What’s Your Monthly Nut?

your monthly nutA monthly nut is just your monthly expenses. Many of the monthly expenses are fixed and if you keep track of your expenses, you should know what your monthly nut is.

I’m writing this post so I can point to it when I do my monthly cash flow update. I think our monthly expenses are a bit different than most people’s and new readers seem to have many questions/comments. For instance, our housing expense is very high at $2,100 and our transportation cost is very low at about $100. This is because we live in a location with great public transportation and walk score.

Fixed expenses

These are all the bills that are roughly the same every month and can’t be reduced easily.

Housing – $2,097. This is our mortgage, property tax, and HOA. We live in downtown Portland and we love this location. There are many entertainment options and we save on transportation and utility bills. However, the HOA is very expensive at $460/month. As long as Mrs. RB40 lives and works in Portland, we will stay here because she doesn’t want to move. I don’t want to move either, but we would consider it once she retires or changes job.

Bills – $250-$300. This category includes property insurance, internet access, and utilities. The electric bill is the only one that fluctuates much. We pay anywhere from $50 to $100 for electricity depending on the season.

Transportation – $100/month. This is just gas and maintenance/repairs. We probably drive 500 miles per month and fill up twice. Once I quit working, we probably drive about half that amount. We share one car and that also helps minimize the expense.

Variable expenses

We can probably reduce some of these expenses.

Cash allowance – $600-$800. This is a bit of a catch-all category. We each get $75/week cash allowance and we use that money for groceries and other day-to-day expenses. Clothing, eating out, gum, and lunch are just some of the things we use the cash allowance for. I can probably reduce my cash expenses a bit more once I quit working.

Pet, baby – $50/month. This category includes pet food and baby toys/accessories. We usually use cash for diapers, milk, and baby clothes.

Medical – $50? Usually pretty low, but you never know.

Entertainment – This is usually pretty low too. I only put tickets to concerts and shows in this category. We haven’t been to the movies since I got free tickets to see Toy Story 3.

Misc – $50? This category can fluctuate a lot too. I’ll put travel, home repairs, and others here.

So our fixed expenses round out to $2,500. Our variable expense is anywhere from $700-$1,500. However, a big part of that cash allowance goes toward food so the real number is probably fixed $3,000 and variable $200-$1,000.

I’ve been keeping track of our expenses for over a year and usually it is in this neighborhood as long as there are no big emergencies.

Our sweet spot is $3,500/month with an extra $500 budgeted toward traveling. This works out to $4,000/month.

The housing cost is the stand out here, but we can deal with it as long as Mrs. RB40 continues to work. We can always move into one of our rental homes if we really need to reduce this.

Is $4,000/month an unreasonable amount to spend for a family of 3 on the west coast? It works well for us and we’ll be hard pressed to reduce it much further. The only way to make a big dent here is to move to a cheaper location and that’s not in the cards at this time. What about you? What’s your monthly nut? Can you reduce it?

If you need some help keeping track of your finances, you should Use Personal Capital to manage your budget. You can keep track of your income, expenses, and net worth; all in one place.

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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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59 thoughts on “What’s Your Monthly Nut?”

  1. I think we need delve deep into the monthly nut. One overall and the other base monthly nut without considering the rent / home expenses. That way we can compare across. Here is our base monthly nut

    Grocery & Household Expenses: 500
    Eat Out: 200
    Entertainment: 100
    Misc. (Clothes & other one time buys): 250
    Car: 250
    Utilities, Wireless, Internet: 150+100+50 = 300
    Kids Classes: 200
    Healthcare (Premium + OOP): 500
    Vacation: 550

    Total Base Monthly Nut: 2850

    I want to retire and move to a low COL area and that would make my total monthly nut to be 4000$ per month. Not bad for a family of 4.

    • Nice job with your spending. Healthcare is a big piece of your expense.
      I want to move to a low COL area too, but I’m not sure where to go. We’ll have to explore more areas over the next few years.

  2. Great to see the splits, although being based in India i don’t quite appreciate the figures :).

    Personally i have been using an excel sheet (with a mobile app to enter expenses as soon as i make cash spends). I add this to the debit card payments separately (I don’t use a credit card).

    I have tried to categorize my expenses across 4 buckets:

    – Fixed + Monthly Recurring (House Rents etc come under this)
    – Fixed + Discretionary (My Gymnasium expenses fall under this)
    – Variable + Monthly recurring (Electricity Bill, Groceries, Fuel for the car etc falls under this)
    – Variable + Discretionary (Eating out+ entertainment expenses + apparel purchases).

