Why our monthly bills seem so low…

our monthly electricity bills are low

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 our monthly bills are so low...?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?


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Joe started Retire by 40 in 2010 to figure out how to retire early. After 16 years of investing and saving, he achieved financial independence and retired at 38.

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60 thoughts on “Why our monthly bills seem so low…”

  1. Your food bill is ridiculously low compared to ours. As a married couple living in NYC we average $1200-1300 per month. Although it’s NYC, I find it hard to believe that food costs 6x more here than in Oregon. However our housing costs are similar to yours ($2300/mo) and utilities are much lower ($80-90/mo year round including full use of air co in the summer and heat in the winter), probably bc in NYC the landlord usually pays for heat and water.

    • Granted, NYC is expensive… but even so, I don’t think we even COULD spend $1200 on food each month. It’s just the two of us but we average around $150 on groceries, and around $50-$100 for eating out. We always have fresh food on the table with plenty of fruits and veggies.

    • Wow, that’s pretty high. What kind of stuff do you buy? You probably don’t have to buy all organic. Just pick the right things to splurge on and buy regular stuff with the rest of your budget. I’ll follow up with you in a separate email.

  2. Impressive that you keep your bills so low, especially your food spending. I’m single and in my mid-twenties and probably spend around $75/week on groceries (for week that I am home… I travel a decent amount for work so don’t spend anything then). So in a full month-equivalent of being home that would be $200-300 on groceries plus eating out (usually lunch ~$5 for a sandwich and more going out with friends for dinner or drinks).

    Right now, I split my spending into two major categories: 1) rent/util, and 2) everything else (food, gas for car, entertainment, etc). 1) is usually ~$1,275/mo and 2) I try to average around $1,200 (less most months and more if I need to do some shopping or take a trip to visit family, etc). I think $2,500 is a target I shoot to stay within. I usually end up less than that, but it’s fine if I don’t. I make around $3.8K net of tax and a 15% 401k contribution, so I still have around $1,500 left over. The majority of the extra cash flow I end up investing every few months when a good stock comes around that I feel inclined to buy into and a little that I put into P2P.

    I could probably cut my spending a bit, but I try to eat better food. I used to shop for the sale, but I think groceries is one area where it’s worth it to spend more for better quality stuff. I also feel better when I cook or eat food I prepare rather than eating out (I have traveled a lot for work, so fast food and non-high quality restaurant food is just not appetizing for me anymore).

    The biggest pain point for me is housing. $1,275 for rent/util hurts, but I didn’t have much time to shop around when I moved for a new job. I guess it’s the price I pay for flexibility. I suppose I could always get married to save more on taxes/housing/groceries. 🙂

    • I think grocery is one area where you should spend money on as well. It’s much better to cook at home and eat healthy. Sounds like you’re doing pretty well with your finance.

  3. Joe,

    Thanks for sharing. Great stuff here!

    What are your thoughts on owning a house vs. a condo? I know the HOA fees are a killer, but maintenance on a decent-sized house is no fun. Have you guys owned a house before? I may own real estate directly at some point, but I’m not quite sold on the idea of owning my own house. The work involved just seems like a drag, but I guess if I were financially independent then the time drain might not be so bad.

    Best wishes!

    • I like the condo when we didn’t have a kid. I think it’s just dependent on your lifestyle. If we move back to our old house, we’d have a lot more bills to pay. Maintenance definitely cost a lot of money. I’m getting ready to sell the rental home and we probably have to spend at least $7,500 to paint the exterior and fix other cosmetic problems. I really don’t want to spend time maintaining a home. Right now, I just don’t have any time. Maybe when our kid goes off to kindergarten.

      • We lived in a house which I loved…except for the fact that our weekends were consumed with yard work. With a condo, the time we spent on maintenance decreased dramatically. Even with a kid, I’d still prefer to live in the condo.

  4. I’ll agree with everyone else who thinks that your grocery bill is really efficient. I have no idea how you subsist on that with 3 people. That’s in the ballpark of what it is with 2 people – and the other secret is that we eat breakfast/lunch at our software company. Your grocery bill is really low, and you obviously do a great job.

    With that said, your electricity use seems sky high. My latest electricity bill was 189 kwh for the two of us in a 1130 sq ft space.

    Thanks for sharing! This post was inspiring.

    • Well, the 3rd person is just a little guy so he doesn’t eat much.
      I guess we can use more energy efficient appliances… Not really sure how we can reduce our energy usage at this point.

