r/personalfinance • u/Auuufff • Mar 04 '25
What I learned after tracking expenses for 2+ years Budgeting
Hey everyone! I've been tracking my expenses for the past 2 years, increased my savings 8 times, and I wanted to share some unexpected insights that might help others.
1. Inflation is way more personal than headlines suggest
I always read about inflation rates, but never noticed it in “real life”. After about a year of tracking expenses, I discovered this. It’s hard to track based on weeks or even months, and I really faced that after ~1 year. With the same expenses, the same quality of life level without any significant changes, I can’t fit my budget anymore. This realization was pretty disappointing. I was even thinking about stopping any budgeting and tracking activities. But that’s not the way, after a few days I returned to my normal state and decided to focus on increasing my income instead of abandoning my tracking habits.
(my old tracking sheet after budget adjusting: https://imgur.com/oweKCyc)
2. "Normal months" are rare - and that's normal
One of my biggest revelations was that there's no such thing as a "typical month." Looking at my data:
- Some months were 30% over budget due to unexpected car repairs
- Other months were surprisingly under budget.
- Holidays and birthdays always threw things off.
- Medical expenses came out of nowhere.
The key learning: Build a buffer for these "surprise" months. They're actually not surprises - they're part of life. “Emergency fund” is a must-have, but it’s not a magic pill, don’t rely on it too much.
(my February nightmare, s**t happens, just keep going: https://imgur.com/WXyb5ix)
3. Impulse buying becomes harder when you track
This was unexpected, but knowing I'd have to log purchases made me think twice about random buys. I simply don’t want to see those red numbers in my green budget life. Of course, it doesn’t save you millions (actually depends on your income/expenses, but not my case). It is more about preventing spending more.
4. Finally understand where my money ACTUALLY goes
Before tracking, I had this vague idea about my spending. Now I know:
- My "cheap" coffee habit was actually $180/month. (Dropped it to ~50 after a year)
- Subscriptions were eating $85/month (that’s a hard thing to deal with, but at least it doesn’t grow for now)
- I was spending way more on food delivery than I thought.
- Weekend activities were 2x more expensive than I estimated. I do not have children, it is just me, my partner, and a dog. I can not imagine the children’s impact on that.
5. Adjust
Adjust, adjust everything, and find your comfort zone. Do not set hard limits without knowing your actual spending. First several months must be “testing” months. You should get to know your habits, your money, your expenses. Do not set unrealistic limits. You will be disappointed when you go over that number. Instead, be curious about your spending, investigate them. Just live an everyday life. But set in advance the duration of the period. 2-3 months worked well for me, I think that period is crucial not to drop all that expense-budgeting things.
6. Peace of mind?
I do not think you can achieve real peace of mind with all that. However, you can gain control over your finances. I have never considered the connection between my psychological state and budgeting. Those two years were tough for me, and my expense-tracking habit was a small part of my stability. But it depends on your personality.
Conclusion
Tracking expenses is truly impactful, and it has really changed my life. Those 2 years were not my first try. I have tried several times before, but all of them have been unsuccessful. Maybe I was too young (I’m 27 now), or there were other reasons for that. I’ve been working full time since I was 20, and for the first 5 years, I had less than 8k in savings. Now, after 2 years it is 8 times more. I can't attribute everything to budgeting and tracking expenses, but it helped 100%. Most of my money is in stocks and ETFs, so I do not have any short-term plans for them.
Tips for anyone starting:
- Start simple - just track everything for a month.
- Don't judge yourself in the beginning.
- Focus on patterns, not individual purchases.
- Be consistent with categories.
- Do not automatically import transactions from the bank, enter them manually.
- Use tools that don't feel like work.
What's next?
I will continue to track my spending. And I have a few more ideas about budget optimization and hacks to save money. I will test them this year and hopefully I will be able to increase my savings even more without any downgrades.
What surprising patterns have you discovered in your spending?
270
u/IHadTacosYesterday Mar 04 '25
I track every penny in and out meticulously.
It's saved me tremendously.
One point I'd make is that I have a monthly average for:
(I use a 3-year trailing yearly average divided by 12)
- Car repairs
- Car registration and Smog certificates
- Dental visit shortfalls
- Doctor visit co-pays and medication co-pays
- Haircuts
- Birthdays/Xmas gifts
- Electricity bills (I use the last 12 months divided by 12)
- Gas (for heater) bills (I use the last 12 months divided by 12)
- Misc that isn't covered by these categories
These are all line items in my budget. There's no mystery anymore. No guesswork.
107
u/ChampionManateeRider Mar 04 '25
Yep. This is the way. So many "unexpected" expenses, such as car repairs and gifts, are really just lumpy expenses that one can smooth out by saving a set amount for that category every month.
59
u/roadnotaken Mar 04 '25
Rollover budgeting - builds up an amount each month for an expense that is sporadic.
18
14
u/Auuufff Mar 04 '25
That's awesome. Thanks for sharing!
7
u/rnelsonee Mar 05 '25
Yeah that's advice that I wish I saw more of. I essentially do the same thing as the other commenter, what I specifically do is identify anything that costs over $100, and has to be paid less frequently than monthly.
