Monday, January 9, 2017

Year in Review: 2016 Spending

While my focus is mostly set on 2017, I have one last year in review post!  I know that talking about money is such a source of discomfort for most people, especially women it seems. But I think it's important to try to find ways to talk about as we can all stand to learn something from one another. Last year I did my first spending post, so I thought I'd do it again this year as I got a positive response to it last year. 

Here's what my 2016 spending looked like:



Observations:
Home and Condo Rental: This year I decided to split out the expenses of my condo rental from the home category. 2016 was a bad year for renting my condo. Between flooding in the unit that required me to replace the flooring in the kitchen to buying a new fridge to a range of other maintenance expenses, I lost money in 2016. I sincerely hope this is my last year having this rental as I would love to sell it in the fall and be done with it. On a positive note, I spent far less on housing expenses for myself as I moved in with Phil and he doesn't charge me rent!  We have an agreement that I will buy groceries and pay for things like vacations and such.  He felt it wasn't worth the effort to split the expenses evenly since we knew we would be getting married eventually and would combine finances at that time.

Wedding:  Yes, we already have spent a considerable amount of money on our wedding, even though we just got engaged on December 9th! We booked the reception venue and photographer in December so have to make deposits on both of those items.

Auto & Transport:  This is new category this year as last year my spending on this category was so small it got lumped into other. My car literally died on me in July so I had to buy a new car, hence the reason why that was my biggest expense category for the year. I didn't pay for the car in full as the financing fee was so low but my goal is to pay it off in 2 years. 

Donations:  My donations category increased this year as I identified a few new charities that I donate to on a regular basis. Since Phil and I live well below our means, I feel that giving back is a very important thing to do.  I don't want to sound like I'm up on my high horse by saying that as I recognize that finances are tight for many people and they don't have extra to give, but since I do have extra to give, it's something I try to do. 

Travel:  This category grew a bit this year since I paid for our vacations in full instead of splitting the cost with Phil. This category doesn't include our Mexico trip as we paid for that in 2015, but I feel good about the amount spending considering that it includes trips to San Francisco, Bend, Spain, and several out-of-town weekends for friends' weddings. Travel will ALWAYS find a place in our budget as it's something we both value.

Target:  Target is still a big spending area for me.  It's hard to split up this category, though, as I get a lot of groceries (non-perishable goods) and household products from Target. I know I still make some additional purchases that I could limit but it would be so much work to get a handle on what I'm spending at Target. I do expect my Target spending to decline now that we have Amazon Prime as now I rarely buy household goods from Target and instead opt to have them shipped to our house.

Shopping:  I actually feel good about the fact that my total for shopping (which includes clothes, books, Amazon, and miscellaneous other purchases). Last year, clothing was 5% of my spending so I feel good about the fact that my total spending in this category was equivalent to what I spent on clothes last year. I bought far fewer clothes this year and instead tried to rely on what I already have. I will need to add to my wardrobe this year as some of my clothes are starting to show their wear, though.

Other:  This catch all category includes things like personal care (haircuts, Arbonne products, massages, and other random expenses). 

What about savings?
I didn't include savings in the graph as I like to see how my spending breaks out. But I also focused on savings in 2016 and significantly increased the amount I have in savings. We know that we will be buying a different "forever" home in the next 1-2 years so I am saving in preparation for that.

Final Thoughts
This is always an important activity for me to do each year, and it's something I encourage others to do.  I keep a close eye on my spending throughout the year, but it's always eye-opening to look at the totals at the end of the year. I feel like I am a pretty frugal person that spends money wisely, but when I review my spending it reminds me I have opportunities to spend less.  I utilize mint.com to track my spending. It does a pretty good job of classifying my expenses, but I have to do a lot of reclassifying of expenses so that it's accurate.

Lastly, this will be my last year of sharing my spending in this manner. Phil and I will be fully merging our finances after we get married and I don't feel right about sharing our spending as a couple. But I will still talk about money and finances, especially about how we adjust to having joint finances, as that is going to be an interesting experience for us after managing our finances independently for so long!

Do you track your spending? If so, what do you use to track it?

16 comments:

Kyria @ Travel Spot said...

I was wondering how your Home category was so small until I read the text!! That is fabulous. I know you're not going to share your pie next year, but I am sure it will change once you merge your finances with Phil's. It will be fun to see where those changes are!!

There are a lot of categories that you split out that I don't. For instance, I should probably split out my utilities, as they are a big portion of my Home category. I also have taxes, insurance and furnishings etc in my Home category, as it's easier to lump everything together. However, the bulk of my Home is still the mortgage payment!

Charbelle4 said...

I recently put my spending into a spreadsheet (I TOTALLY thought of you when I did this) and I was pleasantly surprised to see that I spend less than I make. For years this was not the case, hence the hefty debt. I've paid off several cards in 2016. I also gave regardless of my debt. Probably most financial experts would tell me to pay off debt first but I simply realized that I won't ever give if I wait to do this. I was really excited for how much I've been able to give, and to the variety. This was just the monthly ones, I often will give towards something or other throughout the month. I've learned over the past several years that the more you give, the easier and easier it becomes to give more!