      • Your grocery bill is equal to ours for 1 person who eats ~16 meals at home a week plus another who eats ~6 meals at home per week. That’s 22 meals for 2 people costing the same as 42 meals for adult sized people plus your child’s consumption. Again, your grocery bill is impressive.

        I have no idea why your electricity use is so high – since you’re home and not at work, surely that pushes up your use, and some of it must be that. However, MMM in 2011 (also at home by that point) was using 299 kwh/month. http://www.mrmoneymustache.com/2011/05/10/ill-show-you-my-electricity-bill-if-you-show-me-yours/ You are still very safely below the American average of 920 kwh/month.

        • Our summer month is not bad at around 300 kwh. We also don’t have gas so all our heating is done with electricity. We also spend a lot more time at home in the winter so I’m sure that increase our electric bill too.

  5. Nice work on the grocery costs! We’re in the $450 range for a family of five. I fear what it’s going to be like though once our boys get older. We joke that we’re going to need a cow and a few chickens in the backyard, lol. We moved to buying a lot of organic as well a few months back and find that we’re still generally able to stay within what we have budgeted for our groceries. Overall I think you’re doing very well on the budget/expenses.

  6. The Wife and I are terrible at tracking our spending. Every once in a while I’ll get into it and create a monthly nut post…but it never lasts.

  7. Our combined electricity/natural gas (for heating only) bill is more than twice what our bill was at our old place. Our old place was 33% smaller, but had only seemingly inefficient electric baseboard heaters. Even just the electricity alone (which shouldn’t have changed much?) for everything but heating is higher than our old electricity bill, which included heating. Sad.

    Our kid didn’t start increasing our food bill until she was around 2.

  8. Great Budget Joe, very detailed. I believe your expense are already low, besides the traveling. Im waiting to see the post when you will reach millionaire status, or maybe you are already there. Good luck.

  9. I always keep track of my expenses in an excel file, its definitely overkill as I manually enter each expense but living abroad means programs like personal capital or mint dont work well for me. Every month I keep track of where we’re at in terms of our savings rate compared to our budget. Your food bill is way lower than ours for just 2 people – which is about 400-500 per month, I think a lot of that has to do with the cost of living here seeing as how we don’t eat out very often.

    Unfortunately because things are still in flux (wedding coming up, work permits, etc.) we never quite seem to hit our savings target of 56%. I’m hopeful though once things settle down and we get into more of a routine we’ll be able to get ourselves saving 60%+.

    • I am also keeping an excel file. It’s actually helpful for me to enter each line item. When everything is automatic, you forget what you buy. Where do you live? I’ll drop by your site and check soon. 🙂 Too busy lately.

  10. Our food budget is on the low side: $300 for a family of 5. We cook most things from scratch and don’t buy packaged or prepared foods. We grow a big garden and can/freeze/dehydrate lots of the harvest. We also buy food in bulk when the prices are the best, then we don’t need to buy it again until the price is low again. It works out really well!

    • Wow, that’s really good. The garden is a huge factor. Organic fruits and vegetables aren’t cheap. We don’t buy bulk because we don’t have much storage.

  11. Thanks for the clarification – I know I have to find a way to cut back on our food expenditures and I have a few ideas now and look forward to the future post.

  12. Your grocery bill is definitely on the low side. My husband and I don’t eat much for sure either but our monthly bill is around $500 a month. If we can get out of the store for less than $100 (we shop once per week) we are happy. Part of it is because I really don’t pay much attention on the price – I cook 4-6 nights a week and we both bring leftover for lunch the next day so I buy what I want to cook and eat (I really don’t buy junks). And we don’t really like chicken (which is cheap) that much. 😉 I don’t buy organic so I think our bill is high.

    Our utility bill is low for this part of the world (Texas). We have both gas and electric. Electricity bill is around $60 in winter and can go up to $130 in summer (2400 sq ft house). Last year I paid $90 a month on average. I heard horror stories here peple pay over $300 for electricty a month! Our house is very efficient though. Natural gas is about $20 a month in summer but about $80 in winter since we do have a gas heater. It’s still much cheaper than electricity though. HOA fee is about $80 a month.

    • It’s definitely cheaper to bring lunch to work. Do you eat a lot of beef? That can make a big difference.
      Your utility bills aren’t bad at all. $300/month is pretty high just for AC. $80/month in the winter is cheap for the US. I’m sure we’d spend nearly $200/month on heating if we live in a house.

  13. I too believe that your costs are really good compared to what I saw on other blogs from people living in the US. However, it still puzzles me how come you consume so much electrical power. Families here in Romania living in two bedroom apartments consume as low as 200 kwh per month. We use way more than that (up to 1,000 per month during winter, but much of our heating is electrical) but go down to apartment values during the summer.

