but there’s not a lot I can do about that. I do work from home once a week, on average, so that saves a little bit on my commuting expense.

    Savings/Retirement: Mike puts away a hefty amount of money each month into different accounts for savings and retirement. I think between his retirement, my retirement, his savings, and my savings we have about $100,000, but I have no idea how much is being put into each of them on a monthly basis. A pretty decent chunk, though, because when we got married a year ago I had $50,000 in savings and Mike had about $30,000 in retirement, so we’ve probably put away another $20,000 in the past year.

    Insurance: I don’t pay for insurance through work, but Mike has been paying about $100/month to insure me on his work insurance (because when the decision time came around I was still in school rather than working).

    Miscellaneous: We’re debt-free and while Mike is entering school he has a fellowship which will pay his tuition, so I think most of our other monthly expenses would go towards “miscellaneous.”I spend…I don’t know, maybe $100/month on miscellaneous things (clothing, gifts for soon-to-be-married friends, books from the used bookstore, medical prescriptions, etc). Mike spends probably that amount, too, I’m not sure.

    That’s a pretty long comment, but hopefully it should be specific enough for your interests. I think looking over it this is what I’d say about us financially:

    a. We’re in an awesome place right now, especially considering that I just got out of graduate school and Mike is just starting graduate school. I got very lucky in having generous funding for my program, and managed to save up a lot (see above!) while I was in school. I’ve also maintained my frugal habits while working so while my income has increased after leaving graduate school I don’t think my expenses really have. Mike is really concerned with having retirement accounts, and I’m really concerned with having savings “for a rainy day,” so we’re doing really well on that front. We could probably be more frugal about certain things–I’m kind of mad that Mike is going to be paying so much for health insurance now that he’s a student, for instance, and I’d love to encourage him to cook and bring lunches instead of eating out all the time–but it’s certainly not like we’re spendthrifts who are going to get in trouble, no matter how “loose” the ship might feel to me. (That just feels gross to say.)

    I feel like it’s also important, when listing our financial priorities, to mention things like the trip we just took this summer; I think we probably spent around $5000 for the two of us to go to the Middle East for three weeks. It was definitely expensive, which stresses me out, but definitely also worth it, I thought. I’m also planning to go to Hawaii with him this December, which will be another $500 or so, probably. For me it is totally worth it to live in a “meh” apartment and not drive a car and etc etc but get to travel when I want to.

    Interesting topic. I really hope other people post!

  2. Istykray

    You and I, we’re kindred spirits this way. I love money business. And thanks for this post, because I’ve been behind in my financial awesomeness for the last couple of months and needed a kick in the bum to get me to start catching up. So thanks for the kick.

    Annual income: right around $45,000

    Mortgage/HOA: 25%
    Savings (mutual fund): 25%
    Food: 9%
    Utilities: 4%
    Retirement: 13%
    Tithing/Donations: 10.5%
    Auto: 4.5%
    Everything Else (diapers, travel, home improvement, clothing, gifts, etc.): 7%

    So we try to keep our ship pretty tight as well, especially the “Everything Else” category, because we are saving to buy a house with cash in ten-ish years (or at least a big down payment). Plus, poverty is virtuous, right? Way to go, paying your car off early. It makes a HUGE difference to not have a car payment anymore.

  3. Pinto

    Petra: This is awesome! Thank you. I think you both are totally in a good place. With Mike’s stipend and your sweet, sweet job at the Facebooks–even with the Berkeley prices it sounds like it isn’t that straining. The wiggle room to travel is definitely what I wish we could afford right now.

    Also, I’m totally lusting after your savings/retirement. I do have a mutual fund account that has been hit hard the past few years but still has about 50K in it right now. Sad part is that 30K of that is going to go back to my parents for the expenses they helped me with in college (clunker car, study abroad, Boston moving and living, etc.) once it gets up past $15 a share. So…not as cushy as it may sound. Someday…someday…we will both have real jobs.

  4. Pinto

    Isty: I think that’s amazing that you can put 25% into savings and THEN another 13 into retirement. Are you doing a 401K deal through an employer or on your own or something? This, of course, is a world that we are nowhere near to being a part of, but I like to learn about my options.

    And thanks for posting annual income. I should have put that we’re looking at an annual income this year of: $34,000.

    Having that extra $10,000 you’re getting would be so nice but I also have to keep in mind that we don’t have any children and that would probably put a big dent in that surplus.

    Or not? I don’t know. I’ve heard both that children are very expensive and that children don’t add that much expense. That mystifies me to this day!

  5. Istykray

    Our retirement is a pension program, so they take 11% out whether we like it or not, but we also have a 403B (like a 401K) that we voluntarily contribute to through his work and a Roth IRA on our own. We’ve been really favoring the Roth lately since we’ve paid so little taxes anyway and it’s tax free at retirement time, but as we move up in tax brackets we’ll lean more toward the 403B to try and minimize our yearly taxes. Anyway.

