Our Monthly Expenses After Becoming Debt Free


Ever since paying off our mortgage in early August, our spending has been a bit out of control. After years of aggressively paying down debt we took some time to splurge. In September we attended FinCon and capped off the trip with a short vacation in Fort Lauderdale. Earlier in the year we had several significant life changes including going from two incomes to one and having our second child. It’s time to get our spending back on track before we head into the new year.

Our Monthly Expenses After Becoming Debt Free

A lot has changed since we started our debt free journey in 2011. At the time, we were a single income family as my wife had gone back to school to get her teaching certificate. I was early in my career and made good money but was only a little above median income.

Our debt was spiraling out of control. We were nearly $200,000 in debt and on a path to continue taking on more. Turning things around seemed so overwhelming. As they say, a journey of a thousand miles starts with a single step. That single step was to simply track our spending.

Tracking our spending allowed us to better understand where our money was going so we could make adjustments. If you are struggling financially, start by simply tracking your spending. You’ll be surprised how much clarity this will bring to your financial life.

Becoming Debt Free

Fast forward to when my wife got her first public school teaching job in 2012. At this point we had been tracking expenses for several months. Having this baseline allowed us to put the majority of her salary towards paying down student loans. For years we slowly paid down our student loans and car payments. After a few years, the balance on our student loans was reduced to $23,000. At that point we refinanced the remaining debt into our mortgage. I don’t necessarily recommend this approach but it worked okay for us.

For a few years after refinancing our remaining debt into our mortgage, we didn’t make much progress. In 2016 we re-focused and went all-in to pay off the remainder of our mortgage, which was around $90,000 at the time. We immediately pulled $30,000 out of savings and then for more than two years put every dime left over to the mortgage.

Life Adjustments

During the last few months we’ve had significant changes in our financial lives. Having the mortgage paid has allowed my wife to stay at home with our new baby. Add in our trip and kitchen remodel and our expenses have been all over the place. In this post we will go into detail over our monthly expenses. Partially to be transparent about what we spend our money on, and partly because we needed to sit down and do this anyway.

A few disclaimers: First, this post will only focus on expenses after take-home pay. Not included is the money that comes directly out of the check for taxes, retirement savings, insurance premiums, flexible spending account, parking, and other minor deductions. After all deductions we are left with $6,000 per month in take-home pay.

Necessary Expenses

These are the necessary expenses. If I lost my job and we had to rely on our emergency fund to live, these are the expenses we would continue paying. All others would either be cut out or significantly reduced. While our current monthly expenses are much higher, we could probably live on around $2,000 per month, if absolutely necessary.

Writing this out gives me an appreciation for people who make at or below median income salaries. The median income in my state (as of 2011) is $45,000. Therefore, take-home pay would probably be around $2,500 to $3,000, which doesn’t leave much room after necessary expenses. Since we are debt free, we don’t have bills that many others have such as a mortgage, student loans, or car payments. I understand that it can be challenging to get started, but by tracking monthly expenses any of us can get a little better with money.

Groceries/Toiletries – $500

This expense is a bit higher right now as we are including baby formula and diapers, which comes out to about $200 per month. Overall for groceries we usually spend about $350 per month for our family of four (does not include going out to eat). For toiletries we spend another $25 per week, on average.

Utilities – $300

Well, we have to live somewhere. This includes air conditioning, heating, trash, water, and sewer. We could probably trim this down a bit in an emergency situation. Some months this is closer to $200, with others being as high as $400.

Insurance – $300

This includes car, life, and homeowners insurance. Car insurance comes in around $150 per month, homeowners at $100, and life at $50.

Property Tax – $250

We pay this annually as it includes property tax on our home and personal property tax on our vehicles.

Phones – $100

I’m not sure if phones are truly a necessity, though it would have to get really bad for my wife or I to get rid of them. We use our phones for so much that it would be challenging to not have them. Especially if we were suddenly out of work and had to find new jobs.

Other Necessary Expenses – $200

This includes medication ($45 per month), gasoline for our vehicles ($100 per month), and our two cats ($50 per month).

Nice-to-Have Expenses

After the necessary bills are taken care of, this next rung represents expenses that are nice to have but we could do without if needed.

Savings – $2,000

Putting money in our savings (brokerage) account is the first thing we do after getting paid. Paying yourself first is so important. Tracking your expenses for a few months will give you a good idea about how much you can save or use to pay down debt each month. We hope to continue to increase this savings rate to get it back up to 50 percent of our income. We should be able to get close when our 4-year-old starts kindergarten next year.

