Remember how I said I wasn't going to participate in the No Spending 12x30 monthly challenge for this month? Well at first I wasn't... I spent a ton of money at the first of the month-I bought things for my apartment, I bought supplies to open my new shop, and I fully admitted I wasn't going to be stopping my spending. But then I was surprisingly thrust into a new budget.
I'm going to buy a house. I mean, I just decided I was ready to move and if I was going to be spending so much I might as well buy something. So I applied for a mortgage, I was approved, and I'm already house hunting. It all happened in a matter of hours, and the one thing that has been stressed above all is "save save save!" So now? Now I'm on a no-spend budget.
So in the spirit of budgeting, the first thing I needed to do was get an idea of where all my money goes. I mean I make pretty good money, it's not a ton, but it's a lot more than I did years ago. So why do I still mostly live paycheck to paycheck? Well, because I don't budget. I don't pay any attention to where it's all going-and that's a problem.
Most banks allow you to go in and categorize your spending, so that's what we're going to talk about today. My online account allows you to simply click on a transaction and put it in a group and even add notes about it so you don't forget what it was for. That's where we start, and you should go ahead and log into your bank account and start categorizing.
I did a test period of 45 days-from February 1st to March 17th, and now this period included my tax return so I've removed the amount of the return and the (rough) amount of it from both my payouts (I paid off a bunch off all of my credit cards and a few other things with it) and my income to make this more like a normal amount of time. I even went through my credit cards to see how much I am charging.
For this period, I spent/paid out roughly $4,108.45.
For this period, I charged/went in debt roughly $1,649.52.
For this period, my income was roughly $3,526.21 (not including income from blogging.)
See the problem? Why on earth am I spending so much MORE (roughly $2,231.76 more) than what I'm earning? This is how we end up with credit card debt-and yes I paid it all off and already have a good chunk of it again. This is not okay. This is where I realize that something needs to change. But what?
Here's the part where you now get to sort your bank account history by individual sections so you can see how much you spent in each of the categories you outlined previously. This will help you see where your spending has gone to. Here's a break down of my expenditures:
| Utilities: $1,659.98 Rent: $1,402.7 Electricity: $45.27 Internet: $78.95 Television: $33.06 Phone: $100 |
Auto & Transport: $457.25 Car payment: $219 Car insurance: $111.55 Gas: $120.86 New tail light: $5.84 |
Food & Dining: $1,158.78 Groceries: $650.35 Restaurants: $77.18 Fast Food: $241.68 Coffee Shops: $128.37 Alcohol & Bars: $60.89 |
| Business/Blog Services: $294.28 Shop Supplies: $209.15 Blog Upkeep: $85.13 Educational Expenses: $9.72 |
Entertainment Purchases: $202.85 Music: $54.18 Movies: $25.00 Books: $88.67 Games: $35.00 |
Personal Care: $115.97 Hair & Beauty: $58.29 Gym: $57.68 Travel: $122.63 Rental Car: $107.70 Other: $14.93 |
Shopping: $1,374.72
Home Furnishings: $655.37
Clothing: $211.75
Online/Subscriptions: $128.60
Pet Food & Supplies: $174.25
Other/Hobbies: $146.15
Blog Swaps: $58.60
Yikes. I mean really yikes. When you break it down like that it's pretty easy to see where I'm going wrong. I'm sure if you've broken yours down you're looking at it in the same kind of horror that I am. Well, maybe you're not, but I certainly hope I'm not the only one who lets my spending get out of control. Not that I would wish that on anyone, but man it's nice to not think you're alone in your bad choices.
So what can I do about this? Well I can't really get any of the money I spent back, but I can take a look at my bad financial choices and learn from them going forward. A penny saved is a penny earned right? I'd rather funnel some of those wasted dollars into my savings account-which I need to be doing if I'm buying a house.
So let's look at where my biggest offenses are. I mean I can't get around paying rent obviously, nor can I get around any of the auto expenses since I have to drive myself to work. Honestly, my mistakes are in laziness and trying to shop my feelings away. My food budget, specifically the hundreds of dollars I spend on fast food, is WAY too high. I mean I know that the groceries bill isn't entirely groceries either, it's lazy shopping. I'm also spending way too much in shopping, entertainment, and other categories...
Here's the part where you look at your break down of charges and decide where your trouble spots are. Once you've identified those parts of your life that are costing you too much money you can make a plan going forward for how to fix it. Pick out the things you are willing to give up or do more frugally, and make some goals going forward.
