The months we broke our budget- Expense report October, November 2017

We have been quite good at keeping within or budgets for quite few months prior to this but the Months of October and November saw us zooming past the budget. Thankfully we did not reach the heights of expenses as last year. Let’s dive into what changed in last two months

Clothes: I finally broke down and bought myself some clothes. As I have previously written about women’s jeans are the worst. They shred after few months of use and this time I finally decided to buy some good quality trousers which I am hoping will last me for years to come if I suddenly don’t gain a lot of weight. I also spend money on jeggings and leggings to make the other clothes I already had become wearable. That being said advent of new clothes has prompted me to purge a lot more clothes form my ever shrinking wardrobe.

Medical expenses: Last few months saw us spending a lot of money on medication and doctor visits. All of the people saying we don’t have a healthcare plan calm down. The healthcare expense is temporary and we do expect to see increased expenses in next few quarters as well. We are however trying to keep other costs down.

Eating out: we have spent a huge ton of money eating out in last two months partly because we were travelling to visit family and partly because work and general well being was too stressed leaving one or both of us exhausted. After almost 3 weeks we finally were able to prep and cook week long meals in mid-November.


We stopped publishing detailed list of expenses because it is a drag to write and I have rarely read through anyone’s expense report items. All I care about is broad heads and totals, which is what we share now on our site.

If you are interested in any particular expense or category let us know in the comments and we will detail that out for you.

The expense report is without rent and home loan EMI as that is separately accounted for in our overall yearly budget and savings. We live in perhaps one of the most expensive cities in the country which has a huge impact on our budget predominantly in eating out and doctor consultations. Our rent is also ~3 times more than the previous city.

Our aim in sharing the expense report is to hold ourselves responsible as well as show that even in a high cost of living area it is possible to reduce expenses.


Our expenses for October are as below:

Total expenses: 25884/-

Clothes- 4087/-

Medical expenses- 4147/-

Eating out- 4060/-

Other regular Household expense- 13590/-

Expenses for November

Total Expenses: 24890/-

Clothes: 1047/-

Medical expenses- 5204/-

Eating out- 6811/-

Other regular Household expense-11828


As you would see we have been spending quite a bit on eating out and that has been something that has been a worrying trend. We love food and once in a while it is a good break to sample other delicacies but of late we have been spending a considerable sum on eating out again. This expense if reduced to under 1000/- will help us keep our expenses way close to our actual budget. It would also offset the increased medical expenses and we will be eating healthier.

Since the medical expenses are going to be here for a while and we might need to buy few more clothes if necessary it is highly unlikely we will be able to meet our target of fewer than 14 k in expenses. Currently we are playing this by the ear but we are conscious of unnecessary expenses that have crept in and can be reduced.

We are currently aiming for 20K in monthly expenses recognizing current medical requirements. It will still take us a few months to know exactly how much we will rack up in upcoming months and if we need to make some long lasting changes to our budget. That is highly unlikely since we are very aware that people live on far less than we currently do and there is no reason why we should nto be able to make do on current expenses.

December is here and as the end of year comes we are looking at a hike in income. In past few years we have seen steep increase in income; we are by no means high earners but our income certainly allows us to save a decent sum. A decent hike of over 10% would set us up for at least 10% increase in our monthly savings if not more.

Past few months, life has won the fight between low expenses and comfortable expenses. With one of us recovering we should be set for a better looking balance sheet soon.

Inflation- why we are not that worried.

Inflation and our assumption of inflation at 6% has become one of the major topics of discussion in the comments on our posts. Like we have said before looking at inflation in isolation is wrong and anyone who is worried that inflation since 1991 has been 8% should also realize that NIFTY returns for that period have been 11.7%.

Both of these figures are average and being average they do not present a complete picture of either the stock market or general expenses. However we can’t go around predicting and projecting yearly inflation or returns which means that these are the figures we have. So let’s go ahead and do some calculations both at our previously mentioned figures and new figures from historical averages.

