Posts Tagged analysis

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?