Some people seem to think we live in a cardboard box and eat ramen noodles to save money. In this video we talk about how we save money in the 3 categories that people spend most of their money.
According to the Bureau of Labor Statistics, the average household spends $1400/mo on housing, $750/mo on transportation, and $550/mo on food.
We make up a lot of our savings in these three areas by being flexible on house size, driving only one car, and limiting our restaurant eating.
Food is still a work in progress for us, but we’re getting better.
Awesome video! It really makes me think about my budget busters. Let’s see…..
Housing: We are a family of 4 and live in a 3 bedroom house. I do feel like we could downsize, but we own it free and clear.
Transportation: Our biggest area of work. My husband has a 2000 3-D Honda for his commute, but he also has a dodge full cab truck that he bought for a great price from his grandmother. I also have a jeep patriot. I don’t think I can talk my husband into giving up the truck though. On the positive side, we drive cars until they are very old and unreliable.
Food: This used to be our weak area until we discovered Aldi’s. That made a huge difference. We spend about $400 a month for a family of 4. I think we could get it even lower if we cut out the trips to Chick-Fil-A. lol
Amazing that you own your house free and clear. That’s awesome! We have a love/hate relationship with Chick-fil-A.
I have a question regarding retiring, housing, and planning. You now rent and live on church property. And Mike works for the church, right? So what happens when you retire? Will you be able to live on the church property even tho you no longer work there? Do you plan on having a family? The place you live in now just doesn’t seem like a long term place to live (like 10 or 15+ years). It just seems like it fits your needs now b/c it’s cheap and simple and allows you to save a lot of money. Just curious b/c you talk quite a bit about how you’re saving to retire, but what do you hope to do in retirement (or financial independence, or whatever).
“Retirement” for us is actually financial independence. So, we may or may not continue to work, or possibly go part time. We’re also considering buying a sailboat for 30-50k and doing some sailing for a few years after FI. Or, at that point any money making endeavors and side projects would offset the small increase in rent or mortgage.
Even if we do need a different/bigger house we’ll always find a way to buy a fixer upper and end up ahead.
Interesting. My husband and I are 39 and are also saving for financial independence (hopefully by age 50?). We also have 3 kids (ages 8, 6 and 4) and a mortgage. So part of our savings plan involves paying off the mortgage b/c we plan to stay put until the kids graduate (not that I don’t fantasize about taking an extended trip here and there). Just curious about your future housing plans b/c I hadn’t heard you mention it before. A sailboat sounds like quite an adventure! To be honest it’d scare the hell outta me! And I don’t think you’d be able to take chickens or goats. 😉
PS Aldi rules.
Our closest Aldi is 25 miles away, so haven’t made it up there yet. We’ve heard great things though!
I think if you can stay below the averages in all three you will be ahead of the game. So far I am under on transportation and food. I am still working on housing because I am in a high rent area. Good Post.
Agreed. Besides transportation I was actually surprised these averages weren’t higher.
I went back to look at the list, and I was surprised we are pretty close to many of the averages. We spend about $1250 on our mortgage and property taxes. That doesn’t include upkeep, so I’m sure we’re close to the average. We spend about $600/month on food. I think we’re doing a bit better on transportation costs–we buy cars with cash and live pretty close to work and school. But I haven’t dug up all the numbers to be sure.
Overall we are really close to the average annual expenditures of +/- $50,000 with a household of 5–instead of 2.5 like the survey. Luckily our income is above average, which allows us to have the good savings rate that we do.
I wish we would have started saving more aggressively sooner. We might be retired by now! When we were younger we didn’t make any huge, dumb mistakes, but we weren’t as careful as we could have been. That has resulted in a lot of wasted years. Years that now have to be spent working. (boo)