I Tracked Every Dollar I Spent For 8 Years. Here’s What I Learned.
When my husband and I started living together in 2009, we created an Excel spreadsheet to track our spending. We thought we’d do it for the first year so we had an idea of our combined spending habits. But it was so useful to know exactly where all our money was going that we’ve been doing it ever since.
Keeping track isn’t much work. Since we set up the spreadsheet, we just keep our receipts as we spend and pop in the numbers at the end of each day. It never takes more than a couple minutes, and what we’ve learned has been invaluable.
By comparing our spending year by year, we can project what we’ll need in the future. If one of us lost our income or we wanted to take on mortgage payments, we know exactly where we’d need to cut our spending.
Here are some other great insights we’ve learned:
Your spending adds up much faster than you realise
Anyone who tracks their spending for even a week realises this, but when you look at it over an entire year, it’s that much more startling.
A few nights out each week, the occasional irresponsible splurge, an extra holiday – and suddenly you’ve spent way more than you would have believed if you didn’t have the numbers to show it.
Not owning a vehicle can save you tens of thousands
When we had a car, we spent more on petrol alone than we now spend on all our public transit costs, including taxis.
Unless you need a vehicle for your work or you don’t live near public transit options, it’s cheaper to go without a car – our spreadsheet proved it.
Where you live can be the biggest factor in your spending
When we moved from a smaller city to Sydney, our annual spending literally doubled. While we also have higher salaries, they definitely aren’t double our previous ones.
Having this kind of data helps us consider where we might want (or need) to live in the future.
What’s the biggest variable in your annual spending? Ours is travel
Most of our expenditure stays more or less the same, generally just increasing slightly year by year. But depending on where and how long we choose to travel for, our travel costs might double or even triple from one year to the next.
This might not be the same for everyone, but chances are you’ve got one cost that jumps around wildly. Whether it’s something fun like travel or clothes, or less so, such as medical bills, it’s good to be able to examine that spending over time.
Unless you work really hard at it, your spending will increase year by year
Your spending goes up because the cost of rent, groceries, and pretty much every goes up – but you also get used to spending a certain amount – in other words, living in a certain way. Our spreadsheet charts how we spend more eating out (at better restaurants, and more often) each year, how we spend twice as much on alcohol as we used to.
Unless you’re paying close attention and making an effort to bring your spending down, it will climb gradually higher, and probably faster than your salary will. In eight years, we only once managed to spend less than we had the previous year.
Knowing what you spend every year helps you think realistically about how much you’ll need to retire
Retirement feels a long way off, so there’s no point in thinking about it too much now, right? That’s what I thought, but when I reviewed our spending habits over nearly a decade, the reality of how much we’ll need to retire hit home.
Our spreadsheet data gave us insight into what our retirement lifestyle might be like, and made us take saving and planning much more seriously.
Ashley Kalagian Blunt is a writer and stand-up comedian. She’s written for McSweeney’s, Kill Your Darlings and Griffith Review. Her current project is How To Be Australian, a memoir. She runs the comedy website Full of Donkey and tweets at @AKalagianBlunt.