Here's the part where you look at your break down of charges and decide where your trouble spots are. Once you've identified those parts of your life that are costing you too much money you can make a plan going forward for how to fix it. Pick out the things you are willing to give up or do more frugally, and make some goals going forward.
So what am I going to do about it? Well here are my new financial goals:
- No more fast food. Instead there will be meal planning, shopping lists, and preparing ahead.
- Coffee shops = no. I need to make coffee at home, it's just lazy lack of planning on my part.
- Shopping = no. No more frivolous spending. No more retail therapy, just real therapy.
- Entertainment budget-No more buying books (except for swaps) until I've read 80% of what I have already.
- Funnel all the extra funds into my savings account.
- Try and sell the products in my shop.
How do your finances look? What are you doing about it?
Definitely need to try this and spend money wisely, thanks for sharing
ReplyDeleteCANDICE | BEAUTY CANDY LOVES
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We, thankfully, have always lived a tad below our means. My husband came home from active duty over a year ago and still has not found a civilian job to support a family of five. We've managed using my income from freelancing and from selling wine via direct sales and a few temp jobs he's picked up. It's a far cry from the six figures we made before. We have learned over the past 12 months to prioritize and budget that way. It's been extremely hard, but we have not lost our house! That's a good thing.
ReplyDeleteWow, that does sound hard, but it's inspirational that you've done so well and been able to budget! I'm terrible at budgeting, but it's something I need to learn not to be bad about.
ReplyDeleteBudgeting is one thing I'm semi decent at - we've been a single income household for four years, since I became a stay-at-home mum for our daughter! It was a tough change going from two full incomes to one, but so worth it. I actually found myself happier cutting out all the extra spending, and realize how little I really NEEDED to be perfectly content. It's a good feeling! We still go through little phases of frivolous spending (tax return anyone??), but I think that can be a good thing too. You have to treat yourself sometimes. Best of luck with both budgeting and house hunting...so exciting!
ReplyDeleteAh yes retail therapy is such a problem with me too! Two years I joined a debt management plan to let them help handle all the bad debt I had created for myself. I'm pleased to say that in less than 10 months I will be debt free which is exciting!
ReplyDeleteWow. This was awesome. Hmm.. how does my finances look.. nothing close to being as organized as this! Thank you so much! I really do need to work on setting up some sort of budget for my family and this really helps!! :)
ReplyDeleteKarla
www.karlastorey.com/blog
Ok, we have definitely done this type of exercise...and hated it. :D My biggest spending is usually coffee, so we made an adorable coffee bar in order to try to cut that out! ;) I also try to drink more water and green tea in between cups of coffee. This is a great reminder and a great tip!!
ReplyDeleteWhen I was tring to figure out where all of my money goes, I realized it was on food,transportation to work and Mount Dew. Seriously, over half of my paychecks go to those 3 things. Mind you, my paychecks aren't even half the size of yours. lol
ReplyDeleteI managed to cut this back a bit by buying soda and bringing it to work with me. It's $1.89, upwards of $2.20 per bottle depending on the size I get at the mall I work at. That's absurd when I can buy a 6 pack of 16ounce bottles for all of $3.25! That alone saved me $8/week. I know that's not really a lot, but that's $24 a month I could be spending on something else.
I take a cab to work 3 days a week - sometimes 4. I don't have a car and the taxi costs me $8 every time. That's another $24 every week. I know I could take the bus for cheaper, but I simply don't have the time or the energy to bother with it. I used to walk over an hour to the bus stop in order to get to my current job. It's simply not worth it to me.
But food... it's my biggest issue. Working in the mall, and worse... working in a store that faces the food court, it's way too easy to eat there. It's not cheap either. I eat mall food 5 days a week - sometimes even twice in a day. I spend anywhere from $5-9 per meal. I'm spending at least $50 per week just on food at work. That doesn't even count the food I eat during my days off at home or how much Jeremy and I go out to eat when we could eat something at home. This is the one I need to work on the most. :(
Oh man. I am in no-money-to-spend mode and I still keep managing to find ways to spend. It's bad. I'm looking at things better since I've been using YNAB and have also been categorizing in my accounts, but it's hard to undo years of fiscal irresponsibility. Just ask Congress!