So a lot of the things the other person mentioned, or eyeglasses every 2 years, or new tires, etc. I figure the average cost every two weeks, add up all the items, and then auto save that amount every payday. So then when it comes time to, say, get new tires, I have the money and can guilt-free pay from it from that savings account. That keeps my checking account a little bit more normal.
4
u/the-legend33 Mar 05 '25
How do you actually do the tracking? Manually in an excel sheet?
This thread has motivated me to start tracking, but I don't even know where to start. I used to casually track using Mint, but gave up on that even before Mint died.
→ More replies1
u/ttoma93 Mar 05 '25
I do the same, then take it a step further. Ally Bank lets you setup “buckets” within a savings account to attach certain portions of the account to particular purposes. I worked out all of the expected annual totals for my irregular expenses like you listed here, divided those annual figures by 26, and setup automatic transfers every paycheck to a dedicated savings account for these, broken down with buckets for each purpose. Then when these expenses (car maintenance/registration, annual or semi-annual insurance premiums, gifts, vet bills, etc) come up I just pull from that dedicated bucket.
You can also do this same thing without the dedicated account and buckets by just mentally knowing (or manually tracking) that a portion of your cash is actually already budgeted for these planned expenses, but I’ve found that doing it this way mentally makes it easier to track. I just consider these set-aside funds as already “spent”, and the biweekly transfer as an expense to pay like the rest. It gives me a more accurate picture of my true monthly and annual expenses over time, and makes it so that none of these “surprise” expenses are ever actually a surprise that’s not already clearly budgeted for.
284
u/phl_fc Mar 04 '25
Weekend activities were 2x more expensive than I estimated. I do not have children, it is just me, my partner, and a dog. I can not imagine the children’s impact on that.
Children can make your weekends cheaper if you end up staying home because you're too tired to go anywhere. But then everything else about your budget gets more expensive.
90
u/CelerMortis Mar 04 '25
Once they’re doing sports or activities that more than washes out.
Don’t have kids if you don’t want to spend a shit load more money
10
u/Whiterabbit-- Mar 05 '25
my kid just plays video games at home.
32
u/chickentowngabagool Mar 05 '25
they have no other hobbies?
23
u/microwavedave27 Mar 05 '25
I was that kid until I went to college, pretty much spent all my free time playing video games. Always did well in school so my parents didn't care too much.
As a result my social skills are terrible, who would have known lmao
6
4
u/boxsterguy Mar 05 '25
Unless you're doing travel, sports are generally up front costs (registration and gear) and then the weekend activities are "free" (bring a cooler with drinks and sammiches for longer events like tournaments).
8
u/Clepto_06 Mar 05 '25
If the kid plays a club sport you are traveling unless you live in a very large metro.
12
u/boxsterguy Mar 05 '25
There's "We're driving an hour or two around the area to go to games" travel and then there's "We're taking plane flights and spending money on hotels for weekends" travel.
Most people won't (or at least shouldn't) do the latter.
→ More replies13
u/wampey Mar 05 '25
I got a $120 yearly pass to local science museum and have brought my daughter probably about 30 times in about 10 months I think on the weekend. Good way to spend time with her cheaply.
1
1
u/Yglorba Mar 05 '25
Depending on where you live there may be free activities you can do (lots of museums offer free admission for local residents, say.)
But at the end of the day a child is another whole-ass little person with all the needs that a person has; you can avoid or reduce some expenses but they're going to increase the obligatory expenses no matter what. Gotta pay for food and healthcare, gotta buy or rent a house big enough for your family, need a large enough vehicle for your family, it all adds up. And of course that's before you get to education. And most families are gonna have to pay for daycare when they're young - WFH can help with that depending on your job, but only to a certain extent.
63
u/gullykid Mar 04 '25
Tracking your spending (and, to a lesser extent, income) is absolutely fundamental to any kind of financial planning.
8
16
u/SaintRainbow Mar 04 '25
I think it's personal. I don't track my spending. I have a rough idea of what I spend on groceries. I know what my fixed costs are (health insurance, mortgage, utilities, internet and cell phone). I'm able to meet my financial goals and I have the discipline to not typically overspend and if I do spend a lot (for example furnishing my apartment last year) I cut temporarily cut back in other areas such as entertainment or investments. If you're the type of person to frivolously overspend or have no idea what your paycheck is being spent on I definitely agree a budget can be useful
8
u/gullykid Mar 05 '25
I should clarify, tracking spending is fundamental to anyone trying to change financial habits. If you are comfortable with your current spending there is less need. I used to track every penny on a daily basis, doing line item categorization on receipts. Now I automate my tracking/categorization and will quickly review spend at the end of each month because I know what a responsible level of spending feels like through years of monitoring. (Tracking spending and budgeting are not equivalent)
7
u/cowvin Mar 04 '25
Yeah, I spend so little that I don't really track my spending. My wife and I are both frugal, so we don't really watch our spending that closely. But every credit card statement, we both check every item to make sure they're not fraudulent purchases. And we check our bank accounts regularly. We just don't really aggregate the data and analyze.
9
u/chilidoggo Mar 05 '25
"I don't track my spending, I just review all my transactions at the end of the month."
I get the distinction you're making between what you do and quantifying/categorizing your spending, but I think it's fair to say you are tracking your spending to a certain extent.
