Last month I started tracking my finances. It might not sound like a big step, but I wanted to get a better look about where all my money went each month. I won’t go too deep into details, but I thought it might be interesting to veer off the path of my usual food and beauty posts and do a quick personal finance article instead.
While I love lifestyle blogs (like The Londoner, for example), I’m also a huge, huge fan of personal finance sites. As someone with lots of student debt, I find it fascinating to read about how others tackled similar problems. Some of my favorites include The Financial Diet and posts on Lifehacker.
One of the things these blogs always advocate for is to track your spending. And for the longest time, I thought I was doing just that. Sure, I wasn’t writing down every little thing I spent money on, but I checked my online banking daily, and had a budget in place. That was good enough, right?
Last month I started separating my expenses into different categories on an Excel spreadsheet, along with a running tab of all of my debt and corresponding interest rates. Whoa boy, does it make a difference. At first, it was terrifying to put it all down on one spot. But once I did, I surprisingly felt better and more prepared to really start tackling it head-on.
For April, I tracked my expenses in the following categories: Bills, Food, Transportation, Miscellaneous (aka shopping) and Savings. I made a goal for each one, though these were super rough and way off (I think because it was my first real month of doing this).
Here’s a brief overview of how I did:
Bills. The one area of my budget where there’s not much wiggle room. This category includes rent, credit card payments, car insurance, car payment, student loan payments and other monthly expenses, like a cell phone and the gym. I’ve tried to cut back where I can, and recently refinanced my student loans, so that helped to bring these costs down last month. A little over half of my income goes to these payments.
Food. This was the biggest surprise of the month. Tom and I have a joint account where our bills, including groceries, come from. But in my personal account, I outspent my goal by about $100! Some of the bigger costs were expected and understandable (we went out to a fancy dinner for a friend’s birthday and I was in S.C. for a weekend), but a bulk of the money went to cheap meals on nights I didn’t feel like cooking. I love going out to eat, so spending money on it isn’t the problem. But, when I do spend money to go to dinner, I want to make sure it’s for something more memorable than just a trip to McDonalds here and there.
Misc. This category is a kind of catchall. For April, it included a thrift shopping trip, as well as a few stops for bottles of wine at the liquor store and my monthly Glossybox subscription. This is the one category where I really was proud this month — I was about $20 over my goal, but otherwise I kept dumb impulse shopping trips pretty much in check.
Savings. I love saving money. It’s been getting harder and harder as my responsibilities and bills have piled on, but I still try to do it when I can with Digit (an app I’m obsessed with that takes small amounts of money every few days and moves it to a separate savings account) as well as with a 401k and a separate emergency fund. I didn’t hit my savings goal this month, thanks to some unexpected last minute expenses that took priority, but I’m hoping to get back in the swing of things in May.
Transportation. This is another doozy in my budget. I commute almost an hour each way to work, along with a $3 toll each way. Between gas, tolls and regular oil changes, a good chunk of my pay each month goes to this stuff. Luckily, thanks to low gas prices and deciding to take the long way to work a few times, I stayed about $60 under budget in April.
Since I feel like I finally have a handle on this stuff, I’ll be tracking it again in May. And I’m (weirdly) excited. I used dread budgeting and seeing what I owe, but I’ve decided to make a game out of it, creating goals to hit each month. For May, I’d like to:
- Hit my savings goal, and tuck away a few extra dollars for a vacation
- Pay off one of my credit cards
- Focus on reducing dumb expenses, like random trips to fast food joints. That’s good news for my wallet and my waistline!
I’ll check back in at the end of the month to update my progress. If you want to set up a budget or track your expenses, and you need some help, let me know! I’m in no way a financial expert, but we can try to figure this stuff out together 🙂