This is an extremely powerful tool. Curious what I spent on travel? I can go look it up. Groceries? There’s a line for that too. Mint, the online budgeting software, has the ability to do this on its own, but I like the fun of creating my own categories and learning how to be a badass in Excel along the way. It doesn’t take more than a minute each day to log my spending. Some days I don’t spend anything, so I don’t need to update the sheet. For those of you who don’t want to be bothered with creating your own system, I definitely suggest Mint as a tool to help you understand your spending.
Having said all of that, what can you do with this information? Simple - use it to find areas where you can reduce your spending, thus increasing the amount you can save. I’ve looked at my 2013 spending and found the following areas that could use some reduction in spending.
Work - $83.74
Necessary - $204.07
2014 goal: $100 for only necessary items (like undergarments). I have plenty of clothes and don’t need any new items. If a shirt or pants fall apart, I’ll discard and not replace.
2014 goal: $200. This expense was for one particular trip last summer. I’m taking the same trip in 2014, but this time a friend of mine and I have decided to coordinate our airport arrivals and departures to coincide so we can share the rental car cost.
2014 goal: $400. I made the majority of my big purchases early last year after the late 2012 move. I don’t expect needing to buy much more this year by way of furniture or decorative items. I won’t stop making fun adjustments to my apartment, but I don’t anticipate spending as much as last year.
Total spent in 2013 in these three areas: $1,595.17
Projected 2014 expenses in these three areas: $800
Projected savings: $795.17
That's almost $800 extra that I can put into savings! Are you tracking your spending and looking for areas of improvement? Share in the comments.