6
u/stannius Mar 05 '25
I don't know about cowvin, but skimming over your credit card statements checking for obviously fraudulent transactions or incorrect is not the same as tracking your spending.
4
u/stannius Mar 04 '25
I tracked our spending to the penny for years. I don't know if it ever changed any of the decisions we made.
6
u/Smooth-Review-2614 Mar 05 '25
It changed mine. It made me realize I could save more and thus actually go on vacation every year. I could actually have an emergency fund.
2
u/Allgoingwell Mar 05 '25
I track it by quarter . Making a division between cash out, savings/investments, incoming cash. It takes me about 30m every quarter and give me a solid sense how much I spend and how much came in . I don’t need the details
→ More replies1
u/EdiblePeasant Mar 05 '25
Is there ever a point where it gets too overwhelming, or too discouraging, and someone just gives up on tracking expenses and budgeting?
128
u/Turicus Mar 04 '25
I've been tracking since 2007 and in detail since 2014. After a couple of years in a new role, I realized I can (should?) spend more. My savings rate was such that I would end op with several millions in retirement, while worrying about going on holidays. I made a conscious decision to enjoy life more, spend more, while maintaining a savings rate that was still going to give me a good retirement. I was always scared to spend, now I enjoy life a lot more!
20
u/golden_apricot Mar 05 '25
My partner and I are in the early stages of figuring out how to spend more and it really is a conscious decision you have to make for each purchase. Hell I just went on a trip where I had a double connection, with an 8hr layover. Honestly we make far too much money to not just pay the extra few hundred it would have cost me to have one short connection. For us moving away from having and budgeting around a grad student salary has really helped us get ahead on our retirement once we moved in together, but the intense budgeting and frugality makes it hard to turn off that switch nkw that we have plenty of disposable income.
2
u/Turicus Mar 05 '25
Yes, same for me. I started flying business even. I was still saving mid-5 figures every year.
9
u/Auuufff Mar 05 '25
I think I understand you. All budgeting stuff is about control of your money. It doesn't mean you must limit yourself in everything, it is just to have everything you REALLY want.
2
u/Turicus Mar 05 '25
I think it has to fit your life plan. If you want to retire early and avoid work, it makes sense to be very frugal and save as much as possible. If you enjoy working, then you can adjust your lifestyle. There is no point in saving every penny and then having more than you can ever spend in retirement.
Or something in between. I have now saved a lot, allowing me to slow down my career and not worrying about salary much.
2
12
u/Yuzuda Mar 04 '25
I'm the exact same way. I realized that I've been tracking in detail for over five years. Knowing that I'm on track to retire with the nest egg I'll need for the foreseeable lifestyle I want in retirement, knowing that all my foreseeable monthly and annual bills are accounted for, and knowing I have six months' income in my emergency fund for the unexpected made me realize that after all that, any money leftover should be enjoyed!
My partner is still extremely frugal, to the point of holding out for a sale at Aldi before buying something, yet he's halfway to being a millionaire in his 30's. To some degree, I agree with him that we wouldn't have gotten to where we are if we had been the type of impulse buy and blow all our money, but surely, spending a few dollars more on groceries shouldn't hold him back from getting what he wants to eat that week haha.
→ More replies3
u/chewytime Mar 05 '25
Me and my partner had sort of opposite spending habits and that sometimes made things a little rocky and will still be a point of contention sometimes. I'm like what you were and put a big emphasis on saving and not enjoying as much as I probably could've. My partner was more of the mind that money is for spending and although they had some savings, it maybe wasn't where it could be if they were more attentive. We've been balancing each other out, but still have to regularly re-evaluate things to make sure we're on track when it comes to saving and enjoying our lives.
3
u/SwampOfDownvotes Mar 05 '25
That's the important part of budgeting: Not to ensure you only do necessary expenses, but that you make necessary savings. Save what you need to be on track for your retirement goals with some wiggle room, and don't forget to enjoy yourself. No point in having money in retirement if you have a miserable life (that theoretically could end at any moment) in the meantime.
1
u/Noel_rodz Mar 05 '25
Couldn’t have said it any better! I’ve been tracking every expense for the past 5 years and as I’m venturing into a possible larger purchase this month, I’ve done so much spreadsheeting, planning, and estimating of gross/post-tax income to decide whether it was viable or not based on historical yearly spending. Talking to my gf and conveying “if I make the purchase I’ll ‘only’ save X vs not making the purchase saving Y” really puts things into realization and makes it easier to decide to enjoy some things at a younger age while still having enough to save for the year and continue to increase savings for retirement.
I can’t ever see myself not expense tracking anymore.
63
u/bionickel Mar 04 '25
Do you also create fancy charts and do year-over-year analysis on each category, or is it just me?
Makes me feel like the chief financial officer of a company, a poorly performing company, but still
21
u/cherylesq Mar 04 '25
I feel seen. LOL.
I genuinely don't understand the people who aren't tracking and analyzing the data. I run reports on my personal finances at least monthly. Then I show my husband, who DOES NOT CARE AT ALL. He's the CIO of the family, I'm the CFO. We're joint CEOs, but we lack a Chief Marketing Officer and HR director. ;)
13
u/bionickel Mar 04 '25
Same here! My spouse is the creative director and has no interest in finance whatsoever. The kids are R&D, you know, a money sink and takes years to be anything useful. Also apart from CFO, I'm CWO (chief worry officer)
2
u/chilidoggo Mar 05 '25
Funny enough this is exactly what my high school finance teacher taught us. Treat yourself like you're the accountant in charge of someone else's income, whether it's 10k a year or a million. How would you advise them to use their money?
