Perhaps the most important part of any personal budget is spending, which can categorized into different areas and set with a numerical target. To give you a glimpse of my spending habits right now, here is the current breakdown on a per month basis:
Food (including groceries and eating out)-- $250 to $300
Transportation (including gas, and public metros) -- $100
Worship offering -- $200
Housing (including all utilities) -- $450
Miscellaneous -- $400 to $500
Total -- $1400 to $1550 per month
Right off the bat, I honestly believe that my monthly spending is (much) lower than the average young professional living in the Arlington VA area. For one, the housing around here can be mindbogglingly expensive -- e.g. a 1 bedroom apartment costs upwards of $1500 a month. I live in a shared apartment about 2 miles away from a metro center, which reduces costs considerably. In addition, my food budget is probably much lower than most individuals. This is partly because I am often indifferent about food (company is always the reason I would go out to eat) and possess a fantastic amount of pride in my own cooking skills. I also do not drink. I am not a great cook by any means, but the self-winning argument I always make is: if I can make just about anything ordered out, why would I need to eat out?
The other items on my budget also deserve clarifications.
- Transportation is capped at $100 since I own a car and currently commute into the city to take evening classes twice a week. The commuting is achieved through the wonderful (I jest) metro system, which costs about $4 each time and thus totals to around $30 per month. Gas is increasingly becoming expensive but, fortunately, I drive a very fuel-efficient Honda Civic -- which means I gas at most twice a month (1o gallons each time = $70 to $80).
- As a devout Christian, I make a point to make an offering on Sundays through my church. Personally this is a symbol/token of thankfulness to God for everything in my life. I donate $50 each time, which adds up to around $200 per month.
- Miscellaneous is the most interesting category and probably the most confusing one. This is pretty much where I dump anything that cannot the categorized in the other ones. For example, spending on new clothes or glasses get placed into this. I also put things like some grocery shopping if they are irregular. My records reveal about $400 per month in this.
Now, let's be clear that I will not be revealing my monthly salary (but you can infer from my budget that it is greater than $1550 a month). I find the most difficult category to remain under the capped amount is food expenses. Although I sometimes bring cooked meals from home (as much as I think I am a good cook, my mother is infinitely better...), eating out with friends often wrecks havoc on this. Eating out with friends may only happen on weekends but it costs about $10 per meal, which can easily add to account for 1/3 of the food tab.
More broadly speaking, it comes easy and natural for me to stay under my planned monthly budget. Maybe this is just unique in my case as I consider myself to be a simple, low-upkeep individual who enjoys reading and playing sports much more than "bar hopping". I am also largely not materialistic -- I may blog about gadgets to buy but am also very loyal to the possessions I have (e.g. if it doesn't break and works great, I feel kind of a traitor to buy something to replace it).
The two biggest "suckers" of any budget are bound to be housing and food expenses, as these are "essential" commodities. We are need nourishment and shelter to live comfortably. However, I think the main problem that often arises is what we consider to be "essential". Eating out is not "essential" unless it is to take a client out, nor is living in a luxury apartment complex. It's very important to understand the differences between a common good and a luxury good in economic terms. I will make the case that cutting out luxuries actually improves one's quality of life, because it allows a refocus into the things that really matter. The inverse is a constant preoccupation with material possessions and not on relationships with those around us.
All in all, remaining debt free is not difficult at all if you keep yourself grounded (aka "keeping it real"). Most of it is refusing to succumb to peer pressure to pursue happiness through your wallet, or become enamored with things that do not last. From a Christian perspective, everything we have are blessings given by the Almighty God and thus we should live in thankful for everything. It's often the little things that we overlook, like our health and relationships, that truly bring meaning and joy to our lives. There is no secret staying financially solvent -- if I can do it in an expensive place like Arlington VA, anyone can!