Tracking your spending is one of the most basic things you need to do when on the FI path. December 2016 is the first month I actually kept track of everything I spent, which means I have data for the entire year of 2017.
I have to admit, for months now I’ve been thinking about totaling up everything from 2017, but I’ve also been avoiding it. While I moved to spending more intentionally overall during the year, I know for a fact there was a lot of waste, and I was scared to see what I’d find. But for the sake of better knowing my finances, I sucked it up and took a peek at the numbers.
In 2017 I spent a total of $27,068.64.
I don’t know what I was expecting, but at first glance this number doesn’t seem too bad! However, I’ve always had this idea in my head that I’d try to keep my total spending to $2,000 or under per month, which puts me well over that $24,000 mark. (And even $1,000 in spending after rent is high, so ideally it would be less. Maybe if I’d had a budget…).
How I keep track
Because I wouldn’t want to make this too easy (?♀️), I actually track my spending two ways. I track and categorize every single purchase when it shows up in Personal Capital, and I tend to do that on a daily basis. I mentioned earlier this week that I don’t use a budget but instead keep an eye on what I’m spending overall; tracking in Personal Capital is how I do that. (And no, I’m not shilling for them. I like the way their system works—and I certainly don’t have enough money that they’re bugging me to use them as my financial advisors!—but I realize not everyone does or will. If you like Mint or YNAB, go for it! If you want to write down every transaction on a notebook you carry around, do that!)
At the end of the month I go through and put the totals in each category of spending into a spreadsheet, which helpfully (or depressingly?) also monitors the total amount spent in each category overall and the average monthly spend.
What am I even doing here?
I’m seeing slightly different numbers between my spreadsheet’s breakdown and what Personal Capital is reporting for each category.
Some of that is confusion in categorization. For example, when I buy prints for my walls (which I did on more than one occasion in 2017!), what category does that go under? General merchandise? Some “home goods”-type category? I am absolutely sure that in some cases I did one thing when the charge showed up in PC and another when it came time to add up expenses at the end of the month for each category.
Some of it is also the nature of tracking my expenses for the first time: what did I want to track? That’s one of those things that changes over time, and I had no idea what I’d find when I first started tracking how I was spending my money. What larger categories did I end up breaking into subcategories later? Even now I go back and forth on whether “general merchandise” or “shopping” are good enough for tracking, or whether I want to break things down further into clothes, books, art, etc. My spreadsheet has a “shopping” category, but I do tend to go into more detail on Personal Capital.
The spreadsheet is by no means infallible, but since I manually have to input the totals into it, I’m more inclined to believe those reported numbers. However, the numbers in Personal Capital do give me a better breakdown of some larger categories, which is helpful for the more miscellaneous, catch-all categories.
This first year was certainly a learning experience. Essentially what I’m saying is I’m working with two sets of numbers here, so I’m not even going to bother trying to make every single category add up. Close enough is my general approach to math anyway! (Yes, yes, I know “close enough” doesn’t fly when it’s FIRE numbers you’re talking about, but I’m so far off that close enough works just fine for now.)
The grocery spending there is obviously the one I have the most control of and I have to say I’m pretty impressed with myself for keeping it to around $150 per month! It could be lower but I think that’s a decent number to generally aim for.
I spent $1,193.41 on vacation in 2017, which works out to a monthly average of $99.45.
Last year I went to the Azores. I visited Portland. I went to a friend’s wedding. I did a mini road trip culminating in a few days in Vegas, then immediately went to the beach for a week with extended family.
I’m sure there was some waste there (and I’m a baby still when it comes to travel hacking), but I don’t regret spending one cent of this. Travel is a priority and one of the things I want to spend a lot of time doing after I escape the 9-5 life. But there’s no use in putting that on hold while I’m waiting for that to happen, so I’ll continue spending money on things like this that make me happy in the the meantime.
For the record, this does not include eating out while on vacation. All of the Portland breweries we patronized, for example, all went under vacation spending, not restaurants/bars.
My total for last year was $482.71, or $40.23 per month. It’s probably a good thing I wasn’t tracking expenses in 2016 because I have a feeling I probably spent close to double that. A happy hour here and another there adds up very quickly, and I hardly ever turned down invites back then!
While this is absolutely significant progress, it’s still a bit higher than I’d like. I’m continuing to look for opportunities to hang out with friends that don’t involve spending a ton of money; my cousin can attest to the fact that I’ll suggest brunch at my place instead of going out, or going for a hike instead (and in our case we can then joke about how we’re upholding the outdoorsy,
Depression-era cheapness frugal family tradition!).