    I think you’ll find that an extra few thousand a year can really go a long way, even if you have kids, and actually especially if you DO have kids. I find that they cost very little for the first year or so and besides being a joy in our lives, the tax breaks are amazing. Amazing. Like I was sad that my due date was in January instead of December because I’ll have to wait a whole year for the tax break. :) But as they get older, things do get more expensive, so the time to save is NOW.

  6. Danosaur

    I think an interesting question would be why money is such a touchy topic. Obviously it’s personal, and personal topics tend to be touchy, but even among close friends and family things get a little awkward. Thoughts?

    I don’t have my PC on to do the financial breakdown (Quicken resides there) but I can tell you that we’re 50K+ in the hole at this point with no income in sight for another 9 months. But fortunately that debt has so far financed four years of medical school and should carry us through until the first paycheck so I count us lucky that it’s as small as it is. If I had had the foresight to pursue a more lucrative major it would probably be less, but I suppose that’s water under the bridge now.

    It would also probably be less if we hadn’t done as much international travel and/or holed up in a cheaper home ($975/mo for 3 bedrooms and a garage), but to me those things — unlike a second car or a lot of clothes — are worth it.

    So sorry for the vagueries, but if I recall you asked me this question in person a while ago…

    And on the children topic: besides medical care, most of the hefty childcare expenses aren’t really needs. Poor people have been putting babies to sleep in drawers for ages. And if you’re poor enough for government assistance, the medical care doesn’t even cost (a salary of under 30K in Texas is poor enough for a pregnant woman). And the tax refund is amazing. I had to collect my popped-out eyeballs off the floor when I saw the return we were going to get for (1) me working [Earned Income Credit], (2) husband in school [Lifetime Learning Credit], and (3) having had a baby in December [Child Credit]. It was somewhere in the neighborhood of $4000. Even after going all-out and buying a really cushy rocking chair for $250, Maren has still been a net profit for us so far.

  7. Here’s how I run my finances:

    I am currently saving about 250 bucks a month (give or take 100 if I have fewer sub shifts). And spending all the rest. I don’t track my spending because it sort of stresses me out and because, I feel, if I’m saving a reasonable amount, I should just let things flow, as it were. Of course, this is only possibly supported by the fact that my tuition right now is all loans all the time.

    But, for curiosity’s sake about a year ago, when I quit my real job I had the following

    I had a take home of 2300 per month (after 401K, taxes and insurance and all that jazz. I was socking away 8% a month for 401K).

    10% Tithing (plus $25 per month for fast offering)
    9%ish (200 per month) went to savings
    30% was allocated for loan repayments (car, then student loans)
    20% was my discretionary spending (which means meals I paid for, clothes, random stuff I just wanted, etc.)
    5% was for gas

    And I have no idea what the other 25% was doing. No, really, I don’t. My budget was worked out that way, so that other chunk was a cushion for when I failed to stick to my 20% discresh, just sat in savings, or was used for one-off situations like trips to Kentucky. (the idea was it was my cushion to deal with strange circumstances in a month, like needing an oil change or a doctor’s visits/meds or other similar infrequent scenarios).

    I had no housing expense and few food expenses (thanks, mom and dad!), which is what made my situation tenable.

  8. Oh, though here’s a fun fact! In November/December 2009, McDonalds accounted for 17% of all spending on my credit cards.

  9. Kent

    Ok. Ask and ye shall receive.

    I also enjoy keeping tabs of finances. To be honest, calculating what our income is somewhat dicey. Going by our AGI from income tax returns, in 2007 and 2008 it was 38k a year, and last year was 46k (stipends increased about 2k for each of us, and I did some extra work for a research project on World Bank funds that was about 5k). However, we have a rental property (we own a triplex and rent out the other two units), which on tax records gives us a lot of great tax breaks (mortgage interest, home repairs, even mowing the lawn become business expenses – well, 2/3rds become business expenses, and don’t forget “depreciation”), so usually we technically “lose” money on our rentals, even though that isn’t really the case. Our stipends are about 20k each, and we get rent of $11,200 a year from the two units. This year we’ll get a bit more since I worked over the summer (5k) and got a summer research fellowship (we get one while grad students, and I just elected to take it this year – another 5k), so just taking our incoming revenue (prior to any taxes or anything) would probably put us at about 61k this year.

    Last year we paid:

    About $12,000 in mortgage payments, property taxes, and home insurance. Of that, $7500 went to mortgage interest, $1540 went to principal, 1900 to property taxes, and just under $1000 to home insurance.

