Money

What I Learned From Tracking Expenses For A Month

July 27, 2016
Lessons Learned From Tracking Expenses
This post may contain affiliate links. See disclosure policy here.

 

Tracking expenses is a topic that is fairly elusive to me. It’s something I struggle with a lot so I figured why not broaden things a bit and have a guest share their thoughts on tracking expenses. If you’re interesting in guest posting at LAAB, check out our guest posting policy. Take it away, Aliyyah!


Have you ever wondered exactly where your money goes? I know have a certain amount coming in each month. I know what my fixed expenses are: rent, the Internet, etc. I know how much I set aside in savings. Yet, somehow I couldn’t account for all of my money each month.

So I set out to figure exactly where my money was going. In April, I began tracking expenses. At the end of each day, I entered every expense into a simple spreadsheet. I kept my receipts to make it easier and used Google Spreadsheets so that I could access the information on the go.

Altogether, it was a huge learning experience. I realized that there were a few places in my budget where I spent much more than I thought I was spending. Now, I’m equipped with the information I need to cut my spending and improve my finances overall. Here are three key takeaways from tracking every dollar I spent for a month:

 

Food Can Eat Up Your Budget If You Let It

In April, I spent a whopping $250 on takeout. That’s almost $10 per day! And that doesn’t include groceries or restaurant dining. I ate most of my meals on the go and only spent about $80 on groceries (some of which went to waste, honestly).

This was bad for two reasons:

  1. That’s a lot of money for one person to spend on food for one month.
  2. Takeout food is generally less healthy than home-cooked meals.

I was paying extra for convenience and harming my health at the same time. I knew something had to change — quickly! I’m happy to say that I am now on track to spending more on groceries than on takeout. I’m preparing more meals at home and saving takeout for planned nights when I want to treat myself. Meal planning has helped a lot. At night, I simply write down what I plan to eat the following day based on ingredients I have at home. I also plan for snacks in case I get hungry between meals.

 

Don’t Drink Away Your Extra Cash

In April, I spent just under $70 on alcohol. This is alcohol I drink at home and doesn’t include money spent at happy hours or other drinks while going out. It’s really an unnecessary expense. Okay, a glass of wine with dinner has its benefits. But spending money on alcohol outside from socializing really isn’t worth it. Alcohol gives me a little buzz for the moment, but it’s not worth the premium price as opposed to drinking water when at home.

That’s $70 that could have been put towards additional savings or towards adding a larger cushion to my checking account (which I love to have). Now, I limit the amount of alcohol I drink at home. I stick to mainly water. Not only do I have a clearer mind, I’m saving a few extra dollars each month that will eventually add up.

 

Having Low Monthly Bills Helps A Lot

Despite these flops, I was still able to save over 25% of my income. That’s because I have low monthly bills aside from rent. My Internet costs $30 per month and my phone bill cost a little over $40 per month. All utilities are included in my rent. So I don’t have many monthly recurring bills outside of rent, Internet, and phone. This gives me the flexibility of having a decent amount of cash flow each month.

If you’re living paycheck to paycheck or are just unable to save as much as you would like, I highly recommend taking a look at your monthly bills. Check which bills you can eliminate completely. Do you have any subscriptions that are no longer useful? Also, check which bills you can reduce. Do you have premium cable channels you don’t watch?

 

Final Thoughts

Tracking expenses for a month really opened up my eyes to where my money was going. Since doing so, I’ve made some tangible changes to the way I spend money and already see a positive result in my finances.

If you’re looking to do the same, it’s easy to get started. Just list every expense you have in a simple spreadsheet at the end of each day. At the end of the month, group the expenses into categories and add them up. You’ll probably be shocked at where your money is actually going.

What are your thoughts on tracking expenses?

 

Sometimes finding more money to build your savings simply involves tracking expenses? Read more from lessons learned on a journey of tracking expenses for a month and how it can help you save more too.