    What i consciously try to do is get my discretionary spending minimized as much as possible and the obvious low hanging fruit is the last category.

    As someone pointed out its important to bring down your fixed monthly expense as well, but its a tougher nut to crack.

    Whats important is to be aware of how multiple “harmless” purchases add up to big amounts eventually at the end of the month.

    Work in Progress for me 🙂


    • It can be difficult to reduce the recurring expenses. Here in the US, a lot of people have cell phone, cable TV, magazine subscription, car payment, and many other bills. This is part of the lifestyle inflation most people here experienced. I try to minimize these recurring expenses and avoid any monthly fee.
      Good luck!

  3. Interestingly enough, I spend 3-4x more on my business than I do on myself. For some reason, I have no problem spending and investing in my business, but will double think anything for myself. I guess I’m just in that stage in my life where I’m trying to get somewhere, and unfortunately, sometimes feels like Google is making it a lot harder for me than it has to be.

  4. Our housing is about $1200, transportation $120, food about $500, eating out about $300, and then there is me 🙂 The amount I manage to spend I won’t t disclose because sometimes it is pretty obscene.

    • You guys spend a lot of money eating out. So about $2200/month? That’s not bad at all.
      I wrote a post with you in mind that will go live tomorrow. 🙂

  5. Our usual monthly spending budget is for $1850 (fixed $1300, variable $550) and we also transfer $800 into targeted savings for near-term irregular expenses. Beyond that we have our Roth IRAs and our tithe/giving.

    I live in NC with my husband – no pets or kids.

  6. Our housing is also much lower with transportation much higher, but otherwise our nuts are rather similar. We don’t have an adult allowance, but we do stick to a grocery budget. Our dinners out, clothing and other expenses are taken from miscellaneous. It’s interesting to compare, but I think our expenditures actually even out to about the same. When the baby’s here, diapers and stuff will add an additional monthly cost, but we’re prepared for the blow 🙂

    • I think if you can stick to your budget, you don’t really need allowance. I’m terrible at sticking to a budget especially when I use a credit card so that’s why we are using cash. Baby RB40 didn’t impact our expense all that much. Diaper and formula aren’t free, but we spend a lot less money going out so I think it all evened out.

  7. I think your monthly nut is very reasonable! I live on the East Coast, so my monthly nut is a little different, but similar distribution. I think a lot of people make the mistake of spending more money as they make more and, of course, never really get ahead. The only answer is to reprogram the way we think about money and the way in which we spend.

    • It is really difficult to keep lifestyle inflation in check. We definitely spend more than we did when we were poor.
      Our expenses have stabilized over the last few years though and hopefully stay the same from now on.

  8. I’d like to get my monthly nut down to about $4,000. With housing, utilities, and business expenses I’m pushing $5,400. Ouch, I know. Living in Los Angeles will do that to you – oh, and owning a business that incurs some monthly charges which are primarily web hosting and phone expenses coming in at $500/month. If I can move in the next year or so and knock $700 – $1,000 off my rent, I’d be thrilled!

  9. Let’s see, here’s our monthly nut based on what we “have” to pay right now (we live in Houston, TX):

    – Housing (mortgage, taxes, and insurance – we don’t have an HOA right now): $750
    – Utilities: $200
    – Transportation (gasoline, maintenance, insurance, and toll roads – no car loans, 2 cars): $300
    – Food: $500
    – Cash: $200
    – Dogs: $50
    – Medical (insurance and monthly meds): $400

    Total = $2400 but we also receive $600 in rent for our current 3rd bedroom

    BUT, we are buying a new home in a few months once it’s built, so our monthly nut will be $4400 but we should be receiving $1200-$1800 in rent a month (current $600 in the new home plus $1200 for our current home).

    • Great job with the rentals. Are you guys planning to have children at some point? That will cut down on your rental income.

      • Nope. I mean, we are 28 and 29, so nothing is set in stone. But we aren’t leaning that direction at all right now…I like other people’s kids. 🙂

  10. My monthly nut is about $3900 in the NYC tri state area. I am looking for ways to reduce this to $3500 but it seems a bit harder than expected. On the flip side I am looking for ways to diversify and increase my income as to avoid any more cutting below my nut.