Below is a quick excel for someone who will retire with 2.5cr in 10 years and currently spends 6Lac a year.

starting sum  2,50,00,000.00 starting sum  2,50,00,000.00
inflation 6% inflation 8%
return 8% return 12%
starting expense        6,00,000.00 starting expense        6,00,000.00
age stash expense age stash expense
32        6,00,000.00 32        6,00,000.00
33        6,36,000.00 33        6,48,000.00
34        6,74,160.00 34        6,99,840.00
35        7,14,609.60 35        7,55,827.20
36        7,57,486.18 36        8,16,293.38
37        8,02,935.35 37        8,81,596.85
38        8,51,111.47 38        9,52,124.59
39        9,02,178.16 39      10,28,294.56
40        9,56,308.84 40      11,10,558.13
41         2,50,00,000.00      10,13,687.38 41         2,50,00,000.00      11,99,402.78
42         2,59,05,217.63      10,74,508.62 42         2,65,85,267.10      12,95,355.00
43         2,68,17,165.74      11,38,979.14 43         2,82,48,831.82      13,98,983.40
44         2,77,32,441.53      12,07,317.88 44         2,99,91,280.68      15,10,902.07
45         2,86,47,133.54      12,79,756.96 45         3,18,12,582.91      16,31,774.24
46         2,95,56,766.71      13,56,542.37 46         3,37,11,963.29      17,62,316.17
47         3,04,56,242.28      14,37,934.92 47         3,56,87,755.83      19,03,301.47
48         3,13,39,771.96      15,24,211.01 48         3,77,37,235.52      20,55,565.59
49         3,22,00,805.82      16,15,663.67 49         3,98,56,425.32      22,20,010.83
50         3,30,31,953.52      17,12,603.49 50         4,20,39,874.98      23,97,611.70
51         3,38,24,898.03      18,15,359.70 51         4,42,80,408.08      25,89,420.64
52         3,45,70,301.40      19,24,281.28 52         4,65,68,832.98      27,96,574.29
53         3,52,57,701.73      20,39,738.16 53         4,88,93,612.96      30,20,300.23
54         3,58,75,400.65      21,62,122.45 54         5,12,40,490.32      32,61,924.25
55         3,64,10,340.46      22,91,849.80 55         5,35,92,058.30      35,22,878.19
56         3,68,47,969.91      24,29,360.78 56         5,59,27,274.19      38,04,708.44
57         3,71,72,097.86      25,75,122.43 57         5,82,20,905.94      41,09,085.12
58         3,73,64,733.46      27,29,629.78 58         6,04,42,903.85      44,37,811.93
59         3,74,05,911.98      28,93,407.56 59         6,25,57,687.68      47,92,836.88
60         3,72,73,504.77      30,67,012.02 60         6,45,23,338.34      51,76,263.83
61         3,69,43,012.17      32,51,032.74 61         6,62,90,682.23      55,90,364.94
62         3,63,87,337.78      34,46,094.70 62         6,78,02,254.41      60,37,594.13
63         3,55,76,542.52      36,52,860.39 63         6,89,91,125.53      65,20,601.66
64         3,44,77,576.71      38,72,032.01 64         6,97,79,575.16      70,42,249.80
65         3,30,53,988.28      41,04,353.93 65         7,00,77,592.43      76,05,629.78
66         3,12,65,605.09      43,50,615.17 66         6,97,81,182.28      82,14,080.16
67         2,90,68,189.12      46,11,652.08 67         6,87,70,453.07      88,71,206.58
68         2,64,13,060.01      48,88,351.20 68         6,69,07,458.33      95,80,903.10
69         2,32,46,685.52      51,81,652.27 69         6,40,33,762.19  1,03,47,375.35
70         1,95,10,235.90      54,92,551.41 70         5,99,67,694.10  1,11,75,165.38
71         1,51,39,099.25      58,22,104.49 71         5,45,01,254.58  1,20,69,178.61
72         1,00,62,354.34      61,71,430.76 72         4,73,96,628.86  1,30,34,712.90
73             42,02,197.47      65,41,716.61 73         3,83,82,260.13  1,40,77,489.93
74           -25,26,680.67      69,34,219.60 74         2,71,48,428.31  1,52,03,689.12
75        -1,02,17,772.30      73,50,272.78 75         1,33,42,273.67  1,64,19,984.25
76        -1,89,73,488.69      77,91,289.15 76           –34,37,802.72  1,77,33,582.99
77        -2,89,05,960.06      82,58,766.50 77        -2,36,48,437.85  1,91,52,269.63
78        -4,01,37,904.68      87,54,292.49 78        -4,78,08,390.26  2,06,84,451.20
79        -5,28,03,572.94      92,79,550.04 79        -7,65,06,503.91  2,23,39,207.30
80        -6,70,49,772.81      98,36,323.04 80      -11,04,10,659.43  2,41,26,343.89

In The first scenario where returns are merely 8% and inflation is on the lower side at 6% the said household will run out of money by 73.

In the second scenario with 11.7% returns and 8% inflation they will run out of money at 76. In grand scheme of things if you are going to run out of money it does not matter if you are out of money a year earlier.

