I’ve read countless personal finance and investing books and articles that advise you how to save more money.
…but how much do you spend?
Inspired by a recent article on Big Cajun Man’s site, showing this same Stats Canada infographic below, I figured I’d share some of our household expenses and make some comparisons for kicks. (Note: my numbers account for the 2016 calendar year).
- Shelter/Mortgage – not including any mortgage prepayments we spend 14% of our net income on our mortgage. If I include our household utility bills, that number climbs to 20%. If I then include our property taxes that’s now 24% of our net income to live in our home.
- Household operations, furnishings and equipment – we’re pretty happy with our furniture and other belongings in the house, but is this figure includes general home maintenance and small renovations; landscaping; gardening; snow removal, etc. then I would say we spend close to 10% of our net income in this category.
- Recreation – we figure this accounts for about 10% of our net income. We take at least one major vacation every year, if not two. We also attend many festivals and sporting events every year.
- Food/groceries – we try and eat well in our home. Based on our monthly budget we spend about 8% of our net income here.
- Transportation – we don’t have any car payments, we own both vehicles. We drive predominantly one car however. Insurance for both vehicles is close to $1,500 per year. After I add in maintenance costs and licensing we spend about 5% of our net income on transportation.
- Clothing and accessories – we figure this accounts for about 4% of our net income.
- Health and personal care – this is probably close to 4% of our next income.
- Alcohol, tobacco and games of chance – we drink craft beer and we like nice wines. We don’t smoke and we don’t gamble. This amounts to <2% of our net income.
- Miscellaneous – not sure what this could be, odds and ends I guess, so let’s say <2%
- Education and reading materials – I have a few online subscriptions but that’s about it. <1% of our net income here.
Our average expenditures are less than $60,516 but not by much (again, our figures are from 2016 not 2015). Although our expenses are likely more than most couples, I know our savings rate has gone up in recent years thanks to lower transportation costs/expenses (no car payments since late-2016) and smaller mortgage payments. Once the mortgage payments are gone (within 5 years?) we anticipate some significant cash flow can be diverted to investments and/or we’ll work less.
Water, fuel and electricity
It was interesting to see the costs broken down per province and territory. I live in Ottawa, so my benchmark seems to be about $2,500 per year for those utilities per residence. I keep track of these costs every year. Our costs are as follows:
- Water (on well and septic maintenance) = $400 per year
- Fuel (natural gas) = $1,500 per year
- Electricity = $1,500 per year
Not cheap but it’s not surprising to me; we spend more than average here.
Cell phones and landline
We have two cell phones in our house and one VOIP landline. The latter (VOIP) costs us about $5 per month.
We’ve recently adopted two cats. Lovely guys so far. However, I can tell you for a fact they cost more than $590 per year. $590 per year might not even cover their food bill; that’s only $49 per month.
Summary and takeaways
The major household expenses for Canadians continue to be shelter, transportation and food. For what I can gather from our expenditures, if we can keep our mortgage costs low (to non-existent) we’re be doing much better financially in a few years. If we can continue to keep our transportation costs to a small portion of our net income that will also accelerate financial independence. This will mean any money we make can be largely enjoyed after mandatory household operating expenses are paid.
What are your household expenditures? Ever done the math?