Reviewing Our 2017 Spending

tracking spending

We’re over a week into the New Year! This time of year is a perfect opportunity to look back at how the previous year ended and how you want to improve. Many people resolve to be better with their finances. This is an awesome goal to have, but there are many layers to being better at managing your money.

A few of my 2018 goals also involve areas of our finances, including paying off the last of our student loans, building up our cash savings, and increasing our net worth. If you’re serious about improving your finances this year, the two biggest keys I’ve found in my experience is having the motivation to make your finances a focus in your life, and tracking your expenses.

With the proper motivation you’ll be able to power through even when the inevitable obstacles arrive. With tracking your expenses, you become aware of where money is being spent. This has a profound impact, not only on your spending patterns, but also on your mindset towards money. It becomes much easier to find areas to cut back on that aren’t bringing you value.

We use Mint.com for our monthly budget, which made compiling these numbers very straight forward. It’s no exaggeration to say that tracking our spending through Mint has been life changing for us. I spend a few minutes each day to ensure all our expenses are categorized properly and making sure we’re aware of where our money is being spent. Looking at the year end totals were eye opening, as well as encouraging.

I wanted to use this post to shed some light on what our spending looks like, in hopes it can be encouraging to others on their financial journeys. It also keeps me accountable and helps us track our progress to make sure we’re on the right path to our long-term goals. In order to provide context, I’ll breakdown our 2016 spending too. Note that these charts only depict our spending, not our savings or investment contributions.

2016 Spending

2016 spending

Here’s how the percentages breakdown:

  • Home 39% – (includes rent, renter’s insurance, water, trash/sewage)
  • Education 24% – (all the money we put towards paying down our student loans)
  • Auto & Transport 12% – (car payment, gas, car insurance, maintenance/repairs)
  • Other (Shopping/Pets/Misc) 8% – (this covers home supplies, clothing, pet supplies/veterinary visits, gifts, entertainment, and other small expenses)
  • Bills & Utilities 5% – (electric bill, cell phone, Internet, cable)
  • Food & Dining 4% – (groceries and restaurants)
  • Giving 4% – (church tithe and other charitable giving)
  • Travel 4% – (includes airline tickets, accommodations, sights, food)

A few thoughts on our 2016 spending:

In 2016 our number one focus was paying off as much of our student loan debt as possible. We made incredible progress over the course of the year! While necessary, this meant other categories we value highly (giving and travel) didn’t receive as much attention as we would have liked. That became a big focus for us heading into 2017. We both had consistent full-time incomes, plus my side hustle.

Two other areas of note, Home and Food spending. We rent a one bedroom apartment in a high cost of living area, so while our rent makes up a huge portion of our spending it’s the going rate where we live. The encouraging part about that is we could very easily reduce our spending by moving to a lower cost of living area at some point.We’re not sure where life will take us yet and right now we’re happy in the Bay Area.

We keep our food spending so low with various strategies you can read about here and here. We hardly ever eat out and my employer provided lunch for all employees.

2017 Spending

Here’s how the percentages breakdown:

  • Home 43% – (includes rent, renter’s insurance, water, trash/sewage)
  • Auto & Transport 11% – (car payment, gas, car insurance, maintenance/repairs)
  • Education 10% – (all the money we put towards paying down our student loans)
  • Giving 9% – (church tithe and other charitable giving)
  • Travel 9% – (includes airline tickets, accommodations, sights, food)
  • Bills & Utilities 4% – (electric bill, cell phone, Internet – we cut cable this year)
  • Food & Dining 4% – (groceries and restaurants)
  • Pets 4% – (pet supplies/veterinary visits, training class, Rover boarding expenses)
  • Shopping 4% – (home supplies, clothes, gifts)
  • Misc 2% – (entertainment and various other small expenses)

A few thoughts on our 2017 spending:

2017 was a very eventful year for us. My previous employer did a round of lay-offs early in the year, which prompted us to switch up our debt repayment strategy to be more conservative. Instead of paying our student loans down so quickly, we started to increase our emergency fundThis strategy proved to pay off, as I lost my job and was out of work for about 6 weeks. It’s reflected in our budget percentages, as our Education percentage decreased from 24% to 10%.

Everything else stayed pretty consistent. I was happy to see that we saw increases in both our Giving and Travel budget categories. I expect our travel spending to go down a little bit in 2018 due to using points from travel hacking.

When it was all said and done, even though some of our budget category percentages increased, we ended up spending about $7,000 less in 2017. Both our net worth and cash savings both increased, despite the brief period of unemployment. We’ll look to continue this momentum and kill off the last of our student loans in 2018!

As always, thanks for following along and feel free to reach out with any comments or questions!

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