    So yeah, fun to know that what seems low to some, seems quite a lot in other countries. 🙂

    • Americans probably have too many appliances. I’m also at home all the time now and that increase our electricity usage. We’re around 300 kwh in the summer so that’s not bad, right? 🙂

  14. We do track our expenses–very helpful to meeting goals.

    In 2013 we spent about CDN$3,500 on groceries, or about $290 per month, for two of us. Considering we rarely eat out (maybe once per month?), I think our grocery spending is pretty good. I don’t eat animal products, and my wife rarely does at home, so we save some there. However, I do buy mostly high quality, organic vegetables, fruit, and whole grains, so I think we do pretty well considering all that.

    • That’s not bad at all. Animal product does make a big difference. A gallon of organic milk cost $6. The kid drinks about 4 gallons a month so that’s already $24.

  15. Thanks Joe for sharing about the groceries. I think your family is not eating enough! (Just kidding.) I do suspect that Asians, in general, eat less than the majority of Americans. And…rice, one of the staples of Asia, usually costs less than food products like red meat.

    We have switched to mostly a plant based diet over the past few years, but we still average about $500 a month. It think shopping at Winco is a good way to reduce costs especially in the bulk food section. I love short grain rice and it’s difficult to find in most grocery stores.

    We are searching for a condo this summer in Eugene and most HOA fees run about $200-$300.

    • We probably eat less than most American families. We’ll see at the end of April. We haven’t eaten much red meat lately and I’m really craving a burger.
      Good luck with the condo. The market is hot right now.

  16. The winter was freezing and I had to pay more for natural gas and electricity. It seemed like there was no sunlight for weeks and I often had to turn lights on in the middle of the day just to find matching socks.

    Now the natural gas supplier has announced a 40% rate increase and I have to change the budget for that. Everything seems to go up except my hourly wage.

    • I just saw our old natural gas bill from 7 years ago. It was $40 on a very low month. I’d hate to pay the gas bill in the winter again…

  17. I wish I could track spending; but unfortunately, my wife is American; basic financing, math is like rocket science.

    I think your grocery bill is low because there is no junk (snacks) in your shopping list.

    Please look at your indoor temperature again; I am in Seattle, we share similar temperatures with Portland. You can’t be at 68 degrees without a heater “for weeks now”, if it has not been that hot outside yet, no matter how well your place is insulated. Every time you open your door, heat transfers.

    • You’re right, we don’t buy much junk food. Hope your wife doesn’t see your remark. 🙂
      We live in a well insulated concrete condo and we don’t have much heat loss at all. The door opens to an interior hallway. It really has been at 68 for weeks now. Pretty amazing. I guess our neighbors crank up their heat. The shared walls and floor are concrete.

  18. From my perspective, you guys seems to be doing a really good job of controlling your expenses. I don’t track our groceries spending in quite as detailed of a fashion as you do, but I’d estimate we spend $500+ each month for a the same size family as yours. Then again, we live in California where nothing is cheap. The only thing you’ve listed here that I would not like to have is the $470/month HOA fees! Yuck!

    • You also have sales tax. Yeah, the $470 HOA fee is quite high. I should compare it to living in a house. I don’t think it will be much cheaper once we take in bigger electric, gas, water, trash, gasoline, and repair bills.

  19. Yes, I’ve been tracking our monthly bills every month and I observed that our monthly bills are pretty high during the holiday season. It’s just surprisingly, even if we have a power interruption in our area our monthly bills are still the same comparable to the months that we don’t experience a power interruption. I really don’t know how they compute about that one.

  20. Looking forward to a grocery post in May. Our grocery bill is down to around $650/month for a family of 3, and I would like to get it down. We buy almost exclusively organic. It should go down in the summer due to my garden, and CSA membership.

    • Where do you shop for your organic food? We don’t eat all organic so that probably make a big difference. Organic chickens are somewhat affordable. Organic beef is just too expensive and we go with regular. We don’t eat much beef, though.

  21. My kids are the reason our grocery bills is around $500 each month. It seems like it’s mostly milk! We probably go through eight gallons of milk per month! We also try to buy organic now. It adds up.

  22. Condos and apartments have many shared walls. I would guess an interior unit, on an upper floor, could shut off the heat entirely and never get below 60 or so.

    Many people waste food. There was a statistic that said 40% of food is wasted. Throw out less food, and your food bill goes down.

