When I started this journal back in 2020 I had a lot of time to add content. I was also in the middle of making major changes to my finances, going through divorce, planning for retirement, and trying to figure out how to pay for my masters program. Now my finances are mostly on auto-pilot. I received several pay increases, added more to my retirement and figured out my taxes. Last year I owed $3200, this year I received a refund of $7200, now I am mostly going to be even.

When your finances are on auto-pilot it is even more important to pay attention, especially with your spending. As soon as I finished my MBA I started traveling. Once I realized that it was experiences rather than material things that make me happy I shifted my budget. However, I recently did an end of the year analysis and was surprised at what I found out.

It took me a few days to put the categories together. I do not use an online tool as I have not found one that does exactly what I wanted. I tried Mint, YNAB, etc, but each one had it’s faults. I would still have to customize each category to build the summary and it felt easier to build it in excel since I already had my budget in a spreadsheet.

I built the categories as general as I could, car maintenance, dining, telecom, education, subscriptions, etc. I broke it down to around 41 different categories that made sense for my tracking. Previously I analyzed my spending through a budget rather than actuals. This did not break down all the transactions I put on credit cards, and since I carried no debt month to month, I used credit to accumulate points. This led to an inaccurate representation of my spending.

Spending Categories

Once I built the categories, I imported all the year-end csv files from each credit card company and bank account. Yes, I have several cards that are for different purposes. This is one of the things that I need to work on this year. When I had all the transactions in one workbook, I combined them into one sheet and added the categories. While it seems to be a arduous manual process it actually went really quickly.

Taking the results from each sheet, combining them in a single worksheet and creating a pivot table I had finished analyzing the numbers.

The final result. I had a comprehensive snapshot of annual actual spending. What I also had was a scary realization of how I spend my money. Budgeting was never one of my strong suits, mostly because I did not have any money to budget. We lived paycheck to paycheck for years. In the past six years my salary has nearly doubled and I am finally making enough to have extra cash each month. The danger in that was I stopped tracking where I spent the majority of my money.

When you have money to spend, you tend to spend it. Unless of course you have a goal, buying a house, purchasing a car, a trip to a foreign destination, saving for college. I was still saving. My retirement percentages are set at about 14 percent of my take home pay. I also have money going into a pension. But saving for various experiences or even a rainy day fund was non-existent.

I did have money saved, and have an okay emergency fund, but it’s not where I want it to be. I made excuses, I have enough to pay off all my bills each month, I am still saving for retirement, I am enjoying my life, I make good money, etc… When in reality I was spending nearly $1000 on dining out each month, $250 on alcohol, $550 on travel, and only $300 on groceries.

Spending Realization

This harsh realization has shifted priorities, from dining out all the time to buying groceries and eating at home. We started on a Mediterranean diet, eating healthier and spending more time at home. We are looking at upgrading our living space. By investing more in the house, the returns will be larger.

Considering that the largest portion of my spending, alimony aside, was in the dining out category, it made sense to shift my habits. Groceries have seen a bit of an increase due to inflation but in reality it hovers around three percent from last year, although nearly a six percent increase from 2022. Dining out however, was up nearly 25 percent in Denver.

Even by just reducing my monthly spending to 25 percent, that would give me close to $250 more to spend on other categories or just to even put aside for saving goals. By dining out less, I have more time to spend at home with my girlfriend and our dogs, and ultimately on travel to some fun, relaxing location.

Next Steps and Goals

My next goal will be to continue to analyze all spending in every category on a monthly basis. I have a budget, but I don’t always stick to the exact categories. I do a monthly forecast at work and analyze my actuals compared to my budget, but yet I don’t apply that to my own spending. I will also set some realistic spending goals for larger purchases, travel, furniture, etc. I am looking forward to report back on my efforts.