I like to create a bare-bones budget whenever I get a new job or my living situation changes. It helps me understand how much I’ll need to live off of should I ever lose my job (which happened in 2014 when the company I worked for laid off almost half its staff). Since I’ve had my job (and my new home) for almost two months now, I figured it was the perfect time to re-evaluate my financial situation – especially since the last time I created a bare-bones budget was back in February 2014.
So over the weekend, I took a look at my current financial situation. And after calculating how much it would cost me per month, I’m extremely happy to see that Employment Insurance (about $524/week) would be enough to cover all of my bare-bones budget expenses – without having to touch my Emergency Fund.
You can see I was able to eliminate over $500 from my monthly budget without much effort, and I know that if needed, I could cut that number down even further. Plus, if for some unfortunate circumstance, I had tapped out my EI resources and Emergency Fund, I could rely on RD to help out if absolutely necessary.
Anyway, at some point in 2016, I’ll be testing out this new bare-bones budget for a month – just to make sure I can still do it. I’m confident that I can, but the food budget will be a tough one. It’s been about 4 years since I last tried (and succeeded) at a $100/month grocery budget, but it’s a really good exercise to do every couple of years. :)
Is your bare-bones budget up-to-date?
I mentioned in a previous post that my housing situation has changed dramatically. In the summer I hinted at the idea of selling my house and moving into Vancouver to be closer to work, my friends, and where I spend most of my life. So back in August, I put my townhouse on the market just to see what would happen. There was a lot of interest, and finally I accepted an offer earlier this month. :)
That means I’m moving! But I’m not just moving into an apartment… I’m going to live out my small space living fantasy by renting out a laneway house in Vancouver. For those that are not from the Vancouver area and might be unfamiliar with laneway houses, these homes are typically built on a pre-existing lot (usually someone’s backyard). They are usually detached from the main house and open onto the back lane. My laneway house is a two-storey, two-bedroom house that measures about 685 sq.ft. It’s extremely cute, and I can’t begin to tell you how excited I am to live just a 10 min. drive to work, and within a few blocks of my favourite neighbourhood in Vancouver.
I had a short introduction into small space living in 2012, when I lived in a 215 sq.ft. apartment with a boyfriend for a year in Germany I don’t think I would want to live in a space that small long-term with another person (at least not that specific space – it did not function very well and there was no storage), but it definitely showed me that I can do with a lot less than what I have and still be completely happy. So now that there’s 685 sq.ft. for two people, it seems really doable.
With my new job, I will also be getting a modest bump in salary, which will increase my monthly saving amount. But I want to get right to the fun stuff – and that’s creating a new budget for a new living situation. :)
This is what my initial thoughts are for my new budget:
A few things to note:
- This is not a fair representation of home ownership vs. renting as I’m also going from living alone to living with somebody else. Creating this mock budget for the first time really made me realize how much more I was spending over the last 5 years living solo. Back in the summer, I did create another mock budget to see how much I’d save if I went from owning to renting as a single person ($400/month). So while this isn’t a truly fair representation, it doesn’t result in a *massive* difference in my budget living with someone vs. living solo.
- My townhouse had rental restrictions. A lot of people suggested that I rent out my townhouse and move into the city. However, my building did not allow for rentals, so this just wasn’t an option for me.
- Monthly rent on this house is $1,650. For a two bedroom in an extremely desirable area in Vancouver, this is quite reasonable, but definitely not the cheapest option out there.
- We will be splitting the cost of utilities and internet. Electricity will go up a bit as we are heating a whole house, but that increase is offset by the fact that it’s now a shared expense. Renter’s insurance has been quoted at $30 per month.
- I anticipate my monthly grocery budget will go down a little bit as I’ll have more time to prepare more meals from scratch.
- Car insurance is not accurate – it will likely cost a bit more now that I live in Vancouver.
- The cost of gas is cut in half now that my daily commute to work is 10 minutes instead of 45-60 minutes. :)
Related: Single? It’s costing you more than you think.)
As you can see, I *think* I’ll be able to slash over $700 from my budget each month without changing my lifestyle through variable expenses. Unless I’ve made some glaring error. This is a significant amount, and I am really excited about it. If you add to that my modest pay raise, and if I am vigilant in saving my savings, I could potentially put away an additional $1,000+ each month.
If you’ve been reading my blog for a while, you’ll know that I’m fairly frugal when it comes to groceries. Since moving to Vancouver in 2008 my monthly grocery budget has ranged from $100 to $200 each month (maybe even upwards of $250 if I go to Costco). For me, this is a normal amount. I don’t eat a lot, and while I’m fairly adventurous when it comes to food, I don’t mind eating simple meals when at home.
But that being said, I received this comment on my June 2014 Goals Recap a couple of days ago on the blog:
Now, I do know that I likely spend less than most people on groceries each month. However, when it comes to people who are already frugal, as well as personal finance bloggers, I think I’m about average. I don’t know anybody that spends $500-700 as a single person on groceries each month, unless you are counting restaurants as well. But even then, that’s probably pretty high. Groceries and dining out combined, I probably spend around $225-250/month.
SoI went to Twitter and asked people what their average grocery budgets were each month:
Here are just a couple of small ways I save money on food:
- Eat vegetarian. Even when I was eating meat, I ate vegetarian for most meals. By not centering my meal around meat, I significantly cut down my grocery expenses. Instead, I supplement with chickpeas (and hummus), tofu, lentils, quinoa, etc.
- Shop at farm markets. I’m always shocked at how cheap it is to buy produce at farm markets and small Asian grocery stores. I buy a huge bag full of veggies and fruit for about $15 a couple times a week, and buy staple items like quinoa in bulk at Costco.
- Eat simple meals. Not every meal needs to be Pinterest-worthy. :) I splurge on ingredients when I’m cooking a nice meal for BF or for friends, but everyday eating is pretty simple in my house. A typical meal for me would be some roasted (or steamed) veggies, Wasa bread (or Lavish crackers) with hummus, and grilled mushrooms on the BBQ.
- Rarely buy junk food. If you come over, I won’t have ice cream, chips, cookies, or chocolate at my house. :) I do enjoy them, but can’t justify spending money on unhealthy foods on a regular basis. BF doesn’t have them at his house either, so the only time we might indulge is if we go out with friends or if we make a point to walk somewhere to pick up ice cream or macarons.
Related: Inside my grocery bag
It should be noted that I do spend time each week at BF’s house. Sometimes he buys groceries, and I buy dinner. Or vice versa. We loosely split costs 50/50, and I think my expenses all even out over the course of a month.