    • Yeah, we rarely throw out food. Our shared walls are all concrete and they seem to hold the heat very well. I know our neighbors crank up their HVAC all the time. I hear the AC kicks in during the summer constantly.

    • I believe that 40% statistic is all points of the food system from farm to table. So its more like 10% is wasted in farms, 10% in grocery stores, 10% in transportation and 10% in homes. Then it sums to something like 40%.

  23. To be honest we don’t track our spending as much as we should. I built in a “cheat” to our budget by putting $400 into “Misc” because I didn’t want to cover all the little items that pop up here and there. Our total monthly budget, including amortizing our property taxes and insurance over the year is $2,800 a month. Most months we end up under budget. We spend about the same on groceries, we are at $450 a month for 2 adults 2 kids. The big differences for us are housing and and fuel. Our total house payment including taxes and insurance is $742, but we live in a relatively low cost area. We are also in a rural area, so we have to drive further for everything so our fuel expenses are just shy of $400 a month. Getting your AVG KWH per day down so low is impressive. I need to start tracking and working on that, as well as lowering our fuel costs.

    • Our cheat is the cash allowance. We can use that money for discretionary expenses. $2,800/month is quite good. Housing would be hard for us to reduce. Our area is pretty expensive for a frugal person. We’re don’t want to move to a smaller place. A house is definitely more expensive than the condo in the electricity department. There are just more stuff to power.

  24. When we lived in a 1,000 sq. foot condo our electric bill averaged around $60 per month. Besides that we only paid $150 per month for HOA that covered everything else including pool… I miss those days when I look at our current bills for the house!

    • How much do you pay per month? I just saw my bills from my old rental home and it’s pretty expensive. I’ll have to run a detailed calculation before trying to move into a house. Probably not much cheaper than $470/month we pay for HOA now.

      • Electric bill averages around $70 (higher in the summer, lower in the winter) but it’s all the other bills that come with the house vs. condo that make a difference. Gas heat, HOA+pool (not even close to your condo though – $470 is absolutely insane!), lawn and garden, maintenance… I do everything myself – insource 🙂 – but it all adds up. It’s not just the money; lots of time is spent on all of this too. Then again, I like living in the house and doubt I’d be as happy at our old condo again. I have to stay busy, so home-ownership fits me better than the hands-off condo life. Ability to let our son run wild in our fenced back yard is also something that I would not want to give up!

      • Electricity, water and garbage in our 1500 house with electric forced air cost us about $250 a month total on average. Electric averaged about $160. Water ~$110 every 2 months. Trash $43 every 2 months. We’re in the Northwest like you. And we heat more than you do. Gas heat would be a lot cheaper in winter and a lot of houses do have gas.. I think you’d have difficulty spending more than $470 on utilities.

        • You’re right with the $470. But if we include yard work, exterior maintenance, more driving, a second care, etc… It’ll probably get near $470.

  25. I think your costs are generally pretty good and they make sense in light of your general attention to frugality and details.

    We spend about the same per person on groceries (closer to $600/month for 5) and our breakdown looks kind of like yours – some at walmart, some at Aldi (instead of Winco) and some at the Asian grocery store. I think we eat pretty well and a nice variety of foods. We just cook most things from scratch and pick up whatever is in season or on sale.

    You keep utilities low by not living in a 4,000 s.f. mcmansion. Our electric isn’t quite as low due to living in the southeast, but outside the summer months it’s pretty comparable.

    The other discretionary categories seem about right. It’s enough to have fun and spend a little here and there without wasting piles of money.

    • Thanks for your input. I imagine our grocery bill will increase quite a bit once our kid eat more. He just doesn’t eat much right now. Lately, we’ve been buying more convenient food like gyoza and sandwich meats. It’s just easier for lunch. Yeah, our low electric bill is due to the 1,000 sq ft condo.

  26. This is a great budget. It’s actually pretty impressive for your situation and you may trim here and there but on the whole I think it’s pretty great and over time I guess you will know what to cut here and there. I track my expenses but I, like you, don’t spend a lot on anything at all; I upset this lady on Saturday when I told her that my utilities bill for three months is $40, and she replied that hers was $200 for two months. For me shaving off my budget would be about consolidating things (eg. my internet and phone, etc; I don’t own a television). I love books, so that’s a given in part of my budget; either buying a used book on Amazon or, to save a little, getting it at the library. Great carbon footprint, btw, especially with the gas prices. Truly impressive.

    • Thanks! We love books too and we have about 50 books checked out on my card now. Most of that is for the kid, of course. Wow, $40 for 3 months is AWESOME! The lowest we ever got was $30/month. Now it’s more because I work from home.


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