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Posts Tagged Spending

Determining What You Actually Spend

In 2015, when my husband and I decided that enough was enough and we were ready to take control of our finances, one of our first steps was to determine what we were actually spending. I knew this was going to be scary. We had been spending more than we were earning and because of it, our debt had been increasing.”

What we didn’t know was where that money was going and how much we were actually spending. So it was time to do what I refer to as a “Spending Analysis”.

money leaving hand

 

I gathered up 6 months worth of bank, credit card, and line of credit statements, a few different colors of highlighters, a calculator, and a tall glass of wine and got to work.

How to do a Spending Analysis

  1. Pick Your Color: I first had to determine which highlighter color would represent a different category of my spending. For example, yellow was any food related purchases including dining out, groceries, and those quick trips to the store for a snack or coffee. Blue was designated for fuel purchases. Pink was clothing and kid related expenses (since most of the clothes purchased were for our growing girls), and green was for any miscellaneous purchases (a.k.a. Target, where you are never able to leave with just one thing).

highlight budget

 

  1.  Start Coloring: I carefully went through each statement, highlighting the purchases and debit transactions according to the categories that I had selected initially. As you go through, you may find that there are more categories than you anticipated in which case you add another highlighter or two.
  1. Time to Start Adding It Up: Once my statements were categorized, it was time to begin adding up all of the expenses. For this I would total up all of my food costs (yellow) and divide by that number by 6 (since I was looking at 6 months worth of statements) to determine what my monthly average was. I repeated this for all of my spending categories.

calculate expenses

 

  1. Letting Reality Sink In: When I sat back and stared at the numbers, I quickly realized where the leaks were. We were spending nearly $1000 a month on food for a family of four which seemed higher than it needed to be. More surprising (although not really if I was honest with myself), was the amount that was being spent at Target (darn you Target Dollar Spot!).

Determining where our money was going helped me to see just how much was being wasted by spending $10 here or $20 there. Although they those smaller purchases don’t feel like much at the time, when you add it all up and see in fact how much money is slipping through your fingers, it is an eye-opening experience.

money slipping through fingers

 

This whole process allowed me to see that we really needed to look for ways to cut our spending and consumption.

Your Turn!

  • What are some of your spending weaknesses?
  • What areas of your spending could you cut back on?

 

The Average American

A while ago I wrote a post on being “weird” which was a huge hit and you can check it out here.  I was thinking about what it means to be an average American and started researching some of the numbers.  In particular I was thinking about how a typical American would compare to someone who lived in a Tiny House.   Tomorrow I will write a post on what the average Tiny House person is like to compare.

Average-American-Family-Infographic

how-much-american-save-thumb

Infographic of US Government Budget 2010

Here is a graphical representation on how US tax dollars will be spent in 2010.  Notably is that money to green energy has been increased 92% while nuclear has decreased by 10%.  The largest portion of the budget (62% or 901 Billion), not surprisingly, is going to Defense, this is pretty standard for US spending trends.  National Parks revived a boost of 5%.  Interestingly The Department of State, has also a brand new line item called “Clean Technology Fund” at a half a billion.

Take some time and check it out.  What would you change?  What are your reactions?

Spending Around The World

So I found the article below this post and wrote up the post, then as I ventured out to find tomorrow’s post, I discovered everyone and their brother also had posted it!  Being that I hate to post what the other guys post, don’t get me wrong the other Tiny House bloggers rock,  I felt that I should always have original stuff.   So today you get two posts!map

See a Larger Version HERE

I have this obsession with infographics.  What are infographics, for those of you who might not know, its pretty simple.  It is a graphic that presents information in an interesting and visually stimulating way.  I love it.  While me being a nerd and I love a good data matrix, sometimes the columns bleed together till you want to tear out your eyes.

This infographic is about how people around the world spend on common goods.  It is really interesting to see how much and of what proportion of money we spend on things like clothing, entertainment, alcohol and electronics.  It also serves as a humble reminder that there is much we could do without like people in other countries do.

See a Larger Version HERE

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