This year is my first year out of college with a job, so I figured it would be good to finally get to serious tracking of my expenses over the year. In college I was on campus housing and a meal plan, so my monthly expenses were mainly entertainment and gas. Since those were small, I put off on any monthly tracking and just spent within what I thought was reasonable. Overall it worked okay, I had enough to do so with spending money from working, but I lacked any overall accountability on how much was going out.
For context into my current situation, I am a 23-year-old single male currently employed as a Product Development Chemist within R&D at a manufacturing company. I am renting a 1 bed 1 bath apartment in the downtown section of a large town in central Pennsylvania.
Data Collection
I used the export statement function in American Express to export my monthly expenses. I then manually entered in expenses from my checking account. I broke each expense down by category and then placed the summed total for each category in an Excel spreadsheet. This took roughly 10 minutes each month to track.
For monthly income I used my base monthly pay from work. There’s little deviation from this month-to-month; any deviation would be an increase to add in reimbursement for work travel in personal vehicles, and would not account for much (~$30 per trip, <1 trip per month). This value is my take-home pay which is my salary post-tax, 401K, and HSA contributions.
2018 Categories and Initial Budget Set
After January’s expenses came in I broke down the categories and set an expected budget for each. This estimate was considering the average per month, but as I had little experience in expenses throughout the year, I expected these values to differ from what I initially listed.
Rent ($800)
Internet ($40)
Electric ($160)
Groceries ($310)
Gas ($60)
Auto expenses ($60) – Non-fuel expenses, such as maintenance and tolls.
Student loans ($1,000)
Personal care ($35) – Haircuts, health items, etc.
Entertainment ($150) – Food/drink out, movies, alcohol for home use
Miscellaneous ($100) – Catch all for other expenses, gifts, cash withdrawals, or when a single shopping trip has multiple categories covered and I misplaced the receipt for breakdown.
Subscriptions ($41) – Netflix, Spotify, gym
2018 Monthly Expenses
The graph shows the changes in my expenses as the year progressed. As the year progressed my expenses grew but they settled in appropriately. A large portion of this chart is in student loans; I decided that I have enough income to pay off early and in excess. Currently I am paying more than double my minimum payment across all loans.
Looking at the averages of my expenses show how my initial estimates were compared to actual. I took out January expenses from the average as it was not a complete month of living on my own and tracking expenses. I’ll be adjusting some of the monthly averages for 2019 to better estimate monthly values. On average 20% of my income is being placed in a high yield savings account for short-term goals.
There are some expenses not captured in 2018 data. The major ones are insurance, furniture, and vacation. Insurance is renter + auto and is approximately $65 per month; I was gifted both covered for 2018 by my parents, but will be switching to covering it myself in 2019. Furniture was a major one off expense to buy a mattress and living room furniture, and it totaled approximately $2,000. Lastly, I went on a family cruise vacation over the summer which came out to be approximately $1,400. I elected not to capture these major expenses in the graphs and data as they were one off and the main goal of me tracking was looking at the more routine expenses.
2019 Budget Revisions
I’m going to keep up with the tracking for 2019. I know that I will have some changes to my monthly budget to better track it based on what I know from 2018.
Rent, student loans, personal care, entertainment, subscriptions – No change
Internet – Up to $60 (+$20). First year was their discounted rate for the package I am on. I will keep the same package as it is enough for me and guests.
Electric – Down to $100 (-$60).
Insurance – Up to $65 (+$65). As mentioned above I will be covering this myself for 2019.
Groceries – Down to $250 (-$60).
Gas – Up to $105 (+$45). Once spring hit, I drove for activities like fishing and biking. I also took some trips to visit friends and family, which was not captured in the first month. This is approximately 3 fill ups per month.
Auto expenses – Up to $75 (+$15). My vehicle reached some maintenance milestones at 60 - 70K miles, plus a new set of tires, which put this category above my expectation. I don’t have any major planned expenses / maintenance for 2019.
Miscellaneous – Up to $125 (+$25). Christmas gifts and first year apartment expenses put this above what I had originally expected. I want to better divide expenses this coming year instead of just putting them here.
Learnings
Doing this for my first year out of college really helped me see where my money is going and provide guidance for saving for future goals. From the start I knew that I didn’t need to be strict on the budget in order to meet my financial obligations, so this was mainly used as motivation to save more. Taking that 10 minutes a month to see where my money was being spent helped to push for reasonable spending.
Another important thing I learned is the variability in some expenses. While things like rent, loans, and groceries are easy to budget, expenses like auto care and entertainment are more up in the air. For entertainment it depends on if I do trips to visit friends. A single weekend trip cost me $200 in food, drink, and other entertainment. This wiped out that expense category for the month in two days. Similarly, car tires cost me eight months of my original estimate. I knew tires were in the plan for this year, but for future issues I may not know in advance.
My plans are to continue putting money away into savings towards my shorter term goals as well as up contributions to retirement. I also want to continue paying over on my student loans to knock down the principle more while I have the free funds to do so.
Hope that this information can be helpful to someone out there. I know when I was ready to graduate I had a lot of questions on what I can and can not afford. Tracking these expenses helped me know how much of my take home is actually for fun or savings and not necessities. Believe it or not, it was fun to get my monthly statement and update my sheet for the month. I absolutely suggest to everyone just leaving college to build a basic budget like this, even if you are in the position that you are easily able to meet all your needed expenses.
Submitted December 29, 2018 at 12:30PM by Jolivio http://bit.ly/2s2tRw0