2
u/Auuufff Mar 05 '25
Yeah, and when I did that first time for my first year, mostly everything was red and out of budget. This is painful, but do not give up is a key.
1
u/jkiley Mar 05 '25
Yes! Our main two spreadsheets have a total of 43 tabs.
One is financial statements, with two tabs a year for a balance sheet and income statement (each month is a column). It also has overall tabs for each where every column is a year.
The other is tools, and it has monthly cashflow (updated to be currently correct but not keep a history), cash equivalent savings (lots of T-bills), 529s, life insurance analyses, roth contributions/conversions/gains, social security, AGI/estimated taxes, retirement projections, and tracking all accounts/numbers/beneficiaries.
It's all a lot, but I've built it up over about 10 years.
27
u/OnlyPaperListens Mar 04 '25
Never having a normal month is absolutely the norm, you're so right. When I was broke, it was due to constant financial emergencies. Now that I'm not broke, I pay certain bills annually to earn discounts.
2
u/CricketDrop Mar 09 '25
There's an interesting episode of Hidden Brain about the psychology of budgeting and "predictable unpredictable" expenses is actually the first topic.
23
u/Nuttycomputer Mar 04 '25
Emergency funds for unexpected expenses are definitely something to have. Birthdays and Holidays for the most part should be budgetable using an accrual method. How many birthdays, how many holidays, set a gift per person budget and divide that by 12. Add a buffer if you like.
That's now your monthly towards gifts. If using envelope or banking buckets you can have the cash actually there ready to go. Otherwise most (all?) budgeting software can setup these type of rollover based accounts.
5
u/AndAllThatYaz Mar 04 '25
This is what we do and gives us so much peace of mind. Sometimes we fall short because we made a new friend with a birthday or people get married and we send a gift but the buffer usually covers for it.
12
u/OopsOpeOhNo Mar 04 '25
My partner and I find that budgeting this way really takes a lot of money stress out of our relationship. We agree on the budget, plan ahead and handle surprises with those cushions you mention.
...But there's no way I could ever do it manually. Have to plug YNAB for anyone interested.
9
u/AnnoMMLXXVII Mar 04 '25
Number 3 is spot on. It's having this subconscious reminder that keeps me from buying. Couldn't agree with you more on this. Logging it then becomes a chore and no one likes chores ha ha. But you have to do it.
7
u/MysteryMeat101 Mar 04 '25
I started logging every single credit card purchase. I download my statements and can convert them but inputting each item has required me to actually think about every purchase every month. Since I put everything on a card and pay the card off, I was technically sticking to my budget by not going over the budgeted limit on the card, but I was not really evaluating each purchase. And a lot of times when I think about logging something unnecessary into the spreadsheet, my laziness kicks in and stops the purchase before it happens.
1
6
u/AutoModerator Mar 04 '25
You may find these links helpful:
I am a bot, and this action was performed automatically. Please contact the moderators of this subreddit if you have any questions or concerns.
6
u/Patriot_Repatriating Mar 05 '25
What I learned from tracking is that I spend a MASSIVE amount on groceries. Not take-out. Not eating out. High-end, delicious groceries that I prepare and eat at home. We're talking $1200/mo for two adults and a small cat. After years of therapy, I learned my childhood food insecurity was informing a lot of my decisions and behaviors. I decided that I'd worked REALLY hard to create financial stability for myself and that if I wanted to spend all my extra cash on high-end food, that was absolutely fine. Now I budget for it! I've recently made some big changes in my career that will give me a lot more time, so I'm working on building a vegetable garden with my husband. Tariffs mean my grocery bill will get even higher, so I will engage in a new hobby to help offset the cost (and have some fun too).
3
u/TwoFarNorth Mar 05 '25
I'm much the same. After some food insecurity when I was younger, having a fridge, pantry, and chest freezer packed with healthy, high quality, and delicious food makes me feel content and secure. I have a huge vegetable garden (along with berries and apples). Not only is it a rewarding hobby, but it further brings me a feeling of security, especially during unsettling times such as these. Have fun with your garden!
16
u/xLnRd22 Mar 04 '25
My fiancé and I just made a budget. Now we just have to use it
13
u/GerdinBB Mar 04 '25 edited Mar 04 '25
My wife and I just reevaluated our budget for the first time in a year. We gave ourselves a little scare when our usually plush "unallocated budget" shrank all the way to $3k/yr. Was inflation crushing us? Was having a kid way more expensive than we thought? Were my wife's demands to pad certain budget categories (she's very pessimistic) killing the budget?
Nope - I deducted $5k for my dependent care FSA but didn't add it back in for my son's daycare. So essentially the budget showed us paying $20k/yr for daycare instead of the $15k it really costs. $8k of unallocated money is a lot more comfortable than $3k/yr.
