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 2023. 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. Last year’s annual expenses were low because thankfully we did not have any big ticket item like buying a car.

Expenses in 2023

Our annual budget for 2023 was Rs. 3.6 lakhs. That budget has remained the same every year since 2020 and it will continue to be the same until 2025. Anyway, last year we spent about Rs. 1.15 lakhs on these annual expenses. Lets take a look at where we were spending the most.

As you see, we have expenses in every single category. You might notice that the kitchen expenses are negative. Well we used to have an old fridge which we sold so instead of an expense it became an income. Actually we bought that fridge when we first moved to India, but then my sister gifted us another fridge when we moved to our new house. So the old fridge was just sitting idle for more than 10 years. We finally decided to sell it and claimed back some space in the house.

The entertainment expenses happened because we bought a new TV for my parents bedroom since my dad likes to watch news quite a bit and the living room TV is mainly for other shows and movies. The old TV (from 2006) that was in his room was having some flickering issues that I am unable to fix completely.

The electronics expense was mainly for a phone for my better half. Finally the laptop related expense is because I bought a laptop for my mom since her old laptop conked out. The miscellaneous expenses cover everything that does not fall cleanly in any of the other categories. These include slippers, gifts, another TV for my parents in their home town because that TV died too etc. I don’t think the rest of the expenses need any explanation.

As I always say, the more things you have, the more you spend on repairs, upkeep and replacements. Which is what most of my annual expenses were in 2023. Contrary to popular belief, you don’t own the things you have in your life, they own you.

Budget for 2024

For those of you who follow my blog and read carefully between the lines know that I 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 2020-2023 (both inclusive).

As you will note, I have exceeded my budget only on vehicles. It is expected and hopefully I will not have any major expenses in that department for the next few years. So on average I might be within the budget. Together with monthly expenses, the total annual expense last year was about Rs. 6.25L.