Creating Our First Ever “Real” Budget Was An Eyeopener.

When we started looking at real estate a few months ago and started to get our finances in order to apply for a mortgage, we did what we had never done before – create an actual budget. Sure, we kept loose track of our spending and I knew pretty much what went out the door each month, but we had never created an actual spreadsheet with real, concrete budget numbers in it. Back in July I wrote about the free Google Docs that were available, and that is where I got my budget template that we have been using that looks like this (those are generic numbers in the sheet, not mine):

It is unbelievable how much money you spend when you start tracking each and every dime! You always think of the big things; rent, mortgage, cars, insurance, food – but what about the incidentals that rarely get included in budgets when you are trying to sort out how much you can spend. In August, we managed to spend $86 on clothing, $150 on a composting bin, $68 at the hardware store, $45 on books, $36 on some hobby equipment, and a few other “unplanned” expenses. That was at least $385 in money that was not included in the initial budget but was spent anyway. The little things do add up, especially when you do not think of them as you plan out your spending for the month. And while we have the money to spend on these type of things, keeping track of them really opens your eyes to how much goes out the door unnoticed!

Without getting into personal specifics, our recurring expenses every month include the following:

Rent: $1,000
Car Payment: $317
Renters & Car Insurance: $97
Electric: $50
Gas: $30
Water/Sewer/Trash: $58
Phone: $30
Satellite: $67 (Because DirectTV ripped us off)
Internet: $50
Cellphones: $118
Gasoline: $150
Web Hosting for my businesses: $199
Groceries: $550
Dining Out: $100
Netflix: $9
Student Loan Payment: $121

Total of just the above = $2,946. This does not include stuff I won’t talk here such as investments and savings, charity, and miscellaneous cash spending, but that amount is close to the bare minimum we spend each month on our “expected” expenses. But when you start tracking all the other little amounts you spend throughout the month, the dollar amount climbs accordingly. It is amazing when you start paying this close of attention!

How about you? Did you have any sort of epiphany when you created an exact budget/expense sheet and started tracking where every penny goes? Did you think you were doing better or worse than you thought you were? How do our regular expenses compare to some of yours? Let me know in the comments!

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Comments (14)

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  1. Bellen says:

    Except for food and dining out your expenses do not seem out of line. If you are trying to save money for a house, you could probably cut your food bill. If there are 2 of you, a more realistic monthly food budget would be $350. It requires cooking from scratch, buying on sale, etc. but is quite adequate. Eating out at $100 per month – sounds like 2 times a month – not bad at all.

    Water/sewer – ours is quite high ($41 monthly) but it’s because water is very expensive here, we are very conservative with water. Trash is billed with taxes but is higher than yours.

  2. david says:

    Bellen – we only buy organic foods (my health is more important than saving a few bucks) and we cook from scratch 7 nights a week, thus the higher grocery bill. We go out to 2 meals a month, as you said. It’s not that I am worried about our expenses, its that it’s amazing how much you spend when you are not tracking every penny!

  3. For me, tracking everything just helps me decide if I’m sending my money where I really want. Even a small thing, like going to the library, frees up moeny that I used to waste. It all hit home when I started wondering if I would work until I was 65 or 70 so that Barnes and Noble could make a profit! Once I framed it that way, paying myself through savings became a lot more important!

  4. david says:

    Great way of looking at it Daily Dollars!

  5. Double says:

    Setting up a budget is a great way to control your finances and put one on the path to prosperity. A budget helped my wife and I be better handlers of money and put us on path to prosperity. Tracking our expense was an eye opener as we realized that we were spending money foolishly.

    If you have a house and are paying a mortgage as well as contributing money to a pension plan, you are better off than you may think as your net worth is rising each month as you pay off the mortgage principal and invest in your pension. Net worth is the number you should be happy or sad about, not how much cash you have at the end of the month after paying your expenses.

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  9. Drew says:

    When I created my first budget, I didn’t realize how much money I was spending on food! I knew I spent roughly $40/week on groceries, but I was eating out WAY more than I realized, and basically throwing money away. Taking in to account the fact that I like to leave larger than average tips, and it really brought into perspective the benefits of cooking at home.

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  11. j. Garcia says:

    I used mint.com to track my expenses and it really helps!

  12. Leslie says:

    Wow, I’m just stunned at your webhosting. My husbands site is hosted for about 20$ a month. Yours must be far more involved….what does that $199 include? (is that monthly?)

  13. david says:

    $199 for a private server (only my sites are on it), with a 24/7 tech guy that can fix anything in minutes, do my installations for me, and is always up and running, is worth it. I don’t have to share server space with anyone, and I have all my sites hosted with them. So, $199 is my total business expense every month for how I make a living 🙂

  14. Nico says:

    Wow, thanks for sharing! It’s good to get some inspiration over budgeting!