Thursday Poll: Largest expense excluding housing?

Unless you live at home with your parents, have paid off your mortgage, or get your housing costs covered by your employer, housing is probably your biggest expense each month. The second biggest expense, however, will vary greatly amongst us depending on what stage of life we are in. Word on the street has it car payments, daycare, and alcohol can be budget busters.

Is that true for you? Let’s see what the poll says…

[poll id=”6″]

Extra credit if you comment with your response and why it is what it is.

You can see all my polls here.

76 thoughts on “Thursday Poll: Largest expense excluding housing?

  1. Attacking my $16,400 worth of HELOC debt and trying to put about 40% of my salary on it every month.
    That is only about $1,000 each month so it is going to take me a long time to pay it off.

    I can’t believe how much people have to pay for child care and I often wonder if it wouldn’t be more cost effective for one parent to stay home for a few years and save on child care and all the expenses related to working. I would factor in gas and take out meals and being allowed to claim the stay at home spouse as a great tax deduction.

    • I know daycare is expensive and some people find staying home fits their needs better than working. How expensive could daycare be though? 15k? I would think you could only consider staying home from an income standpoint of you made 20k or close to it.

      • Thank you for clarifying the issue Midwest. Though daycare ends up costing us almost $13,000 a year, both DH and I each make significantly more than that. Even with gas and no tax deduction, we come out on top financially by working (I bring lunch and cook dinners at home-no take out meals!) Plus, our child thrives in his daycare with other children. If you have more than one child in daycare, and/or make a lower income, I would agree with your argument from a financial perspective. Keep in mind though, that the reasons for working (or staying home for that matter) are more than financial, and there is a significant cost to one’s career when you “opt out” for 5+ years until all your kids are in school ful time.

        • Well, retirement is probably my biggest expense but then after housing it’s daycare for sure. Food doesn’t even come close to our daycare bill.

          Psychsarah – opportunity cost is something I try to argue ALL THE TIME when people talk about daycare costs. I once worked with a woman who stayed at home for 10 years and when she returned to the work force after her divorce she made less than she had when she quit 10 years ago. You have to be a pretty low wage earner or have 3 or more kids under 5 for it to be an economic decision. You can make the decision to stay at home because it’s a legit choice but it bugs me when people don’t own wanting to stay home for the real reasons.

          Our benefits also offset these costs – it costs less to insure our family since I insure myself and my husband carries our kids on his policy. Also, we’re able to take advantage of 401K matches from work (and also have more money to set aside to contribute on our own) which we would lose if I’d have quit working to stay home.

          in the past we have paid as much for daycare as we did for our mortgage two years in a row (over $18k/yr -for both kids). But now, both kids are going to be in school this fall so we’ll only have summer care (yay!)

      • In my city people pay a lot for infant care, $400 a week is not uncommon. Cost go down when the kids are over 2.

  2. I voted food and alcohol because I don’t consider retirement an expense. It comes out of my paycheck before I even have a chance to see it, so I didn’t think it should count. But food by and far is my highest expense (almost) every month. Which I can go a few months and keep that budget down, and then I have a month like this past one where I go on vacation and I have 3-4 things to celebrate (which always means restaurant!)

    One of those things that I always want to work on, and sometimes I’m really good at it, but sometimes you gotta get out with the girls and have a nice dinner!

  3. Childcare is insanely expensive… It is my biggest expense each month only because I don’t have a housing payment.

  4. I agree with the poster above that considering retirement as an expense is hard to do. If it counted it would qualify for this selection. 24% before tax and 20% after tax comes out of my paycheck. Food would be next.

  5. Childcare is definitely our biggest expense (and with a newborn it is even more than a one year old would be). I totally ran the numbers to see if it would be cheaper for one of us to stay home and that would be a big fat NO.

  6. Food is definitely my biggest expense. I try to avoid Wal-Mart at all costs because when I DO go in there for food I come out with so much more food than I planned to buy and other things I don’t REALLY need.

