First Quarter Expenses 2008 ($13,246.56, +$1,294.90)
My wife and I have been tracking our expenses diligently since January 2006. The process of actually sitting down and developing a system for keeping track of where our money is going has been enlightening and the most useful step towards financial independence for our young family.
In 2007 we were able to make dramatic cuts due to the cost savings of combining two households and other various one time savings.
In 2008 the “one time expenses” have gone the other way and hindered our progress vs last year. The result was an extra $1,294.90 being spent in the first quarter.
That being said, here are where our dollars went for the 1st Quarter of 2008:
1. My Landlord took 18% : Our rent would cover the mortgage of a very reasonable house in most parts of the country. Renting is one of the prices we have to pay to complete my training. Although we would prefer to be building equity, we are trading that equity for the flexibility that renting provides to a busy Resident. The last thing I want to do post call is to fix broken stuff.
2. Our Doctors took 14% : I find it interesting getting bills from physicians and hospitals know that one day I will be sending out the same bills. After seeing what is being charged for medical services I find it very believable that medical bills are the most common cause of personal bankruptcy. The caveat here is that I rather be bankrupt and alive than rich and dead.
3. Our Grocery(and Farmers Market) received 14% : This is a marked improvement for our family. Since we have gotten married my wife has done a great job of slowly helping us eliminate waste from our food budget.
We came from two different families which had two very different approaches to food. This was easily identified by looking in the refrigerator. My family always had a full fridge but at times had to throw out a lot of extra/old food. Her family had a relatively empty fridge. With her running the budget our refrigerator is looking a lot like the one she grew up with. We are less wasteful, saving money and healthier for it.
4. The Insurance Industry got 8% : As a very risk adverse individual, one of the first things I did after finding out my wife was pregnant was to update all of our insurance policies. I went through our Renters, Life, Disability and Auto insurance policies to make sure that we were carrying the appropriate coverage for the life changes ahead.
The end result is that I can sleep soundly at night know that my family will be on a stable financial footing should anything happen to me or my wife. The one form of insurance which is contributing to the majority of our insurance costs is my disability insurance policy. Given my ongoing training, this was a very important decision for us which I covered in this post last fall.
5. We gave the struggling airlines 5% : With a new baby and our family currently living 3000+ miles from our hometowns let it suffice to say that we have had to make a couple of transcontinental flights so far this year.
As difficult as air travel can be, the cost to cover this distance is very reasonable compared to the time and fuel it would take to drive. It has also caused us to give some serious thought on where we would like to end up settling once I am finished with my training.
In summary it looks like we will be close to our goal of spending <$50,000 for 2008. We still have some significant expenses for the year: a move cross country, some auto work and perhaps some more medical bills.
It will be close, but we will have to do better than we did in 2007 because we will not have the luxury of having two full time incomes to pick up the slack.