 

Aliyyah shares her thoughts and expertise about personal finance at Rich And Happy Blog. She is a twenty-something professional who graduated college debt-free and is aggressively working her way towards financial independence. You can learn more about her on Twitter and Pinterest.

 

 

Latoya Scott
CFEI/Social Entrepreneur
Latoya Scott is a Certified Financial Education Instructor and personal finance writer with a mission to help millennials learn how to stop living paycheck to paycheck so they can become financially carefree.

You Might Also Like

  • Amanda @centsiblyrich July 27, 2016 at 12:29 pm

    Hi Aliyya! Food is an expense that can really add up without you realizing it. And, when you are on the go all of the time, it’s hard to make/take food from home. We stocked up on alcohol in May and spent over $100 that month, but none since (we will run out next month though).

    You’ve reminded me I need to take another look at our fixed monthly expenses! Our phone bill is way too high!
    Amanda @centsiblyrich recently posted…Changing this one thing can help you solve your money problemsMy Profile

    • Latoya Scott July 27, 2016 at 3:22 pm

      The expense of food alone makes moving out to the country and buying a farm appealing:) We overpay for convenience for sure and usually when my budget is busted it’s because of food.

      Also, a few years ago I switched to T-Mobiles pay as you go plans and saved around $40 a month. Last year I signed up for a contract again because I wanted smartphone, but I still have managed to get my bill down to $46.00 per month. That’s way cheaper than what I paid Verizon for years!

    • Aliyyah @RichAndHappyBlog July 27, 2016 at 5:44 pm

      Nice job stocking up on the alcohol. I haven’t really considered that.
      Aliyyah @RichAndHappyBlog recently posted…How I Overcame My Social AnxietyMy Profile

  • Emily @ JohnJaneDoe July 27, 2016 at 12:36 pm

    I learned so much once i started tracking my expenses, even though we started doing it during a no-spend challenge. But now i do it religiously to check where we are versus budget. It’s meant a lot less eating out, and much more careful grocery spending. It meant really serious paring down of Christmas spending to what was needed to enjoy the holidays and not much more. It even meant that we were able to swing things to absorb the almost doubling of our health insurance costs by cutting our phone plan and cable.
    Emily @ JohnJaneDoe recently posted…Read My Post on Reselling…Over at Medium Sized FamilyMy Profile

    • Latoya Scott July 27, 2016 at 3:24 pm

      Speaking of Christmas, I’m already excited about the upcoming holidays. I never put any pressure on myself to have an over the top Christmas and surprisingly this viewpoint didn’t take shape until after I had kids. Before I had them I wanted all the things. Now that I have them, I won’t a lot of NOTHING, lol.

    • Aliyyah @RichAndHappyBlog July 27, 2016 at 5:45 pm

      Wow. That’s great that you were able to afford double the cost of health insurance by cutting your expenses.
      Aliyyah @RichAndHappyBlog recently posted…How I Overcame My Social AnxietyMy Profile

  • Kayla @ Shoeaholicnomore July 27, 2016 at 2:44 pm

    I definitely try to track my expenses! It is hard to budget when you have no idea where your money is going!

    • Latoya Scott July 27, 2016 at 3:25 pm

      Hey Kayla, ain’t it though? It’s serioously no need in budgeting if you’re not willing to actually look at where you’re spending. You have to know where to cut back or accomodate for higher expenses.

    • Aliyyah @RichAndHappyBlog July 27, 2016 at 5:46 pm

      Very true, Kayla.
      Aliyyah @RichAndHappyBlog recently posted…How I Overcame My Social AnxietyMy Profile

  • NZ Muse July 27, 2016 at 7:10 pm

    Low monthly bills are awesome – recurring expenses can be a beast!

    I’ve been a bit slack about track spending recently and really need to get back into the groove.
    NZ Muse recently posted…How I doubled my pay and halved my stressMy Profile

    • Latoya Scott July 27, 2016 at 7:58 pm

      Don’t feel bad, me too!

    Top