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« Free Money Finance March Money Madness, Round 1, Posts 53-56 | Main | Finances of the Average American »

February 16, 2011


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You can tell you have older kids and a stay-at-home spouse...most families with childcare will have it in the top 3 :)


are my top 3 - and we use a relatively inexpensive childcare option (in-home daycare, which is 40% less than using a center).


Hit it right on the money for us!
Car Loan - though I have to say, this is only high (in relation to our other budget amounts) because we make double payments every month. And we only financed because we earn more interest in our savings account than we pay on the loan.


Not counting business expenses:

No mortgage or debt; largest outflow (not expense) is to investing. Preparing for retirement.



School tuition

Federal Taxes
S.E. Taxes
State, Local, School, Sales and R.E. Taxes

We haven't used a budget since we retired but these are our main fixed expenses as a percentage of total income. What's left over gets reinvested.

Income Taxes - 12.0%
Property Taxes - 1.5%
Living Expenses - 1.5%
Utility Bills - 1.3%
Insurance - 0.5%

I am surprised transportation isn't in most people's top 3. AAA says in 2010 it cost between $6,000.00 and $12,000.00 (depending on type vehicle) a year to drive 15,000 miles and most couples are driving two cars.

Roy --

I'm guessing a big part of that cost is depreciation of the vehicles, something many people don't put in their budget. I actually do have a monthly amount deducted in Quicken for car depreciation (I set it up once per year so the car ends up at the value I think it's worth -- based on data -- at the end of the year), but I don't count it as an "official" expense since it's a soft cost.


My car hit the 10,000 miles in 2.5 year, I only get gas once a month for about $20.


Truck payment
Hunting licenses & ammo

My form of humor ;-)


Even fuel alone and if you add insurance and registration, I still think most people would be up there.

I think most people try to ignore this expense because we want to drive when we want and what we want. This includes myself. I wouldn't enjoy that Sunday drive if I was thinking about what it cost per mile.


Followed by:
Van payment

1. Mortgage
2. Taxes
3. Charity

4. Food
5. 401k
6. Medical Insurance

1. Savings
2. Pet expenses
3. Girlfriend Tax

Hurray for living with my parents! Also yes, I spend more money on my dog than my girlfriend...

Rent (+utilities it's all one expense)
Food (we don't spend a crazy amount just slightly above taxes. we just have a low taxable income)

no car payment - but we save an amount each month into our "car fund"

retirement contributions and savings each month (separate fm car fund) are both actually about the same amount as food/taxes

1. Mortgages 25% of gross
2. Savings 24%
3. Taxes 19%

(this includes rental properties)


Children come in a close 4th.

I think you're probably right that total car expenses are higher than many people think.
Some people may not be adding up a total 'transportation' item but instead considering the categories as separate items. e.g. a couple people have "car loan" as a separate budget item, but thats only a portion of their total car costs. If you add up gas, insurance, maintenance, depreciation, etc then you might have a much larger number for all your car expenses. People are probably not looking at it that way. Other people here have high incomes that throw it out of wack compared to typical or average households.

1. Mortgage (we are paying this off early by making principle payments)
2. Giving (mostly to our church)
3. Miscellaneous (this includes last years re-fi)

I wonder where insurance fits in for peoples budgets.

1. Taxes
2 & 3 in near tie: Giving and mortgage

1. Taxes (by far highest expense)
2. Charity (taxes would be much more without charity)
3. Savings (will go up +5% of my budget this year)
4. Mortgage
5. Food
6. Utilities

The top 3 take up around 60% (+/- 10%) of my income. One general comment, due to tax deductions #2, 3 and 4 help reduce #1. I wonder what #1 would be without those. Also this leads to the question, is promoting giving to charity, increasing your savings and owning a home good for the US and society? In my opinion I'd say of course its good for the US. What do you think?

Amanda hit it on the head...

Child care

Child Care expenses will be down this year as my 1st of 2 kids started Kindergarten.... giving might exceed child care this year since my wife had to go from part time to full time...our tithe will probably exceed child care even with full time care costs.

My top 3 including all associated cost for the category....

1. Taxes
2. Rent
3. Overall vehicle expense for truck and boat (little over $11k a year including monthly payment, insurance and gas)

1. Savings (401k, Roth, Emergency fund)
2. Taxes
3. Mortgage

4. Giving (this year higher than childcare, but they switch spots regularly)
5. Childcare
6. Food and Dining

Only one more year before the 2nd kid starts Kindergarten. At that point childcare will drop off the top 6, and the car with all its expenses will probably be number 6.