Marlys Dotzenrod said...

It is a great idea to use plans like this to tract spending. I have done it in the past and it is a great way to see where you spend most of your money and where to cut spending. I haven't used it for awhile but need to get back on track!

Abby said...

This is a great post! Ryan and use our USAA app, - that helps categorize areas of spending - - and he keeps up an excel spreadsheet for our savings/spending habits. I guess a lot of our budget is rule based - is: only go out to eat once/week, $150/month budgeted on clothes - but if I go over for some reason, it either comes out of next months budget, or I cut into my "other" (which is similar to your "other").

Budgeting is kind of fun, and very rewarding. And it is something I did NOT get excited about until the last few years. ;-)

Elizabeth Enger said...

I use Mint for our budgeting. I wish I was better at sticking with it though. I pay close attention to it all but I should be more discipled with the budget.

Amber said...

I do not use mint but I have recently started tracking expenses in a spreadsheet so I should probably just look into joining 2016 and using mint! I never used to use it because Eric and I used to use cash for all our joint home expenses but recently we started using a joint mastercard so that would make it much easier to track our expenses. I will look into it again :)

Also I think you did a great job with your budgeting this year! I know there are maybe some areas you could work on but overall it looks like you do a great job spending well within your means. I would like to get my donations up to 10% of my spending as well.

Ok your post has inspired me, I'm going to look at mint and see if I can figure out a way to start tracking my spending like this. It would be very interesting to look back on at the end of the year!

Jeanie said...

I love that Target is its own category! I SO get that. This is so comprehensive -- very nice to use a program for that. My CU allows us to isolate spending on checking and visa by category so I do it in a way -- but it doesn't offer the nice pie chart! Still, it's a good look at what I do over a year.

Stephany said...

Oh, oh! I would love it if you would write more about money habits and all of that. I feel like you're so good in this area and I know it would be helpful for people like me who are terrible at it. Ha.

I don't really track my spending (bad, I know), but maybe I'll try to do so for 2017 and see what my categories look like. You've inspired me!

katielookingforward said...

So was this from Mint? I really like the graph and really need to implement this in my life, but oh man is it a scary thing to start doing! I know I do "okay" but I also know I could much much better.

Kelly (She Wears a Red Sox Cap) said...

I love when you do this post every year! I'm always so impressed by your donation category. I'm also impressed by how low your dining out percentage is... it would be so much higher for us I know.
Definitely looking forward to hearing about combining finances. We never did because we had a good system before we got married- it just made sense to stick with it. We have luckily never really fought about money- though I have absolutely NO idea how this is all going to work when I lose my salary next month. Will probably have to make some major changes!

Linda said...

I don't track my spending by category and don't have a budget, but I try to keep my overall spending under how much I make. It used to be keep my credit card bill at 1k or under when I had a full time job. Now I aim for 600-700 a month which is REALLY REALLY hard but I sometimes hit it!

Gracie said...

I always find this post so interesting. We usually have negligible housing expenses, as we rent for a very good price (like, 1/4 market value), but I expect we will buy our house this year, and suddenly that category will inflate!
When David and I got married we combined finances jan 1st, even though we got married in July...it made taxes easier. So romantic, I know.

Jolene - EverydayFoodie said...

Okay, every year I think I might start tracking spending, and then I never do. Although we did decide to start saving our grocery store receipts this year, so that we can add them up at the end of the year and see what we actually spend on groceries (I'm thinking it's a lot). We too live well below our means, and therefore haven't really felt like we had to track our spending, although I am interested in it, so it's still something I might do in the future.

suki said...

YAY, love seeing the breakdown of spending! Wow, wedding really is a big chunk if it is almost as much as spending on HOME. Since I shop at Costco a lot, I tend to do a split of the bill on Mint, so that the right amounts are going in the right categories.

Sandra Bond said...

I enjoyed getting a glimpse at your spending again. It's always interesting to 'compare' what other people spend money on. I realize that you've always just talked about your own spending and while you said that you won't be doing the same pie-chart spending report again next year, I hope you'll talk about how you manage finances with a partner.
Because I realized when I put my spending report together (will be posting soon!) that some of the categories that I would like to work on might not be categories that J wants to work on and so there is a balance when you're managing finances as a couple!

The Many Thoughts of a Reader said...

We have way more disposable income than I should be allowed to know about. I am frugal in some way and a ehhhh what the hell in others. Anthony you have to pry money from his hands. So together we make a good team. We both are good spending money when we are trips but sometimes its hard to convince him to do it. I could do better but we are saving so much and then sometimes guilt gets the best of me and I buy my kid something. We've also steadily increased our giving each year and that's important to me too.