    • Heh heh, I hear you. NY is quite expensive right? I want to keep my monthly nut below $3,500 and that is already difficult here. It’s hard to cut expenses.

  11. Our monthly nut is roughly $2,500 (including food and charitible giving) and we have 4 children. We, too, are a one car family and only drive approx 400-500 miles a month (I live about 8 blocks from my office, so I get to walk to work).

    • $2,500 is great for a family of 6. Do you live in a less expensive part of the country? It would be nice to move to a lower cost area someday.

      • I am nearly your neighbor, in sunny Salem, OR! I agree it would be nice to live in a less expensive part of the country, but we love Oregon and my wife’s family is here.

  12. Thank you for sharing! It’s interesting to see what others spend per month, and how they feel about it.

    Our variable numbers are roughly similar to yours, but our housing costs are lower (we live in Houston). Our transportation is higher; however, we lump this in with the variable amount we each can spend each week.

  13. Your “Monthly Nut” seems reasonable to me. I did not see “eating out” in your post so it may add a few hundreds a month + daycare usually costs as much as housing!

    We are from East Cost, NY, but we did not have a regular “Monthly Nut” for the past few years since we were paying off our mortgage. In addition, it is a little different for us since we are self employed, meaning there are quarterly tax payments, health insurance premiums, etc.

    • Eating out is part of our cash allowance. We only go out about once a week so we probably spend $100-$150 of our cash on that front.
      Daycare is very expensive, but baby will be out of daycare once I quit so that should help.

  14. For tracking expenses, I tried Mint for a few months but went back to using a spreadsheet. Tried and true. Plus I can massage the data how I want.

    Over the past 7 years I have found that my expenses hover between $2,500 and $3,000. I am single, so a big benefit for me would be sharing expenses with a significant other. And by sharing expenses I mean sharing my mortgage. That would be, I dare say, the biggest factor in moving my early retirement up!

    • I use a spreadsheet too. It’s more detailed.
      I spend much less money when I was single so good luck. 😉

  15. My focus has always been minimizing those fixed expenses. If something goes wrong (layoff, illness, etc.), I want to be able still to cover fixed expenses for a very long time, so that we’re not forced into doing something drastic like selling our home or taking a low-paying service job just to bring in some cash. I figure we can dial back variable expenses quite a bit if necessary, but the fixed ones are the really tough nut!

    • That’s the way to go and we tried to minimize the fixed expense as much as we can. The housing is tough, but we really don’t want to move.

  16. If you each get $150 per week, that’s a minimum of $1,200 a month. A month with 5 “cash distribution” days is $1,500 a month. Do you mean $150 total, i.e. $75 each per week? That would add up to $600-$750 per month.

    Even that seems high for a family of three. This cash distribution with no accounting in my view keeps you from knowing and controlling a lot of your variable expenses.

    The way I see this, Mrs. RB40’s paychecks are largely eaten up by the housing and the housing related bills. Her net weekly is $2,694/2 , or $1,347. Multiply by 26 and divide by 12, and her monthly net is $2,925. Subtract $2,097 for the mortgage and HOA and $250 for utilities and insurance, and you are left with $578.

    Leaving your paycheck out but including your other income, housing costs in my opinion represent an unsustainable percentage of your net income. You have no room for an incompletely insured medical event or other significant unforeseen expense.

    In your shoes, I would not even consider retiring until I could replace a much bigger chunk of my paycheck and/or reduce my housing expense by at least half. Unless Mrs. RB40 is willing to cut the housing expense, I would look to the day I can pay off the mortgage or I can pay the mortgage with unearned income as my anticipated retirement date.

    • Oops, you’re right. I fixed the post and put $75 each. Do you really think $75/week is too much to spend? How much allowance does high school student get these days? It must be around $50/week now. We used to get $100/week and cut down to $75. How much money do you spend per week? We save up this amount for clothing and most other personal expenses too so I think $75 is already low for an adult.

      Yes, Mrs. RB40’s paychecks are going toward housing and bills. We can accept that for now. Her salary will still grow so I don’t think it’s a huge deal right now. She is already maxing out on her 401(k) before we see the take home paycheck.

      We have health insurance and I think that should cover minimize the health related expense. We also have over $50k in liquidity and I can sell my stocks if I need an additional $200k in a week. I think that’s plenty for the unforeseen expense.

