Wednesday, November 11, 2020

Family budget 2020 – Family budget over last 12 years.

 This is 12th year we are keeping our family budget formally, recording every expense and trying to make sense of it all at the end of the year. 

Family Independence Budget - last twelve years

The expenses this year exclude a one-off house redecoration - $60K. This is fence around the house, internal doors, wardrobes and hallway parquet replacement, repainting the walls and ceilings.  The house is a typical one for the UK of approximately 1,700 square feet.  Previous once were 60 years old, I think.  These are not registered on the expenses but something to take into account.  I think its reasonable to assume that you need to put aside at least $3K a year on the house long term maintenance. This day will come sooner or later.
Bills:  We had to outsource lawn mowing and cleaning (pre-covid19 pandemic). This was about 80 a month.
Mobile – one of the kids had first experience abroad with internet in roaming. Medical – the brackets season is over, for now.  Drugs – various creams and pandemic masks, disinfectants and so on.
Car:  Most of the year there has been one car. This led to lower milage and reduction in expenses.  Insurance column also includes the car maintenance.  I expect slightly higher next year in line with the average, as we returned to two cars.
Adults: We ate a little bit more, as all the food was indoors – no school meals, lunches at work, etc.  There is still about 1,500 worth of food at home as the emergency reserve.  We now live between two countries. One of them is more expensive than England.   
Kids:  as they were at home there was less extracurricular activities but we spent more on educational toys and books.
Miscellaneous: New laptop for kids studying at home (500), pet insurance and food (1,200). I also bought a teak outdoor bench for parents (1,200).
Home:  With my new remote assignment I started a new hobby – vinyl records. For every week I am gratifying myself with a record.  It has cost about 1,500 for about 50 vinyl records. I hope this continue into the next year.  This gives me pleasure and I can actually focus on the music, as I unable to quickly turn to next song or composition. 
Additionally, there were:  a new mobile phone (1,200), treadmill (3,000) and some furniture (3,500) and my expenses into settling in the new rental apartment (2,000).  I expect that next year home expense return to their normal average of 5,000 a year.
Alcohol: lock down was a difficult period and we intentionally reduced consumption of alcohol. I even to stop taking coffee and tea for 5 months.
Joy: less dining out and two-week trip during summer lead to good reduction.  However, now there is commuting expenses with my flying more frequently. This is additional 2,500. I sincerely hope commuting will go up next year but this is compensated by the current salary.

Summary:  Target set a year was 80,000.  This did not occur.  Overspent is about 7,000 (the commute, gardening and cleaning help are excluded. I also discounted the food prices by 3,000).  The next year I expect home expenses will be down to their average by 8,000. Miscellaneous expense will stay due to the pet.

I want us to be at 80,000 next year. Following items will be discounted: food by 4,000, home bills by 1,000. The commute to be excluded. 
What worries me, that even with inflation and buying the house the expenses rise 9 consecutive years.  This represent additional 10,000 all together

 Family independence budget over past years per category:

Family independence budget over past years per category
I invite to have a look at percentage per category comparison new locations vs. old one. Real life example cost of living comparison Chicago (the USA) vs. Oxford (the UK) based on 12 years’ average (living expenses comparison between the USA and the UK):

Family budget comparison between Chicago (Illinois) and Oxford (the UK)

 It could be clearly seen from personal perspective, why consumer-oriented economy flourish in the USA and not so much in western europe on mortgage and bills we spent almost 38% of our combined income vs. 26% in the USA.
On average, we were spending 3 times more on clothes and 2 times more on miscellaneous (i.e. electronics) in the USA than in western europe.  The kids’ chart is not entirely representative as the kids left nursery in the western europe and going to a free school.  
Consumer spending is further reduced in the UK due to the high value added tax (20%  vs. sales tax in Chicago at 10%). I really miss the Windy City.

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