The first question I ask of any business owner is, “What is your overhead cost?” Most business owners know this answer. If you ask anyone off the street about his or her household overhead, I would receive a look of a blank face.

What is your household overhead? The term “overhead” is used in business quite a bit. Overhead is the day-to-day cost and monthly/yearly cost of operating your household. You would be amazed at how many people do not know what it cost to “operate” their house. They think they know until they actually put pencil to paper and write out every cost. They are usually very surprised how much money is actually wasted and where it all goes. And it goes pretty damn fast.

Just as business owners know their overhead the same should be for those who run a household. And we all operate a household whether you are one person or a family of four. You must operate your household like a business therefore you need to know how much it cost to operate your house.

So let’s put paper to pencil. You need to know what you spend on the following:

Groceries & Restaurant Purchases- This includes weekly grocery shopping, eating out at restaurants, take-out (pizza night, Chinese food night, etc), convenience stops at local grocer, WAWA, 7-11, Circle K, Starbucks, Dunkin Donuts, local bagel shop, etc.

Automobile Costs

– Monthly car payment

– Gas & Oil (Shopping for the cheapest gasoline for your car is not the best move. Sometimes a cheaper gas can cause problems for our cars and in turn cost you more in the long run).

– Oil Change (It is true you should change the oil every 3000 miles. It will make your car last longer).

– Repairs (You should save $20-25 per paycheck for repairs)

– Parking

– Public Transportation

Housing/Shelter Costs

– Mortgage/Rent (If you are paying a mortgage, some folks take the advantage of bi-monthly payment. Bi-monthly payment means your mortgage company splits your monthly payment by two and they automatically withdraw the payment twice per month. This figures out to be one extra payment per year and in turn it could shorten the life of your 30-year mortgage loan to 21-22 years. Some folks do not want to give their mortgage company anymore than due and they would rather invest the money in stocks, CD’s, etc.)

– Property Taxes

– Utilities (Electric, Water, Sewer, Gas, Trash)

– Telephone (Many people are considering dropping their land-line. This might be a good idea. If you are not in business for yourself yet (and hopefully you will be soon) why have more than one telephone.

– Security/Alarm

– Repairs

Personal Costs

– Haircuts

– Toiletries

– Laundry

– Dry-cleaning

– Childcare

– Gifts given

– Allowance for children

– Clothing

– Vitamins/Supplements


– Revolving charges, i.e. department store charges

– Student loan payments

– Alimony


– Health (Add this to your budget even if your employer automatically deducts from your paycheck)

– Mortgage Insurance (PMI-Private Mortgage Insurance)

– Renters Insurance (I always recommend purchasing renters insurance. It is very affordable.)

– Disability

– Life

– Long-term healthcare

– Automobile


– Concerts/Movies/DVD Rentals

– Books

– Hobbies

– Memberships/Dues

– Vacations

– Subscriptions

– Toys

– Cable TV


– Medical co-pays/co-insurance

– Dental

– Vision

– Prescriptions

– Accountant

– Attorney

– Bank charges

– Educational Costs

– Postage

– Any other expenses


– Personal savings

– 401K

– Charities

– Stocks/Bonds/Mutual Funds

Now that you have a budget outline you should complete this form over a 3-month period. The reason for a 3-month period is because a one-month snapshot is not long enough for a proper analysis.

After your 3-month analysis you will be able to see where you spend your money and the cost for operating your household and lifestyle, hence your personal lifestyle overhead. Armed with this information you will be able to make changes and hopefully begin to save more and spend wiser.

Please keep in mind just as in business life changes. Sometimes the change is slow (paying off your school loan) or sometimes fast (becoming ill and needing your appendix out immediately). One should prepare for these changes to the best of their ability and one way is saving money in your bank, envelope, jar, etc. for the life’s little “Uh-oh’s”.

It is easier than you think to keep/analyze your overhead. There are many computer programs that will do this for you. One such program is Quicken. There are many others. It will make your life much easier (and your accountant’s). You can learn more at

I hope you enjoyed this article.

Here’s to your Health, Wealth & Happiness!

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