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Monday, May 10, 2021

What My Family Spends Our Money On

I don't know about you, but when I am first waking up for the morning, my thoughts can be kind of random. Yesterday morning I was thinking about the proportion of our money spent in different categories and how that must relate to our values. Following that thinking, the areas that we spend the most in must be the areas that are the most important to us.

There's a "however" to this. The expense for a couple of the most expensive categories for our budget is largely out of our control. These items are fixed in price by bodies greater than our family. Aside from this, I still think there is some truth to my morning musings. I'll list out our top spending categories in order from greatest monthly expense to least, then discuss how the order is a reflection of our families values and choices.

Taxes, that fee that we pay to government so that we can be governed -- far and away the winner for most expensive category for our household. When I combine income, property, and sales taxes, our family pays a larger share of our income in this category than any other.

Healthcare insurance -- again, another area where we have little control over the cost. We purchase our insurance through my husband's employer. We could buy insurance for myself separately from my husband's and choose a low up-front, but high deductible plan. But we choose to have the same plan for both of us, mostly because if I knew I had a large deductible, I would simply not go to the doctor. My access to medical care would be psychologically limited, whereas my husband's lower deductible plan would allow him to feel free to get medical care for himself.

Charitable giving

The next two categories are tied for 4th place.

Car insurance and food  

We live in an area with high car insurance rates, plus we have 4 drivers. If my husband and I were paying for the entire insurance on 4 drivers, car insurance would beat food in cost. However, our daughters pay the share of additional insurance to have them on our policy.

We have more control over the cost of food for our household than any of the previous categories. We keep costs down by growing our produce, shopping around for price, buying basic food items and cooking from scratch, eating at home, and having simple tastes.

Heat -- this cost is dependent on climate, home size, quality of insulation and heating equipment, and personal tolerance for cold or heat. I actually like a cooler house in winter. I like to sleep in cool air, and I find I'm more active during the day if the house is slightly on the cool side. We don't have AC, so I don't have to factor in cost to cool the house in summer.

Water -- despite living in an area known for rainfall, our cost of water is somewhat high, here. We do what we can to keep our water bill down, such as using rain barrels for some of our garden watering and taking shorter showers.  Four adults simply use a lot of water. And we're no longer willing to take extreme measures to reduce this bill. Water use is an area that we indulge.

Car repair and maintenance -- with an older car comes higher repair bills.

Internet service -- as we've seen this past year, modern lives have evolved to the point that having good internet service can be a requirement to earn a living. My husband has been working entirely online for the last 14 months, both daughters have needed internet service for their careers, one substitute-teaches online through Zoom, and I use the internet to earn a little money, too. We also just prefer high-speed internet and that costs more.

Electricity -- years ago, we had super low electricity usage. We own more electrically-powered gadgets and appliances now, so this expense has risen in our list. 

Items for the home -- we buy used, acquire for free, or shop discount stores/sales/coupons. We also keep our "stuff" in good condition, doing as much maintenance ourselves as we can. Every once in a while we buy a new appliance or electronic. It's these appliances or electronics that increase our average annual spending on items for the home. Last year's purchases included a new desktop computer and a new freezer. This year we bought a power washer.

Vacations and fun outings

Prescriptions, supplements, co-pays for medical/dental

Cell phone service -- my daughters pay for their own service. When my kids were in university, we bought prepaid text/voice only service. The main intent was that they'd be able to keep in touch with us. If they had wanted smartphone features, that would have been something they'd have to fork over the dough for.

Gasoline for our car -- my daughters use the car more than my husband or I, as sub teaching is often not compatible with taking the city bus. They also drive for their other career needs (classes, internships, auditions, filming). We've come up with a system that we feel is fair. We rotate who fills the gas tank -- daughter one, daughter two, then husband and self jointly.

Landline phone service -- we have a cheap basic phone plan for the home phone that is bundled with the internet. I don't know at what point we'll drop the landline. For the time being, it's the only number that one aging member of my extended family will call to talk with us. I want to leave that number intact to accommodate this member's comfort.

*see below

Garbage collection -- We used to opt for their cheapest service, once per month pick-up of a small can. We upgraded our service to once per week of their smallest can. We've been using the additional service for about 2 years, primarily to get rid of all of the junk that we acquired over the past 26 years that is either not recyclable nor fit for giveaway or resale. When we have cleaned out the attic and garage of all of this junk/garbage, we'll go back to once per month service.

Non-food household supplies, like paper products and cleaning supplies

Clothing -- I used to love buying clothes. I also used to giveaway my clothing on a regular basis. I now wear items until they are too far gone. And I'm careful to only wear nice clothes for as long as needed and change into comfy, less-nice clothes for when just around the house. 

* in a non-pandemic year, I guess we spend a bit more on restaurant dining per month than garbage collection but less than landline phone service. We haven't eaten out since Feb. 2020. I'm not sure how our dining out will look later this year. We seem to be enjoying eating at home all of the time.