If they add another 50L to their stash their money will suffice for another 10 years at least on either calculation.

What does that mean?

On the surface someone would think this means that the corpus is way less that the actual requirement. Well there are a few safety nets in place.

  1. PF/pension realisation. We would benefit from EPF post 60 years and it would contribute a decent sum in our 60s which might skew the balance by quite a bit.
  2. Reduction in expenses– We expect a reduction in our expenses as we grow older and definitely when we leave the work life. We would no longer be living in one of the most expensive places in the country and we would have more time to actually insource both eating and other small maintenance. If we have a kid in recent years we would definitely be out of kid related expenses by the time we are 60. I am definitely not supporting a ~30 year old.
  3. Earning while out from active job. Our field allows us a huge amount of flexibility and possibility for side hustles and with our specializations we would fare quite well being advisors with limited responsibilities and a decent chunk of money even a 5-10K per month income can change the way expenses pan out and allow us to live a better life. This might be true for most of us.
  4. Actually trying to reduce costs- We have a lot of fat in our budget for many reasons. We also have a lot more things we can do actively to reduce our expenses and keep them well below our desired amount of 14K. We slip up every now and then but I expect us to last better and achieve more once we have the time and are not facing daily time crunches of going to office and making things happen.

Talking about inflation might be an easy way to say ‘you don’t know what you are talking about’. Well neither do you because things affecting your money 10 years later haven’t happened yet. What it does mean is that both of us would be in similar scenarios a year here or there. I would just be a bit more conservative in my returns and might be withdrawing less money.

We have learnt to take these projections with a pinch of salt just like our expenses. We hope to keep our day to day expenses below 14K but we know there will be months where we will exceed that way too much be it to buy a new phone or to finally buy some clothes. Healthcare is also an expense we have learnt to take in our stride and as we get closer to our target year we hope to have a much better understanding of what our 40 year selves would require in terms of medical care. For big things we will trust health insurance to come through.

The Healthcare Inflation

There is currently no way for us to know what health problems we will face when we are 70/80or 90. We can also safeguard against the rising medical costs to a certain extent. Will it cost 10cr for assisted living per year? Or will India by then be a single payer healthcare system. These are questions we do not wish to be scared by today.

It might sound short sighted but the reality is most of us will need some help as we grow old. There will also be people far older, sicker and poorer than us at every step of the way. Almost all of us will find a way to get through the illness; difference might be the location and type of care both of which are quite important.

There is a chance that we might not suffer from long stretched illnesses which drive our networth into ground and leave us at the mercy of others. If this is in our future and we keep on working years on years to safeguard ourselves against a disaster decades in future we might be left with quite a few regrets.

 

The Education Inflation

We are currently DINK but that might change in future and we understand that education is a huge investment and costs have skyrocketed in past decade or so. However, we also believe that there are ways to reduce the expense as well as take education in your own hands. Though the time we have to worry about our little one’s first education is at least 3-4 years away we are currently not averse to home schooling once one or both of us retire. That would allow us to divert the money to other endeavours the kid might be interested in and also to travel.

Travel Inflation

Our budget to most might look like we have cut it too short and would not be able to make room for any travels. We have been travelling extensively for last five years and there has been one trip which has crossed 1Lac for both of us in all that time. If we could travel slower, not worry about days off we would definitely bring the cost way down. We also have a lot of time to figure out how much taking a child along would impact the expenses and how we can cut them further.

When we started we were on a shoestring budget and it is only in past few years that we have finally let the purse strings a bit loose. We currently target to keep our travels under 10% of our CTC. This expense also includes any trips to visit family or a shorter weekend getaway. With two international trips and multiple family trips we are well below our budget.


There is no end to whatifs in life. We might both die tomorrow or go on to live healthy fulfilling lives for decades to come. Most people will call us stupid if we leave our jobs to enjoy whatever life we have left; in case we die tomorrow or maybe next year. There is a perverse fun in giving into your fears, it makes us feel smarter, rational and someone who can think clearly. We have succumbed to those fears and it is similar fear which makes us question what we are doing and aiming for every few days.

There is a definite possibility that you will die bed ridden in a a subpar care center because inflation ate all of your purchasing power. there is however an equal chance that you will live a comfortable life with enough to support you during and at the end of your existence. We would like to believe in the second scenario because life is just too long to be lived shrouded in fear.

Saving Money- How we cut spending?

We have been trying consciously to reduce our consumption and expenses. Surprisingly the easiest area to cut was the kitchen. Utilities, rent and maintenance of other moving parts did also reduce. For quite a bit of time we have been thinking of detailing how we are saving money so that you our readers can help us find areas we should be looking at.

