It’s time for another challenge update! Below, you’ll find my up-to-the-minute credit card balance (hint: it’s still shrinking and lower than last month). But I also want to get some feedback from you, the reader – because I’m trying to answer this question: what is a reasonable amount to budget for things like groceries, eating out, and travel each month. I’ll explain more below…

But first, let’s check in on my budget for this past month and see how I did.

Budget Update

As you can see, I came in below budget for the second month in a row. I’m really happy about that and I’m encouraged to see that I’m making progress toward reducing some of my unnecessary spending. The only category that creeped up a lot this month was Miscellaneous, which was due to: getting a graduation gift for a friend, adding money to my FasTrak account (for paying bridge and road tolls), and buying a pair of movie tickets.

Despite the progress I’m making, I still wonder if I should be doing more to reduce my budget. One of the reasons why I’m thinking that is because of a comment I received on my May challenge update… actually hold on, let’s add a clever sub-heading to put more of a focus on this:

Am I a Budget Champ Or a Budget Chump?

Now, as I was saying, I received a comment last month that made me think. In my challenge update last month, I described a couple of things that were helping me pay down my credit card balance. One of those things was renting out my car. The other was the fact that I spent less money than the amount I had budgeted for the month of April. (Instead of the $2,000 I had budgeted, I spent only $1,684, which allowed me to put the extra $316 toward paying off my credit card)

I was excited about coming in under budget for the first time since I started this challenge in January. But not everyone was impressed with my budgeting abilities. One commenter said:

Your misc budget seems like a pit for money.  Also your budget for groceries, clothing and eating out seems out of whack.  (very high) Family of 4 we spend $100 at Costco/Winco and we do not go out very often. We also find that if we wash clothes, we can wear them for more than 30 days so we might have a clothing budget of $100 but every 2-3 months instead. Also why the high cell phone bill? Do you really need it? I spent $70 last year on prepaid and I used it whenever I felt like it and I didn’t feel guilty. If you are some sort of traveling sales person I could see a need for that fancy cell phone and data plan. It is all a matter of misplaced priorities.

I read through his comment a few times, and I have to agree with him on one thing: I do spend more than necessary on groceries and eating out. That’s something I’ve mentioned over and over again during this challenge. And I appreciate him contributing to the discussion and making me think about how much more I could do to save money.

I also thought about the fact that different people face different costs due to the city they live in. For example, I live in the San Francisco Bay Area, which has one of the highest costs of living in the U.S. That means the cost of housing, gas, and even food will be higher than for someone who lives in a less costly area. (If we were to look even broader – beyond the borders of the U.S. – the variation between cost of living would be even more striking)

However, I still wanted to think more about his comment and the numbers he cited for his own budget. I’m curious what you, the readers, think about those numbers? He said his food budget (for a family of four) is $100 per week, and that he only spends $70 per year on phone bills. To me those numbers seemed extraordinarily low, but I realized that maybe my perspective was skewed so I did some research.

After digging around for a bit, I found this excellent resource. It’s a document from the USDA that shows a range of different food plans (at different levels of cost) for individuals and families in the U.S., assuming zero restaurant meals. Here are the options it shows for individuals:

So in my age bracket, $53 per week is considered a low-cost budget for monthly groceries, and $82 is considered a higher-cost budget. According to that estimate, my spending on groceries (around $65 per week) is within a normal range – it’s just the restaurant/fast food meals that are the problem for me.

What about for a family of four? Let’s see what the USDA says:

For a family of four with two young children, $159 per week is considered a low-cost budget and $244 is considered a high cost budget. So the person who commented that his family of four spends $100 is spending well under the lowest estimate given by the USDA.

What do you think? Are the USDA estimates accurate? Do they align with your own experiences? Do you think my budget is reasonable/unreasonable?

And a related question: is it possible to get too focused on budgeting, to the point that you eliminate all the little things that make you happy? Or does it simply depend on your individual situation and the kind of financial goals you’re working toward?

Anyway, in the midst of all this budget talk, I still haven’t mentioned my current credit card balance. After making another payment this month, my momentum continues going in the right direction.

Credit Card Balance… Still Shrinking

Last month my balance had gone into triple digits for the first time in a long time, ending at $981. And this month, after making my monthly payment of $480, here’s where I stand:

Ben’s ReadyForZero Snapshot. (Want one? Get one!)

I’m now down to only $507 on my credit card! I can really see the light at the end of the tunnel now. It’s pretty crazy to know that my balance is that low. After starting this year with $3199 in credit card debt (and even higher before that), knowing that I’m so close to being debt free is exhilarating.

Will I be able to pay off my balance entirely next month? I’m not sure. I hope so, but $507 is a little more than my usual monthly payment of $480, so I’ll need to have a successful month of budgeting in order to make sure I can get the full $507 paid off one month from now. Be sure to stay tuned for next month’s update to find out if I did it!

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