What is Your Household Overhead

The first question I ask of any business owner is,employer automatically deducts from your paycheck)
"What is your overhead cost?" Most business owners- Mortgage Insurance (PMI-Private Mortgage
know this answer. If you ask anyone off the streetInsurance)
about his or her household overhead, I would receive- Renters Insurance (I always recommend
a look of a blank face.What is your householdpurchasing renters insurance. It is very affordable.)
overhead? The term "overhead" is used in business- Disability
quite a bit. Overhead is the day-to-day cost and- Life
monthly/yearly cost of operating your household.- Long-term healthcare
You would be amazed at how many people do not- AutomobileEntertainment
know what it cost to "operate" their house. They- Concerts/Movies/DVD Rentals
think they know until they actually put pencil to paper- Books
and write out every cost. They are usually very- Hobbies
surprised how much money is actually wasted and- Memberships/Dues
where it all goes. And it goes pretty damn fast.Just- Vacations
as business owners know their overhead the same- Subscriptions
should be for those who run a household. And we all- Toys
operate a household whether you are one person or- Cable TVMiscellaneous
a family of four. You must operate your household- Medical co-pays/co-insurance
like a business therefore you need to know how- Dental
much it cost to operate your house.So let's put paper- Vision
to pencil. You need to know what you spend on the- Prescriptions
following:Groceries & Restaurant Purchases- This- Accountant
includes weekly grocery shopping, eating out at- Attorney
restaurants, take-out (pizza night, Chinese food night,- Bank charges
etc), convenience stops at local grocer, WAWA, 7-11,- Educational Costs
Circle K, Starbucks, Dunkin Donuts, local bagel shop,- Postage
etc.Automobile Costs- Any other expensesInvestments
- Monthly car payment- Personal savings
- Gas & Oil (Shopping for the cheapest gasoline for- 401K
your car is not the best move. Sometimes a cheaper- Charities
gas can cause problems for our cars and in turn cost- Stocks/Bonds/Mutual FundsNow that you have a
you more in the long run).budget outline you should complete this form over a
- Oil Change (It is true you should change the oil3-month period. The reason for a 3-month period is
every 3000 miles. It will make your car last longer).because a one-month snapshot is not long enough
- Repairs (You should save $20-25 per paycheck forfor a proper analysis.After your 3-month analysis you
repairs)will be able to see where you spend your money and
- Parkingthe cost for operating your household and lifestyle,
- Public TransportationHousing/Shelter Costshence your personal lifestyle overhead. Armed with
- Mortgage/Rent (If you are paying a mortgage,this information you will be able to make changes and
some folks take the advantage of bi-monthlyhopefully begin to save more and spend wiser.Please
payment. Bi-monthly payment means your mortgagekeep in mind just as in business life changes.
company splits your monthly payment by two andSometimes the change is slow (paying off your
they automatically withdraw the payment twice perschool loan) or sometimes fast (becoming ill and
month. This figures out to be one extra payment perneeding your appendix out immediately). One should
year and in turn it could shorten the life of yourprepare for these changes to the best of their ability
30-year mortgage loan to 21-22 years. Some folks doand one way is saving money in your bank, envelope,
not want to give their mortgage company anymorejar, etc. for the life's little "Uh-oh's".It is easier than
than due and they would rather invest the money inyou think to keep/analyze your overhead. There are
stocks, CD's, etc.)many computer programs that will do this for you.
- Property TaxesOne such program is Quicken. There are many
- Utilities (Electric, Water, Sewer, Gas, Trash)others. It will make your life much easier (and your
- Telephone (Many people are considering droppingaccountant's).I hope you enjoyed this article.Here's to
their land-line. This might be a good idea. If you areyour Health, Wealth & Happiness!Michael J.
not in business for yourself yet (and hopefully youKayeMichael J. Kaye is a chiropractic physician
will be soon) why have more than one telephone.practicing in Bucks County, Pennsylvania. He is a
- Security/Alarmmember of the American Chiropractic Association,
- RepairsPersonal Costs- HaircutsPennsylvania Chiropractic Association and the
- ToiletriesAmerican Chiropractic Rehabilitation Board. He has a
- Laundrysub-specialty in Chiropractic Rehabilitation. He is the
- Dry-cleaningdirector of The Rehab Group of Bucks/Montgomery
- ChildcareCounty-a multidisciplinary clinic with an emphasis on
- Gifts givenchronic pain and wellness. He is a publisher of two
- Allowance for childrenpapers on rehabilitation of chronic injuries. In general
- Clothinghis clinic promotes nutritional and lifestyle changes for
- Vitamins/SupplementsLoansthe chronic pain patient.Dr. Kaye also developed a
- Revolving charges, i.e. department store chargesweb site dedicated to Health, Wealth & Happiness.
- Student loan paymentsHe authored an e-book titled, "The Living Triad"-a
- AlimonyInsurancesbook about the pursuit of changing lives to live
- Health (Add this to your budget even if yourlonger.