Saturday, April 7, 2012

The budget

I talk a lot about deciding how much to give, but I want to make it a bit more concrete. I know it's weird to lay your finances before the world, but I think it's helpful to get a feel for what a high-donation life might be like.

Since finishing college, my husband and I have been giving somewhere around 1/3 to 1/2 our income. For the past two years I've been in grad school earning nothing, so donations haven't been on our usual schedule. We've also been in a variety of living arrangements (our own apartment, a large apartment we shared with another couple, and currently living with Jeff's family).

I want to show you numbers from 2009, because it was a year we were both in paid jobs and living in our own apartment. Jeff was a computer programmer and I was an administrative assistant at a nonprofit. Our combined income was around $95K. We were 24 and 25 years old.

“Saving” was Jeff's retirement fund and my grad school fund.

“Allowance” is discretionary spending money, $38 a week for each of us. This covers clothes, shoes, meals out, gifts for other people, hobbies, phones, computers, and entertainment. It also covers feel-good donations. Having separate allowances works well for us because it avoids the argument about "You spent how much on sound equipment?" or "You already have enough shoes!"

Housing was a studio apartment in Cambridge, MA. Rent was $1,100 a month, utilities included. It was small but pleasant:

Some things that helped keep costs down:

We had no car. We chose an apartment near train, bus, and subway lines that took us almost everywhere we wanted to go. The apartment (and living in an urban area) cost more than housing in a less transit-friendly location, but the increase in cost was much less than a car.

At the time, we had one cell phone. It was part of Julia's parents' plan and cost about $15 a month.

Jeff's work paid most of our health insurance costs. We weren't sick, so there weren't a lot of copays.

Food was groceries, not eating out. Occasional meals out came from allowance.

Some things are different now: We've been giving less because I've been in school and not earning money. Our expenses are lower because we're living with Jeff's parents for a while. But our general spending pattern is the same.

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