monthly expenses

Ask the Readers: What Is Your Biggest Monthly Expense?

Ashley Jacobs — Tue, 26 Mar 2019 08:30:09 +0000

Editor's Note: Congratulations to Jessica, Jessi, and Alicia for winning this week's contest!

Every household has different needs, but there are a few big categories that most families have to budget for, like food, housing, utilities, and transportation. Which category ends up as your biggest expense each month will likely depend on where you live and how you live.

What is your biggest monthly expense? What have you done to keep that expense as low as possible? What are some of your other big monthly expenses?

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Tell us about your biggest monthly expense and we'll enter you in a drawing to win a $20 Amazon Gift Card!

This article is from Ashley Jacobs of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Ask the Readers: What Was Your Biggest Expense This Month?

Ashley Jacobs — Tue, 25 Aug 2015 15:00:21 +0000

Editor's Note: Congratulations to Robynn, Daniella, and Christina for winning this week's contest!

Our biggest expenses each month will differ from family to family, and maybe from month to month. It might be a regular payment like mortgage or student loans, or it could be a one-off purchase like new appliances or airfare for vacation.

What was your biggest expense this month? Was it a regular monthly expense or a one-off payment? Were you able to plan for it or did it catch you by surprise?

Tell us about your biggest expense this month and we'll enter you in a drawing to win a $20 Amazon Gift Card!

Win 1 of 3 $20 Amazon Gift Cards

We're doing three giveaways — here's how you can win!

Mandatory Entry:

Post your answer in the comments below. One commenter will be randomly selected to win a $20 Amazon Gift Card!

For Extra Entries:

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If you're inspired to write a whole blog post OR you have a photo on flickr to share, please link to it in the comments or tweet it.

Giveaway Rules:

Contest ends Monday, August 31st at 11:59 p.m. Pacific. Winners will be announced after August 31st on the original post. Winners will also be contacted via email.
You can enter all three drawings — once by leaving a comment, once by liking our Facebook update, and once by tweeting.
This promotion is in no way sponsored, endorsed or administered, or associated with Facebook.
You must be 18 and US resident to enter. Void where prohibited.

Good Luck!

Tell us about your biggest expense this month and we'll enter you in a drawing to win a $20 Amazon Gift Card!

This article is from Ashley Jacobs of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Best Money Tips: 40 Ways to Save on Monthly Expenses

Amy Lu — Thu, 21 May 2015 19:00:10 +0000

Welcome to Wise Bread's Best Money Tips Roundup! Today we found some great articles on ways to save on monthly expenses, tricks to make your groceries last longer, and ways to make extra cash this summer.

Ask the Readers: What Is Your Biggest Monthly Expense?

Ashley Jacobs — Tue, 21 Apr 2015 15:00:09 +0000

Editor's Note: Congratulations to Jeff, Kelli, and Christie for winning this week's contest!

An important part of budgeting is figuring out how much we spend each month on various things — utilities, groceries, mortgages, credit card debt, etc. — and a popular tip for lowering our monthly expenses is to find a way to slash the biggest item on the list.

What is your biggest monthly expense? What percentage of your budget does it take up, approximately? Can you think of any way to lower this expense, and does it make sense for your situation to do so?

Tell us what your biggest monthly expense is and we'll enter you in a drawing to win a $20 Amazon Gift Card!

Win 1 of 3 $20 Amazon Gift Cards

We're doing three giveaways — here's how you can win!

Mandatory Entry:

Post your answer in the comments below. One commenter will be randomly selected to win a $20 Amazon Gift Card!

For Extra Entries:

You can tweet about our giveaway for an extra entry. Also, our Facebook fans can get an extra entry too! Use our Rafflecopter widget for your chance to win one of the other two Amazon Gift Cards:

a Rafflecopter giveaway

If you're inspired to write a whole blog post OR you have a photo on flickr to share, please link to it in the comments or tweet it.

Giveaway Rules:

Contest ends Monday, April 27th at 11:59 p.m. Pacific. Winners will be announced after April 27th on the original post. Winners will also be contacted via email.
You can enter all three drawings — once by leaving a comment, once by liking our Facebook update, and once by tweeting.
This promotion is in no way sponsored, endorsed or administered, or associated with Facebook.
You must be 18 and US resident to enter. Void where prohibited.

Good Luck!