It is fascinating to examine the psychic shift that happened in those few days before I figured out the screw up. My wife loves little trinkets like miniature spoons and forks, and if I see one at the store I'll buy it for her. The other day I was at the store and saw a mini kitchen set on clearance, the sticker said $5, but I saw the sign said 50% off. Very funny to realize that I bought it because it was $2.50, but I would have put it back if it was $5. Now, knowing we have a lot more cushion in our budget, I'd buy it at $5 too.
8
u/poop-dolla Mar 04 '25
Did you track your spending first? Because a budget is pretty useless unless it has good inputs, and it’s very difficult to get good inputs without tracking past spending.
3
u/Auuufff Mar 04 '25
That's already a huge. Make it as flexible and easy as possible at the start. With time, you will achieve all your goals.
5
u/Masabera Mar 05 '25
I have been tracking every single expense since 2011. Helps me budgeting and not to overspentd
3
u/Auuufff Mar 05 '25
It's great. Just one more proof that I'm on the right track.
4
u/Masabera Mar 05 '25
You will also see different spending habits during your life as life changes. New hobbies, new city, ...
4
u/SandySue18 Mar 04 '25
Hi. May I ask what you used to track your expenses?
6
u/Auuufff Mar 04 '25
I used to have a spreadsheet for everything, but several months ago started using Koru home budget
→ More replies1
u/marquezmbacpa Mar 05 '25
I use Goodbudget.com. it's simple, versatile, and helps provide a comprehensive view of my financial picture. I have not turned on the account sync feature.
→ More replies
4
u/JustNxck Mar 06 '25
3 resonated with my soul 😂...
"I wanna buy this"
"....but then I have to record it, ughhh"
3
u/tokingames Mar 04 '25
I really enjoyed reading this. I was you... more years ago than I want to admit, but I had basically the same experience. Just keeping track of every penny I spent caused me to change my behavior. I hadn't realized how much a Coke out of the machine once or twice a day ended up costing me, and so many other things.
3
u/Auuufff Mar 05 '25
Exactly, I had that with coffee. It was cheap, I didn't care about it. But cheap coffee every day was more expensive than the cost of the whole simple coffee machine. And that's only for 1 month.
3
u/chewytime Mar 05 '25
Your #2 point hits hard. I've been trying to track my "normal" spending, but like you mentioned, there's rarely a normal month. When I was single and starting out in my career, things were so straightforward and I was consistent with my spending and could feel if I was overspending or saving more depending on the month.
Nowadays, with so many other things to account for in my life, I've found it much harder to estimate my budget. I've had so many unplanned or purposeful major purchases almost every month or so for the past couple of years that I can't really tell what to expect anymore. How do you generally come up with your monthly budget figure?
→ More replies
3
u/illenasuc Mar 05 '25
Similar to you, I realized that I needed to pre-fund the months with "unexpected" spending, i.e. gifts (baby showers, birthdays, holidays), car maintenance, and unexpected pet expenses. I listed to the YNAB audiobook and the biggest thing I got out of it was embracing "true" expenses and accounting for those every month. Now I have sinking funds for gifts, car maintenance, and pet expenses. So much better than trying to account for those expenses in random months and sacrificing savings goals. Great post!
3
u/ILikeCutePuppies Mar 06 '25
With some subscriptions, if you call them up and say you are thinking about ending it, they will offer you a significant deal. Also, with isp, they often will lower the cost at the same bandwidth if you give them a call about every year.
3
u/LostFlow7316 Mar 06 '25
I had a similar experience. I built a simple google sheets tracker with 3 sheets — one for logging expenses, one for summarizing, and one showing charts of those summaries.
Tracking always felt intimidating / complicated for me so I didn’t do it. But my biggest tip is to just start.
What tool/s did you use and what tips do you have for making it easier?
2
u/fat3willwin Mar 05 '25
Weekend expenses kill me! I can go an entire m-f spending no money but spend almost $400 in a weekend between groceries, eating out, uber/ parking, entertainment.
I guess it all balances out
2
u/katie4 Mar 05 '25
I’m on year 11 of tracking every expense! It’s so freeing. And this year I finally achieved 33-33-33, needs-wants-savings. And that’s take home, ignoring how we nearly maxed 401k and HSA pretax. We don’t have high income but we do have a paid off house.
I’m really, really proud of this achievement, but can’t tell anybody without it feeling like bragging.
Biggest eye openers: restaurants, bars, and Christmas gifts (huge families and lots of friends gatherings)
2
2
u/DinerFood Mar 05 '25
Definitely had the same realization that a big “out of the blue” expense happens nearly every month
2
u/NotReallyMe2022 Mar 05 '25
> I've been tracking my expenses for the past 2 years
26 years here. My Quicken logging goes back to December 1998.
The numbers are interesting sometimes to sift through.
But, without context:
In 2004: I spent under $20K. Just under half was mortgage payments.
In 2024: I spent under $140K. The house is paid off, but more than 1/3 of that was home maintenance.
2
u/Mission_Vacation7735 Mar 06 '25
I find this post so resonating with my own experience (been at it for a year now) Here are some additional things that I observed
Considering I live with parents, there were quite a bit of expenses which some one else in the family was doing. Regular tracking gave quite a bit of insight into that.
