Tracking Expenses

[bubba]

As we are about to finish the first year of tracking our expenses, I'm appalled at frankly the fat in our spending that could easily be cut (and therefore increase savings). Furthermore, and more troubling, though, is we actually spend more on the "basics" than I believed and we are thinking about reworking the "magic number" required for FIRE.

It's really odd; we thought we knew where our money was going but this experience has been a real eye-opener. Next year, we are going to break out even more categories; this should help with a retirement budget since some of our expenses should go away soon.

I'm just using Excel and it works fine. I do the detail by month, with another annual summary page. We are using the data collected this year to create a realistic budget for 2010 that trims some of the fat and increases savings. My suggestion is that if you've never tracked your expenses, give it a try.

 

[LOL!]

So what's the budget-buster for you? Eating out? Gifts? Miscellaneous?

 

[Bimmerbill]

I'm writing down everything I spend this month. May not be the best month due to the holidays, but I don't spend that much usually on gifts.

Mint.com tracking is working great for me too. Groceries seems to be the budget buster for me.

 

[bubba]

Eating out is at it's limit, I'd say, but bookstore, the grocery store, and insurance of all things (not health insurance) are too high. We waste money at the grocery and that's clearly a lack of planning and using coupons/watching for sales/better menu planning. The insurance deal is home/auto/sport vehicle/renter's (for son in college), cancer policies. It's amazing how your insurance premiums don't look too high until you see a year's worth listed in a nice column. I will be calling the agent here shortly to discuss. The miscellanous category is too high also, and when I look at the detail I see all sorts of random things that could have been better planned or at minimum shopped for to find better pricing.

What occurs to me as I go back over the data is that a little more time invested in planning the purchase of goods/services would go a long way to reducing these expenses.

 

[W2R]

Bimmerbill, I decided to write down every penny that I spend this month as well. I have not done this to THAT extent in many years.

I am well within budget - - but one category in my budget is "ATM", which is money that I get for myself from the ATM. It has been averaging $500 and I cannot for the life of me think of where that much money could be going. Yes, $140/mo for the lawn guy, and probably $240 for eating out, but that still means that I am missing $120 or so. It's not like I buy a lot of doo-dads because I already have all that stuff.

Writing down every cent should tell me where that missing money is going.

 

[ksr]

It's really odd; we thought we knew where our money was going but this experience has been a real eye-opener. Next year, we are going to break out even more categories; this should help with a retirement budget since some of our expenses should go away soon.

Isn't it amazing how tracking your spending can affect your spending? I started tracking, in great detail, my expenses more than 10 years ago. I remember being appalled at how much I spent in some categories, given that I already considered myself frugal. I don't have big surprises any more, but I do re-evaluate at the end of each year when I review my projected vs. actual spending for the year.

 

[FIREd]

As we are about to finish the first year of tracking our expenses, I'm appalled at frankly the fat in our spending that could easily be cut (and therefore increase savings). Furthermore, and more troubling, though, is we actually spend more on the "basics" than I believed...

We had the same brutal realization when we started to carefully track our expenses in 2006.

 

[audreyh1]

One advantage of using credit cards rather than cash is that you can import the transactions into Quicken (for example) and automatically have them categorized. We use very little cash, and so it makes detailed spending tracking easy.

Audrey

 

[hguyw]

The miscellanous category is too high also, and when I look at the detail.

One rule I've made for myself is "there shall be no 'Misc' in thy tracking." It just seems to turn into a blobby, bloated, out of control category for me.

Maybe banning 'Misc' is my version of "Make sure every dollar has a name".

 

[Khan]

One rule I've made for myself is "there shall be no 'Misc' in thy tracking." It just seems to turn into a blobby, bloated, out of control category for me.

Maybe banning 'Misc' is my version of "Make sure every dollar has a name".

I agree on the 'no miscellaneous'. Have seen posted budgets with: miscellaneous, ATM, and pocket money.

Track every cent for months and admit where there is a problem.

 

[mews]

I track everything on Excel, and I admit I have a column called "Misc" - But at the end of the year I break that out. I just don't like spreadsheets that go to the right forever.

I track SPENT money - so there is no ATM column. That money, if in my pocket, isn't on my list yet.

