Calculate Your Cost of Living

Before creating a budget, it’s important to know what your current cost of living is. This will serve as a starting point when you decide the areas you feel like you need to trim; or let you know which areas you have a good handle on.

First, gather all the financial information you have access to that will shed light on where your money is going: Credit card receipts, check registers, bank statements, store receipts, spending logs, etc. The more data you have, the better. It's a good idea to go back six months or even more. This way, you can create more accurate monthly averages.

Use the financial information you collected in step to get a six-month average of spending to determine your average cost of living. If you don’t have six months of data, do the best with what you have in calculating your averages but try to be as realistic as possible.

Segment spending into general categories: clothing, eating out, auto repair and maintenance, gas, groceries, entertainment, phone/internet, utilities, mortgage, and so on. Avoid common mistakes like not including everything you spend money on and forgetting about categories that may not be mentioned. If you use a lot of cash, your expenditures may be harder to track. The more accurate you can be with this step, the better picture you’ll get of what your spending actually looks like.

For example, this may be what your gift expenditures look like:

Gift Expenditures
August 2007 $0
September 2007 $100
October 2007 $100
November 2007 $50
December 2007 $500
January 2007 $50
TOTAL = $800
AVERAGE: $134/month

Once you complete this assignment, you’ll see how expensive your life really is, and if you can afford it or not. In the days/weeks remaining in the project, we'll be helping you trim key areas without sacrificing your quality of life.

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That's how we have gifts set up as well as the kids' sports and all quarterly bills as well as semi-annual auto insurance.

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Cost of living
Category Total Averag
Income 20580 3430
Car payment 1500 250
auto gas 1027 171
Electrical 318 53
garbage 133 22
gym 392 65
natural gas 787 131
internet/phone 541 90
student loan 810 135
water sewer 208 35
Clothing 333 56
Gifts 1323 221
groceries 2310 385
healthcare 1117 186
auto insurance 951 159
Home owners 282 47
Leisure 264 44
mortgage 6300 1050
Pet care 85 14
Credit card payment 1800 300

So here is what I came up with december 1st to may 31st $17 a month left over. This however doens't include the tax reture which pretty much went to debt. It does include christmas gifts having december in it. On average we don't spend so much on gifts during the rest of the year.

Still this is all for the past our actual Cost of living is going to be changing so I think looking at areas where we can cut back is super important now.
Clothing, gym, eating out, leisure, credit cards & medical bills (paying them off next month in full) Just the loss of the gym membership and debt will put around $600 in our pocket to take care of the increase in mortgage payments.

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Kimberly Proud Mommy to Bethany Rose April 2006 &

Organizer of the Coupon Clippers of Tacoma

I was only able to estimate these amounts as I do not have receipts for everything purchased. Some of this has changed in the past month or two since we've stopped eating fast food and tried to spend less. But I just put down what we were spending.

Monthly Expenses
Movies (Netflix + buying movies before that) - $15
Clothing - $50
Eating Out -$160
Gas - $150
Auto Maintenance - $34
Insurance (Auto, Renters, Life) - $167
Groceries - $600
Phone/Internet - $128
Utilities - $105 (this will increase at least $5 in August)
Rent - $879 (this will increase to $922 in August)
Swim Class - $70
Gifts (including Christmas) - $108
Memberships - $22
Books (my own personal weakness) - $20
Leisure - $80
Student Loans - $123
Credit Cards (min payments) - $300

Total Monthly Expenditures - $3011

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Monica ~ Mommy to Matheu, 7 and Liliana, 2