The order of expenses has changed with time and as our income level has risen. When we were younger (and poorer), housing was our largest expense each month. Yet we didn't have a mortgage. We were renting a small 2-bedroom unit in a triplex, and spending 3 times the amount for our housing than for food at that time. When we bought a house and took on a mortgage, we spent about 6 times for our mortgage compared to food. An interesting point, though, is that when we were younger and poorer, we not only spent a larger share of our income on dining out than we do now, but we ate out with more frequency then than we do now. We also bought more new clothing back then. My thought is that feeling "poor" led to us treating ourselves to meals out and buying knick-knacks or clothing. 

At this stage in our lives, medical access and care is very important to us. So is the luxury of long, hot baths, having a well-watered garden, fast internet, and not worrying about the lowest possible electricity bill. We do try to turn off lights when not in the room. But I don't chase family members down just so I can lecture them about turning off those lights. My younger self did plenty of lecturing over wasting money. But we needed to always be vigilant, then. There wasn't much wiggle room at all in our budget.

Another thought about spending less on items for the home or clothing: once you've acquired what you need to run and enjoy a home or buy a set of nice clothing, you only need to replace items when the old ones wear out, you outgrow them, or technology or style outdates them. So, there's less need to buy something like furniture at this stage in life than there was 20 years ago for our family.

One thing to note about our family's not spending a lot of our income on food: it isn't that we don't value good food. To the contrary, we do value what we eat, and that is why we prefer to make and grow our own food as much as possible. We don't like the taste, texture, or knowledge of additives or preservatives found in or on many commercially prepared foods. We appreciate good, homemade meals made simply with fresh ingredients.

Yes, I was thinking almost all of this in those groggy moments of yesterday morning. It was threshold consciousness thinking -- not always in words, but in ideas. It was interesting to me to write this all down and analyze my family's spending priorities. 

Do you ever think about your spending values and how they play out in your actual spending?


  1. I do think about what we spend our money on and where we're willing to spend more. When I look at our spending, one of the biggest categories is for our cats. They are both elderly and require special food and medicine. That, along with litter that doesn't have dust or smell, adds up. That is an expense that shows we think of them as family members and it's our responsibility to take care of them the best that we can.

    We also spend more on internet and tv than necessary. I think the pricing is a gimmick because they price it so it's cheapest to get a phone, cable, and high speed internet as a bundle. However, my husband has had to do weekend and night work at home even before he started working at home fulltime. And we spend more on food than some. We shop prices and eat at home a lot more than we used to, but still enjoy takeout from time to time. This is an area where we are willing to splurge because no one is that interested in spending time in the kitchen.

    My problem is actually spending money. It's hard for me not to angst over spending for something not absolutely necessary even though it is entirely within the budget. It's been a struggle to do, but as my kids got older, we tried to model responsible spending along with that it was also okay to treat yourself from time to time. Watching how they spend their money as adults, I think they're doing okay.

    1. Hi Live and Learn,
      I can sympathize with your angst over spending on non-necessities. I think when you've had a prolonged period of need-imposed frugality (either growing up or in young adult years), it is difficult to spend on yourself later on. Having a detailed budget (where I know the money is available for specific categories) has helped somewhat. But it's still difficult to spend on myself.

  2. "Do you ever think about your spending values and how they play out in your actual spending?"

    Yes! Very much so. For instance, we try to save and conserve in many areas, but have decided it's worth it to us to spend more on meat in order to both purchase from local farmers and to buy better quality. Another area is pet food. In this instance, we buy a higher quality (albeit more expensive) food for our pets, but feel it's better for their long-term health and potentially saves on unnecessary vet bills. When installing the last of our planned garden beds this past spring, we opted to spend more on excellent quality soil and hopefully have great crops from it first season, rather than to make do with inferior, clay-heavy (but cheap!) local topsoil and work on it over several years, as we've done with most of our previous garden beds. So many more instances I could name, but this is a good sampling, I think.

    Great topic!

    1. Hi Cat,
      I've thought a lot about buying better beef or poultry, and buying locally raised. I know prices vary by region, but about what price per pound do you think is worth it for locally-raised beef? Do you buy a half or quarter steer at a time?

      Investing in your garden beds is wise, I think. If you have the money to pay up-front for the good soil, you'll reap a better and larger harvest right away, instead of slowly building up beds and having less produce for several years.

    2. We have been buying a half steer yearly for several years now. The price has crept up, as with so many things, but currently is at about $6.00 per lb when bought by the half (from our rancher, $6.50 a lb by the quarter). That is the actual price per pound of meat delivered--many times in buying this weight the price is advertised as by "hanging weight" which is not the actual price per pound of meat delivered.

      We are able to locally source pastured heritage breed pork (almost melts in your mouth), whole chickens, and lamb.

  3. We have always been cautious about spending on anything. We do splurge once in a while, however. Like Live and Learn, we watch how one of our adult kids spend their money and cringe because the essential bills aren't always being paid on time. Their problem and could easily be resolved.

    Pets are a big expense but I find it necessary at the joy they give us. My parents got a cat recently and I really was after them to haver her vaccines up to date and to have her spayed. That was expensive so I paid for it but mom demanded to reimburse me for her cat's expense. They do understand why vaccines are important for their indoor cat.