Seeing the real, precise, exact figures is a shock, isn't it! (Slowed me right down, and I wasn't Sally Spendit to start with.)

ta,
mew

 

[W2R]

I have BOTH "ATM" and "Misc/electronics" in my budget. The latter is for miscellaneous things I charge on my debit card (bigger things, most of which are usually electronics) and the former is for miscellaneous things that I pay for in cash. Expenditures in "Misc/electronics" averages $61/month. That seems reasonable. But the "ATM" category needs some work to find the missing $120/month, on average.

I suspect that I am paying more towards eating out than I think I am. If I write down every cent that I spend for a while, then I'll know for sure.

 

[kyounge1956]

One advantage of using credit cards rather than cash is that you can import the transactions into Quicken (for example) and automatically have them categorized. We use very little cash, and so it makes detailed spending tracking easy.

Audrey

I find that Quicken works well for this even though I use debit cards and cash rather than credit cards. I download my transactions directly from my bank website (which is free—the Intuit download has a monthly charge). After a while Quicken gets to know which payees go into which categories, although it's possible to change this for an individual transaction if necessary. I find that Quicken also speeds things up enormously at tax time, because I can very rapidly pull out a total for charitable contributions or interest income or medical expenses. It used to take me hours to find all the entries in my hand-written check register and get an accurate total to put on my tax form. Now it takes only seconds.

I am also using the amounts tracked in Quicken to develop a retirement budget. I confess to having a Miscellaneous category, which I use for stuff like postage stamps, a magazine from the newsstand, and other things I don't buy frequently enough to give them a separate category.

 

[Bimmerbill]

I have an ATM/MISC entry in Mint too. I try to use my debit for everything, as Mint makes tracking things pretty easy (nice charts too).

I always like to keep $100 in my wallet tho. I guess if I don't spend it, its OK.

 

[F4mandolin]

I am planning on retiring at 54 the summer of 2011. The last 5 months I have finally started keeping track of everything we SPEND only. I copied an Excel worksheet off the net and started trying to keep a lot of catagories. Nope, too much work. After 5 months (actually 4 when I bagged the catagories) I just keep track of ALL money that is being spent. Actually about where I thought we were. Low of a few dollars over $2k and a high of $3500. I know the food bill is the easiest to whack money off of and probably will cut about 30% when I quit. If there is some tight tight tight money issues while retired I will consider going to tracking catagories again...but for now (and likely for good) as long as we keep most "regular" months under $3k then I know we will be fine in retirement.....with a budget of $4k a month.

 

[tmm99]

Yes, I started tracking expenses maybe 4 years ago when I started seriously thinking about the retirement plan. I really like doing this so I can see where the money is going.

Do you have a category that you budget for living expenses such as shampoo, skin care, cleaning stuff like dish soap, AJAX, dish towels (basically non-food and non-clothing items)?

I made this category a few years ago when I started budgeting but maybe my budget for this category is over-estimated.

Do you have a category like that?

What are your categories?

 

[Moemg]

Do you have a category that you budget for living expenses such as shampoo, skin care, cleaning stuff like dish soap, AJAX, dish towels (basically non-food and non-clothing items)?

I put most of those items in my food budget since I usually purchase them at the grocery store . My make up and any skin care comes out of my spending money . A big saver that I have been able to do since retired is shop at several stores and just buy the specials that they use to draw people in . I also stock up when it is buy one get one free of items I use . This had really cut by grocery bill . My grocery bill for two people a month was just under $400 . It is now under $ 300 and we eat three meals a day . We do go out to eat once a week but our bill is usually under $35.00 unless it is a splurge dinner .

 

[Independent]

We've tracked "every penny" (really, about 98% accurate) for 39 years. My wife likes records for questions like "Gee, the microwave is broken already. When did we buy it, anyway?". I thought we'd use it for decisions, but it turns out we only use it for the very biggest decisions "Can we afford to pay the kid's tuition?", "Can I retire?"

For those questions, we only need broad totals. A category like "ATM" if perfectly fine if I think I'm spending the money on things that aren't going change.

 

[bosco]

I have been tracking our expenses since my wife RE'd (20 months of data at this point). I RE'd about 9 months before that (July 07), but since she was still employed, and we had an extra household near her place of work, I figured the data wouldn't be very representative until she dumped her apartment and came home full-time.

Turns out, nothing has been very representative. Since REing, we have sold a house, loaded all our crap in a U-Haul, driven it up the road, rented storage, and are in the early stages of building a house. We are currently living in a 12' x 15' cabin waiting for spring to start pouring footings. Once the house is built, our expenses will morph again. It's amazing how cheap it can be to live in a 12' x 15' cabin, although the lack of plumbing gets annoying (I'm too old to have to go to laundromats for showers, but also too old to not take showers...). We do have electricity, however, good cell-coverage.

