The Three Expenses You Have to Get Right

Financially, I’m all about sweating the small stuff. Even though I don’t like the word “frugal,”  if you followed me around for a week you might describe me that way. I bring my lunch to work almost every day, reuse plastic bags, and almost always order water in restaurants.

However, I’m also all about sweating the big stuff, and if you really want to get the money thing right, this is where you’ll get the most bang for your buck. In particular, if you’re going to live generously, save and invest adequately, and experience that wonder of the financial world known as margin, you really have to get your housing, transportation, and food expenses right. Here are some guidelines and suggestions.

Where to live

The absolute max you should spend on housing (mortgage, property tax, and homeowner’s insurance) is 25% of monthly gross income. Far better to keep it to 20%. And especially for those who are newly married, keeping your housing costs to 20-25% of just one income will get the financial side of your marriage off to an amazing start.

Read An Uncommon But Brilliant Money Move for Young Couples  

I know some people live in really expensive parts of the country where keeping housing costs to 25% of monthly gross income seems like a stretch. So, you either need a really big income in order to make it work if you want to live there or you’ll have to work really hard to keep your discretionary spending (entertainment, clothing, vacations, etc.) under control. I don’t see generosity or saving and investing as options for cutting back.

What to drive

After teaching a recent money & marriage workshop at our church, a couple came up to me to ask for some budgeting suggestions. They were doing a ton of things right, and yet it was a struggle for them to makes ends meet.

We went category by category, and soon enough we found the culprit: a financed car. For most financial mortals, a car payment simply doesn’t fit on a budget. If you’re going to experience financial freedom, you need to free yourself of a car payment. That may take some time, but it’s a goal I’d encourage everyone with a financed vehicle to pursue. 

Read Living Without a Car Payment Gets a Good Rap

What to eat

I’m not sure I have a lot to add to the how-to-save-on-food discussion. I’m sure you’ve heard all of the tips that come most readily to mind. Use a grocery list. Make a weekly meal plan built around what’s on sale. Don’t shop when you’re hungry. Figure out what stores have the best prices on the items you buy most often. And if possible, don’t bring your kids to the grocery store. 

Actually, I did hear one other tip recently that made a lot of sense. Online ordering. It’s a time saver and perhaps even more importantly it can be a money saver. When we’re in the store, most of us pick up items we didn’t intend to buy. Buying online, and then being able to pick up your order without wandering through the store, can remove some of that temptation. A lot of grocery chains, such as Kroger, offer this service.

What tips do you have for managing these “big 3” categories?

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6 Responses to The Three Expenses You Have to Get Right

  1. Peter March 13, 2019 at 5:54 PM #

    These three areas are certainly among the most expensive, and if you don’t watch it they can consume most of your budget.

    We always save up and pay cash for our cars, buying slightly used cars, and then driving them for the better part of a decade. While we use the car we pay ourselves a payment so that the next time we need a car we can just pay cash again.We also don’t overestimate what we need for a car, often we’ll see neighbors driving $70,000 trucks when they don’t really need one more than once or twice a year. Crazy to me.

    Food is one of our biggest stumbling blocks since neither one of us enjoys cooking. We end up eating out way too often. We’re doing our best to cut some of that out, however, and it’s amazing how much money you can save when you do cook more at home.

    • Matt Bell March 13, 2019 at 8:10 PM #

      Food costs can definitely drive a budget off the rails. Even though you guys don’t really like to cook, it’s great that you’re trying to do more of that. I think you should turn your attempts at cooking more into a series of posts on your site. I’m sure there are a lot of people who don’t really like to cook, but want to cut back on their expenses. You could show them the way!

  2. Aaron March 13, 2019 at 11:37 AM #

    Food is a big expense – more than I think many of us realize. You can certainly put a lot of money back in your pockets by trimming what you purchase / eating habits. It’s also a balance act as the better / higher quality foods cost more. That’s what we’ve found through switching to more organic, less processed foods.

    • Connie March 13, 2019 at 4:07 PM #

      My husband and I have always maintained a vehicle fund so that we have the funds available when we need to replace our vehicle. We also try to walk as much as possible. My husband also rides a bike frequently and we always lived fairly close to our places of employment which helped to cut down on vehicle expense. We are currently retired, and we make a concerted effort to walk whenever possible which not only cuts down on costs but provides us with good exercise as well.

      • Matt Bell March 13, 2019 at 7:56 PM #

        Great ideas, Connie! Love the double win of getting some exercise while you’re cutting expenses.

    • Matt Bell March 13, 2019 at 4:08 PM #

      So true about the added cost of organics, which only makes it more important to find the stores that sell things like organic milk for the best price. One little step we’re taking this year is starting an organic vegetable garden, but with the start-up costs, it’s going to take a while to make this cost-effective!

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