Tell us what your biggest monthly expense is and we'll enter you in a drawing to win a $20 Amazon Gift Card!

This article is from Ashley Jacobs of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

The Psychology of Cash Flow

Philip Brewer — Mon, 14 Nov 2011 09:48:32 +0000

Money flows into your life, and money flows out. To deal, you need to get your finances right — but also your mind. (See also: Managing Your Short-Term Money)

Are your finances under control? One good test is how your spending is constrained by your income.

Far too many people are forced to arrange their bill paying around their income schedule. They put bills aside until their paychecks arrive, then they write the checks (or authorize payments online), hoping they don't run out of money before they run out of bills.

If your finances are under control, there's no need to do that. You always have enough money to pay your bills, whether "payday" is today or tomorrow or next week.

Control Your Finances

You only need two things to get your finances under control:

You need to have an income that's larger than your expenses.
You need to have "enough" money sitting in your checking account.

In this case, "enough" is a reasonably specific amount — enough to pay the largest sum of bills that can be expected to arrive between two paychecks. For most people, one month's expenses is a handy target. There are, of course, special circumstances, such as annual or semi-annual bills for car insurance or property taxes. You could just leave enough money in your checking account for those, but they're probably better handled by accumulating money in some sort of savings or investment account.

If those two measures aren't in place, you need to take action right away. Perhaps emergency belt tightening is in order to get your expenses below your income, and then to accumulate the appropriate cash balance in your checking account. But even once you've got those measures in place, getting this right is tough, because this isn't just a matter of getting your finances under control. You also need to get your mind under control.

Case in point — me.

Not having a regular job, I get my income from various sources — interest, dividends, payments for my stories or articles, and so on.

One of my regular payments used to arrive late in the month, but a while back things got rearranged, and it started arriving early in the month.

This turned out to have an unexpected psychological impact.

Here's the thing — the payment used to arrive shortly before we'd make the monthly transfer into our checking account to cover that month's expenses. Now, the payment arrives half a month away.

Before, it felt like my writing income was paying a big chunk of the bills, and then we'd transfer money to cover the various small expenses that show up over the course of the rest of the month. Now, it feels like we're drawing down capital to pay our bills, while my writing income ends up dribbling away to pay those ancillary expenses.

The reality of the situation hasn't changed at all. The right way — the smart way, the useful way — to think of the situation is to view all the money that flows into my life as my money. I've written about this before — it's all your money.

Control Your Mind

It's hard to defeat the notion that the dates that the money flows in and out make a difference. But even though it's hard, it's worth doing.

Getting this right is key to financial success.

Get your finances under control. Your spending should be controlled by your budget, not by when your paycheck arrives. See past the illusion that money that arrives one day has anything to do with the money that gets spent the next.

This article is from Philip Brewer of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Shrinking Your Cash-Flow Period to Create a Better Budget

David Ning — Fri, 07 Jan 2011 13:00:09 +0000

Over lunch the other day, my friend Jessica told me she discovered a new idea to help her save more money on a daily basis. She has always been careless with her spending, so it was awesome to hear that she found a method that works for her. I'm paraphrasing, but this was her basic concept:

I used to try maintaining a positive cash flow on a monthly basis, but money is always tight at the end of the month. These days, I take my monthly take-home pay, deduct all my big expenses like rent, and then divide the remaining amount up by the number of days in the month to get what I call the "daily spend limit." Whenever I want to spend money, I just think of my daily spend limit and try never to go over that. I find that I can easily keep it under the limit most days and by the end of the month, I'm pretty much always ahead.

I'm so happy to hear that Jessica found a way to spend less than she earns, because spending within your means is probably the most important personal finance lesson you can ever learn. But why does this work?

1. The Math Makes Sense

Mathematically, you are essentially trying 30 times harder a month when you try to spend within a daily limit. For example, you might end up spending $1,197 a month if your monthly cash limit is $1,200, but if you spend $39 out of $40 every day, you will only spend $1,170 in 30 days.

2. It's Easier to Manage

Breaking up the large monthly budget into smaller, daily amounts is also easier to visualize and manage. When Jessica was trying to conform to a monthly limit, she usually spent more during the first half of the month and started cutting back during the second half when she got dangerously close to the limit. When she doesn't go way out of control at the beginning, she ends up pacing herself throughout the month.

