So a few weeks ago I actually had a deal worked out on a new car. I currently have a 2006 Honda Civic which has been paid for for a number of years. It has 212000 kms(131000 miles) on it but it still drives like new. Well almost. Not a squeak, rattle or clunk.

So why would a even think of getting a new car? This is something I said I would never do again. It is a fools game. As we all know a car is not an investment. An investment makes you money. A car costs you money and of course depreciates in value.

After my marriage various things came to light and let’s just say that my interest rate on a new car would be 4.9%. On a used car it would be in the teens or higher. This surprised me. So this is why I was even considering a new car.

My current car is a standard transmission and Tyler will be 16 in January. We have been out a few times on some back roads and while he has been making out okay I am terrified about him being in traffic on his on and with friends in the car.

So the deal was done. The monthly payment was 365$ per month. And then I pulled the plug on the deal.

Why?

I sat down and figured out my monthly budget. Here it is. It is based on some standard spending percentages as suggested by various financial blogs and websites.

I make about 2300$ per month net.

Housing- 650 month rent= 29%
Utilities- Electric/High speed internet/Phone- 160$= 8%
Transportation- Insurance/Gas- 175= 8%
Food- 300$= 13%
Personal- Coffee/Misc= 100$= 4%
Savings- 300$= 13%

Total= 1685$

So yes, based on this I could, on paper, “afford” the car payment.

But I realized that it is not about just being able to afford it. I have to be comfortable with it. And the thought of making that payment every month for 5 years just did not add up at this time.

I would absolutely have to stay at my job for at least 5 years. Not sure that will happen.

Tyler graduates in a couple of years and after that Maybe I would like to volunteer somewhere in the world and actually do something good and meaningful.

So what I am planning to do here on the blog is post every week exactly what I spend. I figure that this will help to keep me accountable and will allow me to see where I spend(waste) money.

Would love to hear what you have to think about the budget I have come up with.

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11 thoughts on “Minimalist Living Monthly Budget

  1. Budget looks good. And you have a decent percentage going into savings, which is awesome (might want to roll some of that savings into a 401k or Roth IRA so that it actually works for you). My one critique would be on food. I’m married with two children, ages 4 and 5. Our monthly grocery budget is just under $700 per month. This includes breakfast lunch and dinner. Broken down, our weekly grocery budget is $140. Again, for 4 people. If it’s just you, and you worked it a little, I bet you could get away with $50 a week on groceries, which would save you $100/mo.
    Good luck! Keep minimalizing!

    1. I am in Canada so our retirement planning is a bit different. I do contribute through work and the company matches(up to a percentage).

      I bet a lot of people will say I do not spend enough on food!

      I do not buy a lot of simple carbs(pasta) etc. But I get what you are saying about ways to save. Thanks

      1. Agreed, most people can’t believe our grocery budget either. And we eat almost 100% organic, free range, grass fed, etc. We are what my wife calls “crunchy” parents. In our experience it’s less about how much you spend and more about what you do with what you have. But then that’s basic budgeting 101, isn’t it? 🙂
        Cheers.

      2. Ha. Sure is. Not how much you make but how you decide to spend it. I work with guys who make A LOT more than me but have all kinds of expensive” toys. On payday they rush to examine their pay stubs. I don’t even bother to open mine. I know what it will be and I have no debt. It’s all good.

      3. In Canada the groceries are a lot more expensive, especially where we live. Selection is minimal as well. We try to make most of our own food and in the fall we drive to the Valley to stock up on produce at farm prices to help supplement what we got out of our garden. A freezer sure is a life saver. One of our big debates is RRSP vs. TFSA, that is a big planning decision when looking to cash out.

  2. I am going through the same thing buying a house,the bank says I can afford this but on paper , I can but in my mind all I will be doing is buying a house .No extra and never paying it off.No thanks I’d rather live than keep making payments and repairs.Your budget gives me ideas.

    1. Exactly. The bank WANTS you to buy a house as they are the ones making money! If you do decide to buy a house try to find one that is a lot less than you are pre-approved for. Most people end up spending more than they can afford.

  3. It is great that you did the budget ahead of time and really thought about it. As far as driving a standard, I think everyone should be able to drive standard, we taught our daughter that way and she has never owned an automatic. I recently posted about the importance of a budget on our new blog http://contentinretirement.blogspot.ca/. We have been following your blog and it gives us a boost to get back on track when we fall off the minimalist wagon.

    1. Yes I agree about the standard car thing. get this- I owned a Younf Drivers of Canada driving school franchise for a number of years! It is different when it is your own kid though:)

      I will be sure to check out your blog! Thanks for commenting!

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