When my husband and I began to seriously consider a move into another rental while we delayed purchasing our own little house, I broke out my excel budget and started reworking the new costs and projected savings. I used the budgeting spreadsheet I created for my Newlywed Bliss Box as a start. As I compared my current rental house budget with my soon-to-be new apartment budget, I noticed that some categories, like rent, increased a bit in the total dollar cost. However, the total cost of projected utilities decreased. Though the dollar figures were staring me in the face, it was hard to compare if the new rental would be worth the stress of a move. So I created a new column on my nifty spreadsheet and decided to compare percentages of each category compared to the overall monthly budget.
What I found was that the percentages really showed me where the majority of my budgeted expenses were going: rent and utilities.
Whoa! Almost 50% of my expense is for housing and utilities (I factor in renters insurance and phones as well here.) After revising my monthly rent and assuming the cost of utilities will be significantly lower…I’m projecting here since I haven’t lived in an apartment in 5-years…my total housing hold percent increased by 1% compared to what the total house hold cost was in the rental house I was living in.
Looking at this section of my budget, the phones take up quite a hefty part of the utilities, but since my husband runs a business out of our home our two phone lines are something we’ve lowered as much as we can at this point. I could possibly move the phone costs to the business category, but since we also use them for our own personal use, it makes more sense in ‘house hold’.
The remainder of my budget is evenly divided into sections such as auto expenses, groceries, personal, savings, and business expenses that each account for about 10% of my expense budget. Not too shabby since I’m still able to squeeze about 10% into savings.
I’m sure looking at my budget percents, one would wonder why I’m not calculating those percentages based on my income rather than total expenses. In most cases, especially on steady incomes, it would make much more sense. But on a fluctuating income, where I’m living from feast to famine at any given time, it makes much more sense for me to figure out total expenditures. This way I can set aside the extra income in any one month and carry it over to the next if need be.
What I’ve noticed through my percentage-based budget is that I can see which aspects of my life are costing the most. Perhaps in the future I can realign my lifestyle to a simpler, less expensive one!
Do you calculate your expenses or income in percents or whole dollars? Which makes more sense to you? Have you found areas that seem exorbitantly expensive?