ReplyDeleteIt's crazy to see where all my money goes! So much on groceries to make my food for the blog! Ugh it's unreal!
ReplyDeleteI want to do this, but I'm also afraid to. haha
ReplyDeleteThis was a great read for me today. My husband and I are in the process of buying a house and we are getting ready to make a budget too. It's always kind of scary when you look back and trunk "I spent how much on food and movies?!" I know I thought that last time I checked!
ReplyDeleteI really need to do this. My boyfriend and I suck at money, and if we want to buy a house in the next few years, we need to get our act together!
ReplyDeleteI need to try this as well. When I'm good, I'm OK. When I'm no,t I am an absolute mess.
ReplyDeleteWow, it really does give you pause when you look at everything itemized like that. I should've budgeted more for my Seattle trip two weeks ago, but I intentionally didn't buy any souvenirs and sometimes I skipped lunch to save money. Not the best idea! Thanks for sharing this and good luck on the house buying process!
ReplyDeleteGreat! I am pinning this for when I get back from vacation. I have a lot more learning to do on how I am spending my money and saving it as well. I am doing okay, but I need to do better! Thanks
ReplyDeleteGreat post! Finances can get really out of hand quickly if you're not watching them. Love this!
ReplyDeletewow it's amazing to see how little things can add up when we are not paying attention! it's awesome you are doing this! XX
ReplyDeleteI didn't realize that you could sort it out like that in your bank account! The good thing is, when you look at it like this, it's very easy to see place to cut back. Your basic necessities/bills look pretty reasonable/average to me, but cutting back in food spending should definitely be a way for you to save a lot of $$$!
ReplyDeleteHaha those are exactly my goals too! Really, too much money is spend on eating out and coffee runs. We saved a ton of money by bringing our lunch to work/class and bringing out own coffee to make at work and school. There's something more to learn everyday too!
ReplyDeleteWe totally need to do this! I am sure we will be shocked by the reality as well!! Good for you and good luck!!
ReplyDeleteI really need to do this as well. I give myself a set amount of cash per week for spending, but by the end of the week I hardly have anything left in my wallet. I'd like to put more in the bank than out in the world on things I don't necessarily need. Great post!
ReplyDeleteI completely agree. I saw a thing that said spending cash lights up the nerve centers in your brain, but using a card does not. I definitely need to start allocating only cash for spending like you do. It's too easy to swipe the plastic!
ReplyDeleteThank you! And it was shocking haha...
ReplyDeleteI seriously have that problem. It's coffee and eating on the go that has me broke-sure the shopping doesn't help, but YOWZA that's a lot to spend on just food and drinks!
ReplyDeleteOh man, I can totally understand! I buy way too much stuff and now I"m hurting and thinking-what can I sell?
ReplyDeleteRight? Sooooo true, it's nice to identify exactly what areas you need help in-and mine is definitely impulse buys, food, and coffees-I have a coffee machine but I just forget to set it and then am too lazy! lol
ReplyDeleteAmazing, and horrifying! Haha, thank you very much.
ReplyDeleteThey really do, and thank you!
ReplyDeleteThanks for pinning-I hope it helps and enjoy your vacation! (Try not to think about the money you spend while you're out! Haha!)
ReplyDeleteThank you so much, and I totally understand. It's hard not to spend money while you're travelling, but it's easier when you plan ahead and have savings for it.
ReplyDeleteI hear you completely.
ReplyDeleteI suck at money too, so now looking at buying a house has me re-evaluating everything in my life. I spend WAY too much!
ReplyDeleteIt's scary, not going to lie. It's also scary that this week I'm still unprepared and I've bought lunch and coffee twice and thought-oh god what am I doing? lol
ReplyDeleteI can totally understand. I really need to learn to meal plan-I think it could help if I bought a bunch of stuff that uses the same kind of ingredients, just in bulk. Then you can do a week of eating similar (but not necessarily the same) meals and it will be cheaper haha!
ReplyDeleteSeriously!
ReplyDeleteGiving up soda helped my belt and health line immensely. I just drink water at work and with my refillable cup it's free! (though my work gives us free soda-I just avoid it-I don't even like the taste of it anymore.)
ReplyDeleteBuses are hard. Where I am our public transportation isn't great, but cabs here are like $40 for a 20 min trip! It's insane! My car payment is big now, but I average 42mpg (and my drive is 45 min each way) so it's a necessity.
Food is my hardest part too.