Monday, October 13, 2014

Family budget comparison 2008 – 2014

Non-inflation adjusted table of our family finance for the last 6 years:
Family Financial Independence budget comparison

-         Education expenditure is up by ~$10,000.  Expect to remain stable next year.
-         Car insurance remained almost the same. However additional cost was two set of tyres (winter –summer) and annual service.
-         Miscellaneous expenditure was up due to the administration expenses (~$4,000).
-         Medical bills are up (additional dentist cost ~$2,700).
-         Bills are up (electricity and heating are up, etc).
-         Home, after extended period of time we started renewing some of the furniture – bed, carpets.  Additional electronics cost us  ~ $3,200.
-         Joy – $4,000 extra in comparison with last year. Two separate week breaks cost us $9,600 this year, which is $,2700 more than last year on the holidays. Another $1,300 increase came from random miscellaneous expenses.

For the next year, I expect to:
-         Spend more on clothes. We have been intentionally curtailing our demands but there will naturally need to buy some.
-         There will be no any additional administration expenses, dentist, less new things for home. Hopefully  any entertainment expenses will go down by $2K as well.
The plan is to stay under $100,000 a year. 

Family budget consumption categories (2007-2011 vs. 2011-2014), as percentage of total:  

Financial Independence Family budget

This is the same information presented, per category - actual expenses:
Family budget comparison over 6 years - expenses per category - Financial Independence

If you will pay closer attention, it could be noticed even percentage wise our consumption categories are changed. We are paying much higher price to maintain the same life style - house, car, food. This is not taking into account that the overall bill is much higher.   Main contributors are house rent, bills, education, home.

In the first three years about 60% or $ 40K were essentials (home, bills, nursery, car, food) , second three years  it was 70% or $ 78 K and hardly anything could be done about it.  Admittedly we are renting a $650K house, so annual rental is about 4% of its cost.

What is important, raising expenses puts additional pressure on the size of my next egg towards the financial independence. Initial goal was based on $65K expenses a year.  At $85-$100 K a year I need to save at least $3 million to be independent.

One of the possible solutions is to take on more work, I managed to get some additional days at expense of the rest time.  It will compensate some of the expenses.  I only see the money early next year and plan to invest them towards financial independence.

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