It’s the first of the month, the day I add up and analyze all the expenses that I entered into the spreadsheet all of the previous month. And because it’s the 1st of October, it’s also time to do a larger analysis, which I do every three months.
Let me preface this by saying I pretty well made up our budget: the numbers I assigned to categories other than fixed expenses were fairly random, my gut feeling on what we had been and should be spending. It turns out I was right on the money (forgive the pun, it was unintended) on some things, and out to lunch on others.
Here’s where I was right (defined as being with 10% of the average monthly expenditure): car maintenance (not gas); the cats; clothing, health – over-the-counter drugs and anything our drug plan doesn’t pay for – and holidays.
What I overestimated: lawn and garden expenses, and, house repair and maintenance. Given we’ve been doing a fair bit of house renovations this year, this latter one surprises me – but it’s mostly been cosmetic, and paint just doesn’t cost that much, I guess.
Now for what I underestimated – the longest list!
Car running expenses. This one surprised me, since we’re not commuting to work any more. We live in the country, so all shopping, library visits, movies, etc., mean a drive. I didn’t realize how much of this I did on my way home from work before, trips that now entail driving to town. I need to get better at consolidating trips!
Charity: well, we should be giving more than I had budgeted, so this one is a good thing.
Entertainment: twice what I had budgeted. But we like going to movies…and the occasional play. Expensive rural internet means Netflix or its competitors isn’t an option. Hmmm.
Groceries: we choose local and sustainable over cheap for meat, fruits and vegetables. It costs. BD’s allergies also mean some specialized foods that are also expensive. I try to make up for it by buying other things at NoFrills, but I don’t think I’ll ever get the monthly expenses down to what I thought I could.
Household: this was a catch-all for anything that wasn’t health and wasn’t groceries, like a new broom or picture hangers. I’m surprised by how high it is, given that we try not to buy much. A surprisingly high portion of it is fees: drivers’ license renewal, memberships, credit-card renewal fees (worth it, though, because we use our air miles frequently).
And then there is Miscellaneous – which differs from Household in that it involves things like haircuts and pedicures and anything else that didn’t fit anywhere else. I probably should just amalgamate these last two.
Our variable expenses are running about 20% higher overall than I thought they would. Now, this isn’t a huge problem – we’re still spending less than what is coming in, but it’s not leaving us with as big a cushion as I would like, and, because we only retired in the spring, the tax withheld from our pension cheques probably is underestimated, which means we’ll be paying a chunk of income tax in the spring. Once I see how much that is, I’ll have the pension deductions adjusted appropriately so it doesn’t happen in another year. BD turns sixty this month, so he starts receiving a small government pension in November as well, which will also need considering when it comes to tax time.
The completely flexible piece in our budget is the holiday spending. If I take that line out of the budget we’re spending about 70% of our net pensions, so overall I think we’re doing fine. We’re not touching our registered retirement savings plans, or our other savings, at all, and we have no debt. There were a lot of raised eyebrows and voiced concerns when I chose to retire two years early, reducing my potential pension by about 20%, but I was fairly confident we could do it. So far, fingers crossed, it looks like I was right.