    About $3200 in income tax.

    $7500 in charitable contributions, of which $5400 was tithing.

    Around $5400 on car stuff, of which: $1750 on gasoline (seems like a lot), $2500 for our Mitsubishi Mirage, since we needed a car that can handle a car seat (paid cash), $560 on car insurance, $500 on car repairs/inspection, etc.

    $4500 on travel – plane tickets, hotels and stuff in China for three weeks, wedding in Utah, family reunion in Alberta.

    $2700 on groceries.

    $1040 in restaurants.

    About $400 for medical stuff.

    About $4000 other shopping and expenses(electronics, clothing, home stuff, random payments for school, textbooks, my Economist magazine subscription, going to the movies or theatre, etc.).

    $2800 on Utilities and cell phone (we need to insulate the house better…..)

    And whatever is left over went to savings. I keep track of monthly changes in our “net worth” (although it is a bit dodgy given I really don’t know what our house is worth), but last year it went up by 15k.

  10. Pinto

    Waaa! Soo many comments.

    Okay, breaking it down:

    Isty: Question for you. Do you have any advice about how much to save for a home downpayment? What are you shooting for and why?

    Danosaur: I think money is so touchy because Americans are obsessed with the idea that class/societal respect=money. But, at the same time, since we are American rather than fully British, it is also tacky to look braggy about any money you do have. So we’re all just paranoid schizos.

    Thanks for the comments from both of you about the children question.

    Alea: You’re crazy–17%!!!??? And how is the loan payment thing going? Do you not have to pay them right now since you’re back in school?

    Kent: You guys have some pretty sophisticated stuff happening what with your mortgage and rentals and all. I’ll pose the question to you too–what’s your view on having a child? Hit to the pockets or not?

  11. Pinto

    Also, I wanted to offer these facts too for perspective–maybe better for understanding than percentages.

    We pay per month:

    $565 for rent and utilities
    $600 for car payment and gas
    approx $250-300 for food (restaurants and grocery)
    $130 for auto insurance
    $75 for phones
    $200 for miscellaneous

    Yeup.

  12. Kent

    Having a child is definitely a hit to the pockets, at least for us.

    For comparison, last year from Jan. to Aug. our net worth increased $8800. This year during the same period (Isaac was born in Jan.) it only increased $4300.

    The total out of pocket for him getting born was about $1500, his health insurance isn’t covered out of our stipends, and that is $1804 a year (makes me want to go back to Canada…..). Plus we’ve started daycare for him, which goes from Sept.-May and is $904/month. Luckily Duke gives us a $5000/year childcare subsidy, which helps out a lot – but even with that we’ll be paying $3000 a year for childcare. So after the entire business of just bringing him into the world, we are looking at an addition $5000 a year.

    Other than that he hasn’t yet increased costs for us for food (breastfeeding’s pretty cheap), etc. We really haven’t had to buy many clothes for him since we were given so many from people. Diapers and stuff cost some money, but they aren’t terribly expensive. For us the big hits are health care and childcare at this point.

    Of course – things would be different for many people. If you are poor enough, you get Medicaid. And if you have a stay at home parent then you obviously don’t pay for childcare.

  13. Istykray

    We are shooting for paying for a house with cash, because why not? Read Dave Ramsey for more on that. I think it’s just a matter of managing your wants. Because really, a larger house most often is a want rather than a need, no matter how much the small space drives me crazy. Once we sell this place, we’ll probably rent a series of slightly larger houses for about the same amount as our current mortgage plus HOA, and in ten years, if we can’t pay with cash, we’ll at least have enough of a down payment to only pay 5-15 years worth of interest rather than 30.

    But if you don’t want to be so extreme and just do your traditional down payment/mortgage thing, a 20% down payment is a great minimum, even though it seems like a lot, because then you don’t have to pay mortgage insurance, which is a nice chunk over the years. We got into this place, though with, like, less than 1% down payment. I can’t recommend it. Renting is great, from where I stand.

  14. Istykray

    Also, for the record, I don’t believe in accumulating equity by owning the series of homes you live in. Because it’s not like you’ll stop needing a place to live. I know it CAN work, but I don’t think it’s a good way to use money. I’d rather invest in the stock market with the money I save from not owning and maintaining a house.

  15. Rachel

    Wow, these posts are fascinating. My nature tends toward desiring an actual budget, but given my financial situation it is impractical — so I’ve worked out this system:

    My income changes month-to-month/semester-to-semester, so my “budget” is simply minimum-fixed-expenses (a.k.a. “I need to make $1250/mo. to cover rent/food/gas/cell phone/misc.bike-repair&household supplies” — I give myself a generous food allowance of $400/month, which I rarely usually spend up).

