A realistic budget for the future. (Sooner-Rather-Than-Later-Retirement, Part 3).

Hello world! Well, last year I barely wrote a thing and now it’s only been one hot minute since my last post and I may as well keep on truckin’… :). Today I am trying to figure out how to create a realistic monthly budget to stick to that comes to less than $1,000 per month, to allow me to work part-time rather than full-time for the foreseeable future!

In my 2018 review I gave a break-down of my spending for the year. That breakdown unfortunately did have some flaws as I did not track everything precisely for portions of the year, my gas expense for example is far from accurate but it does show a rough picture of how my spending works without depriving myself.

I spent about $15,000 on living expenses in 2018. [I count ALL travel and churning separate, as it’s a luxury thing that I.do.not.need] I had extraordinarily high medical expenses at $5,668.93 in 2018. For most of my life my medical costs such as dentist, orthodontist and medication or doctors visit not covered by provincial health care have been under $500 a year with the exception of that time I had my wisdom teeth out for $1,600. Yikes.

There are quite a few things in my budget that are hard to break out into individual categories so I am going to focus on the main points and build a basic living budget from there. The one thing that I have NOT been over the past year orso is cheap, I’ve been quite splurgey and bought whatever fun things I wanted whenever I wanted as there was always more than enough incoming to pay for it and still save and invest a lot.

2018 was a great year overall, we traveled a lot, both worked way too much but still managed to have fun, eat well, and I never felt I couldn’t or shouldn’t buy things or go out to dinner with a friends. I felt like financially I’ve really been able to enjoy the funds I’ve worked so hard to acquire. So that is nice! Now I want to build from that knowledge a way to live, while working less and still enjoying life… except with a lot more free time and a lot less work-time as I have not been blessed with the most awesome main gig – and haven’t enjoyed it in quite some time. I want to move on and leave it behind me and work part-time at other things I DO enjoy, so I want to figure out how to do that.

A pretty good, enjoyable budget that includes FUN STUFF should look approximately like this to me:

Groceries $400.00/$4,800yr – I cover all the household food bills, which is more than enough to cover my share of heating, electric and internet usage. I do not pay towards the property tax and am unwilling to do so until marriage. $400 is loads to eat well, fresh and splurge.
Fuel $80/$960yr (my cars fuel consumption hovers between 5.9-6.3, = approx $1,058kms at $1.20/L) This will cover about 15 drives to town and a couple of drives to see family further away, each month.
Phone $20/$240yr (3gb data plan through Fido, ftw!)
Spending money – $35/$420yr anything that doesn’t fit anywhere
Restaurants – $50/$600yr This is a bit less than I spent last year, but approximately on course with my spending the last couple of months while I have been working less, basically I haven’t been grabbing as many coffees with coworkers.
Medical – $20/$240yr- one dental cleaning/visit per year, and extra for any rx or other visits needed
Clothing – $50. At $600/yr this is the only category I’ve knocked down by half.
Household goods – $20/240yr cleaning stuff, etc
Life insurance – $12/$144yr, although I am considering cancelling this one
Christmas $20/$240yr, more than enough for diy project gifts, gift for Tom, family etc. I usually like to bake or create something
Car repairs $50$600yr – I have a newer vehicle and we have our own hoist so $600/year buys quite a lot of parts, this is also in line what I have paid in the past excluding the expensive labour.
Birthdays $20/$240yr, more than enough to cover fam&friends and other occasions
Car insurance $47/564yr. Painful, but it’s required
Hobbies $15/$180yr, stuff for my bike, snowboard etc.

Total: $839/month = $10,068 per year.

I feel this is a very fair budget that with the exception of cutting my clothing spending allows me to live quite a fun life. I still have funds for gifts and projects around the house. I still have funds for going out to eat with friends or grabbing the occasional coffee or tea. There is more than enough funds in the grocery budget to cover seeds and stuff for growing amazing things in the garden and buying whatever we wish at the grocery store. There is also enough for occasional splurges I make on essential oils, or body products or a gadget here and there.

Things not covered in this budget:

  • Buying expensive things like a new bicycle (looking at you, carbon forked new cyclocross bike and gear) or an expensive new smart phone or computer
  • Alpine membership next winter, $214+hst
  • Significant medical bills
  • A new vehicle
  • Any other big purchase
  • Living on my own
  • Travel

The $541 per month budget from my previous post is really a bare bones living budget for dire situations – say, I am unable to work at all. I do hope to never be in that type of situation.

My true passive income as of today is; $377.79 from interest and investments (dividends) (I need to update that sidebar again! ->). That’s pretty awesome! My AIRBNB sidehustle + side hustle X are now at an expected income of $340/month for 2019/. Both are fairly low maintenance so my average ‘passive’ income now sits at about $720/month. A $12/month increase since my last post on this! And yeah… we are counting nickels here, did you notice the name of this blog? 😉 Every nickel counts!

So, to summarize alllll of that, it looks like I’m about $120 short every month to cover my desired level of spending. I can make up this difference by saving like CRAZY and investing another $50k orso to get to the desired level of income and working to make up the difference and cover all the fun money and not so fun spending mentioned, like buying big things and adult-toys.

That’s not so bard overall, it definitely gives me some perspective. It’s not a bad proposition to think; I want to buy that fancy thing in a couple of months, let’s take this job and make that happen! It’s a very different proposition than; you must continue to show up to a job you dislike just to pay your basic living expenses and LIVE.

Published by Renée

I write about my life, travel and my financial up and downs on my blog, Nickel By Nickel, while contradicting myself daily. ;)

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