I’ve decided to participate in 20’s Finances’ The Dollar Challenge, which is an interesting study that asks what do people spend their money on as a percentage of their income. In other words, for every 1 dollar earned, how is it spent? So here we go.
On an average month, my take home pay is used up in the following ways.
1. Housing: 31.8%
Mortgage isn’t cheap in a city like Vancouver, and the additional costs of electricity, strata, and property tax doesn’t help. But it’s still better than renting IMO.
2. Transportation: 3.6%
Gas, tickets, auto insurance, all inclusive. I have a pretty fuel efficient car and live really close to work. I do take public transit sometimes to go downtown.
3. Food: 5.0%
Includes groceries, eating out, snacks, restaurants, and other costs associated with food. My employer offers us free breakfast once a week so that saves me a bundle right there. Food is cheap if you know where to buy it.
4. Insurance: 0.9%
This insurance is for personal items at home in case of fire/damage. Apartment building insurance is covered by my strata, and car insurance has already been included with transportation above.
5. Personal Care: 0.1%
Tooth paste, soap, tissue paper, deodorant, etc. I’m not a financial services representative who work with clients, or do anything like that so I don’t try to look good unless there’s a special occasion. I haven’t bought any new clothes for over 6 months because all my current clothes fit just fine.
6. Entertainment: 2.7%
Games, movies, etc. I don’t usually go out to party, attend sporting events, or go on vacations. Last time I left this city was 2008.
7. Savings: 52.2%
Everything that doesn’t get used elsewhere goes here, which usually ends up going directly into my investment accounts. My savings rate use to be under 50% when I wrote about my 50/50 balanced budget. But since then, I’ve gotten a promotion at work so most of the extra money I’m making now goes towards strong, dividend paying stocks which will naturally increase my income in the future, which will increase my savings, and the cycle continues…
8. Others: 3.7%
This is internet, cell phone, debt payments, and other minor expenses.