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Monday, January 22, 2018

My Monthly Expenses

I wanted to briefly detail my current expenses and show you how much I spend on a monthly basis. I would consider my expenses around average, but I know I could probably cut back a little which would help me on the road to early retirement. If you can cut back even $100 a month then it can have a big impact on being able to retire early.

Below are my expenses every month: 
(I live in a 2 bedroom apartment with my girlfriend)

Rent: $1,475
Electric: $45
Water: $15
Cable/Internet: $40
Gas: $25
Car Insurance: $41
Entertainment: $400
Food: $600
Misc: $400

Total:  $3,041
Per year total:  $36,492

Rent is definitely my biggest expense and I would love to be able to scale that back a little. Unfortunately the DC Metro area is a very expensive place to live. My salary is adjusted because of the high cost of living around here though. 

I currently work from home and drive a 2006 honda civic. This means I have no car payments and my car insurance is very little at this point.  Working from home also means I spend very little on gas every month.

My employer pays for my cell phone bill and that is why it isn't listed on here. 

Entertainment would include anything like movies, going out, wine/beer, vacations, airline tickets, sporting events, etc. This is a hard number to track on a month by month basis, but I think $400 is about right. Some months it is higher and some it is lower. 

I do a very good job and eat most of my meals from home. We spend about $100 on groceries per week for the both of us. This includes breakfast, lunch, and dinner. The weekends are the only time we eat out, but we do enjoy grabbing a nice dinner. Again, this number could vary greatly depending on our weekend dinners. Food is probably the easiest way to save money if you are looking for areas to cut back.

I've done plenty of calculations on how much my breakfast, lunch, and dinner cost during the week. I probably spend around $7-8 a day on breakfast, lunch, and dinner. Compare this to someone who eats out and spends about $20-30 a day and this really adds up over the course of a year. Is eating out during the week really worth it? What if you could save an additional $5,000 to $10,000 during the year?

Miscellaneous refers to anything unexpected. Gifts, doctor visits, procedures, car issues, etc. This number could also vary greatly from month to month. 

As you can see at this rate I would currently need $36,492 in dividend income to retire. I tend to overestimate so the entertainment, food, and misc could easily come down. If they come down $100-200 then that makes a big difference. Rent is also a huge expense and I'm looking to see if we can reduce that next year by moving to another apartment. 

Overall, I would say my expenses are below average, but there is definitely room for improvement. I think a lot of people spend money on things they don't need thinking it will make them happy. I would consider myself a minimalist and would like to be able to cut back on my expenses a little going forward. 


What do you guys think? What are some of your biggest expenses?

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