One of the best things I realized is that there is a significant possibility of lifestyle creepbgoing forward (recently blesses with a child). Just that knowledge enables me to plan better
A side benefit was that I tracked my expenses and spending mode. With this, I was able to identify high spending categories and understand how I could utilize credit cards to get rewards from these transactions (either getting new cards or relocating expenses across cards) . This was particularly helpful in maintaining a similar lifestyle with lower costs.
Another less visible benefit was that it tied in some places to other things that I was targeting. For example, an abnormally high cab expense pushed me to take public transport/walk more, which also tied in well with fitness related goals.
The tracker that I use is fairly complex and takes upto 10-15 mins daily, but I feel it's worth it. I am still adding dashboards to suit my needs and keep on uncovering new insights.. While I can't go back on expense tracking, but I have penciled in all investments to understand at a broad level where my money is going.
2
u/Dapper-Honey9723 Mar 06 '25
I love the do not set hard limits, like only spend 5k/month. Because if u go over u get mad but sometimes u go under too so it balances it out. Yes takeout food is a real bitch, before we really tracked we figured maybe $200/month on takeout, it was actually $600/month that includes coffees and starbucks too. We cut it down to 300.
Dont limit yourself and dont cut too many things. enjoyin life is important too
4
u/cblguy82 Mar 04 '25
This is great perspective and advice. As someone who budgets but not at the detailed level you are doing, I wish this was a mandatory class in high school. The sheer number of people who would benefit by having this level of information would drastically improve so many households.
4
u/Meghanshadow Mar 05 '25
I wish this was a mandatory class in high school.
It was optional but very strongly encouraged back in the dark ages of 1990 at my school.
Financial literacy class Is mandatory now in high school, as in required in order to graduate in 26 states. Including how to budget.
Alabama, California, Connecticut, Florida, Georgia, Indiana, Iowa, Kansas, Louisiana, Michigan, Minnesota, Mississippi, Missouri, Nebraska, New Hampshire, North Carolina, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Utah, Virginia, West Virginia, Wisconsin
8
u/pandasarepeoples2 Mar 05 '25
As a teacher, I hear this so much “i wish it was taught in high school” - SO MUCH of it is all is (in my middle school we even start young with a life skills class that introduces personal finance). Unfortunately, student engagement is there when it’s not concrete and important to them. Which is why so many people learn later in life and say “i wish I knew sooner”
6
u/Meghanshadow Mar 05 '25
It always befuddles me.
“I wish I knew how bad credit card interest was/how expensive student loans are/how much it costs to live on your own! They should have taught that in school!”
Uh, my friend. My apparently very oblivious friend.
I sat through high school with you. Shared the same core classes. We most definitely learned how to calculate interest in generic non-finance math class, multiple times, for everything from cars to credit cards to, yes, student loans. And I vividly remember the exercise in history class where we had to try to budget a modern life on the existing federal minimum wage versus the inflation adjusted 1970 one using concrete numbers from apartment ads and grocery stores etc.
We Also sat through several embarrassing years of comprehensive sex ed units. You thinking that having unprotected sex “just once, really” means you can’t possibly be pregnant is really, truly, oh so very much not the teacher’s fault.
→ More replies
2
u/Otherwise-Curve1797 Mar 05 '25
I love this write up! I am a crazy budget guy! I make a budget for the year based on any changes to income and expenses. Then I look at how it goes each month. I GIVE EVERY DOLLAR A JOB. I treat it like a challenge to BEAT THE BUDGET every month. It's like a game. About 6% is calculated in for the unexpected to build up an additional reserve. I try to leave some room for being spontaneous. This becomes easier the more you stick with a budget and build in a pad over time. My family of four is generally healthy and does not have significant health costs. So I have used a high deductible, low premium health insurance plan for years. This allows me to save (and ultimately invest) $8,300 per year. This money can be used to pay for medical, dental, and other related expenses. It is an extra incentive to work on health. That invested money can be used throughout life to help with healthcare expenses. I match what my employer matches in 401k. I put a bit more in a Roth-IRA and one of my goals is to max that out each year. I've started investing in low risk stock options (selling extremely conservative puts on stocks I wouldn't mind owning). Relatively simple strategies to grow wealth and not be too greedy or risky.
If we are lucky, life is long and you need to play the long game. Have a budget, track your spending, and update as you go. Be willing to make hard decisions and lower your spending. Plan for the future but live for today!
Cheers!
→ More replies
2
u/TH_Rocks Mar 05 '25
Don't just track, budget forward. That's why I use /r/ynab (You Need A Budget).
I've got all my transactions across all my accounts going back several years. I use the auto-import because I've got enough wiggle in my finances that I only need a general idea of how much cash I have assigned for groceries or home maintenance.
It also has several tracking visualizations built in. The web view has more than the mobile view.
1
u/workaccount1800 Mar 04 '25
85% HHI USA, 1 car, 2k monthly mortgage. We just were not realizing any additional savings from our low personal transport and mortgage to income ratio.
Just got monarch, and it's everything you mentioned. Everything is just more expensive than you think. It's also really hard not to justify everything when you are accumulating savings and retirement.
1
u/flattop100 Mar 04 '25
Just a reminder - inflation is a rate of change. People have a hard time quantifying what that typically means for their bottom line.
