Tracking Spending

It is an eye opening experience when you start to track your spending. We started doing this in January of 2020. Not as a guilt-trip, blame and shame deal, but more of a “huh – I had no idea where that money went.” I recently created a spreadsheet for 2021 and it was very interesting to look at what the data was telling me.

What do you think were the top categories?

Rent. This figure is very frustrating, however, it is also calming. There are many pros and cons of renting and there are many pros and cons of being a homeowner. When I look at the amount we make combined, (my wife’s income with mine) it shocks me to think that between 1/4 to 1/3 of that is going to rent. (One day, we will be homeowners and begin to build our net worth through the asset of a home).

Groceries. The good news is that dining out was not a major category. That means we are directing our energy at making more meals at home and not spending more money on less food. We make our meals from scratch a majority of the time. Our focus for 2022 is going to be cut down on the grocery bill.

Tithing / Offerings. This for us is a non-negotiable category. We are always going to give at least a tenth of our income as we believe we are called to do so. It feels good to give to our church knowing that they are utilizing the funds to enhance the mission field and further the kingdom of God.

Tuition. It amazes me to see how much we spend on having someone watch our child so that we can get some kind of work done during the day. However, we are really spending money to get time in the day back. Bonus – he gets to learn a lot and have fun with his friends in school.

We don’t shop a lot at Amazon. We try to focus our support by voting with our dollar with smaller businesses. Subscriptions are low because we don’t have many recurring expenses. We do our best to purchase discounted car parts and install them ourselves. I think gas is going to continue to increase in the near future. Unfortunately in SoCal, a car is a commodity and fuel is a necessary evil.

What you focus on, you win at. Every dollar needs to have an assignment. You need to make saving money a priority or consumerism, food, and housing will eat your income alive. Remember: it is not about how much money you make, it is about how much money you keep/save. Budgeting will help you determine what you have to save, and then allow you to spend what is left after saving.

*Make sure you track your spending for Christmas this year. If you were planners, you would have set up a sinking fund for holiday gifts since it is not a surprise when the holiday arrives the same time every year. If you didn’t plan, that’s okay – there is always 2022. January is around the corner…

Are you ready to get started?

Published by MadsenFinancialCoaching

Madsen Financial Coaching was created to bring awareness to personal finance. When you pay attention, you win! We work with clients to understand their behavior and relationship with money, as well as basics of personal finance such as: following a budget, eliminating debt and building an emergency fund to name a few. We want you to succeed, and it starts with your willingness to put in the work.

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