Guide to Net Worth Updates: Budget Categories and Savings Rate Calculations

Tracking Expenses

After reading Your Money or Your Life by Vicki Robins, I began to diligently track every cent that came into or out of my life. I adore spreadsheets, and with a raw data sheet and liberal use of the SUMIFS function in various summary sheets, I made an epic workbook that not only tracked income and expenses in 196 different categories, but also reconciled my monthly credit card statements automatically. Hell yeah! For simplicity (and to see larger trends) I’ll only post 18 top-level expenses and 6 top-level sources of income in my monthly updates, but in this introductory post I’ll show you all the budget categories so you can get an idea of what I’m tracking.

I’ll occasionally drill down into certain categories in a multiple month overview to look at finer trends. I can already tell that the food breakdown will be a pretty interesting analysis once a few months of data are available.

I decided not to lump special occasion spending such as Christmas into its own category, but rather to work those expenses into whatever category they would belong in for my family’s spending, as I pick things up here and there throughout the year, and often it’s things we would use anyway, such as books and clothes. I did place a special occasion category under “giving to others” for our extended family, as this expense is outside the norm.

Tracking Income

Under “Income” I decided to track my complete pre-tax income plus all employer benefits. I feel this gives me a better feel for what I’m actually earning by being an employee, and thus an idea of what I need to replace if I leave to work for myself. I also like knowing what I pay in taxes, as I can compare it to what I get back in credits to know my true tax rate.

I don’t count my pension fund as “savings”, as I might not actually see much of this money when I cash out the commuted value of my pension, so I’m separating it out as a different category.

Calculating Savings Rate

Early Retirement Now (ERN) has an excellent post on calculating savings rates. The important point from his blog post is that in any savings rate formula, anything that appears in the numerator should also appear in the denominator. I use his formula #1, which calculates savings rate based on gross compensation. My gross compensation includes all benefits, including insurance and pension contributions. I consider my savings to be whatever I have left at the end of the month, plus my pre-tax contributions to my pension, as well as my employer’s contribution to my pension.