3. It Helps Reduce Careless Spending

When she was working with a bigger monthly amount, each small purchase seemed negligible. However, once she deducts the fixed expenses from her income and then divides that number further into a daily limit, a popcorn at the theater seems like a much more wasteful purchase. If Jessica really wants something, she can buy it, of course, but she's more likely to realize that her life is just as great without eating that bag of popcorn. (It's probably unhealthy and bad for her anyway!)

What Jessica did with her budget is basically divide and conquer, breaking up major projects into smaller, more manageable tasks. This may not work for every person out there, and it certainly doesn't address large purchases. But if you are in a rut with your wasteful spending, why not give this a try?

This article is from David Ning of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

How often do you get your paycheck?

Philip Brewer — Tue, 15 Jan 2008 17:37:23 +0000

One of the BlogHer featured posts (Mrs. Micah's Credit Cards: Billing Cycles and Bimonthly Paychecks) talked about a mis-match between pay dates and credit card due dates. It reminded me of just how much I used to agonize over this issue, back before I had my finances under control.

Over the years, I've been paid on just about every paycheck schedule: weekly, biweekly, half-monthly, and monthly.

The schedules

Biweekly seems to be the most common, at least in the United States. I know a lot of people who figure that one check goes for the rent or mortgage and the other check goes for a car payment or some other major expense. The pay dates tend to shift around in the month, though. Someone who counts on, let's say, the second paycheck of the month to pay their next month's rent, can get burned if the check comes unusually early and the money gets spent before the rent check gets written. (It used to be that getting the check unusually late could also be a problem--a check that arrived the last day of the month might well not have cleared before rent was due on the first. Direct deposit and ACH has probably made that a non-issue for most people.)

Half-monthly is almost like biweekly--you still get a first and a second paycheck every month--except that you miss out on the best thing about biweekly paychecks: the two months a year when you get an "extra" paycheck, because a 52-week year means that there are 26 biweekly pay periods but only 24 half-monthly ones. If your finances are under control, there's really no difference between getting 1/24th of your annual salary twice a month or 1/26th of it every two weeks. But for a person who's living paycheck-to-paycheck, those three-paycheck months can cover all manner of careless spending.

Weekly sounds great to someone who's gotten a bit too used to saying, "Wait until we get paid and then we can buy that." In practice, though, it's kind of scary, because there are ordinary monthly expenses that can't be covered by a single paycheck. Where one biweekly paycheck will commonly cover rent or the mortgage, one weekly paycheck probably won't (unless you're living in a very cheap apartment). All of a sudden, that simple budgeting scheme (first paycheck covers the car payment, second paycheck covers next month's rent) doesn't cut it any more. All of a sudden, you're having to save and budget just to get your bills paid.

Monthly has the advantage that it's the same frequency as most of your bills. Times when I've been paid monthly, the payment typically comes a few days before the end of the month--early enough that the check had cleared in time to pay the rent on the first. In my experience, it was actually better than weekly. With monthly you have to budget, but at least you have the whole month's money in one big lump.

Personal history

I got paid biweekly at my first full-time job. Then, my second employer was an old-line industrial firm that ran a weekly payroll for all the factory workers, and found it easier to just include us software types in that payroll.

With a biweekly paycheck, my bill paying was pretty simple. I'd let bills pile up as they came in, and then I'd pay them all when I got paid. It was pretty unusual for two weeks worth of bills to come to more than one paycheck. Once I moved to weekly paychecks, though, that changed. It was perfectly ordinary for one weeks worth of bills to be more than one paycheck--it happened at least twice a month.

I think that experience was what first prompted me to get my finances under control. I cut back a bit on spending, got my credit cards paid off, let some money accumulate in my checking account. When my next job turned out to pay monthly, it was not only no big deal, it was actually kind of a relief--I didn't need to do nearly as much figuring and planning ahead. I got my money, and then I paid my bills over the course of the month. It was easy.

A matter of class

There's some degree of class distinction in pay frequencies. I don't know if it's still true, but as late as the mid-1980s, payrolls in England were strictly divided between the middle-class folks (who got paid monthly by direct deposit to their bank account) and the working-class folks (who got paid weekly by their boss handing them an envelope with actual cash money inside). Even in the US there's a general sense that the working-class folks need to get paid more often (because they can't be expected to budget wisely), with the implication that people who get paid less often must be of a higher class.

