How My Monthly Budget Looks in 2014

In September, I went through my annual ritual of carrying around a notebook and keeping track of every time I spent money, with an eye to making sure my spending is sustainable under my deliberately limited income.

In order to meet that target, my taxable expenses must be less than the Adjusted Gross Income ceiling that I need to stay below in order to keep my federal income tax at zero. This year, that means $18,000 annually, or $1,500 per month. My taxable expenses don’t include business expenses, which get subtracted from my gross business income before they have a chance to show up as Adjusted Gross Income. They also don’t include medical expenses, which I can pay for with pre-tax money via my Health Savings Account.

I took the numbers from what I explicitly spent this month and then added in a few more items: estimates for my utility bills based on those from previous months, an estimate of my average monthly expenses on cat stuff (my spending for my expensive, diabetic cat comes in bursts at irregular intervals, so it’s hard to account for by looking at an individual month’s expenses), and some regular expenses that I didn’t happen to spend anything on this month but that I do spend money on throughout the year and so I felt I should include in the tally. Here is what I found from this year:

(The numbers may not all add up quite right due to rounding. Also, I adjusted the 30-day September totals to correspond to the average 30.4-day month.)

In 2011 I started separating California state sales tax into its own line item, and I have combined that with my expected California income tax bill (I don’t resist my state tax, just as a matter of picking my battles) for the “California state taxes” line.

I didn’t have very many unusual expenses of note this month. I spent $25 to help kickstart a friend’s free and open database of farming and gardening knowledge and $44.09 to rent our public library’s conference room in order to throw a Sharing SLO WikiJam next month. I spent more than usual on homebrewing, as some of my equipment needed replacing and I forgot to bring my refillable malt syrup container to the brew supply store, but I spent less than usual on transportation as my bike is in good repair, the weather has been fine, and I haven’t needed to borrow a car or travel anywhere out of the area. I spent $10 on a component video cable to hook up our hand-me-down DVD player to our hand-me-down projector. I spent another six bucks on a hand-cranked food mill at a garage sale.

Here’s how my current burn rate compares with past years (I’ve had to rejuggle the numbers a bit so that the categories remain the same from year to year; and in many past years I didn’t account for sales tax separately, which probably messes up the numbers a bit):

Some of the numbers compare awkwardly. For example, during the past decade I have lived in places where utilities were included in the rent, which had the effect of raising the rent and lowering the explicit utility payments. Today, we pay the utilities ourselves, so the situation is reversed. I also get a reduction in rent in exchange for buying the bulk of our household groceries, so my grocery budget (and some of the drinks-of-vice budget) is elevated this year as a result while my rent is artificially low.

A $14,905/year burn rate is quite sustainable given my current technique of staying below the tax line by keeping my adjustable gross income below $18,000.

Here are the results from years past, if you’d like to compare:

• 1 October 2003
• 5 September 2004
• 1 September 2005
• 1 September 2006
• 1 September 2007
• 1 September 2008
• 2 January 2010
• 1 June 2011
• 2 October and 7 December 2012
• 1 November 2013