Our food is a pretty small portion of our budget. And when we bought our house, we made certain that it didn't eat up a huge chunk of our finances. It's barely more than our rent was, but the utilities have definitely been a wake-up call!

Regarding taxes, my husband just became self-employed. I now know the height, width and depth of our extensive taxes!!!!!

Food / Household items - 20%
Mortgage - 17%
Giving - 15%

Normally food shouldn't be so high, but we are a family of 8.... still too high?

So here goes. My three largest expenses are:

Taxes (Ugh! I didn't even consider these before)
Food & Dining

I wouldn't consider savings and investments real expenses, but if I did, they'd come in after taxes and well above rent.

As a percent of total spending, without savings:

1) Taxes - 35% (income 23%, property 12%)
2) Food - 17% (includes household goods bought at grocery stores)
3) Medical - 8% (including insurance)

followed closely by:
4) Cars - 7% (including auto insurance)
5) Household insurance - 6% (home, umbrella and earthquake...California)

No mortgage or auto loans to contend with.

I can't see how transportation cost can be that high if there is no car debt. I lived in the city with the highest car insurance in the county was gas was pushing 4 a gallon and with 2 cars we were only at 600 a month. Now we are at 200 a month with only one car. Gotta love cities with good transportation.

Tuition --I'm cashing flowing a Masters degree

Taxes (federal)= 19% gross income
Mortgage (PITI)= 7%
Child care = 5%

Just a guess, but almost certainly right:
Rent (if you want you can include utilities in there)

No debt, thankfully.

Ed said: "I can't see how transportation cost can be that high if there is no car debt"

But there usually/often IS a car payment. Even if there isn't a payment then the cars aren't free. The cost of the car shouldn't be ignored. Wheres that money come from if its not in your budget?

The definition is too broad.

Most mortgage payments include escrow which is taxes and insurance. If I take that out that is alot of expense. Should you include the utilities in the equation? That is part of the home like a car.

A car has alot of items that are not usually lumped into one. Gas, maintenance, insurance. Are these seperate or included?

In order to compair apples to apples you need to com up with a guideline of what really is the cost of a category.

I want to switch my top three to

401k & savings

1. Charity

2. Travel & entertainment

3. Taxes

No debt, retired and my wife and I are enjoying the fruits of our labor. Life is good!

Re: car expenses

We have no car debt. We put money into a savings account each month towards our next needed vehicle. Would you want that included as an eventual car expense?

Our other car expenses (which includes gas, insurance, registration, inspection, and minimal yearly maintenance) computed into a monthly figure still only hit about 300 a month for two vehicles.

To be honest one of those vehicles could go and we'd be only slightly inconvenienced occasionally, but it's fairly cheap to keep and my husband likes having a second car.

First time commenter here, but I've been lurking for a couple of months.

1) Rent and utilities (We earn USD but are paying in Euro. Yikes!)
2) Student Loan (Less than $4,000 left!)
3) Retirement

No credit card debt, mortgage, or car loans. Not too bad for a mid-twenties couple, but we've only now just seen the budget and finance light! I hope next year it will be something more like:

1)Extra savings (For an extra cushion as we think about starting a family and possibly making a down payment on a house)

1. Taxes

2. Rent
3. either Food or Leisure



1. Taxes
2. Giving
3. Vacations

1. Savings (401k, Roth, HSA, Brokerage, Emergency Fund)
2. Mortgage + Home Improvement & Maintenance
3. Vacations

4. Utilities
5. Taxes
6. Food & Fun

No debt, except mortgage payment, which is less of my take home pay every year since 1995. I live 4 miles from work and don't drive much. I also don't have kids, student loans, or shop for shopping's sake.

The reason savings "expense" is so high is that I don't accelerate my mortgage payoff, and plow all my extra cash into savings. I'll keep saying it until I run out of breath, but paying off a mortgage too soon is a BIG mistake over the long run.....I count home improvement as a way of reducing my mortgage as a percentage of its future worth.

Our 2010 Top 5 Expenses by category according to Quicken:

18.7% Taxes
13.6% Auto
11.7% Interest Payments on Mortgage, Car, Student Loans
9.2% Groceries
8.0% Medical

mortgage with prepay
kids' college savings
family cell phones


Mine are mortgage, taxes and then business expenses. Our mortgage is actually very low, but we're working on paying it off this year so are shoveling money at it.

Taxes, Mortgage, School Tuition, and Business Loan Payment are all ~$2500/mo for us.

Mortgae/Rent (military family having a home we can't sell and paying rent)



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