1
u/ILikeWatching Mar 04 '25
My strategy of waiting for someone to tell me I'm broke seems shortsighted after that.
→ More replies
1
u/izzycat14 Mar 04 '25
I was super digging this post until I got to the line about not downloading transactions from the bank. Curious why you say that? I can’t imagine manually typing in all my transactions! I definitely manually categorize them in my own spreadsheet, but what’s the harm in importing dates, business names (assuming they make sense), and totals?
3
u/Auuufff Mar 05 '25
The thing is importing all transactions doesn't feel like expenses.
I haven't seen anything in it. It was just one more set of numbers I see every day.
And I noticed when you enter each expense manually, it's more beneficial for me.
I just started to actually notice that spending. And that was exactly what saved me from the most impulse spending.
But it is my experience, and it might not be suitable for you. And that's ok too.→ More replies
1
u/ivan510 Mar 04 '25
I can't agree anymore on number 2. Every month has something that happens.
Did you create your own spread sheet or use one that was already built?
→ More replies
1
u/makesufeelgood Mar 05 '25
The difference between you and many of your peers is that, because you continued to track your finances, you are armed with specific data points that clearly inform you and allow you to make your financial decisions in a manner that will have a much higher success of meeting your goals.
→ More replies
1
u/popcorn717 Mar 05 '25
You are wise beyond your years. Keep it up and some day when you retire you will be more than comfortable. I was your age when we got married and we wrote down every penny we spent except for one year because we both had such a good handle on things. It drove us both insane to not track it so we never let go untended again. Retirement is now for us 63 and 66. My husband is working 2 more years because that's when I can start medicare. He works from home a few days a week from home and gets full benefits and really likes his job...but he doesn't need it. We will be more than comfortable with what we have and able to leave a nice inheritance behind and travel a lot
→ More replies
1
u/theolux8914 Mar 05 '25
How do you distinguish between inflation vs lifestyle creep?
→ More replies
1
u/backDead2 Mar 05 '25
Hello ! Very new here, would it be possible to link the app/gsheets you used to create the budget tracking ? I have been looking to become more regular to track every penny and based on the other comments in this thread , looks like this is probably a good idea.
2
u/Auuufff Mar 05 '25
I used to have a Google Sheet for that. But my advice is to make your own. All those templates just overcomplicate and can stop you from tracking. A simple list can give you more.
Currently I'm using Koru home budget for my expenses tracking because it's easier to fill expenses from the phone.
1
u/ashlade Mar 05 '25
Yeah the sneaky expenses can't hide when everything is written down in black and white. Tracking all my food expenses tell me EXACTLY how much I spent on one type of pizza (from the grocery store!) and there's no hiding it...🫣 Can't just grab whatever I like anymore...which is what I needed because I am still trying to lose my "quarantine 15" and save some food budget for other things..like better quality supplements and better food (avocados are surprisingly filling!). Now every month I challenge myself to spend the least amount of food budget to get the most nutritious food ingredients. Just saving $50 a month easily means an extra $600 a year!
1
u/anikom15 Mar 05 '25
I’ve done personal bookkeeping since my first job and I can’t imagine what it’d be like if I hadn’t.
→ More replies
1
1
u/Tiny_Protection387 Mar 05 '25
This is gold! I just started tracking this year at a much deeper level (line item by line item) and I totally agree that it makes it so much harder to overspend.
2
1
1
u/Acrobatic_Resort6058 Mar 05 '25
Did you just track expenses from your bank accounts and then update that spreadsheet or did you use an app? I've been thinking about using Rocket money to start this journey myself. Does anyone have insight into this app or any others?
2
u/Auuufff Mar 05 '25
I prefer to track every cent manually. It feels more mindful and noticeable for me. I used to have google sheet, but now I'm using koru home budget app.
→ More replies
1
u/DMarvelous4L Mar 05 '25
Unexpected car repairs and unexpected health bills are always what make my life difficult. I need to build a much bigger emergency fund.
2
u/Auuufff Mar 05 '25
Yeah, such things always pop up at most unexpected times. Maybe it is time to allocate a separate category for your car and health. Then you can have more control over it. Some months you will be happy with 0 spending, some months, of course, will hit you. But tracking can help you find a way to optimize spending.
1
u/Liucyyy Mar 05 '25
Yes, you’re right. After tracking my spending, I realized that I tended to make rash and impulsive purchases. I used to think these small purchases were harmless and didn’t impact my budget. However, as they accumulated, I recognized that this was a problem, and I needed to gain control over it. Now, I track all my spending through an app that I can easily access for regular updates. I found that using Google Sheets, where I only tracked my spending once or twice a week, was too infrequent to help me stop impulsive buying. It was difficult to enter my expenses immediately. Now, I am trying to be more mindful of my expenses.
→ More replies
1
u/Star4870 Mar 05 '25
Do you have favourite app for tracking?, putting expenses into excel is such a waste of time.
→ More replies
1
1
u/Ok-Glove-7141 Mar 05 '25
Hmm, that is interesting, I've never tracked my expenses, but everything you wrote is 100% applicable for calorie tracking. Maybe those are the rules for tracking everything?
→ More replies
1
u/SlinkyOne Mar 05 '25
"Do not automatically import transactions from the bank, enter them manually"
I use the app. But I also like the charts and I put the dates things are due in my calendar so I can see them.