I’m also a fan of the pre-happy hour PB&J or similar snack to hopefully tide me over and keep me from buying food as well as drinks (it doesn’t always work though. Fries have such an irresistible siren song sometimes!). Know yourself: I have a tendency to get hangry when my blood sugar drops too low, so snacks are a must if I don’t want to end up spending a ton of money on happy hour.
At the same time, though, this isn’t one of those categories I’d have a strict monthly limit on going forward. I’m finding great joy lately in paying for a meal when I’m out with one or both of my parents, and I’m not going to decide not to do that if the opportunity arises just because I’ve already been out with a friend that month.
Just so you can see what owning a car (despite living a largely car-free life) cost me in 2017:
The insurance number is a bit high because I was paying monthly until May, when I renewed for a year; that obviously spills into this year and isn’t included in this calculation. But either way, that’s not an insignificant amount of money my car costs me, and that’s without a car payment. That’s a decision I’ve made, but it’s something anyone who is thinking of owning a car should think about.
Ah yes, that good old “general merchandise” category. I don’t particularly want to, but I’m going to unpack this anyway.
It looks like I spent approximately $739 on clothes last year, or an average of $61.58 per month. Considering I knew that was a problem area and went for a few months last year without buying clothes, that’s even more per month in practice.
That’s way, way too much. To be fair, that number includes a new work purse, a wallet, and new undergarments to replace the ones I’d been wearing since high school that finally wore out. Even without those included, the number is way higher than I want it to be, especially considering I buy cheap fast fashion, not quality items of clothing.
I’ve mentioned before how I don’t particularly care about clothes, but clearly I care enough to buy way too many of them. This is a definite case of my spending not aligning with my priorities. I’m not going to implement a total yearlong ban (although I do think about it occasionally), but my goal is going to be to spend a max of $50 on clothes per month and to go without buying clothes for at least half of this year (so a total of $300).
A whopping $1,867.16 or $155.60 per month.
It’s honestly hard to tell what this all covers. I bought prints for my apartment on multiple occasions and then bought frames for that art. I bought a Vitamix. I bought a new raincoat and a large carry-on backpack right before the Azores. I bought a new Fitbit. I’ve spent a long time slowly switching out my gross, chemical-laden cleaning supplies for more natural ones, which certainly isn’t cheap. I bought gifts for people.
A lot of these were one-offs, but I was tracking my spending and supposedly being more mindful as the year progressed, and I still can’t tell you how I managed to spend this much money on miscellaneous stuff. This is a prime candidate for reducing in 2018 as I continue working to be a more mindful consumer (especially with regards to the environmental impact of my purchases).
Remember how I said before I’ve historically spent to try to gain a sense of control or to project an image of someone I wanted to be? Yeah, hello all of that right here, to the tune of $322.78/$26.90 per month.
It’s not my fault that switching birth control has resulted in a whole host of skin issues (-shakes fist at sky-) and making the switch to more natural facial products isn’t a bad thing overall. But almost a year later I’m still at the point where I have to follow a rigorous skincare routine every day or my face will make its displeasure known soon afterwards; I haven’t found some magic potion that will restore me to the clear skin I had while I was still on the pill.
I’m still trying to figure out what works best for me: case in point, I just bought two different moisturizers last week. But the fact that I’m still trying new products is a reminder that I’m not likely to ever find the magical product that fixes everything. At some point I need to call it good enough and stop spending money on endless new products.
Avoiding the blame game
Back to that $27,068.64 I spent.
Despite the initial relief that it wasn’t horrible, that’s high. It would be so incredibly easy to blame myself for spending so much on stuff and for going well over the arbitrary $2,000 per month number I only very loosely set. But what’s done is done. I’ve spent that money and it would be an unproductive use of my time to berate myself about it or think about how much better off I’d be if I hadn’t spent it.
I was scared to do this exercise in the first place because I was afraid of what I’d find in terms of mindless and wasteful spending. While I’m not happy about the overall spending, and especially about the almost $3,000 I spent on “stuff” last year, I’ve got a much better idea of my weaknesses and things to watch out for.
Now that I’ve looked at 2017’s total spending, I’ve got a baseline from which to measure myself this year for improvement. Given those numbers, it shouldn’t be hard!
Has anyone else looked at their total spending for last year? Were there any surprises (good or bad)?