  7. I voted retirement because of the categories you listed that gets the highest percent of our gross; however I don’t consider savings or debt payoff expenses. Food would be the highest true expense.

  8. Food, Alcohol, and Entertainment is by far the majority of my expenses each month… greater than my mortgage! It’s insane!!!

  9. I was initially going to answer eating out, because that certainly used to be where all of our money went. As I went to mark my choice, I realized that with our budget, I know exactly how much we’re spending on food, and that’s it’s pretty reigned in now. So what’s the next biggest now? Tithe. We’re actually giving 10% of our gross income to our church every month, and it feels pretty good!

  10. $795/month for full time daycare for my 3 y/o. This expense sucks the most because I only need part-time care but this center doesn’t offer it and the ones that do charge more than what I pay now.

  11. Retirement would be our largest expense by far (including housing costs) since we save about 80% of our income, and all of that is going towards retirement at the moment. Even if you just considered our 401Ks it would still be our largest expenditure since we max our both of our 401Ks (so over $30K) and our rent only comes to around $9K annually. Like others above though, I don’t consider this an expense at all, it’s simply where I’m directing my savings.

    In true spending terms after our rent, our food costs are the next largest at $5533 for 2012. We are tightening our belt for 2013 though, and hope to spend $4200 ($350/month), and so far we’re on track.

  12. After housing our biggest expense is food. We eat a lot of food. Although we have gotten better by eating at home more often. I don’t consider retirement or savings as an expense.

  13. Retirement is the highest number in our budget, if it is considered an expense. The next highest line item on our budget besides rent is our “fun money” that we use for eating out, bars, entertainment, retail therapy, hobbies, etc. The proportion of what we spend our fun money on varies every month, but we always try to stay within the budget. Really though, the majority of our money goes to savings, about 30% of our take home without counting retirement and about 50% if you do count it.

  14. My student loan payment (the minimum) is equivalent to most mortgages and rent. It’s 1000+ a month. So for now all I can do is make the minimum payments. I can’t afford my own place so I currently pay rent, $300 per month, to my aunt to live in her spare bedroom. Not sure if I see a light at the end of this tunnel. Oh well…it is what is!

  15. Student loans are my biggest expense by choice. Paying 3700 a month towards them for the next 2 years. 50% of take home pay. My entire salary plus more!

  16. Health insurance since I’m not covered by my parents and don’t have a full time job with benefits yet (start in August). Granted come August, student loans will be my biggest monthly payment.

  17. Even though we mainly eat at home, food is still our biggest expenditure, after paying the mortgage. Cooking is my husband’s hobby (and he’s good at it!), so we spend a little bit more there than we would otherwise. I really appreciate his culinary skills, and am willing to spend a little more on ingredients in order to enjoy the results.

  18. Student Loans. Down to my last $1,830 though so soon that will change! Only the second highest expense because I’ve been paying them down extra each month. Can’t wait til food is my largest expense! 🙂

  19. I said retirement but, I guess it is food. Not alcohol really. I drink only when I am out with friends about once a month and never drink more than two glassses of wine or a glass of raki. Now that I am on a diet, I do not even drink that much.

  20. Tithing takes second spot on our budget. Food is a very close third though, but if we drank more, it could easily be pushed into second place. In our house, it’s a big month if I buy 2 bottles of wine… heck it probably means family is visiting!

  21. I’ve been a student for the last 5 months, so I voted for food. No alcohol. When I was employed f/t, I would’ve voted for retirement.

  22. The car payment is definitely the largest expense we have each month. Add in the cost of gas and insurance and it will be the top expense in our house for a little while.

  23. Health insurance! I pay over $1000 a month to cover my family of 5– and that is the mid-priced plan!

  24. Saying Food/Alcohol is kind of an odd thing to put together. That could include eating out or groceries. Groceries/household items are out biggest expense after housing. 3 Kids and some food allergies.

