How to budget like a millionaire

Millionaire monthy budget

I recently downloaded every spending transaction I made from August 2021 through July 2022 and averaged it out. I thought it was interesting so I thought I would share here! Here are some notes on why some of these numbers may be strange:

• Car: It’s only $29/month because that covers my maintenance costs over the previous year. I’m still driving my 2016 Mazda that I paid cash for 6.5 years ago.
• Housing: My home is paid for free and clear. The $936 covers property tax and HOA fees. I paid about $800K cash for my house and I’m STILL paying almost $1,000/month to live here (more when you include insurance, maintenance, realtor fees, etc!)
• Spending money: These categories come from my @youneedabudget app that I defined. I don’t overanalyze all my spending, so everything not in these other categories basically falls under spending money. It covers clothes, Amazon, household items, basically any “stuff” that I buy.
• Monthly Bills: Health insurance is the big one($396). Also in here is auto/home/umbrella insurance ($185), utilities ($150ish), internet ($65), YouTube TV ($65) Netflix ($15), Adobe ($10), Pandora, GoDaddy domains, Ring, Google storage, dental insurance (the rest).
• Restaurants & Vacation: Back before I was rich, these categories were probably around $200/month combined. I was super frugal with that discretionary spending, but now I basically eat out (and try to pay for my friends) and go on vacation whenever I want!

All together it’s $5,218/month. If you don’t count my house, I have about $3.3M invested. Using the 4% rule, that would give me $132,000/year or $11,000/month to spend. So I’m about half of that! That means I’m very likely to be able to live forever on my investments with no other future income. And in fact, I’m very likely to see my wealth continue to grow even after living off my investments!

As always, reminding you to build wealth by following the two PFC rules: 1.) Live below your means and 2.) Invest early and often.

-Jeremy

via Instagram

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