This summer I have tried to learn more about personal finance, and specifically budgeting. Whether reading the Living Below You Means boards on Motley Fool or the various budgeting groups on Wesabe, I have gotten some of my best budgeting advice from regular people people (see great quote below on budgeting). But sometimes, empirical data helps me internalize all of this great advice, and it validates my impressions about average spending.
I found these charts because I was looking for ammunition in a debate with a future housemate: what is a frugal amount to spend on groceries each month? She thought my summer monthly budget was ridiculously high, and I did not think so given that PB&J is my staple food. After some research, focusing on the first chart below and this Wesabe group discussion, I concluded that food costs vary so much between regions that comparing my spending in Washington DC to her family’s spending in semi-rural Pennsylvania produced no meaningful data for how much we should spend in Pittsburgh.
However in this journey for evidence I found two great resources I wanted to share:
- This great chart from Choosing Voluntary Simplicity, a neat and practical blog about simple living. This chart breaks down grocery costs by age, gender, and then into four plans: the Thrifty plan, the Low-cost plan, the Moderate cost plan and the Liberal plan. It goes on to show how each variable affects monthly grocery costs. It is a little out of date, but provides solid comparative data.
- This graph of where an average U.S. consumer spends her annual paycheck. While there are costs which I do not have (who ever spent more on clothes than books? Not me…) it does help me answer the basic question everyone’s been asking since that first gym class in middle school: “Am I, uh, Normal?”
More than anything this summer, I have learned not to think about numbers, but lifestyle choices and needs. If I want an expensive haircut, I need to ride Greyhound to make up for it. If I eat PB&J for most lunches, I do not stress about spending $8 on some great curry once a week. I have the general impression that my budget is frugal. Charts like these allow me to compare this general impression with some empirical data–which helps me define and stick to my limits. And prove my friends wrong.
“The key is to have a budget that minimizes your “non-essential” spending and maximizes your “essential” spending. Frugal does not mean cheap – it means cheap where you can do with spending less.”–retire65 on Wesabe board