      Thanks for your input, but I am not that worried. Our cash flow is working out pretty well. Mrs. RB40 is still maxing out on her 401(k) so we are continuing to save. I can always go back to work in a few years if it doesn’t work out. We’ll deal with any problems as they come up.

      • I’m not looking at the $75. I’m looking at the $600 to $800 per month, and you have been at the high end of the range the last two months. It seems like a lot for food and for personal items. I would work on the food and related costs as a separate item, accounting for everything and looking for ways to cut. Then I would agree on a much smaller small allowance for personal expenditures for the adults. I think you will be surprised how much the two of you are spending on clothes, haircuts, toys, eating out, and all the other items where money just disappears if you accounted for all that spending.

        I have personally seen many people that thought they are FI get slammed by changes in their lives or in their assets and income. Maybe I am more conservative because I am older than you, but I do not think you are yet prepared to weather the storms ahead. Five more years, some good investing luck, and another rental or two would make me feel a lot more secure if I were in your shoes.

        • We eat out about once per week and it does get expensive at $20-$40 a pop. Other than that, I haven’t spent much money at all. I’m cutting my own hair now and haven’t purchased any clothes since Christmas. We don’t spend every penny of the allowance. Mrs. RB40 is saving up the left over for shoes and purses for instance. I’ll keep track of my cash spending this month and see where it goes. Good advice.
          I see your point of view and my parents and in laws share your view. I’m sure we can handle at least 5 years of me not working. Once our kid goes off to school, I can definitely go back to work again. Thanks for you input. I appreciate it.

        • $250,000 in liquidity seems pretty good no? With a $65,000 gross annual nut, their savings can last 3 years without them having to do anything.

          I’d say that’s not bad, especially since Joe will likely be making some money during that time.

          • That presumes Joe (and RB40 wife) are ABLE to go back to work at some point….what happens if something catastrophic (medical or otherwise) occurs and the ability to go to work becomes limited or disappears –for example, Joe’s mental health /depression returns (who says it was all work related…could be other factors) What if physical injury prevents sitting in a chair, eyes get worse, kid or wife has a medical issue that requires extensive care.

            Combine that with a market hiccup — another 30% swoon or worse in stocks, etc, and there is recipe for disaster. How’s the insurance line up? – long and short term disability, medical insurance, long term care insurance, life insurance?

            The cushion they have is not very large….it’s larger than most but probably not large enough to last for 35 or 40 years even with a spend-down/die broke spending plan.

            I think one should have 15x annual salary to consider having a properly sized cash/deferred savings “nut” for retirement . …especially with small child and not having saved for college education, is actually really small…..

            Feels like $2m required, vs $1M outlined…

  17. You live in Portland? I didn’t know that. It seems like lots of bloggers do/did/have live(d) in that area. Awesome!

    I only spend like $1700 per month but that’s just for me. I could dial that down a lot though.

  18. $3,500-$4,000 a month for a family of 3 sounds great! All you need is $48,000 after tax a year, or $65,000 gross a year which is not bad at all.

    What about $50,000 a year college tuition costs though?

    • The 50k/year for college will be tough. We’re saving in the 529 plan and hopefully that will take care of a lot of the cost. We can sell one of the rental if we really need to and I’m sure he can borrow some money too. 🙂

      • how about the JC route to save money

        i busted my butt and just finished college in 2 years. total costs was <10,000. i did not get to dorm on campus which saved a fortune. i did miss out on a lot but did not miss on the college debt.

        do you think your child would be better off with 200k give or the college degree?


        • I think the JC route is a great idea. We’ll see how it goes. I think it all depends on the major.
          If he wants to go into business or finance, it would be worth paying for an prestigious school.
          I guess we’ll re-evaluate again when the time come. If he wants to be self employed then cash would be much nicer.

          • College was really stressful for me, but I also had a great time. I’m still have many close friends from my freshman year. It was pretty amazing.

    • Why 50K for college? I’ve heard bad news about college costs since my kids were born, and though they no doubt are rising my three kids are all in college now and it is costing nowhere near 50K each. One more aspect of the politics of fear, methinks.

      • We have 17 years left before college and I’m pretty sure by then it will cost more than 50k/year.
        I hope the cost stabilize, but I’m not betting on it.

        • I really liked this post! It inspires me to save more and maintain a lower level of spending.

          I noticed that it’s been 6 years since you wrote the article. Have you noticed any increases in your family’s expenses (i.e. inflation, growing kid)?


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