Under control

Of course, none of it matters, once your finances are under control. The money flows in whenever it flows in, it flows out when the bills are due--and the surplus goes into whatever savings or investment vehicles you've selected. A large fraction of my income is now paid either annually (mutual funds that pay dividends just once a year) or semi-annual (interest payments on treasury securities). It's all the same to me.

I remember vividly the shifts from biweekly to weekly to monthly, because they made a huge difference in the way I managed my money. Since then, I've had several different payroll schedules--biweekly, half-monthly, back to biweekly--but I scarcely remember, because it never really made a difference after that.

Of course, while you're in the process of getting your finances under control, you're likely to be especially aware of these matters. It's necessary to pay close attention to the flow of money into and out of your life, in order to get a handle on your finances. It may be of some comfort to know that, once you do, it turns out not to matter so much any more.

This article is from Philip Brewer of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Top 7 Reasons Why I Use My Credit Card for Everything

Nora Dunn — Wed, 14 Nov 2007 00:19:02 +0000

I charge absolutely everything to my credit card. Everything. Even $3 purchases if I can. I am a credit card junkie (and have been for many years) for a number of reasons. Here’s my countdown of them.

7. It builds up a great credit rating.

By charging and paying off up to thousands of dollars in expenses each month, I have built up a rock-solid credit rating — the best one possible. So whenever I have sauntered into the bank for a loan, I have been accepted right away, and at the lowest possible interest rates, with no security deposits required. (See also: How to Use Credit Cards to Improve Your Credit Score)

6. It's quick and easy.

Swiping or dipping a card these days is often as quick as (if not faster than) paying with cash and counting out coins.

5. It's great for accounting and spending reports.

Since I don't dole out cash, or make purchases on my debit card (and I rarely use checks), all my monthly spending is nicely bundled into one report — my monthly credit card statement. Not only that but my current credit card of choice actually categorizes my spending for me, so at a glance I can see how I've spent my pennies for the month and year-to-date.

4. I don't need to carry cash.

I don’t have to make stops to ATMs to keep enough cash in my wallet, which is also one less thing to remember to bring whenever I head out the door. Not to mention the less I have to deal with storing and keeping track of loose change, the better.

3. Automated billing is great.

Cell phone bills, utilities, cable, you name it. If I can sign up for automatic billing, I do. It doesn't mean I don't look at each carrier's statement to ensure the charge is correct. But it does mean that on a monthly basis I don't have to worry about paying any bills (other than my credit card!) — they're already paid.

2. They provide free services and protection.

From concierge services to car rental insurance and extended warranty, my credit card provides extra services and protections that I wouldn’t normally pay for, but benefit from greatly, especially should the rare unfortunate thing happen. If someone steals my brand new iPhone, purchase protection will replace it. If I get into a fender bender with my rental car, my credit card insures it. (See also: Awesome Credit Card Perks You Didn’t Know About)

And my number one reason for charging everything to my credit card (drum roll, please):

1. I get frequent flyer miles.

Since I started to charge all expenses to my credit cards, I have collected and redeemed miles for everything from fancy dinners to sports gear, to multiple flights all around the world. It’s easy to get started with travel rewards, but redeeming miles for travel isn’t your cup of tea, a cash back card will give you free cash just for using your credit card instead of cash (of course, the only way you stay ahead is by paying off every balance, every month. Any interest charges will obliterate any benefit or reward a card can offer). (See also: Best Travel Reward Credit Cards)

This article is from Nora Dunn of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

7 Monthly Expenses We Don't Realize We Don't Need

Nora Dunn — Fri, 26 Oct 2007 15:57:03 +0000

When you put together a frugal budget, you are usually careful to make sure you're not spending money where you don't need to. But are you getting railroaded by expenses you are bearing which you don't even realize you can avoid? Here are a few you may want to consider paring down.

Television

Okay, for some people television is not an option — it is a necessity. And if you are one of those people, that's fine. But even so, it might pay to take a close look at exactly what you are paying for and whether or not you can take up some of the slack.

I had free cable for the longest time. It was simply a matter of moving in, plugging in the tv to the cable outlet to see if it would work, and blamo — it worked! I didn't have the heart to advise the cable company that I was getting free cable, so I just kept it. Of course a few months later, the cable company realized the error of its ways and cut the cable. I thought as an exercise I'd see how long I could last without it. And you know what? With the internet I could get all the news stories I wanted and more, and although I initially missed some of my favourite shows, I didn't miss them enough to go back to paying upwards of $50/month for them.

