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Reviewing my Necessary Expenses

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When I started this blog more than three years, I got in a habit of writing about my net worth. As I mentioned on Monday, I stopped writing about my net worth for a variety of reasons. Along with keeping track of my net worth, I used to periodically review the expenses that I consider necessary. These are typically monthly bills that I have to pay no matter what: house, car (if it protects my income), food, utilities, etc. It doesn't include things like a Netflix account because, in a hardship, that can be canceled. (Note to self: It would be interesting to post my "unnecessary expenses" at some point.)

I should make a mention that "necessary" is a term that can be debated. As I mentioned above, having a car is necessary if it protects my income - or serves a variety of other uses that can be deemed to making my life "live-able." If I have to spend 3 hours walking to the store, it's not cost effective use of my time and thus the car qualifies. As final note, I used to count just "my half" of the numbers since I wasn't married to my wife at the time, but we split the costs of most of these things. I'll put my numbers in parenthesis so that you can compare with the link above where I did this two years ago.

  • Housing - $2900 ($1450) - This went up from the $987 that I paid in the past for my share. Rent is expensive here in Silicon Valley, but the biggest difference is that we moved into a bigger place going from 1200 sq. ft. to around 1600 sq. ft. The addition of a bigger yard for our dog and a garage makes it lot more livable. My wife got a nice promotion recently and I was contracting for pretty good money, making this seem like a good fit.
  • Transportation - ($250) - I'm just going to give my number here because we still keep our car expenses separate. We each own our cars outright, so the costs are maintenance, gas, and insurance. I'm working from home, which makes my use of gas fairly limited.
  • Groceries and Health and Beauty - $400 ($200) - I might be over estimating here. Sometimes it's tricky to know where health and beauty come into play. And as long as we are talking "necessary", I'm sure I could limit this to less if I wanted to. Also included in here is dog food and money for a new Lobby the Lobster toy as he just ate the last one.
  • Internet - $60 ($30) - I would still get high-speed Internet in a financial crisis... it's just too much of my income to penny-pinch on.
  • Gas and Electricity - $80 ($40) - This is where living in Silicon Valley really starts to pay off. We don't have air conditioning and use heat only a few months of the year. Though I have a lot of electronic gadgets (side-effect of being a techy), most of them stay unplugged much of the time.
  • Cell Phone - ($75) - like the costs of cars, this is an expense that my wife and I handle separately. I used to have a great grandfathered plan with Sprint, but for someone reason Sprint makes you switch to new plans if you upgrade hardware. I can't get back to that plan if I wanted to. Bad Sprint, bad!
  • Property Insurance - $50 ($25) - This includes insurance for being a landlord as well as renter's insurance on the place that we have. Neither expense is very big especially when broken down by the month.
  • Water - $50 ($25) - Not much to say here, I think this might be fairly standard
  • Home Phone - $15 ($7) - This might not be necessary with our cell phones, but since it's such a small cost because it's Vonage, I thought I'd include it.

The total expected necessary expenses for me each month is $2102. In Silicon Valley, things could be a lot worse. My income from blogging and other related online ventures is usually around $1600. So I'm losing $500 a month or so unless I cut back some expenses or grow the online businesses. Fortunately, with a wife earning much more than enough to cover this gap, I can focus on doing just that - growing the online businesses.

At least I now have a very good idea of where I stand and how far I have to go to break even and/or start having a profit.

Posted on September 23, 2009.

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9 Responses to “Reviewing my Necessary Expenses”

  1. Chris says:

    I’m very interested to see the “unnecessary spending” list. I may have to make one myself!

    Also, why are you and your wife on separate cell plans? Why not buddy up on a family plan? I pay $10/mo. for my cell (in addition to “way too much” for my wife’s iPhone plan).

  2. Lazy Man says:

    There aren’t good savings to be had at Sprint with our plans. I could get more minutes that I would use for more money, but our plans can’t get cheaper with our phones as they require the “Simply Everything” plan, even if we don’t need everything.

  3. Lazy Man's Wife says:

    RIP Lobby the Lobster

  4. Palm Pre does NOT require Simply Everything. We checked into this and were told we would need to upgrade to the “Everything Data Family” plan for $129/mo. That includes 2 lines, which can be 2 Pres.

    We’ll do the upgrade in January when our 2-year contract expires. By then, the Pixi will be out, making things more interesting. ;)


  5. Lazy Man says:

    Those lying Sprint people! Well my wife is on the $99 unlimited voice plan, so I don’t know if I could save anything without downgrading her.

    I’m curious to see the Pixi. It doesn’t have wifi, but being extra thin and a form factor that Centro users will be used to may make it a good seller.

  6. If much of that $200 is going toward beauty … well, you might consider asking for a refund.

    (Kosmo ducks to avoid flying objects)

  7. I think a lot of people never put on paper what they spend a month, but just keep charging things, figuring that there will a way to stay afloat.

  8. Zengirl says:


    I live in sillicon valley too, your electricity and groceries/health/beauty costs seems low to me, and I think I am frugal person. So, tell me how are you saving money on these? I sure can use those tips. My groceries generally runs about $350 alone with 2 of us and 2 tiny kids under 5 years of age. Do not even ask about health, as a private health insurance holder, we pay $600 per month plus high deductible on top of it.

  9. Lazy Man says:

    My wife being in the military gets us access to the commissaries which are very pretty cheap. My wife has been traveling for work about 40% of the time over the last year, during which time her meals are paid for.

    We have no kids, just a mischievous dog.

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