Year in Review: 2015 Spending

If there's one thing that people (at least Americans in my experience) struggle to talk about, it's money.  We all know that religion and politics are taboo subjects to be avoided, but money seems to be silently lumped in there as well.  I, too, am guilty of this myself. But it's kind of a shame that we are so quiet about money and spending and retirement because they are important topics.

Back in 2012, I did an (almost) monthly post series about money in an effort to try to be more open about talking about the topic, but since then I haven't really talked about money ion a straight-forward way. Then last year my friend Kyria shared her 2014 spending breakdown. I thought it was fascinating to read as each person spends money differently and it's helpful to see how your spending breakdown differs from others.  So in 2015 I utilized mint.com to carefully track my spending so that I could provide a breakdown as well.

A few notes on my spending for 2015:

- Home - this was obviously the area where the majority of my spending went. If you took the amount I put into savings into consideration as a "spending" category, my housing expenses (rent, bi-weekly house cleaning, moving expenses, etc) would be a far smaller piece of the pie. Another thing to consider is that because I live downtown, my rent is higher. But, on the other hand, because I live downtown, I drive very little which is why auto and transportation accounted for a mere 3% of my spending.

- Donations - as I've gotten older and more financially secure, one thing I've really tried to focus on is increasing my charitable contributions. I feel fortunate to work in a well-compensated industry so I feel it is my duty to give back. The majority of my charitable donations go to my church, but I also give to other organizations throughout the year. It makes me a little bit uncomfortable to share how much I donate because I don't want anyone to think that I expect others to do the same or that I am tooting my own horn for donating. However, since it's a big portion of my spending, I didn't feel like I could leave it out.

- Travel - I am actually surprised that the travel category didn't account for a larger percentage of my savings as I went on several vacations last year. However, I did not take any really big trips as most were long weekend trips. I would expect this category to grow in 2016 as I am hoping to take an international vacation in the second half of the year.


- Food and Dining (excludes groceries) - I am proud of the fact that the percentage of money spent on restaurants and coffee shops, which are the main categories in food and dining, is as low it is. This is an area that exemplifies how we all have different priorities when it comes to spending and how it's all about give and take. While I enjoy dining out, I'd rather dine out less and use that money for other things such as my bi-weekly house cleaning service. For someone else, dining out on a regular basis might be a huge priority.

- Other - So what falls under this category? Things like massages, hair cuts, hair products, make-up, theater and concert tickets, taxes, stamps and shipping expenses for mailing packages, etc. No individual category that fell under "other" was large enough to warrant its own call out.

Biggest areas of opportunity:

Of course the whole reason to track my spending in such a detailed manner is so that I can learn from it and improve my spending habits in the years to come.  I have two big areas of opportunity for 2016:

1. Target - Target is my weakness, and it does not help that there is one a block away from where I work. While I save money by buying some non-perishable goods there, I am also guilty of buying things that I really do not need. In 2016 I want to cut back on those unnecessary purchases.

2. Clothing - This is a tough one for me as I need to look professional and polished at work and also have to travel a decent amount to visit clients or my company's head quarters. So investing in my clothing for work is an investment in myself and my career. That said, I want to be more mindful about the clothing purchases I am making in 2016. I do take advantage of great sales at Banana Republic but I have certainly purchased things that I truly don't need.

What about saving?

As I mentioned in my paragraph about my housing expenses, I saved quite a bit in 2015. I considered adding my savings in when creating the pie chart as choosing to save is ultimately choosing to not spend, but saving is such a personal thing, so I did not feel comfortable displaying it. I definitely save quite a bit between my 401(k), IRA, and my savings accounts. I am able to aggressively save because I work in a well-compensated industry. However, the downside to that is that it's also a volatile industry with very little job stability.  Early in my career, my mentor told me that I need to be careful not to fall into the trap of spending what I make because part of the reason our compensation is generous is because we have less stability than other industries.  I have lost count of the number of friends in my industry who have lost jobs over the last two years, but it's approaching the double digits.  My industry is shrinking so the job search timeline can be extended so I feel like I need to save save save so that I have a safety net in case I am ever laid off. I think I still have room for improvement and luckily Phil is the poster child for how to save as he saves more than any person I know!

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So there you have it!  I hope I haven't bored you all to tears with this financial talk but I always enjoy these kind of posts so hopefully you do, too.

Do you use a program such as mint.com to track your spending? What are your biggest areas of opportunity in regards to spending or saving?