  25. We range from $500 to $900 (at our worst) for “Food/Alcohol”. This would include (Groceries, Restaurants, Bars). We are trying to make sure do not exceed $500 for most months.

  26. Family of 5 in Canada – our FOOD COSTS are our next highest expense after housing. ($1100/month)

  27. To get rid of our car loans, paying $800 (soon $1400 after CC is gone in 2 months!!) and will be gone by October. Our other vehicle we are paying $500 a month until we can commit more. Our cars are more than our housing… until October!

  28. “New driver” with lousy credit = astronomical car insurance and car payment

    My monthly car bills are over $700… Almost $900/month with gas, tolls, maintenance, etc….

    -While I’ve been chipping away at my debt and working on building my savings for a while now, one’s financial state doesn’t improve overnight…. I had the option of pouring hundreds of dollars (and sometimes more) most months into my 11 year old Ford Taurus with over 230,000 miles or biting the bullet and taking out a loan for a more reliable car (I put down as much as I could upfront!). At least it was used and I chose the shortest loan term possible! And, at least in my state, you’re a new driver for 7 years (not sure if that’s national), so my car insurance rates are about 3x as high as my friends’!

  29. Childcare baby! There is no way around the expense for us, so we just found the best place we could afford. You usually get what you pay for with regard to childcare, so don’t go skimping on that!

  30. The mortgage comes first (33% of income, includes almost doubling the required payment). After that vacations are my biggest expense (26% of income). That includes a trip to Egypt, Winnipeg, and Kentuky this year, and a major trip next year.

  31. Cars are our Achilles heel…. 1100 total car payments, 250 in tolls.. 600 in gas… plus insurance.. somewhere around 2100 month total. We both commute pretty far from work, and do not have a way around the tolls between point a and point B. The car payments are ridiculous, but we are drilling down on those to pay off early and they are at a low interest rate( 0.9, 1.9) so it could be worse.

  32. Retirement savings, then food & dining – including alcohol & bars – for me. I’m 23 y/o and in an urban area with lots of friends to socialize with, so I have a healthy weekly alcohol and ‘going out’ entertainment budget. However, my number one priority is always saving and investing in my future 🙂

  33. Student loans, for sure. House is paid off, cars are all paid for. Hubby and I have separate bank accounts and he buys food, so my biggest expense is trying to get rid of my student loan debt.

  34. Food is generally our biggest expense ($600 to $800/month) but the last two months it’s been our cars. Between car insurance, gas, and needing repairs on his and tires for mine, we spent a little over $800/month. Typically, we keep it under $400 since our cars are paid for.

  35. If you count the pension contributions that come off every pay, then definitely retirement. But if going based on my net income, it would be food. With a chef for a husband, we have expensive tastes!

  36. Next to housing which costs me 300 a month on June 1st, is my student loan which is about the much because I pay more than just the minimum payment. Then comes car expenses (just had to renew plates, inspection and whatnot).

  37. Food. My wife and I have been cooking a lot more at home, but we try to eat healthy and the grocery bills add up. We also end up eating at restaurants a couple times a week. On average, I would say it’s $300/month for groceries and $200/month for restaurants.

    It has been higher for restaurants lately as we are in the midst of an interstate move and have been traveling a lot. And we have met family and friends at restaurants when we are back at our old home state.

  38. As a huge con-incidence I am doing the annual budget which hasn’t been updated properly for about 2 years, so I can confidently tell you that food is our no 1 expense – we have no mortgage. That is the household’s no 1 expense – for all I know my husband has an expensive coffee habit, but it’s his money so it doesn’t effect me! Council rates is our next biggest expense by a long way.

    I should point out that we have no childcare costs, no private health care costs (I am Australian and we are covered by medicare, although a lot of people still have private health care. Our income level doesn’t extend to that)

  39. I thought it would be healthcare expenses (not insurance), but it’s taxes! Actually taxes are a bigger expense than my rent! After taxes and rent, the next is charitable donations, which I don’t really think of as an expense since I would probably stop giving if I were unemployed. Healthcare is 4th on the list. Huh. Interesting stuff always, Ninja.

