I just published our March cash flow report and many comments asked me to expand it a bit more. Why are our monthly bills so low? I’ll try to explain it today.
How you keep your grocery bill so low?
We spent $364 (+ $40) on groceries last month. Is this low for 2 adults and a small child? This is quite a bit more than what we spent when we didn’t have a kid. Five years ago, we spent less than $200/month on groceries. Now with a young child, we are trying to eat more organic food so the cost is higher than before. Food prices also went up quite a bit over the last few years.
I didn’t keep every receipt last month so I will keep a careful track of everything and write a comprehensive post at the end of April. Here is what we spent in March. I charged
all most of our grocery purchases on the credit card so at least I can see the gross price.
- WinCo: $47
- Safeway: $16
- Trader Joe’s: $135
- Asian food market: $110
- Walmart: $56
- Cash: $40 (Mrs. RB40’s cash allowance.)
Mrs. RB40 just informed me that she used cash at Safeway a few times. So that’s what that last $40 above is about. I asked her to put everything on the credit card so we’ll have a more detailed picture at the end of April.
Summary – I really don’t know why our grocery bills are lower than other families. I guess we don’t eat that much. I will work on it this month and get a report out at the end of April. We only use a few coupons.
Mrs. RB40’s take: My theory is that we just don’t buy as much. When we remodeled our condo kitchen some years ago, we intentionally created space for a much smaller refrigerator and pantry, and gave away our huge energy-inefficient fridge. This way, we can see everything at once and nothing gets lost in the back. We are really good at eating what we have before buying more, so nothing gets wasted. During the summer months, we participate in our community garden, so we get a lot of fresh veggies and herbs that way. We also grow a few herbs like mint, chives and parsley on our balcony.
Why are your utility bills so low?
This short answer is that we live in a condo and pay only the electricity bill. The HOA fee covers water, trash, sewer, etc… We use Ooma VOIP (free version) and we don’t have a dedicated land line.
In March we spent $91 on electricity. Actually, only $67 is for our electricity bill. The rest is for our rental during the vacancy period. We usually spend less than $80 per month during the cold months. In the summer we usually spend less than $50 on electricity.
Our condo is in a big concrete building. It has good residual heat and we don’t really need to turn on heating and cooling much. Actually the HVAC has been broken for a few years and we have been using the portable heater. I’ll get it fixed one of these days. Our indoor temperature is pretty stable about 68 degree Fahrenheit right now and I put away our portable heater a few weeks ago.
We pay about $470 for the HOA fee every month. That is one reason why our housing bill is so high. I think it works out okay, though. We don’t have to do yard work. We only need one vehicle. We don’t need to do much maintenance and repairs on our own unit. We only have the electricity and internet bills.
How can we reduce our spending?
I feel like we are already living frugally so it will be difficult to cut down much more. Let’s go through one by one.
- Housing ~ $2,200. It’s fixed for now. If we move to another house, then hopefully we won’t have to pay for an HOA. However the monthly bills will definitely increase. We might pay for a house in cash and that would drastically reduce our monthly expense.
- Cash allowance ~ Discretionary spending is at about $300/month. That’s not much and I think it’s about right.
- Groceries ~ $400. I’ll get back to you on this one.
- Transportation ~ $50 to $100. I’m driving more now because I need to drop the kid off at school and go to the gym. Yes, driving to the gym is kind of dumb, but it’s the only way I will exercise.
- Pet ~ $40/month for food and litter. Not bad.
- Kid cost ~ This should be less than $400/month. We had an unusual month in March and it was higher than normal. The preschool will be pretty stable until he starts kindergarten at the local public school. Then we can channel this fund into his 529. He is really hard on his clothing, too. I’ll write a follow up article about kid clothing next week.
- Utilities and insurance ~ $250/month. Should be mostly stable.
- Medical ~ $50. I guess don’t get sick. Mrs. RB40 has good health insurance and the cost is deducted from her paycheck.
- Entertainment ~ $100 to $200/month. We haven’t spent much on entertainment lately. Now that the weather is warming up, there should be a lot of free events locally.
- Misc – $???. Not much here except when we go on vacation. Anything miscellaneous, we usually pay for it from our cash “allowance.”
So it seems like we are at around $4,000/month normally. I don’t see much room to cut back. At least we know where we are. If you don’t track your monthly expense, you won’t know what you spend money on. That’s one of the first thing everyone need to figure out how to do to get on the right track.
Do you keep track of your monthly expense? What do you think we can improve on? The big item for us is the housing, but it might take a while to improve that. What about you? What can you improve on?