    I need a new pair of jeans badly. I have worn many of my clothes for many years (some upwards of 15 years) and since I don't are about style I still wear them. My jeans, however, are falling apart and are becoming thin everywhere. We can't try clothes on in many places yet so I just wait. But I haven't been to a mall yet either for clothes shopping. Since working from home, I have not worn work clothes in 14 months. More like leggings and tunics! I don't think I could wear that to work when/if we ever go back.

    We have ventured out a couple of times to eat at a restaurant and the social distancing tables was rather interesting. We also drove to Indiana once where they no longer social distance and the restaurants were very crowded.

    1. Hi Alice,
      I've lived in leggings and t-shirts for the last 14 months. I had to try on my black jeans to see if I could even fit into them yesterday, as I have worn these to church for years and our church will be starting up in-person services soon. The jeans just barely fit. I noticed the black has faded badly, but I have a packet of black dye that I can over-dye them with and make them look new. But my everyday blue jeans are beyond repair to look nice. The holes are in the inner thighs. Even patching wouldn't look polished, but I could wear them to work in the yard or to run errands and wouldn't look indecent (once patched). Jeans shopping takes me a long time, because I try on every pair in my size. I'm not ready for that, nor do I have a car available for an extended shopping trip. Maybe next month.
      Good luck to you with buying new jeans!

  4. Yes, I do think about categories of spending and our values in where we put our money, but I'm sort of intimidated by the level of detail you have on your spending patterns, Lili! I find that my spending has shifted throughout the years. In my single years (I didn't get married till I was 35), I rented an apartment--I thought about purchasing a home, but I somehow didn't feel like I was in a permanent place in my life at that time, so renting made more sense. I also ate out a lot at that time--cooking for myself was unappealing and I enjoyed the social interaction with friends. In the first couple of years of marriage, we still ate out a lot, but we bought a house and then I had a baby and eating out became more of a hassle than enjoyment for me. After baby #2, I went on Weight Watchers, lost a lot of weight, and discovered that it was easier to control what I ate if I prepared it--and then I realized how much money we saved versus eating out--and now restaurant eating/takeout eating is an infrequent pleasure rather than a regular way of eating.

    I went from full-time to part-time when I was pregnant for #1 child, and after I had him, I moved to an on-call position and have stayed at that position ever since. We became more laser-focused on our spending habits at that time (not that we were big spenders before--Alice will understand my reference to my husband being Dutch, as that's a big thing in west Michigan!). Finances were super tight for awhile and like you, Lili, I was on the lookout for any form of waste and we were very careful about "fun" spending. If activities weren't free, or close to it, we didn't do them. Through the years my husband's position changed and became more stable (as stable as anything can be these days) and he earned more money so we have been able to loosen up a bit. Something that is very important to both of us is travel--when our kids were a little older, we wanted them to experience more of the US and so have made room for that in our budget. We still are careful when we vacation--we bring what food we can, rent VRBOs so we can cook many of our own meals, and so on--so I wouldn't say we go crazy with our money, but it's definitely a big chunk of our budget. Our trips are something we reminisce about frequently and I think it has brought the four of us together more closely, so I think it's been money well-spent.

    Right now I feel like we are in a big spending phase. My son is graduating from high school in a few weeks, so we have associated expenses with that, as well as college expenses coming up. Meanwhile, my daughter has grown quite a bit in the past 2 years (we did very little in the way of clothes shopping for her last year and as the weather is becoming nicer, I'm realizing how few things fit her anymore!) so updating her wardrobe has been priority. I think her growth may be starting to stabilize so I'm hopeful that many of this newest batch of clothing will be good for awhile.

    I'm going to go out on a limb here and mention that I suspect that giving to church/charities is important to you and your readers and all of our frugal habits allow us to be able to do that.

    1. Hi Kris,
      Interesting analysis of your spending evolution over the years.

      I agree, you are in an expensive period of life. There were so many extras that we had to pay for when our kids graduated high school, and we didn't do many of the things that public schools did (like Senior pictures). And next comes university. Even with my daughters living at home and commuting, this was so expensive. They both earned really good academic scholarships, but that only covered half of the tuition. They both worked every summer and used that money toward tuition. We had set aside some money and both sets of grandparents set aside some money, and still we had extra to chip in each month. It was just such an expensive period for us.

      Many of the kids that they went to university with came from more privileged backgrounds and had all of the latest tech gadgets, nice clothes, cars, ate out regularly, and had spending money. My daughters were shopping at thrift stores for clothing, had no spending money, brought sack lunches every day, took the buses to/from, and we gave them a cheap flip-phone with prepaid service as a birthday gift when they turned 18 (to be activated when they began working that summer) and a laptop for high school graduation gift (to be picked up just before school began in fall). But, after all of this, neither of them came away with student loans. And that made this worth it. It's easier now, as they pay for their own needs. Good luck to you and your husband and you two enter this very expensive period!

      I left a few categories out that I have now added in to the original post. Charitable giving is very important to us, but more automatic so I didn't even think of it. I also forgot about vacations, as we haven't been anywhere in a couple of years, but we do save for that every month. And I forgot about household consumables, like paper products and cleaning supplies.


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