Expense Analysis - December 2007
Filed under: Expenses, Tracking Spreadsheet
This month we began closely tracking all of our expenses for the first time. We knew that we would be in for a few surprises, but if we were going to reign in our expenses we had to be willing to embarrass ourselves to find the truth.
We have always used Quicken to track our expenses as they were related to our checkbook and credit cards, but we have never tracked our cash expenditures before. I had a hunch that while our numbers tracked in Quicken looked pretty good that we were quietly losing a lot of money through “untracked” cash expenses. To help me find the money leak, I set up a spreadsheet of my own outside of Quicken to track every way money was leaving our household.
After a full month of fine-grained tracking, I discovered that the money leak wasn’t as big as we originally believed. But at the same time, I think that the fact that I was tracking our data caused us to change how and where we spent. Before we would eat out at least once a week. Many times this was done with cash and we would always wonder where the $40 we pulled out for the week went. This month we avoided eating out whenever we could; part because we knew we would have to track it, and part because we knew there were going to be other “unusual” expenses associated with the holidays.
Here’s how our expenses broke down this month in percentages (note: I excluded the mortgage and home equity from the spreadsheet because its size threw off the graph.)
| Category | Percent of Total |
| Auto Insurance | 5.87% |
| Baby | 3.52% |
| Birthday Party | 1.10% |
| Blogging | 0.27% |
| Cable | 0.98% |
| Car Loan | 10.22% |
| Cell Phone | 2.37% |
| Church | 20.51% |
| Clothing | 0.20% |
| Crafts | 1.31% |
| Entertainment | 2.34% |
| Food | 4.08% |
| Gas | 3.82% |
| Gifts Given | 10.72% |
| Grocery | 9.48% |
| Household | 5.45% |
| Life Insurance | 2.42% |
| Medical | 1.34% |
| Membership | 2.12% |
| Phone | 0.63% |
| Postage | 0.63% |
| Utilities | 10.59% |
What’s good to note about this past month is the fact that there are a lot of expenses that either wouldn’t normally appear in any other month and there are a couple that can be amortized over 6 months or a full year. Considering the fact that just under 11% of our non-mortgage expenses was tied up in gifts, that will be 11% we could push to savings any other month.
All in all, I’m glad we started tracking. I came in expecting doom and gloom and ended up with a pretty good outlook for our future. This week, I’ll put together a spreadsheet template so you can do the same tracking yourselves.
Here’s to a fruitful 2008!
January 1st, 2008 at 11:01 pm
Just out of curiosity, are your landline phone costs really low or are your postage costs high? Did you mail a lot of gifts or something? I know I spend far more on local telephone service than I do on stamps.
January 2nd, 2008 at 6:46 am
It does look a little odd by those percentage breakdowns, doesn’t it?
For phone, we have the bare minimum to keep the line live - just enough so that we have the ability to get incoming calls, make local calls, and (heaven forbid) be able to make 911 calls. As the business picks up I might add more features, such as caller ID and call waiting, but for now I prefer to pay very little since we’re paying much more for cell phone service.
The postage was extraordinarily high this month because of all of the cards and letters we sent out. In a “normal” month, postage should be near-zero since we usually stock up on stamps to save a trip.
Good eye!