What is a Monthly Nut?
A monthly nut is your fixed costs, month to month, absent job loss or disability that will be there waiting for you. A monthly nut is not the same as a budget. A budget is whether you are over buying clothes or certain types of food, while a monthly nut is made up of items like heat and other contractual obligations.
While a budget can change month to month it is unlikely your monthly nut will outside of direct inertia to change something (i.e. shop for cheaper insurance, pay off a debt, etc).
My Monthly Nut
When I originally calculated my monthly nut I came up to about $4,400 per month. That number has increased pretty dramatically in the past year due to some very obvious factors:
- I moved from a townhouse to a much larger home (with a much larger tax bill and higher utilities)
- The Wife’s lease is up in the next few months and “we” have decided to buy a minivan next. This will increase her car expenditure from $339 to probably about $500, so I just included the $500. It could be less, but regardless it won’t be forever once we pay off the future note.
- I have increased my life insurance, significantly and will be providing an update as to that in the next few weeks when it finalizes. As such, I have just included the expected increase in price here.
Everything is rounded up:
|Mortgage, Taxes andH/O Insu||$3,000|
|Sprint Cell Phone Service||$135||The Wife and I have a shared plan with unlimited data and texts and minutes that we don’t come near but can’t reduce.|
|Verizon FIOS||$150||Home phone, Internet and TV|
|Life Insurance||$400||Not exact as I am in the midst of updating my insurance but includes ins on my life, my wife’s life and child’s life|
|Alarm System||$30||Contract based on new equipment provided|
|Law School Loan Payment||$255||I paid off my smaller loan and this one is locked in at 3.5% but going to take a while to pay off, so unlikely to be removed from the monthly nut for years|
|Car Insurance||$225||Covers The Wife and My Auto Insurance. We recently just priced this out.|
|Electricity||$172||“Budgeted” monthly cost. I inherited this from the previous owner so I have no idea if this is too much for my family’s need. This might be lowered if we use less electricity than the last homeowner|
|Gas||$17||Again, this is the budgeted monthly cost. The only thing running on gas is our cooking and our hot water. The reason it is so low is because of the next item which is new to me.|
|Oil||$300||I have zero clue how much oil we will use in a year, but I do know it costs about a grand at current rates (which I locked in) to fill up the tank so if I have to fill it up 3 – 4 times a year we are in this world|
|Gas||$300||Reviewing my American Express Bill from last year it looks like The Wife and I spend about $300 a month on gas. This number is something we should be able to fix with a little better planning.|
|New Car||$500||As explained above we are getting The Wife a new car in the next few months|
|Food for Home||$540||According to AMEX this is what we spent at the following shops: Target, Stop and Shop, Shopright and Trader Joes – last year. I am not sure how much is food and how much is other since I don’t go to any of those stores except Trader Joes.|
Missing items that could be shut off right away:
- Water – Poland Springs $40
- Pet Insurance $50
- Average household purchases: $225
- No clue on restaurant/bar expenditures
Ever try to calculate your monthly nut with this much detail? It is pretty rare that I put myself out there this much but feel free to comment!