That all being said, there are two seriously offending categories over the last 20 months: vehicle maintenance and eating out/entertainment (I consider eating out to be a form of entertainment).

The vehicle maintenance (I hope) is likely just a run of bad luck. New rear end, 2 brake jobs, a breakdown on the Alaska Highway (thank goodness we had a towing package in place).

The entertainment/eating out, will likely also stabilize, but if not, I'll have to refigure. I started out with the notion that categories would be readjusted based on what areas are overspent/underspent.

I do have a 'miscellaneous' category, but I find it rarely gets used and runs a surplus because my other categories are detailed enough to handle most everything. At some point, I will probably trim it back, but until the house is build, surpluses will likely get dumped into the house construction bucket which will likely need all the help it can get.

 

[rsingh6675]

Sample Excel Spread sheet for Spending & Assetts?

Does anyone have sample spread sheet (Excel) for EXPENSE and Assett Tracking. Please post it on this board.
Thanks

 

[eridanus]

I, too, track every dollar and have for years.

The only time I do an un-examined grouping is on vacation. I just lump all the credit card receipts and ATM withdrawals and slot the total in the 'Travel' category. As long as it's below what I expected, I'm ok with however and whatever I spent.

 

[F4mandolin]

Rsing......I just use a generic excel budget sheet which I have copied the link to. Toooooo many catagories for me, but it works fine and you can add catagories and delete etc. I was cutting out catagories and then said what the hell and just went to one catagory. But I could easily go back to this form which is easily adjustable.
http://office.microsoft.com/en-us/templates/TC062062791033.aspx

 

[kyounge1956]

Yes, I started tracking expenses maybe 4 years ago when I started seriously thinking about the retirement plan. I really like doing this so I can see where the money is going.

Do you have a category that you budget for living expenses such as shampoo, skin care, cleaning stuff like dish soap, AJAX, dish towels (basically non-food and non-clothing items)?

I made this category a few years ago when I started budgeting but maybe my budget for this category is over-estimated.

Do you have a category like that?

What are your categories?

I use a combination of tracking categories in Quicken and the "Cash Envelope" system, a-la Dave Ramsey. Shampoo, cleaners etc usually end up in the Groceries category (or paid for with cash from the Groceries envelope), but if I happen to be in a drugstore or something when I buy them, the money would probably come out of the Miscellaneous envelope. The envelopes get refilled at the beginning of the month with the budgeted amount of cash from the ATM. I also have a spreadsheet of the money I set aside into my savings account for expenses that don't occur every month like registering my car or Christmas shopping. These set aside amounts and the monthly cash to fill the envelopes are recorded in Quicken. Each one is a "split" transaction, so I can keep track of how much money went into the envelope or savings for each category.

I don't know if I remember all my categories off the top of my head without my Quicken in front of me, but Household (utility bills, home repair, clothing), Housing (mortgage, property tax),Transportation (gas, repairs, car insurance), Groceries (food including buying lunch at the office), Cat Costs (expensive hobby ), Miscellaneous/Entertainment and Medical includes most of them.

 

[mews]

my categories:

Food out <- the most wiggle room is here, but I like my sushi
food in - groceries
personal & apmnt stuff - cleaning supplies, soap, toothpaste etc.
cat stuff
books
phone
gas / elec
Transportation - subway / cabs / bus / train ...
Co-op payment
Savings to Vanguard
Misc - break out at end of year.

ta,
mew

 

[FIREd]

Here are my categories (I track everything in Quicken):

administrative fees (driver's license, passport, etc...)
auto depreciation
auto repairs and maintenance
gasoline
auto insurance
auto registration and taxes
bank charges
cash (ATM withdrawals, we don't track actual cash purchases but they represent only 0.5% of our expenses).
charitable contributions
clothing
computer
dining
entertainment
financial service fees
financial support (we help my mom financially on occasion)
furnishings & durable goods (appliances, furniture, electronics, etc...)
gifts
groceries (food, but also paper towels, booze, cleaning products, etc...)
mortgage interests
home improvement
home repairs and maintenance
pest control
property taxes
home insurance
home security
disability insurance
life insurance
legal fees
dentist
doctor
health insurance
drugs
vision
personal care
pets
cable TV/internet
phone
water & electric
vacations