Savings right now are going towards remodeling our kitchen. Once the kitchen is complete and paid for, we will begin saving for a rental property. Keep in mind this is savings above what we are contributing to our pre-tax retirement accounts.

A few hundred dollars here is also used as a slush fund for any vacations. We probably should also budget for cars, but when it comes time for new (used) vehicles we’ll pull money from savings.

Pre-School – $600

With the transition of Mrs. FP to a full time stay-at-home mom this has moved from a necessary expense to a nice-to-have. We decided to keep our 4-year-old in pre-school as he showed a tremendous amount of growth in his first year. We send him to pre-school at the public school district that we are in, which is significantly less expensive than other pre-schools in the area that can cost as high as $1,500 per month.

Charitable Giving – $500

I really debated which category to include this one in. Part of me would hate to pull the plug on our charitable giving, especially the two children we sponsor overseas. While we’d likely keep donating to their causes, in a dire situation we’d probably pull back on some of our other charitable giving. Other organizations we support include The United Way, the Epilepsy Foundation, the International Institute, and our local church. We are so blessed to be in a situation where we can give away money to groups that we care about. We hope to continue to increase our charitable giving over the years.

Internet and Cable – $100

We have made some changes to keep these costs at a reasonable level every month. Recently we switched our internet service provider and are saving about $30 per month. We also moved from a traditional cable provider to Sling and also have Netflix. As much as we’d like to ditch cable all together, we really enjoy live sports. In fact, it’s about all we watch this time of year.

Luxury Expenses

These are the expenses that would be cut immediately in a difficult financial situation. When we started our debt pay down journey we rarely went out to eat or had any extra spending money. Now that we have paid off the mortgage, cars, and student loans we have extra money every month to do with as we wish.

Restaurants – $300

Going out to eat is something that our family values either for convenience or for a date night. We’ll usually do fast food about once per week, and then try to go on a date night once or twice per month. Having grandparents willing and able to watch our two children keeps costs down since we don’t have to pay a baby sitter. We eat at home often, so when we do have the chance to eat out we appreciate it.

House Cleaning – $80

This is probably my favorite $80 that we spend every month. We have someone come and clean our house once per month. It’s just often enough to keep us from having to dust the furniture, mop the floors, vacuum the rugs, and clean the bathrooms. We’ve talked about giving this up with my wife now at home full-time. For now, we are keeping it.

Everything Else – $770

There are several small items that come up every month that aren’t included above. A few examples include haircuts, swim lesson fees, minor home repairs, random trips to the zoo, tickets to sporting events, clothing, gym membership, and a variety of other expenses related to entertainment or impulse purchases.

These tend to be our variable expenses that we can easily scale back on if an unexpected expense comes up during a given month. We’ll also leverage funds from here (and restaurants) to fund emergencies. I know this seems like a lot of money, but it’s amazing how quickly we go through it every month. Especially now that we have kids and random expenses seem to come up all the time.

Our Monthly Expenses

Being debt free has put us in a unique situation to have a decent amount of cushion in our monthly budget. The average family in America with debt likely spends thousands of dollars on a mortgage or rent, car payments, student loans, and credit cards. Paying off our debt has allowed us to live with lower monthly expenses so we can spend more on things we enjoy. It also positions us well if we ever have a sudden job loss or other life event. We are beyond blessed to be in the situation we’re in today.

Our Monthly Expenses Debt Free

Do you have questions about our monthly expenses? See anything significant that we’re missing?

Our Monthly Expenses After Becoming Debt Free


  1. This is very inspiring to see how you are living life after being completely debt free. I appreciate the transparency of all your expenses and income. Keep up the great work!

  2. We kept our cleaning service after DGal retired early last year. We’ve started discussing if we would keep it when I quit my job (whenever that is). It might be one of the items we cut in order to help pay for non-employer sponsored health insurance.

    I like your bucketing of costs into the 3 groupings (Necessities, Nice to Have, Luxuries) I have done detailed tracking of our costs, but I have yet to split them into those groupings. I really need to do that some day.


    1. Thanks. When we first started out we tracked every expense no matter how small. It’s what we had to do to create some separation to be able to start paying down debt. Now that we have separation between income and expenses we can be less strict.

      This was an interesting exercise to see how much we could live on if we really had to. Thanks for reading!!

    1. Thank you! Trust me, this has been a LONG process to get where we are. We started our journey back in 2011 and have been far from perfect along the way. However, three steps forward and two steps back is still heading in the right direction.

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