Budgeting: The Ups and Downs and All Arounds

January 1st is over, so unfortunately it’s right back to reality. While the celebrating was fun and well deserved after a long year, it is back to basics at our house. What is most basic for us, and for that matter anyone else, is budgeting.

When budgeting, you have to deal with the annuals ups and downs the affect your income and expenses. Check out our budgetary changes for this coming year.

We hashed out our budget plan for 2017 in December, and we are set now to dig in and make this year a winner in what really is a war. Why do I say that? Just look at some of the stats and you’ll quickly see that for a huge number of us, our finances and economic wellbeing has suffered from a lack of personal income growth and increases in many of the basic costs of living.

It’s a fact that every year there are “ups and downs” when it comes to your budget. That’s because situations and priorities change and so do your finances. That leads me to once again indulge myself and yes, wait for it!…another 60‘s classic that nails these words to a T. The much overlooked and dissed version by Paul Revere and the Raiders (featuring Mark Lindsay) of Ups and Downs. Just apply it to your personal finances and enjoy the next 3 minutes!

Now back to budgeting…

Income Growth (or lack thereof)

The federal government released the U.S. median household income statistics last September and it showed that the trend of the past 10 years has continued to stagnate. In 2015 (the most recent numbers available), household income was $56,516 per year. Compare that with the year 2005 when that number was $56,224!  That’s ten years of no growth.  The numbers for individuals (per capita) are not any better. That makes making ends meet and dealing with price increases in things like medical care, food, and housing really difficult. Throw in something like the cost of college and the debt repayment that has to be made afterwards and those 10 years can be crushing to an entire generation and in fact, it is. So whether you are 25 or 65, dealing with your budget is a big deal.

Our Budget Plan and Goal

It is not a whole lot better for the rest of us. Being a senior citizen, retired and with a disabled wife, means that we have to be super-efficient in our budget control. Our goal is being frugal without sacrificing every comfort in our lives. It’s a huge challenge. This year we have made a total commitment to not only live within our means, but to live below it. We have set up a self-challenge to help us save 5% of our expenses and pass that to our savings this year.  That translates to $50 a week, or saving $2,600 this year. In addition to not drawing our customary monies from my retirement fund (which I’ve been doing since my retirement in 2013), this means we will actually be shooting to reduce our spending and increase our savings by over $7,000 this year! Here are some facts we had to consider.

Roadblocks to Success

Some parts of our budget, what I like to call fixed expenses, are pretty much out of our control. But, there is an irony here. These expenses are only fixed for the year. They seem to go up every year no matter what and we have to deal with it whether we like it or not.

  1. Our real estate taxes, which seem to go up every year (New Jersey has the highest real estate taxes in the country), went up annually another 4% this year which is $14 a month.
  2. Our condo homeowner’s association fees went up for the 4th straight year, another $5 a month or 4.2%.
  3. One of the biggies, health insurance premiums have increased this year for both our Medicare coverages and our private advantage plans to the tune of a total of $32 a month or 8.25%, and we’re among the luckier ones.
  4. Utility costs have risen and our monthly costs for natural gas, electricity, water and sewer have risen by 4% or $8 a month despite our lowering our thermostat and conserving energy and water. Remember, we bought a new front door and storm door last year specifically to save energy and help keep warmer in winter and cooler in summer.
  5. The cost of our gym membership went up this year as we were forced to give up our great plan when our gym closed down and we had to find the next best deal. I say “had to” because it is an essential part of our health plan to use the gym for us both (there’s not enough room in the condo for exercise, and not enough temperature tolerance for exercising outside). We will pay $15 a month more this year for our memberships, a whopping 50% increase!
  6. The price of gasoline is definitely going to be higher here in NJ this year after a November 1st state tax increase of $0.23 a gallon! Despite our fairly low driving expenses, even if the price per gallon remains the same in 2017 as it was in 2016, the tax increase alone will add $60 a year or $5 a month. And we expect the prices to rise on top of that!

These six “fixed expenses” alone add up to a total of $73 a month or $876 per year. It may not sound like a whole lot, but it is when your income is not growing and there are still so many factors outside of these that can throw a monkey wrench into your finances. We learned that the hard way with medical expenses, such as my 3 hospital stays over the past 6 years, which added thousands to our annual expenses.

Cutting Our Expenses

There are just two ways to achieve your financial budget goals. One is to increase your income. That is easier said than done, for sure. The second way, and our plan of attack on this “war” of the budget, is to cut expenses. That’s our plan and that includes reaching a goal of saving $50 per week. There are a number of ways we plan to do so. In fact, we have already set the wheels in motion to make sure we hit the mark.

  1. The first challenge was and is to exercise some “preventive health measures” like taking better care of our health to avoid as many surprises as possible, like the emergencies that have hindered us in our recent past. Regular testing to monitor my heart and blood sugar plus regular doctor visits, as well as the previously mentioned gym exercise. Savings are yet to be determined.
  2. Switched providers for both our condo and auto insurances which will save us over $300 in 2017.
  3. Enrolled in a new Medicare advantage plan that has a “zero” monthly premium saving almost $1,000 for the year (it also saves on co-pays for doctor visits).
  4. Eliminate one restaurant dining visit per month (savings will be about $500 per year).

Raising Income

You will notice that we haven’t mentioned increasing our income anyplace here. I have set that as a goal for my work here on the blog, but I am deliberately not including it in my overt planning. Realistically speaking, I’m not going to be setting any records here, although I do expect to outperform last year. I am purposely focusing on saving money from the expense lines rather than looking for the additional income which could lead me to actually spend more than we should or want to do. My overall goal is to make sure I don’t outlive my retirement funds and by taking action plans like the one we are using for 2017, I truly believe we can make that a reality.


