I’m a little later than I would normally be with this update as I was waiting for my final electricity bill to come in. I changed providers right near the end of June, and it took a couple of weeks for my previous provider to send through the finalised account. While the overall spend on electricity is unlikely to be much different, the offer of an additional $20 off the bill each quarter (for both gas and electricity) was the clincher.
June results came out quite well, although that is primarily due to having “leftover” budgeted spending that didn’t happen in some categories. The only categories that were over budget were ‘Food & Groceries’, ‘In-super Insurance’, and ‘Travel’, and these last two were only relatively small amounts. June also had three pays in it as opposed to the usual two, so that boosted the June figure quite significantly, with a savings rate for the month of 57.47%.
There’s not really much to say about June in itself, other than that the discretionary spending during this month was down quite a bit on the usual results. I’ve been avoiding takeaway as much as possible, and making good use of meals made in bulk in the Thermomix, so I know I can do it when I set my mind to it!
Annual wrap up
On a total annual basis, the categories that ended up over budget were ‘Food & Groceries’, ‘Household & Utilities’, ‘General/Miscellaneous’ and ‘In-super Insurance’, and the categories that were under budget were ‘Entertainment’ (unsurprising given the ongoing pandemic), ‘Car’, ‘Personal, Health & Wellness’, ‘Tax’ (yay) and ‘Travel’.
This first image shows the comparison (in %) of how the categories were budgeted for v. how much was actually spent. The total is based on expenditure only.
This image below shows the comparison (in %) of how the categories were budgeted for v. how much was actually spent or saved. The total is for my entire household finances – income, superannuation, savings and expenditure.
In looking at the overall final wash-up, I managed an average monthly savings rate of 38.64% – not as high as I’d like it to be, although only 1% down on last year’s monthly average of 39.64%. My actual savings rate over the entire year was 41.78%, which just pips last year’s result of 41.56%. (You’d think that the monthly average and the annual overall percentage would be the same, wouldn’t you? Maybe I’m doing something wrong.) The over-budget spending throughout the year almost completely ate away my projected net cash flow, so that is something for me to pay more attention to in the 2021-22 financial year.
Considering that this year I was working on a “whole of income and expenditure” basis – i.e. gross pay, superannuation, tax, etc. as well as expenditure – instead of just looking at net pay and expenditure, I thought it was interesting that the percentage savings rates were so similar from last year to this year. Part of the reason that I chose to do an all-in budget this year was to see whether accounting for the money that I never actually see would make a difference to my savings rate. I guess I have my answer! 😀
One thing that isn’t really reflected in the budget is the shares I purchased a few months ago. From a budgetary perspective, I consider this to be a transfer of funds from my cash holdings to shares rather than an expenditure item. This may or may not be technically the correct thing to do, but I wasn’t really quite sure how to account for them. Then again, superannuation is kind of the same in that respect and I do include that, so perhaps I need to add share purchases to my budget. If you have any thoughts on this, feel free to let me know in the comments.
So, what have I learned about my non-fixed costs from this exercise? (I’m not focusing on fixed costs like my mortgage because I have no real control over them.) A few interesting things came to light:
One: I need to track how long it takes me to use consumable items to get a baseline for how often I need to buy them.
I have a tendency to stockpile items that I can get for a significant discount, without considering how long it will take me to use them up. The one that has stood out is bottles of deodorant – I only recently decided to write the date I started using it on a fresh bottle, and discovered that I get just under three months out of a bottle. However, I have a habit of grabbing a few whenever I can get them for half price and it turns out that I now have at least 18 months’ supply sitting in the cupboard. 😀
Two: I significantly underestimated what I would end up spending on what I class as discretionary foods and alcohol.
As well as eating out or takeaway food, this group also includes supermarket purchases that aren’t staple foods; e.g. if I buy something like frozen apple pies for dessert, that’s a discretionary item in my budget because it’s not an essential food. I think I may have to make more of an effort to avoid certain aisles in the supermarket! This figure really surprised me, even after considering how much of it might be due to unpredicted events – i.e. work-related celebratory lunches when people leave or have a baby or some other special event.
The line item for alcohol was actually quite an eye-opener because I’ve never really been a big drinker. However, I have discovered a love of good gin over the past few years and these days I will have one on a Friday and Saturday evening. Good gin is, naturally, a bit more expensive, too, although I try to buy when I can get a good special or a good offer for Flybuys points that I can then use towards other purchases. Next financial year I will have to pull this one into line.
Three: I’m pretty good at estimating what I’ll need to spend on staple foods and grocery items like cleaning and personal care products (with the exception of the aforementioned deodorant 😀 ).
The figures for this were actually within a reasonable margin compared to what I had budgeted and, while they were both higher than budgeted for, they were not what I would consider significantly over.
Four: You really never do know what is going to pop up out of the woodwork.
I was less successful at budgeting for homewares and appliances. While more than half of this category was spent on the Thermomix and the new upright freezer, even after factoring those in I was still way over with this one. Thinking about it, I think a fair chunk of this would have been some accessories for the Thermomix and the additional Tupperware I bought so that I could store things like meats in bulk in the new freezer. In the long run I expect these items to more than pay for themselves. (I made my own bread for the first time this month and it was delicious!)
Five: I can be a sucker for a sad story.
I ended up donating almost twice as much money as I’d budgeted for. That said, charitable giving is one of the categories that I have been considering increasing, and in the particular case where I did end up giving quite a bit extra to an organisation, it was to alleviate an innocent animal’s suffering (said animal’s rather nasty injury has now healed – sadly, amputation was required – and she has since been adopted). I just can’t feel bad about donating for that.
So, that’s it for another year’s challenge. Despite coming out ever so slightly ahead savings rate-wise, I oddly feel as though it was less successful than last year. I think that might be because I was more focused on specific spending categories that I struggle with, but it has certainly given me food for thought. In comparison, though, I showed good growth in my net worth, so all in all I really have nothing to complain about.
I haven’t decided yet what I’ll do for the 2021-22 financial year, but when I have it figured out you’ll all be the first to know. 🙂