After a fall from the mountain, Katie and I had to skip our monthly budget meetings for a bit. When we finally got back to it, we needed to catch up. My role involves tallying our income, while Katie focuses on tracking our expenses and planning our cash flow based on our spreadsheet totals.
These days, our approach to budgeting isn’t as strict as it used to be. We don’t stop spending when we hit a certain limit in any category, largely because our income comfortably surpasses our expenses. We’ve been on tight budgets before, but we’ve loosened things up a bit now. We still occasionally review our spending, but it’s been some time since we’ve dove into the nitty-gritty details.
When Katie gave me the total for our spending over the last four months (this data was from 2024), it looked like this:
- July: $20,690.58
- August: $36,835.77
- September: $28,248.60
- October: $32,809.49
I was taken aback. We thought we averaged around $15,000 a month, and hitting $20,000 felt astronomical. Yet this was the fourth month running we exceeded that amount. Maybe $20,000 doesn’t seem wild to some, but consider what it doesn’t include:
- Income and taxes
- Charity contributions
- Financial advisory fees (being your own financial planner can be surprisingly lucrative)
- Retirement savings
- Mortgage payments (which we don’t have)
- Car payments (I don’t have those either)
- Student loan payments (none)
- Other miscellaneous payments
Does it sound excessive? This is just for the usual stuff. Meanwhile, the average American household lives with far less.
Curious about our expenses, Katie decided to sift through her credit card, bank, and Venmo accounts. Here’s what she discovered during October, when we nearly hit $33,000 in spending:
- Food: $2,750 (including $1,000 on dining out during two brief trips)
- Gasoline: $750 (we’ve got a garage prepped for electric vehicles, but it’s not equipped yet)
- Clothing: $875 (a bit unusual for us, mainly shoes for the family)
- Vacation: $8,200 (this doesn’t even cover our upcoming family trip to South Africa)
- Tax Preparation: $5,875 (with over 20 K-1 forms)
- Healthcare: $1,800 (note to self: don’t fall off a mountain)
- Gifts: $1,100 (I included “matching dollars” to a 529 plan in this)
- Utilities: $500 (I appreciate my heating and lighting)
- Insurance: $730 (having a teen driver drives up costs)
- Household: $1,380 (subscriptions, cleaning, repairs, and setting up Google Fiber)
- Car Registration: $234 (not driving a clunker in Utah means higher fees)
- Property Tax: $6,921 (for a big house, which is at least in Utah)
- Kids’ Activities: $300 (not too bad considering how active they are)
- Miscellaneous: $1,400 (we just didn’t want to categorize everything else)
- Total: $32,815
Katie was hesitant about sharing this list. She rightly pointed out that people tend to make snap judgments. Just check the comments section on similar posts. Everyone loves to scrutinize other people’s budgets, often focusing on perceived waste. I told her, “I’ve shared raw moments on my YouTube channel—it’s fine to share our budget too.” She conceded I had a valid point.
I know what you’re spending
The takeaway here is that we thought we were around $15,000 per month, but clearly, we weren’t. If you don’t track your money, you can easily misjudge your financial situation—either cutting back when you can’t afford to or believing you’re saving for retirement when you actually aren’t. This is why it helps to have budget meetings every so often with your partner, so you can get a clear picture of your finances.
Inflation is real
I started to think about how inflation plays into this. Back in 1996, I could manage a month’s groceries for about $100. Of course, the quality wasn’t great, but now a family of five spends around $1,800 on food alone—and that’s without considering eating out. You really need to plan for inflation, which can sometimes hit hard, exceeding 3%.
There’s a one-time fee each month
You could argue that many of our October expenses are “one-time” and that’s partially true. Property taxes are annual. Truck registration? Once a year. That vacation? It certainly doesn’t happen every month. But we genuinely value our travels. As we say here, “It’s not just a vacation; it’s a lifestyle.” This isn’t a break for us; it’s how we choose to live. If you’re taking your child on a lengthy journey, prepare for the costs to add up.
Even our healthcare expenses are typically one-time, unusual charges—like, hopefully, I won’t be tumbling down a mountain again. Yes, you only need to set up Google Fiber once. But every budget must account for these costs, and if your finances are tight, consider setting aside a “sinking fund” each month to cover those annual expenses.
Value judgment
Families often break down their spending to judge priorities better. It’s all about self-reflection, not comparison. Consider these questions:
- “Is this truly important to us?”
- “Would we prefer to invest more in vacations or retire a bit earlier?”
- “Did we genuinely enjoy that meal out more than spending on our favorite hobby?”
- “Is it time to reconsider our insurance coverage?”
- “Should we go back to just using Turbotax?”
Expect your spending to rise
Many people find themselves spending more for various reasons, not all tied to inflation. You might relate to this. When considering your future plans, remember: while $4 million might feel sufficient to retire on right now, it may not last in 15 years. Initially, I thought a $2.7 million financial plan was adequate back in 2004, but adjusted for inflation, it’s closer to $4.6 million today. It’s still not enough for our current expenses, especially with kids still in the house. And we can’t overlook additional taxes or other costs.
All these extras can really add up quickly.
The White Coat Investor Community serves as a haven for high-income earners navigating their budgeting struggles. While our issues may center around spending, many of you likely find the reality relatable. Keep track of your spending and make sure your time and money align with your values.
Have you ever been taken aback by how easily your spending increases with your income? How do “one-time expenses” often derail your budget? What does your budgeting process look like? Does it help to know you’re not alone in facing these financial challenges every month or year?