We live what we believe is an average urban Indian lifestyle though with a few tweaks.  Before we move ahead and let you know what we are doing with our money let’s clarify the lifestyle definition a bit.

We live in one of the major Indian cities with an above average paying jobs (not by IT standards) at a multinational company. Our palates are best served with a wide variety of cuisines and we enjoy travelling a bit too much. We visit malls and restaurants and use taxis whenever required to ease our lives. Internet is a necessity so is a clean and well maintained living space with light and wind coming through windows and doors.

Our Take on homemade vegetarian lasagna. Turns out a decently maintained 6 year old convection oven can bake damn well and save a good sum.

 

We do differ a lot from the other comfortable aspects of urban life which seems ubiquitous in every Tier I and even Tier II city. Let’s get on to what all we have cut from our lives which we think saves us a shit ton of money.

No CAR.

Yes you read it right we don’t own a car. Why you ask. Simply because we don’t need it. We live quite close to work and our trusty 5+ year-old motorcycle works amazing at ferrying both of us to work and back in 10 minutes. If traffic is particularly bad we spend 15 minutes on the road.

The bike requires much less space for parking and it is cheaper to park it in any mall basement compared to the smallest of cars. It also requires far cheaper maintenance and less petrol to ferry us. The truth is we spend maybe 500 on petrol every month and ~1000 on maintenance every two month.

Without a car we are much more mobile for our jobs. When we did move last year it was a pretty easy task to get the bike shifted and transferred on office money compared to colleagues who moved their cars.

When we have friends and family over or we want to go somewhere far we hire a cab. Someone else deals with traffic, we don’t have to worry about parking and most importantly we have never paid any capital to buy the aforesaid vehicle.

We do believe our requirements will change especially if we have a kid. Maybe we will buy a car but I doubt that. If we do, I have my eyes set on a used TATA NANO simply because it will get us from one place to another drinks less and costs way less.

If we do want to experience the luxury of a high-end sedan or sports vehicle well I’ll just rent it for a day and save us from sinking a considerable part of our net worth in a depreciating metal shell.

Estimated savings 3K (based on around 5k people spend on their cars a month also considering occasional taxis for family)

Live close to work.

Like we said above we live 10 minutes from work and to be true on really bad days of finding no transport we can easily walk to work in 20 minutes. It is also something we would have done had the roads been walkable and we weren’t this lazy. We do pay a pretty penny compared to those who live over 30Km from office and commute for at least an hour daily in public transport or 1.5 hours in private cars.

Call me crazy but I don’t want to spend my life sitting on the road for over 10% of my awake hours every day. Living close allows us to get up way later than we would have to do if we were living further away and that is a big bonus for me.

We believe our quality of life improves and dissatisfaction reduces with this short commute. We always know that in 10 minutes we will be in a much better and private place which keeps us far grounded than if we had to stew on latest irritating thing for hours on the road.

So how does that help us to save money?

When we are happier we tend to buy less and think much more rationally than justifying everything with ‘I live a hard life and I deserve this’.

We also spend way less on petrol and maintenance than many people do. We also don’t have to worry too much about safety on motorbike in long commute hence we comfortable get by without a car. If our vehicle breaks down of a random nail punctures the tire in the morning it costs us barely Rs.30 to take an auto and get to work.

We cook much more and eat at home than we would if we had to be commuting for hours. Unlike many families we also get by without any hired help because we have time on our hands to actually do chore. Whether we do them or not is a completely different thing. We have not eliminated eating out completely but we have drastically reduced it.

Estimated saving – around 2K (in direct saving in not owning a car is not included and can’t price peace of mind)

We don’t own a TV.

Well that would just save you a few hundred you would say. Those hundreds do add up. The truth is I hate television and it’s capability to completely suck a person’s attention. We do consume a lot of TV’s content but we both believe we have much power over what we watch with a laptop and internet than we would have with a TV. Months go by and neither one of us is aware of the latest advertisement urging people to buy or latest fluff which people seem to love. I have a long-standing issue with the content televised because it is mostly negative and I would be hard pressed to remember a good prime time show on any Hindi channel.

We have also been away from the cycle of change that televisions seem to go through in people’s houses and the initial money that is sunk into the set. If I were to buy a TV today it would cost us a significant part of our monthly rent if not a full month’s rent to get one. That does not seem like a good deal.

Having more time and not being inundated with adverts allows us to make better spending choices and just keeps our life generally happier in our opinion. If someone is visiting they are welcome to use the internet and their handheld device/laptop to stream whatever they wish to see.