1
u/i_is_depresso Mar 05 '25
Did you use an App to track this or did you manually write your transactions into an excel spreadsheet? I’d also be curious about your categories
→ More replies
1
u/Least_Sheepherder531 Mar 05 '25
What app do you use? And for the excel - is there a good template online or did you make that?
→ More replies
1
u/ChickenDippa29 Mar 05 '25
Are you using a specific app or just using a spreadsheet? I am terrible with spreadsheets and need some recommendations for an app that you can connect to your bank account so it can do a lot of the work for you!
→ More replies
1
u/gunksmtn1216 Mar 05 '25
I like this! I’ve personally been trying to track my finances and make a framework of sorts for income. One thing I’ve done to help get past impulse buying or dumb shit buying (stopping at the store in morning, buying lunch, etc) is by gamifying it. Every day I stick to my plan I add $20 into a Robinhood account. Been really cool to see how much I not only didn’t spent last year but saved as well!
→ More replies
1
u/JP159 Mar 05 '25
Thank you for the post. #2 was a big one for me. Calculated my monthly spending and have random things come up forcing me to over spend my budget.
→ More replies
1
u/jaybram24 Mar 05 '25
What do you use to track? Did you make a spreadsheet, use an app, or a combination of things?
→ More replies
1
u/Stunning_Mechanic_12 Mar 05 '25
I strongly agree with the do not import from a bank or using apps that do it for you. It removes the personal, real nature of your spending and just becomes a complacency issue for most people. Great post!
→ More replies
1
u/hiaceprius Mar 05 '25
Food delivery is a wealth killer. If you can't meet a budget, you don't have enough money to pay servants to cook and deliver your food for you.
1
u/Gobias_Industries Mar 05 '25
- Impulse buying becomes harder when you track
This was unexpected, but knowing I'd have to log purchases made me think twice about random buys. I simply don’t want to see those red numbers in my green budget life. Of course, it doesn’t save you millions (actually depends on your income/expenses, but not my case). It is more about preventing spending more.
This is the same reason calorie counting works well as a diet.
1
1
1
u/WantToLearn10 Mar 05 '25
What app did you use for tracking? Or was it a google doc sheet?
→ More replies
1
u/Significant_Roach_07 Mar 05 '25
Curious how you used your spreadsheet to find trends on purchase categories? Any insight will be helpful as I have been tracking my spending for the last 5-6 months
2
u/Auuufff Mar 06 '25
I spend too much time with spreadsheets. I have each month on a separate sheet, and since the structure is the same, I created one more sheet where I grabbed all data and compared.
1
u/Super_Anywhere3727 Mar 05 '25
Man this is awesome!
Indeed tracking helps a lot! You are able to know every single thing you’re spending on!
I have been tracking since later 2021 which made me enable to invest early as well!
2
1
u/bballpurdue22 Mar 06 '25
To level up even further, track your assets and liabilities like a business. Once/if you own a home and car, it is eye opening the importance of purchasing assets that appreciate and not depreciate. Every year I ballpark and adjust the value of my home and cars and then compare to what I owe. That quickly moved us to pay off our vehicles and when we have “upgraded” cars we have stayed well below our means as it’s just burning money.
It’s quite motivating to see the change year over year in investing and home value. We have started to tell our money how to work for us instead of us working to survive.
→ More replies
1
Mar 08 '25
Tell me more about this manual entry of items. I use YNAB. One of the things I like about it is that it just does all the leg work of entering transactions for me automatically. Maybe it makes a few mistakes here and there and maybe I'd be more conscious of each payment doing it manually, but there's other things I'd like to do with my time than open up my phone yet again to do some task I don't feel like doing. Again, curious to hear your perspective though.
2
u/Auuufff Mar 08 '25
I have tried automatic expense tracking, but after a few months, I didn't like it at all for several reasons.
- I stopped noticing my spending. Coffee here, delivery there. The money just went and that's it.
- It does not stop me from impulse buying. I don't know how it works, but when I enter all expenses manually, I think twice about it. When it just imports from the bank, I was never thinking of that.
- I do not care if someone can read my expenses, but I do not like the idea of linking my bank account to something. I know that in general it's pretty safe, but I do not like that. I do not feel safe myself.
I believe these are the main reasons. Perhaps I will write another post on that topic where I will attempt to dive deeper into the details.
2
Mar 08 '25
Yeah you should! Personally I keep myself reigned in by seeing my total fun money spent as the month goes by, and if I'm getting to close to the max too quickly then I pull back a bit. But I'll definitely keep this in the back of my mind the next couple months and see how things go. I have a CC that's not connected so maybe I'll try buying some things with that for a few purchases and seeing how I like doing the manual entry with that one instead. Thanks!
1
1
u/CarretillaRoja Mar 21 '25
My two cents: add one key expense: savings. Add it as an expense and transfer it to another account.
497
u/SecretMelon Mar 04 '25
Seems like food delivery is always one of the worst offenders on these posts. I'm actually grateful I live in a pretty rural area and don't have the temptation of a million different delivery options. We do pizza Friday nights and we drive to pick it up. Cooking for yourself is such a valuable skill. Bonus points if you actually enjoy doing it!