Daily Life | 2016 Spending Report

Let’s talk about finances again, yes? I think we should talk much more about our finances, without wanting to make anybody uncomfortable, but I personally like to get a glimpse into other people’s finances.

I know, in the end, everyone’s budget will look a little different (and that is MORE than ok), but it’s nice to compare a little bit and see where other people’s priorities are. Since there is no official education on finances (other than what you learn from your parents), this can give you some understanding and some tools (and also maybe reassurance) to come up with your own budget.

A few notes about our spending. This pie chart was created from my data in YNAB, the budgeting software I’ve been using since April 2015 (and which I reviewed here). I am still using YNAB and very happily so. If you ever want to try it out, they have 34-day trial version.  It’s a web-based (paid) version now (I will have to do an updated review sometime!) which goes hand in hand with a very handy app on your smartphone, which makes tracking ‘on-the-go’ super-easy.

These percentages are based on our actually spent money, not income (although this would be also very interesting statistic to explore). Not included are contributions to retirement funds (around 10% of my paycheck, which I am planning to raise this year) and personal savings.

So here’s the breakdown:

Home: This category included mortgage, home maintenance, utilities, household items and some bigger one-time expenses like washer/dryer and HVAC replacement that came as part of the purchase of our house. It’s definitely a larger chunk than last year, but I guess that was to be expected.

Groceries: Percentage-wise, our grocery spending is a smaller piece of the pie this year, in actual monetary value? Not so much. I know, for many people that percentage is “a lot”.  Our average grocery bill is $698/month (which falls into the moderate-to-liberal spending plan for two adults, according to the most recent USDA flood plan from November 2016). I am trying to be ok with it. I keep thinking that I want to lower our grocery bill, but then again, I am not really willing to compromise much on quality and since we’re not spending wastefully (as in, we throw a lot of food away) or buy a lot of junk food, I just keep working on it here and there, if possible, but I won’t lose any sleep over it. I will accept that food is a priority budget item in our household.

Dining Out: We get (cheaper) take-out maybe once a week, we go out maybe 2-3x a month.

Personal Care: This category includes all toiletry items, makeup, haircuts.

Entertainment: This category includes the Internet, cable, and our Netflix and MLB TV subscription. 

Cellphone: I am still paying for a family plan with four lines, but I have successfully lowered our bill for 2016, which brings down our cell phone spending to 5% (vs. 6% last year). I should mention that this includes upgrading our phones (which were 3 years old) at the end of last year, otherwise it would have been an even smaller percentage.

Shopping & Misc:  This includes all expenses that didn’t really belong in any other category, e.g. impulse purchases,  work lunches, annual membership fees, running-related expenses (except for the gym membership).

Transportation: Since I live close to my work, our transportation costs (mainly gas) are fairly small expenses. This category also includes every other car-related expense: insurance, AAA membership, car service, rental car, parking, and tolls.  

Health and Fitness: This category includes my gym membership and our medical and dental co-payments. I also included our health care premium this year, because let’s face it, it’s a (chosen, but necessary!) monthly expense that affects our budget.

Gifts: This is a pretty straight-forward category and it includes birthday gifts, Christmas gifts and ‘just because’-gifts for family and friends. I like to give gifts.

Donations: We donate something every month, but it doesn’t account for a whole lot of our whole spending. I know we could do better.

Travel: I didn’t travel very much last year, so the category shrunk quite a bit from the previous year. I only made one trip to Germany and a couple of weekend trips throughout the rest of the year.

Life Insurance: I added this in as part of my spending report, as it is a voluntary expense.

I’ve been very diligent with tracking our spending last year and I have reorganized and refined the categories a bit from the previous year.

I think the biggest areas of opportunity for us to make some changes is still the grocery budget and donations (which I would like to be a bigger piece of the pie). I recognize though that we did have quite a few irregular, one-time expenses in 2016, for which we did have to dip into our savings a bit. This hopefully won’t be the case this year.

I hope this post was at least remotely interesting for you. I personally enjoy these kinds of honest posts about finances. One thing I contemplated when reading posts of some of my friends who do similar spending reports is that I want to talk more about how spending is affected when you manage your finances as a couple.  I realize that if you’re not the sole decision-maker on where your money goes that it might be more difficult to change spending habits or prioritize your spending. While I will say that J and I are generally on the same page when it comes to money, I might want to explore these thoughts some more and maybe share in another blog post sometime.

What is the biggest piece of your spending pie? Do you have a budget and/or track your expenses? Do you manage just your own finances or do you have joint finances with a partner?