Detailed list of budget categories

Expenses

  • TAXES
    • Federal Tax
    • Provincial Tax
    • CRA balance owing
  • SHELTER (incl. insurance)
    • Mortgage minimum payment
    • Mortgage additional payment
    • Property Taxes (incl. water)
    • House Insurance
    • House Maintenance – required
    • House Maintenance – optional
    • Misc housing expenses
  • TRANSPORTATION
    • CAR
      • Car Loan – minimum payment
      • Car Loan – additional payment
      • Gas
      • Car Insurance
      • Registration, Licencing for car
      • Regular car maintenance
      • Unexpected car repairs
      • Misc car expenses (parking, etc)
    • OTHER
      • Public transit
      • Other transit expenses
  • FOOD & CONSUMABLES
    • Costco membership
    • Special food for medical reasons
    • General groceries unknown breakdown
    • FRUIT & VEG
      • Frozen fruit/veg
      • Fresh fruit/veg
      • Canned or dried fruit / veg
    • DAIRY
      • Cheese (all types)
      • Fresh dairy (yogurt, cream, milk)
      • Canned milk
      • Powdered milk
    • SEAFOOD
      • Frozen seafood
      • Fresh seafood
      • Canned seafood
    • PROTEIN
      • Pre-made veggie meats
      • Eggs
      • Tofu
      • Canned (beans, lentils, etc)
      • Dry (TVP, beans, lentils, peas, etc)
      • Nut butters
      • Nuts
      • Meat (for baby or guests)
    • CARBS
      • Bread
      • Bread products (bagels, tortillas, buns, pizza crusts, etc.)
      • Crackers, croutons, etc.
      • Pasta
      • Bulk grains (rice, oatmeal, corn meal, barley, etc)
      • Boxed cereals
    • PANTRY
      • Flour, oil, margarine, butter, sweeteners, seasonings, baking
      • Tea and coffee
      • Condiments / sauces (spreads, dips, dressings, pesto, pasta)
    • CONSUMABLES
      • Cleaning supplies (detergents, cleaners, road salt)
      • Toilet paper
      • Facial tissue, paper towels
      • Cling wrap, foil, parchment paper, ziploc bags, etc.
      • Personal care
      • Diapers, baby wipes, baby creams
    • TREATS
      • Treat baking supplies (chocolate chips, condensed milk)
      • Junk food (chocolate, candy, chips, popcorn, cookies)
      • Drinks (soft drinks, juice, dealcoholized beer, etc)
      • New or unusual or special treat (eg. battered shrimp)
      • Any food not eaten at home and not planned celebration
  • UTILITIES
    • Heat and Light
    • Internet
    • Cell phones – parent plans
    • Home phone
  • INSURANCE (not house or car)
    • Life insurance (2 people)
    • Amazon Drive Online Backup
    • Dental insurance (my portion)
    • Dental insurance (employer portion)
    • Medical insurance (my portion)
    • Medical insurance (employer portion)
  • HOUSEHOLD
    • Major appliances
    • Small appliances
    • Kitchen / baking utensils, pans, food containers, etc.
    • Household tools (mops, brooms, etc.)
    • Furniture, lighting, storage, etc.
    • Textiles (blankets, sheets, towels, dish cloths, etc.)
    • Technology
    • Office Supplies (not hobby related)
    • Workshop tools (power, handheld, bits, etc.)
    • Misc (hangers, batteries, etc.)
  • CLOTHING, SHOES, ACCESSORIES (not work related)
    • Clothes: Me
    • Clothes: Hubby
    • Clothes: Son #1 (oldest)
    • Clothes: Son #2 (middle)
    • Clothes: Son #3 (youngest)
  • HEALTH
    • Prescription drugs
    • Non-prescription drugs
    • Vitamins and supplements
    • First aid supplies
    • Fitness equipment
    • Fitness activity admission, trail memberships, etc.
    • Dental work
    • Vision expenses
    • Other health services
  • EDUCATION
    • School supplies (office supplies, bookbags, etc.)
    • School field trips
    • School fundraisers, concerts, events, etc.
    • RESP contributions
    • Children’s books (all types)
    • Scribd
    • Non-fiction books (physical, eBooks)
    • Misc (library fees, etc.)
  • CHILDREN EXPENSES
    • Childcare
    • Fitness activities
    • Music activities
    • Other formal activities
    • Spending money for kids
    • Toys, Games
    • Kids technology
    • Kids cell phone plans
    • Subscriptions, plans, memberships
    • Special occasion food/treats (Halloween, Easter, Xmas, etc.)
    • Birthday party expenses (food, games, rentals)
    • Misc kids expenses
  • PET EXPENSES
    • Pet Food
    • Litter
    • Pet Toys, Equipment, Misc
    • Pet Health
  • ENTERTAINMENT
    • Movie rentals
    • Streaming services / subscriptions
    • Fiction books (not children’s)
    • Restaurant celebrations
    • Family fun outings
    • Hobby expenses – Me (notebooks, etc)
    • Hobby expenses – Hubby
    • Vacation
    • Misc. entertainment
  • GIFTS TO OTHERS
    • Kids’ friends (birthdays, valentines, xmas, etc.)
    • Kids’ teachers
    • Birthdays (extended family)
    • Easter (extended family)
    • Halloween (extended family, neighbourhood)
    • Christmas (extended family, friends)
    • Just because or donations
  • BUSINESS EXPENSES
    • Gourmet food business
    • R&D business
    • Blog
    • Self-publishing
    • Science outreach
    • Other business expenses
  • EMPLOYMENT EXPENSES
    • PAYCHEQUE DEDUCTIONS that would not continue after FIRE
      • Deductions I pay
        • EI (my portion)
        • Life Insurance (my portion)
        • Dependent Life Insurance (my portion)
        • Long Term Disability Insurance (my portion)
        • Union expenses (my portion)
        • Travel Insurance (my portion)
        • Other paycheque adjustments (my portion)
      • Employer paid deductions
        • EI (employer)
        • EI rebate (employer)
        • Travel Insurance (employer)
        • Workers Compensation (employer)
        • Other paycheque adjustments (employer)
    • WORK RELATED EXPENSES that would not continue after FIRE
      • Work clothes, shoes, accessories
      • Bus pass
      • Work activities (office get togethers, parties, etc.)
      • Misc. other work expenses
  • DB PENSION + CPP
    • Defined benefit pension (my portion)
    • Defined benefit pension (employer portion)
    • CPP (my portion)
    • CPP (employer portion)
  • MISC
    • Fines, interest, etc.
    • Credit card payment
    • Haircuts
    • Other Misc expenses
    • Lending money to others
    • Paying others back

Income

  • FULL-TIME JOB
    • Pay before deductions
    • Employer benefits
  • SIDE HUSTLES
    • Gourmet food business
    • Self-publishing
    • Blog
    • R&D business
    • Science outreach
    • Other minor hustles (short contracts, etc.)
  • GOVERNMENT
    • CCTB
    • GST credit
    • Tax refund
    • Other government
  • DECLUTTERING
    • Facebook marketplace
    • eBay
    • Other decluttering
  • INVESTMENTS
    • Bank account interest
    • TFSA – Me – gain/loss
    • TFSA – Hubby – gain/loss
    • RRSP – Me – gain/loss
    • RRSP – Hubby – gain/loss
  • OTHER
    • Credit card cash back rewards
    • Rakuten cash back rewards
    • Cash gifts
    • Gift cards
    • People paying me back
    • Other income
    • Borrowing money from others

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