  40. Childcare is our largest single expense after our mortgage. It is actually $5k per year more expensive than private school in our area!

  41. I currently pay $600 for student loans (and my husband is deferring his debt) while we’re hustling to save for a down payment. I am a bit worried about child care (no kid yet, but planning shortly) as the daycare at my work site is $2200/month (yes, I’m in HCOL area and it’s an academic campus)
    But still…$2200 is a lot (and no, I definitely come out ahead by continuing to work as I’m the bread winner and my husband is still in training)

    I think we have to move to a lower COL area.

    (I also second that taxes are the BIGGEST drain on my budget)

  42. Childcare is more expensive than our mortgage. We have 2 children so we’ve gone with what is the least expensive (nanny) @ $420/week (childcare is so expensive, especially with young babies) childcare possible. We’ve also not grown our house in accordance with our family, so we’re squishing into a 2 bedroom townhouse until we can afford for sure something bigger. Out mortgage is $1100.

    Are we the only ones who’s mortgage isn’t the biggest expense?

  43. I voted health insurance. Our mortgage payment (with taxes and insurance) is $800/month. And our health insurance runs about $600/month. Groceries only runs around $450/month and we’ve cut all other expenses (including contributions to the 401K) to a minimum while I’m in school for the next 18 months.

  44. family vacations! We really save up for “travel fund” so we have a budget for our trips! 🙂

  45. I was going to say Rent and daughter’s college tuition were tied for our largest expenses. However, the comments about taxes made me curious. Income taxes are definitely are largest expense about the same amount as Rent and Tuition combined. Ouch!

  46. I voted for student debt. In reality its also credit card debt… I graduated less than a year ago and am sitting on close to 50k between student loans and consumer debt. I moved oversea and thankfully got full time employment almost immediately. So, I am doing my best to make a dent in the debt because I am in a sweet spot where all of my expenses (from food to clothing to cell phone to housing) are less than 500$ / month. So I am able to funnel quite a lot of money one to my debt each month but it can be difficult!

  47. Mine’s definitely student loan debt, which I put $850 a month into. However, ignoring that, it’s really food/alcohol. Once I tracked every dollar I spent in March, I was able to take a step back and figure out exactly what I needed to spend. The next month I was able to cut about $200 from my food and alcohol budget!

  48. Definitely it is childcare. $1,000/month for my 4 year old and $400/month for before and after school care for my 7 year old for Sept – June. And then comes summer childcare for my 7 year old…$200/week for 11 weeks unless I take most of my yearly vacation time to reduce the number of weeks I need childcare…so I usually end up paying for 9 weeks or $1,800 for my 7 year old during the summer…So about $19,000/year (gulp)…

  49. Food/Alcohol got my vote! Even though it’s only the 2 of us (plus 2 cats), our grocery bill’s average $150- every week, but we rarely eat at restaurants and brown-bag our lunches.

  50. Daycare and it’s not even close. Approximately $1800/month for 2 kids, ages 5 and 3 in MN.

  51. Retirement (which is what I voted for). However seeing the other comments I would say that the next would be Tithing/Charity. The rest compete for 3rd place on a month by month basis.

  52. I bought an Altima with payments of $259/mo. – it seemed like a great idea at the time (I went to just play and look at cars and walked away with one haha).

    Then I couldn’t get the jeep wrangler out of my head that had been floating around for years.
    So I bought one, but paid cash.
    Only $5,200.
    The funny thing is that this vehicle won’t lose value from here.
    By keeping it in good condition, I will be able to sell it for at least the exact same amount in the future should I decide to sell.

    So I regret the Altima purchase.
    I had an older Altima before and would have just kept that one instead of selling!
    But hindsight is nearly always perfect 😉

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