June Finances

These are exciting numbers for us.

To be close to 40% of take home pay in savings is beyond what we had expected. A few things have helped. The taxes here have been less than we estimated, we chose a smaller rental apartment with lower rent and we haven’t bought a car.

June wasn’t a great month for casual spending or eating out. With a touch more planning and frugality we’ll be saving even more. We also purchased our tickets to Dublin out of our general spending but from here on out all travel will come out of our separate travel savings account.

So far so good with the reverse budgeting. Where I see stumbling blocks is when we have bigger or unexpected expenses. But at the moment we would rather throw as much as we can into savings and then dip in when something arises. Here’s a breakdown of percentages of where our take home income went last month:

  • Savings: 37.3%
  • Accommodation: 28.6%
  • Food: 13.8%
  • Travel: 6%
  • Eating Out: 4%
  • Grooming: 4% *Bought a UK hair dryer and flat iron – normally this would be 2% at most.
  • Transportation: 4%
  • Casual Spending: 3%
  • Dry Cleaning/Clothing Repair: 1%
  • Child: 0.5%
  • Misc: less than 1%
  • Charity: less than 1%
  • Gifts: less than 1%

Savings: I’ve included the total percentage of savings but this is actually split into three categories/accounts. We have General Savings, Travel Savings and Education Savings. I’m officially saying we are saving now because we have enough in our accounts to pay off our final consumer debt.

Accommodation: this includes utilities and phone/internet.

What always surprises me is how much more we spend on groceries than I expect. We are spending 100-200 pounds more than I had initially estimated. I always forget that you need to stock up at least once a month on staples like toilet paper and dish washing soap. What category do you constantly underestimate?

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  • I find that food is the most “variable” expense; still we are doing pretty good. Our other expenses (inclusive rent, childcare, insurance, retirement and education savings, loan payments) are fixed. We are very conscious of our transportation costs, not much to change there. I don’t do the reverse budgeting, it would help with my special occasions and entertainment costs (birthday, gifts, zoo, theatre, books); ironically, I usually set a budget for those saying like ” we should not spend more than $XX at the Zoo”. These end up being more than my estimates, we rather spend money on experiences (ride on the camel vs. stuffed toy). Our variable income covers higher entertainment costs in the summer and we have beefed up our savings as well. We are saving for my plane tickets for a visit back home in October in a separate account.

    • It’s nice to variable income that you can spread out for unexpected times. We have a bit of that too and it’s padding our checking account back in Canada for our mortgage shortfall. If I have a bit of writing income we will throw it in there as well.

  • Food/hygiene/household items are the only area of our budget that I underestimate. I lump them altogether because the purchases are made at the same store. The prices keep going higher and higher, so it’s hard for me to know exactly what things will cost. Since we underspend on utilities and gas for the cars it’s not such a big deal. My husband got a nice raise at the first of the month, so I plan to use part of that to just increase our food budget.

    • Sadly, food costs are just as high here as they were in Vancouver.

      Congrats on the raise =)

  • YUP. Food/household supplies always seem to cost more than I expect. I think I overspend on food because it’s a necessary expense so I justify spending a little more money.

    • Same. I’ve been enjoying the free range eggs here. They aren’t as expensive as they were back in Vancouver so I have justified the cost.

  • Household expenses are always the area we have difficulty planning for too! It always seems like we run out of several items (laundry detergent and dish soap and light bulbs) at once! I’ve been trying to make some cleaning supplies to save money in this area lately – it helps but after budgeting for almost 2 years I still struggle with this category.

    • The last tenant left a bucket of cleaning supplies but when they run out I am moving to vinegar and baking soda.

  • I realised the other day that I ate $8 worth of fruit in an afternoon. Not good. So easy to overspend on groceries but what is actually essential? I hate the cheap feeling that comes with telling myself spend $4 on salsa isn’t a good choice. Like, if I’m cutting back on condiments and fruit, where does it end? Am I stealing napkins to use as toilet paper next? I’m sure I could spend half as much on food but the food would be boring.

    • Been ordering exotic fruits through grocery delivery. It’s my splurge now that I am off chocolate during the week.
      If you’re staying away from grains your grocery bills will never be truly cheap.

  • Household expenses are tough to nail down. They vary so much each month, as it’s not like everything runs out at the same time. Also, unless we are in dire need of something, I try to buy it based on when it’s on sale; not when we’ve run out. For example, whenever toilet paper hits $5.99 for 24 rolls at Safeway, I always buy some and stow it in the laundry room.