    I just try to have one job that will cover rent, one job that will cover food/gas/phone, and one that just goes directly into savings — and then whatever I make in tips from week to week is misc. money with the leftover from rent-job, food-etc.-job and unspent tips going into savings (which are mainly laddered CDs) or I throw at my undergraduate student loans while they are still in graduate-school-forever-forbearance (I’m determined to mainly pay them off before I graduate).

    When I have a teaching gig at UMB they grab money for some forced retirement fund somewhere, but the last time I got a statement the account fees were actually more than the interest accrued — so I opened a Roth IRA CD last year for retirement (I don’t trust the market — but I do trust fixed interest rates).

    One day I aspire to having a real more-than-one-semester job where I can actually have a fixed income and discover what percentage of my income goes to each category. All I know is that housing is roughly 40-45% of my reported income… (I can’t really calculate food because I often gather free food from various sources — mainly what acquaintances can’t eat from farmshares and destined-for-trash food from the cafe).

    How did you do all of your calculations as a grad student?

  16. Pinto

    Rachel: To tell you the truth, I didn’t really pay attention at all in grad school. Shame shame.

    My first year, I was the GA which meant I got my health insurance and tuition waived with a “stipend” of about $140/month (hah!). I paid for housing/books/food/transport out of my college fund from my parents and I couldn’t even begin to tell you what that amounted to.

    I ate out a lot in Boston and my rent was $600/mo. I also actually bought clothing now and again, which is something I literally never do now. So…maybe I spent about 1300ish a month?

    My second year I had the CURA grant which was very VERY generous in my eyes. I remember never pulling from my college fund that second year and still having enough money at the end to move across the country and pay for various wedding stuff (dress, flowers, photographer). I think it included health insurance, tuition, and a $20,000 stipend for the school year. Woo! Spoiled.

  17. Pinto

    Isty: I’m with you on the home-owning equity scheme. It gives me ulcers just thinking about the possibility. I’m way interested in your home owning plan too. Thanks for mentioning that author–I’ll look him up for sure.

    Kent: Thank you for your run-down of how your baby has affected your finances. I know that Paul and I are looking at needing some form of child-care at some point and so your numbers are really helpful in imagining it. Also, the price of actually being in labor is a big concern for us too. We have good health insurance now through my job and Paul’s school, but we don’t know what we’ll have after next year when we will probably move. So…it’s something we think about in our family planning conversations.

  18. to answer the query on the loans: yeah, they went back to “in school” mode, which I don’t really understand, as they were already consolidated. Though, not that it would matter much, when I called up to ask another question I also asked the servicer when my next monthly payment would be due (since I’d be paying extra every month). It was sometime in 2013. So, I could probably have dealt with them being in repayment mode.

  19. kia

    Pretty much since I was a baby my parents made me keep track of my money and I was just realizing that I have Quicken data that goes back more than a decade. However, now that I’m on a fixed stipend for the next 8 years it’s kind of nice because my budgeting is on autopilot and I don’t have to spend much time thinking about it. My program pays for insurance, tuition, and all school fees, so my expense breakdown is simple. Here it is (in order of percent of income):

    Yearly Stipend: $25,500

    Savings: 24% ($500 month)
    Rent: 18% ($375 month)
    Discretionary: 17% ($350 month)
    Food: 12% ($250 month)
    Charitable Donations: 11% ($234 month)
    Income Tax: 8% ($2000 year)
    Utilities: 5% ($100 month)
    Auto: 3% ($70 month)
    Recreation: 2% ($50 month)

    I’m really lucky because I have no debt from college and am actually saving quite a bit while in medical school. My rent is so cheap now that it isn’t worth buying a house, so my goal is to save up for a hefty down payment once I’m done with school. In the next month or so I’m also going to open a Roth IRA since my 403b is no longer an option since I’m not working anymore. I plan to divide my savings between retirement and future-house funds. I’m also thinking about opening a 5 year fixed-rate CD to put my future-house funds into since I won’t be needing them for a while, and the interest is definitely better than my savings account. I’m also considering a money market account, but I’m not sure if I that would be a smart move. I definitely need to do more research on that front though. If anyone has any other suggestions on where to invest wisely for retirement while in school, or how to best grow short-term savings please let me know.

    Moving on. My discretionary funds include travel (I try to get out of town whenever we have a break), clothing, occasional medical expenses, and I saved enough last year to buy a beautiful new road bike which is the love of my life. As far as food, I could definitely save more money if I didn’t eat on campus so much, but when I’m in lockdown study mode, not having to worry about grocery shopping or cooking is worth the extra expense to me. As far as the other categories go, I usually bike everywhere so I don’t spend too much on gas or auto maintenance, and my recreation expense includes gym membership and the occasional bike expenses, kayak rentals, race registration fees, etc.

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