Frugality is not a four-letter word. It’s not only is a good idea, but for many it is a requirement. It comes as no surprise that as you get a bit older, you may not have the same kind of family obligations that a family imposes on you and you can more easily adjust to living comfortably, yet frugally. The surprising thing to me is that so many younger people have come to that conclusion as their lifestyles have unfolded and a newer non-traditional lifestyle has taken root.

I am passing on our self-challenge to you now.  Can you find a way to not only live within your means but actually live below it? Have you been dealing with budget issues and decisions that will impact your 2017 lifestyle? Is it a subject that you are comfortable with as we enter the New Year? What are your budget plans right now?

brokeGIRLrich

 

About Gary Weiner @ Super Saving Tips

Over the last 45 years I've worked in retail (department stores and supermarkets) and financial planning. In addition, I am a shopper, born and bred, who enjoys the challenges of finding the best items for the best prices. When I'm not busy saving money or writing here at Super Saving Tips, I enjoy baseball, music, and classic movies. I am retired and live in New Jersey with my wife.
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20 Comments

  1. Scary numbers Gary. You have a good way of attacking your situation, but it demonstrates how hard it can really be….growing fixed expenses and no increases in income can be painful.

  2. We are right there with you Gary for 2017 and beyond, but for different reasons. We are looking to live below our means to help our children fund college. So we are taking a hard look at the budget to see were we can cut cost.

    We just had a conversation with our retired neighbors, both in their 70’s who have some of similar concerns, working off a fix income and not having many opportunities to have their income work for them (interest down and not willing to risk to much at their age) They stay diligent to keeping cost to a minimum to make sure their money lasts.
    Brian @ Debt Discipline recently posted…Holiday Hangover: Tips to get your Finances on Track in the New YearMy Profile

    • Making the sacrifices that you will be making to insure your kids have the money for college is certainly a good reason to do so. Once that goal is achieved, and hopefully other goals along the way, you can feel more comfortable planning your retirement. Other than your current priority, that of course is another significant one. But I’m sure you already have a good plan in place for that. Really appreciate your input, Brian, thanks.

  3. Those bills do have a way of creeping up on you. We are hoping to lose an expense in the summer/fall (my college girl graduates in May) but we will have a high school student in the fall–and high school tuition is double grammer school tuition

  4. “But, there is an irony here. These expenses are only fixed for the year. They seem to go up every year no matter what and we have to deal with it whether we like it or not.”
    We’re debating this at our house too. These ‘fixed’ expenses would actually decrease if we downsized our home, so we’re starting to look at our house as a luxury instead of a need. I don’t think we’ll move, but we will try to focus more on appreciating what we have.

    • Many people look at housing expenses as fixed when in reality it’s possible to move and downsize. This really depends on where you are in your life and lifestyle, so it is a choice that you make. The house itself and its related expenses can be reduced. It may not be something you’ll do today, but someplace down the road, it might be recommended. In retirement, my wife and I made that choice and we’re glad we did. Thanks for your comments.

  5. This might be one of the most formal breakdowns I’ve seen someone do of their financial year. Its very inspiring.
    Do you find it helps you figure out what to focus on more?

  6. True making the right sacrifices will help you to build pipeline for the future. We are not saying here to be frugal at every step but live within your means.

    • Some of the sacrifices that we make are forced upon us because of economics. Others, we make our own decisions on. Those things are a trade-off so that we can use our resources for the things we feel are most important. I agree with your comment, living within your means will make the life choices more meaningful.

  7. We made our budget New Year’s Weekend ourselves. You have hit on some key points. Expenses have been rising but incomes have been relatively flat. My wife & I work in jobs that partially cater to after-school activities. Several families have been re-prioritizing this spring to spend more time at home or only doing one activity instead of two.

    We are just a microcosm, but, other people have been talking about budgeting as well. Which is a good thing.
    Josh recently posted…2017 Money Saving ChallengeMy Profile

    • I agree, Josh, the first steps into making your finances work for you is to have the conversation about budgeting and where your priorities ought to be. It’s kind of sad that even though there are so many two-income families like yours that they’re still struggling despite their work ethic. It’s really important for both wage earners to come to agreement on how their money should be spent. Thanks for your comments.

  8. Oh my word, that tax increase in gas is insane, isn’t it? A friend was visiting me for New Year’s and commented that our gas prices were extremely high and I raved for like 10 minutes straight about how we used to have some of the cheapest gas in the nation because all the refineries are in NJ and now this stupid tax has us as one of the most expensive gas rates in the country. I’m not even sure why anyone stays in New Jersey anymore.

  9. Those household income numbers bring an entirely new meaning to “the lost decade”.

    I almost feel like I’m cheating to intentionally move somewhere less expensive (well before the age of retirement!), but I suppose I have several peers who have that option if they really wanted to exercise it.
    TJ recently posted…Invest Even When You’re Not Sure What to Invest In.My Profile

    • A lot of people are considering moving to less expensive areas and if you do so before retirement comes, the only question is are there any jobs in those areas (unless you’re a digital nomad or something similar). I think that’s a very appealing thing to consider, especially if you are using alternative ways to support yourself other than the traditional workplace. Thanks for your comments, TJ.

  10. Even though the numbers are looking tough for you, at least you are making a plan to work to beat them and cut your expenses! Great job shopping your auto/home insurance and saving! We just saved $350 for the year ourselves! Keep your chin up and keep fighting, you got this!

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