    I try to stock up on essentials (cleaning supplies, paper products, light bulbs, filters) whenever they’re on sale – the better the sale, the more I buy – so there are things that we sometimes go a year or more without purchasing, but occasionally it’s a huge upfront expense.

    • Same on the toilet paper. They seem to run it half price every 6 weeks or so at London Drugs and Shoppers. I was also a fan of the Costco Kirkland brand TP. Use to rest it on the handle bar and top of canopy of the UPPA stroller and roll it home.

      Over here they do a two for one deal so I just stocked up.

  • A long way for us to go down on the numbers on groceries and going out food. So hard to keep “control” with the partner. Especially when all his life – 32 years – have learnt otherwise. He is much better, but sometimes we slip.

  • My least favorite (and usually underestimated) category is the bigger items that must be replaced but are not on a set schedule, like cars and computers!

    • We need rain jackets. Not as big as a car or computer but they will run us a pretty penny. Thinking I will keep an eye out in the Thrift stores here and if we don’t find anything by September we will bite the bullet.
      Oh, and my laptop is acting up. But I can’t even think about that investment.

  • Food is a difficult category for me as well. Especially to choose between cheap vs. organic food. Usually I start the month with the cheaper foods, and if halfway through the month we have enough money in our food budget left I buy more organic foods.

  • Wow Rachel! You’re savings rate is fantastic!

    I tend to underestimate how much we’ll need for things like toilet paper and paper towels too. We only buy them occasionally, so when we run out it always seems to surprise me a little.

    Oh, and gas. I’m always disgusted with how much we’ve been paying for gas each month.

    • Thanks, Jenny. I’m so excited. We’re even looking at some cheaper rentals so we could bump up the savings even more. Fingers crossed we stay here for a few years.

  • Same for me…groceries/households are always underestimated in the budget. We’ve had to have a weekly budget for those variable items in order to not spend more than the money coming in, but it’s so hard, even when I shop at the cheaper grocery stores, and buy very simple food. And especially with two boys, who eat a lot! Anyway, I’m so happy to see how much you are saving! That is amazing! I also wanted to ask how you are able to resist chocolate all week, and do you still crave sweets on the weekend? Chocolate is my weakness, something I can look forward to in the evening after busy days with my boys:)

    • Usually I am unable to resist chocolate for 24 hours. Having some accountability with this challenge, and reading and hearing about others making changes, has given me better focus.
      It hasn’t been easy but I really want to make this habit stick.
      And yes, I still crave sweets but my evening chocolate has waned a bit since Monday. We have some goodies I will enjoy this weekend and then back to no sweets on Monday.

  • Hi Rachel…..we miss you!!!!

    One thing I started doing is doing a BIG shop for food/hygiene etc at the start of the month. I book a car co-op car and usually shop at Superstore ( the challenge of trying to save money versus the socially conscious decision of not supporting big box stores…possible blog post?). If I estimate what I will need for the month and buy those items in bulk ( bags of pasta, juice, soy milk etc) I find all I need to shop for during the month is produce and the likes. We have also agreed in our house if something runs out in the month, if it non essential then we wait till the next month.
    There have been many benefits of doing this, such as buying cheaper items at Superstore, getting a car only once a month for shopping and not having to drag as many groceries home many times in the month. I have more to choose from when menu planning and in the end I think I have likely saved quite a bit this month by doing this. I am able to get better quality produce and organic meat locally for the meat eaters in my house with the savings on other items. I am not tempted when out shopping to buy extra stuff as I have what I need already and finally less time shopping and more time enjoying life! This has worked well for me recently.

    • Miss you too! Just met a great couple from Melbourne. Really lovely and they just moved here and have young kids. Thought of you.

      You’re giving me an idea here. I think I should start doing a larger shop at the beginning of the month.Check through the cupboards for what we will run out of and buy in advance.

      Saving money vs. socially conscious decision of not supporting big box stores: been thinking about that lately here on a small island. We’ve been buying at Tesco because they do home delivery. I would like to support the locally owned chain, ShopRite. But.. they don’t have home delivery and their selection in store is limited. I do try and order local meat – the offer it at Tesco online.

      Plan must be working for you because your family eats very well!

  • Well done Rachel, your savings are great!
    The only thing I notice is that you do not have any outgoings for insurance. Home insurance (even for rental), private health, life?

    • Good questions.

      Health: we have extended private through Chris’s employer. They pay all of the deductible. Great to have should we need to urgently go off island for care.

      Life/renter/home insurance: we have a life policy back home for Chris and I and it is just under $100/month. Our insurance for the condo we still own and are renting out was about $350 for a year.

