In the previous post I wrote about my monthly expenses. This is the continuation of that post and I will be covering my annual expenses in 2022. While monthly expenses are those kind of expenses that occur more frequently, yearly expenses occur rarely, perhaps once every few years like house repairs or buying a new car etc. I will explain where we are spending the most and why. Remember that for all the expenses, whether monthly or annual, the money is coming out of my retirement corpus which consists of a bunch of debt and equity mutual funds. There are no other incomes or special savings for annual expenses. Every year since retirement we have seen different kinds of expenses and last year wasn’t any different either.
Expenses in 2022
Our annual budget for 2022 was fixed at Rs. 3.6 lakhs and we spent a whopping Rs. 7.7 lakhs. Can you believe that? Going way over my allocated budget. But it was bound to happen once in a while. The whole point of annual expenses is for them to be lumpy in some years, where as monthly expenses are more uniform. First lets take a look at where I was spending the most.
As you will notice, we have expenses in every single category except for laptops and desktop. But the biggest expense has to be the car :). If you recall, we recently exchanged our old car for a new one. We are completely satisfied with the purchase and it was a well deserved expense.
We had a lot of expenses (Rs. 85K) related to house repairs. Basically a couple of leaking bathrooms, a leaking roof (the roof on top of staircase) and a leaking water tank that needed repairs. Then the usual property tax and other minor repairs like water filters replacement, new bulbs etc complete the house and other room expenses.
Other than that we had a Rs. 30K expense in entertainment department which consists of expenses mainly related to renewing our US visitor visas in addition to expenses related to components that I bought to repair our TV. The electronics expense was because I had to replace my broken phone. Renewing the domain for my blog and purchase of a few electronic components are part of the projects expense. Finally, expenses related to buying gifts for family and friends was the primary reason for miscellaneous expenses to be that much.
Budget for 2023
For those of you who follow my blog and read carefully between the lines know that I usually don’t increase my annual budget every year like I do for my monthly budget. I plan to increase it only once every 5 years (scheduled to happen for the year 2025) because these annual expenses occur less frequently. So the budget for this year remains at Rs. 3.6 lakhs per year. If all that sounds confusing, you might want to read my post on annual expenses explained. Anyway, here are the cumulative expenses for 2020-2022 (both inclusive).
As you will note, I have exceeded my budget in the categories of vehicles, miscellaneous, laptops / desktops and projects. Vehicle expense is expected and hopefully I will not have any major expenses in that department for the next 5 years. So on average I might be within the budget. Laptops and project expenses are only slightly over budget so nothing much to worry about it. The only unexpected part is in miscellaneous expenses. I might have under budgeted on that one. We will only know after 2024 and if required I will increase it for the 2025-2029 budget :).
In spite of being under budget in the rest of the categories, overall I am still over budget by Rs. 62K for the 3 years since 2020 mainly because of the car expense. Let’s hope this year will be better.