If you are not willing to cut out the television entirely, consider cutting some of the extra services or beefed-up channel selections you have. Personally, I found my life was immensely enriched by listening to more music, reading, and socializing instead of sitting in front of the tube.

Credit Card Insurance

I recently wrote a post going into more detail about this expense, but to sum it up, more often than not it is a superfluous expense for which the benefits do not outweigh the costs.

Coffee

As per the well-known Latte Factor , those cups of java can add up! Sure, it always tastes better when you get the local brew and don't have to clean the coffee pot at home yourself, but you're paying through the nose for this service. Not only that, but every time you take away a coffee, you're hurting the environment by disposing of yet another (albeit recycled) paper cup.

Bottled Water

I just paid over $2 for a 710ml bottle of water. It's water! Shouldn't it be free? Bottled water comes from many sources and is sometimes just filtered tap water anyway, and the plastic is of such poor quality that after 6 months of shelf life the plastic actually starts to break down and leach toxins into your water! Not to mention the amount of waste used bottles are producing.

With a little forethought and preparation, you can carry a sturdy glass bottle or thermos of tap water around with you and save the astronomical expense.

Lunch

Ever since I was a child, I brown bagged yummy lunches that I looked forward to. No baloney sandwiches here — I brought left-overs! When I became an adult, I always cooked enough for dinner to yield a lunch the following day. No time was wasted in the morning getting it ready - it was already in a re-useable container in the fridge ready to go. Most workplaces have a microwave, and even if they don't, I don't mind cold stew if it will save me $10 on a mediocre lunch eaten out.

Home Phone

For the last year, I have had nothing but my cell phone as my "land line". This has worked out just fine, and I haven't missed the home phone one bit. Most cellular plans have great features and promotions that will suit your specific needs (be they long distance, lots of minutes, or a good range).

Another consideration as an alternative to the home phone is the increasing popularity of voice over IP, where you can use your internet connection to call other computers, land lines, and cell phones. Some of these services are free (or partially free) like Skype, and others you will pay for depending on your needs.

Grocery Store

The more often you go the grocery store, the more likely you are to spend over your budget. When I went shopping religiously every Tuesday evening, I had a list I'd been working on throughout the week, and I stuck to it quite effectively. Then I moved to a place more conveniently located closer to the grocery store, and thought it would be neat to just buy the ingredients only a meal or two in advance.

It may have been fun to prepare meals inspired by what I saw as I cruised the aisles, but my grocery expenses also almost doubled as a result. Not only that, but I gained weight too! Sticking to a list can save a ton of money and grief.

These are just a few among the myriad of monthly expenses we don't realise we don’t need to be doling out our dollars for. What are some of yours?

This article is from Nora Dunn of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

monthly expenses

Ask the Readers: What Is Your Biggest Monthly Expense?

Win 1 of 3 $20 Amazon Gift Cards

Giveaway Rules:

Ask the Readers: What Was Your Biggest Expense This Month?

Win 1 of 3 $20 Amazon Gift Cards

Mandatory Entry:

For Extra Entries:

Giveaway Rules:

Best Money Tips: 40 Ways to Save on Monthly Expenses

Top 5 Articles

Other Essential Reading

Ask the Readers: What Is Your Biggest Monthly Expense?

Win 1 of 3 $20 Amazon Gift Cards

Mandatory Entry:

For Extra Entries:

Giveaway Rules:

The Psychology of Cash Flow

Control Your Finances

Control Your Mind

Shrinking Your Cash-Flow Period to Create a Better Budget

1. The Math Makes Sense

2. It's Easier to Manage

3. It Helps Reduce Careless Spending

How often do you get your paycheck?

The schedules

Personal history

A matter of class

Under control

Top 7 Reasons Why I Use My Credit Card for Everything

7. It builds up a great credit rating.

6. It's quick and easy.

5. It's great for accounting and spending reports.

4. I don't need to carry cash.

3. Automated billing is great.

2. They provide free services and protection.

1. I get frequent flyer miles.

7 Monthly Expenses We Don't Realize We Don't Need

Television

Credit Card Insurance

Coffee

Bottled Water

Lunch

Home Phone

Grocery Store

3. It Helps Reduce Careless Spending