Budgeting 101

So a few people have asked me to share more specifics about my budget. I am not going to share monetary amounts, but I will share percentages so you can take your own income and see where you spend your money.

Big Disclaimer: I live in a fairly expensive urban area, my housing expenses (i.e. rent) are much higher than they should be, but I don't have a car so my transportation costs are much lower (I figured that out when I moved to downtown Boston 11 years ago, higher rent and no car was a wash financially).

So we began by me confessing to how much I spend on everything (see extensive list below) and the financial counselor figured out the percentages. He tweaked some and asked me to make some concessions (less money for clothes and gifts, more for food and reducing my debt). Then he broke the percentages into 3 big categories:

Household Expenses (Not including rent, but everything else): 28%
Rent: 43%
Credit Card and Student Loans: 29% (this is now with the credit cards rolled into a DMP)

The last 2 are pretty straight forward, but Household Expenses is subdivided into 14 different categories, so I thought I would break that down for you.

Household Expenses Include:

Transportation: 3% (remember no car payment, insurance or gas this is public transport only)
Cable: 14% (trying to find a way to get that down a little)
Gym Membership: 5%
Clothing: 2% (trying to increase that a little)
Charitable Contributions/Gifts: 6% (going to be a lean Christmas)
Entertainment: 6% (luckily I am very entertaining on my own)
Groceries: 26%
Household Items (non-food): 8%
Laundry/Dry Cleaning: 5%
Medical(co-pays, prescriptions): 6%
Personal Care (i.e. hair cuts): 4%
Savings: 1% (baby steps)
Telephone: 6%
Utilities (I only pay electric): 9%

This is a very comprehensive list. In two weeks of tracking every penny I spent there was no time when I couldn't classify something. I won't lie to you, I borrowed a little money from groceries to pay for entertainment, but I didn't go hungry. It is a fluid process and things will certainly shift and settle.

Right now I am tracking my budget with a steno pad and an Excel Spreadsheet, but I am investigating online tools like mint.com and others and will report back on my journey to the 21st century.