      We actually have a separate set of bills/accounts/income that is in operation back in Canada. We think it should be almost self-sustaining with the variable income my husband outside of his 9-5 job. Well, we hope. We have to cover the insurance bills, mortgage vs. rent shortfall, fee for the management of our condo and any costs related to maintenance of the condo. Obviously, we could need to send money back from the UK should anything out of the norm arise.

  • One thing that stood out to me was how little you spend on charity. Is there a reason for that?

    • Hi Amber,

      Our monetary donations vary month by month depending on asks from charities and friends. We are almost out of consumer debt and one of my goals is to give more consistently. Still working on a plan for that but I will be sure to discuss it here.

      On the topic, do you have a set amount or percentage of income that you donate? I would love to hear from others about how they decide when/how/who to donate to.


  • Congratulations on your success–yay!!

    I find that gas for the car is sadly, the area where I consistently underestimate. Full of good intentions for bike-riding, I budget for one tank of gas per month. However, there always seem to be weekend trips (errands or fun things) and days when it’s just not easy to ride with the kids to school–projects to turn in and it’s reaining, or we;re running late–and we end up filling up the tank twice or even more. It’s frustrating because there are so many areas I’d rather be putting this money. I know that if we didn’t have the car, or had it off insurance even, the temptation wouldn’t be there…but as of yet we;re just not quite ready to take that plunge. I’m impressed that you did!

    • Thanks, MM. I’m impressed with your occasional vehicle use. That is a huge decision to make as a family. We would probably be in a similar spot if we had a car. As it is, if I am running late, and the bus or my feet can’t get me there on time – we’re late or miss things. Not great. But, it does keep me on my toes for scheduling.

  • Do you divide up the types of savings that you do? If so, what percentage goes into what?

    Also, by the way that I read your post, I think you waited until you “paid off” (or had enough to pay off as you say) all of your consumer debt first? I’m going by Dave Ramsey’s plan and he says to have 1000 in an emergency fund, but doesn’t specify beyond that. Do you just pay off debt and then afterwards worry about savings?

    • Hi!! Nice to hear from you. Will have to mosey over and see how you’re doing.

      We saved 37% of income and roughly 75% of that goes into general savings, 20% into our travel savings and 5% into Henry’s college fund.

      I’m a Dave Ramsey fan but his $1000 emergency fund was really hard for us when my husband’s income was erratic. That is when we paid off the bulk of our consumer debt so I didn’t worry too much that we couldn’t manage the emergency fund. We just dipped into a line of credit if needed. Not sure that system would work for everyone.

      Now we’re working on our emergency fund as something that will get us back to Canada and that we can live off of for 3 months when/if we leave the UK. We think the goal will be to have 10,000 pounds sterling (roughly $15,000 US). Once that is stocked our general savings will be split out 50/50 to retirement and extra payments on our mortgage in Canada.

      Good luck!!

  • Definitely food costs throw me too. It is so variable and far too easy to eat out, buy coffee too often or splurge on a dinner in the city. The other would be transport – gas and bus tickets always seems to be higher than I expect for the month.

  • I like the questions you ask at the end of your postings.

    I underestimated groceries and taking lunch at the restaurants during the lunch-break.

    The biggest inpact on our groceries-spendings had the “cleaning out the kitchen cabinets”-project: we don’t buy new groceries except vegetables and diary products until we old stack is gone. Like that I also buy less vegetables, only those I use the same day.
    Like that we throw away nothing, in the past I had to toss foods every week because something always got bad. And a minimalistic fridge and cabinets are eye-candy!

    Here you can see my humble approach to minimalism:
    (we live in 620 square metres as a coupl, before Mr Paula moved in, I used to live here alone. His moving in changed the appartment to the better – less stuff, more air!)

  • I always under-estimate ‘Other’. This includes presents to take to birthday parties, medical/pharmacy costs and other random things. It varies a lot week to week, but next year when I redo the budget I’m definitely going to put medical as a separate category and maybe gifts too. At least with other I make a note of specifically what each purchase was, so when I’m re-doing the budget I will be able to see what common expenses are and approximately how much how often :-)

    Food and other grocery store products are tricky but I find it all averages out OK over the months or the whole year.

    An Australian website does a $21 Week challenge which is to feed a family of 4 for $21 for a whole week. The trick is to use up what you’ve already got lying around in the cupboards. Not recommended to do it every week, but once a month or once a quarter it’s a great way to clean out the cupboard and save some money too!

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