Estimated savings Rs 500 (considering service provider’s bill, electricity and any other repairs required)

We don’t have an AC.

One of the places we lived on a recent trip. Good room good price and the luxury of a well needed AC.

We live in a city where almost everyone owns and runs an air conditioner. To be true all through May we were debating if we should buy an AC because we weren’t sleeping well. We solved our problem with open windows and a mosquito net first and then realized living without AC was feasible. The weather has taken a turn last few days and we hope to see some showers soon. Humidity though really makes me want to buy one. We are in office during majority of the day; our flat is blessed with good wind and huge windows which don’t allow us to justify the purchase. Fans work but Air coolers don’t so we consume very few units during summers compared to our neighbors.

We are sure we will be discussing this purchase again next year, unless we end up living in an apartment which is even cooler than the current one. Neither one of us hates the sweet relief that AC provides in fact we enjoy it plenty on our travels. However, on a daily basis we let our office pay for our thermal comforts during the hottest part of the day.

Estimated savings – 3K (considering repairs and electricity consumption)

Avoiding wastage

We have always been ones to reduce wastage but the truth is we had no clue on how to actually reduce our consumption. Last year we have re-learnt how to buy and consume food and related items. However we have been quite particular about our energy consumption and in past have been blessed with bills amounting to as low as 300.

First few electricity bills in this city were all above 1000 and use of Induction cooking top was the reason for it. This past month we paid 510 as our monthly bill in one of the most expensive utility rate area. We are quite conscious that this can further be reduced and are looking at how we can achieve that.

Another utility which has saved us quite a bit of money is gas and for some reason we have not consumed as much of it as many do. Maybe it is because we rarely feel like spending hours cooking things, share cooking load with our oven and never boil water for any other purpose on the gas. Even when we did not have the luxury of piped gas, our cylinders lasted anywhere from 4-6 months.

Estimated savings – Rs. 500

We stopped buying stuff.

I have written about it before but seriously if you saw how many of those tiny cute things we own you would think we are insane. Well, unless you have your own stash of useless trinkets collecting dust and taking up storage space.

If I say we haven’t bought anything in last one year that would be lying. I have practically replaced almost all of my 6-year-old plastic storage containers and replaced them with new containers. We bought a few plants to liven up our living space. Bought containers to store meals, carry and freeze them better… you get the drift. But we have not bought any trinket which would look very pretty on some corner of our house.

Some of my new storage containers serving as the assembly line for burrito bowl. The dining table was bought second-hand 2 years ago for 5K.

Not only did we stop buying stuff we also have started reducing the amount of stuff we own. We recently sold bags of stuff for a very small amount but they are now out of my house and not adding to the clutter. After purging and donating bags full of clothes last year we have again managed to suddenly purge another big bag full of clothes we don’t can’t or won’t wear. Since April we have spent a decent sum on clothes for both of us only it has come from free credit from our company and will help us reduce our tax liability. A lot of older clothes are now again in circulation since we can see them in the closet. (On a side note, ladies can you help me with a pair of jeans which doesn’t shred around the inner thigh area in a few months?)

We have managed to look decent for work and lack of expensive new clothes has never impeded our performance.

We are also constantly questioning if we need to actually own a particular item or replacing it with something will actually serve us better. We are looking for buyers for our living room furniture which after 2/6 years is not what our current lifestyle requires. If all goes to plan we will replace 3 big items for 1 and make a bit of money as well.

I cannot insist how calm and happy open spaces make both of us feel. We are quite messy people and none would credit us for keeping the house clean but we abhor clutter and filling every corner with stuff.

Estimated savings – 1K


Kitchen has been one of the biggest sources of our savings and it really deserves a post of it’s own. Above are just the major contributors to our savings and have resulted in small changes which will help us in the long run. One of these changes is being at ease and comfortable at home as well as reduced urge to buy stuff.

Total Estimated Savings – 10k


We are aware that a lot of our savings are derived majorly from our decision to live close to work and many would argue the extra 10K you pay in rent equalizes everything. Well not really, anyone commuting for 50Km per day is spending around 4L petrol in a decently efficient car. This would in today’s prices result in around 280 per day or 7000 in just gas. Added expenses,  like house help would then bridge the gap between the differences in rent. I would rather sleep more than spend the same amount for false sense of savings.

Saving money is one of our favorite topic to talk about with anyone. I intend to write more about this and would like to know what do you believe is holding you back from saving more. What are the ways you are saving on your expenses and where do you think we can look for optimizing our expenses?