When I was looking for our 2019 spending report, I realized with surprise that I never posted it last year. I had done quarterly reports throughout the year of 2019 and then never shared the annual report. I also completely dropped the quarterly reports through 2020 (might have been a bit distracted by other things, oops! What could that have been?!). However, I’ve been doing the analyses behind the scenes and I thought it would be interesting to compare our 2020 (pandemic) spending to the previous spending report because I suspected that our spending shifted.
I also debated if I wanted to add our healthcare expenses to the chart. I never see that money because it’s deducted from my paycheck, but I feel like I should include it because healthcare premiums can differ widely and are technically part of my budget. (I have one of the cheaper plans my employer offers and I am pretty happy with our coverage (so far), but it’s still a big chunk of money every month). However, since we can’t really opt out of it and it’s money I never actually see in my account, I decided to not add it to the expense report.
The analyses of these datasets made one thing crystal-clear again: a budget is a very fluid thing and needs constant tweaking and adjusting. Not one annual budget will look like the other and spending can vary significantly from month to month. Therefore, it’s really imperative to know your spending, your fixed expenses, and your discretionary purchases, and to budget the money that you have according to short- and long-term priorities. I pulled these data out of YNAB* — You Need A Budget, the software I’ve been using for 6+ years (the pie-chart was done in Excel). It’s been helping me to really stay on top of our finances. I’ve previously reviewed YNAB here.
As a reminder: These are percentages based on money spent, not based on my (take-home) income. Not included are savings, retirement contributions, healthcare premiums, taxes, and everything else that is pre-deducted from my paycheck.
Home (45% was 39% in 2019) — The spending for our (rental) home includes rent, utilities, household items, and rental insurance. Spending in this category was actually down by $750 in 2020, which is a little confusing if you see that 45% of expenses went towards our home compared to 39% in 2019. It simply means that overall, we spent quite a bit less in 2020, and home expenses made up a larger chunk of our overall spending than the previous year. Overall spending: ⬇︎
Groceries (22% was 15% in 2019) and Dining Out (5% was 9% in 2019) — This shift in spending shouldn’t come as a surprise to anyone, as we were all forced to stay at home and cook our own meals (most of the time). We “saved” about $400 overall, but spending shifted significantly from takeout to grocery spending. And yeah, food is still a huge chunk of our budget. I know. Overall spending: ⬇︎
Cable/Internet (4% was 4% in 2019) — This category stayed pretty much the same in 2020 and interestingly stayed the same percentage of our spending as well. Overall spending: ➡︎
Travel (3% was 8% in 2019) — This one “hurts” a little bit, because most of this spending was for travel, we didn’t even take (I had some flights booked that I have available as “vouchers” now, but the money was spent, and besides a weekend trip to Tahoe in January, no traveling actually happened in 2020. Overall spending: ⬇︎
Shopping and Miscellaneous (3% was 4% in 2019) — We spent about $400 less on discretionary spending in 2020, which was not very high to begin with. I guess we’re just not frivolous shoppers. Overall spending: ⬇︎
Gifts (3% was 3% in 2019) — We spent about $500 less on gifts in 2020. This includes birthday, Christmas, and ‘just because’-gifts throughout the year. Overall spending: ⬇︎
Car Maintenance (3% was 6% in 2019) – This is a bit of a shifty category. We usually pay our annual car insurance at the end of the year for the following year, but we switched insurances and they only billed us for a 6-month policy (so we’ll have to pay the other half in the middle of this year, which totally messes with my budget LOL). Regardless, I think it’s needless to say that we drove our car very little in 2020 and except for a battery replacement, and the usual maintenance expenses (registration, AAA), we didn’t spend much and spent about $2000 less than in 2020. Overall spending: ⬇︎
Fitness (2% was 1% in 2019) — This category includes my gym membership (which was frozen for most of 2020 and then canceled) and other exercise/running-related expenses. We spent about $540 more than the previous year, even though I dropped the gym membership and didn’t attend any in-person races. We did however invest in some home exercise equipment. Overall spending: ⬆︎
Healthcare (4% was 2% in 2019) — Our medical spending, out-of-pocket and co-payments, was down $1200 in 2020 and I am attributing that to staying home as much as possible, wearing masks, washing our hands, and not having any unforeseen doctor visits (thankfully!!). Let’s keep it that way. Overall spending: ⬇︎
Cellphone (2% was 2% in 2019) – Expenses were about the same. Overall spending: ➡︎
Subscriptions (2% was 1% in 2019) – This includes YNAB, Netflix, Prime, and Identity Guard Fraud protection. Oh, and my bi-annual blog hosting service was due, so we spent about $170 more overall in 2020. Overall spending: ⬆︎
Personal Care (1% was 2% in 2019) – This category includes all toiletry items, makeup, J’s beard trims, and haircuts. We spent about $460 less. I mean, nowhere to go, barbershops closed, it makes sense. Overall spending: ⬇︎
Transportation (1% was 2% in 2019) – Well, we already spent very little gas money in 2019, because I was using the bus and bike more to get to work, but we moved our car even less in 2020. Our gas spending was down $460. Overall spending: ⬇︎
Donations (1% was <1% in 2019) – We upped our donations in 2020 but it’s still just about 1% of our spending. We’ll be expanding this further this year. Overall spending: ⬆︎
Clothing (<1% was 2% in 2019) – we’re not big spenders when it comes to clothing anyway, but 2020 was definitely a new low. With no place to go, I spent most of 2020 in workout gear and I think the only things I purchased were activewear. Overall spending: ⬇︎
So, overall our spending was significantly down last year, and funnily enough, almost three-quarters of the pie represent our reality of last year: staying at home + food. Ha. I am more than okay with the categories where spending went up (donations, fitness, and subscriptions), but what you don’t see in this chart is that we got (more) serious about retirement/investment planning. I had been paying into a 401K at work, of course, (make sure you get at least get your company’s match! Don’t miss out on free money!), but we also made sure to set up IRAs and other investments to plan for the future. It’s been something we had talked about for a while but never put into action. Last year seemed like a good time to take care of it.
Did you see the same trends in your spending in 2020?
* This is not a sponsored post. I have not been compensated by YNAB for mentioning their product. I just share it for transparency’s sake. However, the post does contain an affiliate link. If you feel like you need a budget software in your life, download the fully functioning trial version and give it a shot! If you like it, you can use this link to activate the software and we’ll both get a month free!
