Q-FI’s 2019 Spending – My First Year of Tracking

This is kind of embarrassing being a finance guy, but I have never tracked my expenses before.  2019 was the first year that I finally linked all of my family’s accounts in Mint (well, I actually started in March 2018, but it took me a little time to customize everything and get it dialed in to my liking.  So 2019 was my first full year of results that I can analyze). 

And wow… the results were fascinating to me.  The top ten categories may not be that surprising to FI people overall (in my opinion they come out relatively normal), but the spending amounts for an entire year were a big eye opener. 

Keep in mind that I have always saved well, never taken on any debt that I could not pay off in cash any time I wanted, and budget monthly.  However, all of my budgeting was always estimates.  I think I spend around this much on this or that… I think my savings rate should be around here… I think that my annual spending was this… 

You get the picture. 

But when I finally tallied up the results for my wife and I, Boy Howdy (as JL Collins would say), I was surprised at the results.  I will say that we had several one-off’s this year like a trainer, paying off an old low-interest school loan and paying off a car loan, but the overall spending was much higher than I had anticipated for only two people. 

As I have mentioned previously, I don’t report actual numbers but use percentage breakdown when talking about spending amounts.  You can read my reasoning for this in my original FI Status post. 

Here are our total categories by percentage breakdown: 

No big surprise in my top five except for Health & Fitness or maybe Taxes. 

When it comes to Health & Fitness, I also include medical in this category (two pairs of prescription glasses, some dermatology procedures and an injured foot).  For the fitness part, the wife and I went all in.  Although very pricey, getting in shape and running Spartan races has fueled an entirely new passion that I have to say was worth the price.  This year for 2020, I’ll still do some races but we chopped the trainer and now the responsibility falls squarely on our own shoulders. 

On the tax front, it pains me every time I look at this category (and these are taxes above and beyond what is taken out of my normal W-2, WHOA).  Unfortunately, CA and the Fed like to stick it to the hard-working man!  Ahahaha!  You can chime in with all the violins, and I don’t mind paying my fair share to keep the good ol’ U S of A spinning Its well-oiled wheels, but I have an issue with the double taxation on capital gains as well as not to mention the credibility and intelligence of those that will actually be managing those tax coffers for the government.  But I digress… 

The point is, I’m doing everything I can to actively manage this tax expense, but it’s still one of my top five expenses.  Hopefully next year, I’ll have found a new way to lessen the load creatively. 

Home and Auto combined, were a whopping 42.55% of my total budget.  Although half of my auto percentage spending was to pay off the outstanding car loan, so that category might drop down below #2 overall next year.  And I know, why do I go to two decimal points???  It’s because I’m a fucking numbers ninja!  Muwhahahaha!  Actually, I had one category that was so small I had to expand the column to get a number in there and I’m too lazy to reformat everything for this post.  So you’ll just have to deal with it. 

My top five categories: Home, Auto, Health, Food and Taxes accounted for 72.49% of my total annual spending.  I had no idea that these few categories dominated my overall cash outflow by so much.  It’s a good thing to know going into 2020 that these are the areas I can focus on improving the most.  Looks like there’s some good fat to start trimming off… hahaha. 

Really, besides the one-offs, I feel pretty good about my spending.  Even with those increased expenses we still managed a conservative 42% savings rate for the year.  It’s probably a little higher, but I still haven’t received my 1099’s yet to properly calculate it. 

Sifting through the weeds, there’s always more to glean, if we are only willing to look. 

Another thing that I learned this year by tracking my expenses, is that I see things very differently when broken down as a monthly expense versus an annual expense.  I didn’t actually realize that about myself until going through this exercise and laying everything out in detail. 

For instance, a spending category that I budget $250 for monthly, looks a lot different to me when I see the $3,000 annual expense.  The smaller amount monthly, psychologically seems less significant to me than when I visualize the larger amount yearly. 

This takeaway has taught me that I need to review my spending a couple times a year in an annual framework as well as my monthly budgeting. 

When we pull back the curtains on what we actually spend, we either learn more about ourselves or realize how ignorant we have been with this important part of our lives. 

My overall takeaway is that I’m thoroughly impressed about how great of an exercise it is to track your annual spending and then be able to analyze it in order to improve your cash outflow moving forward.  You would think that this would have been a no-brainer for me and I still can’t believe it has taken me as long as it has to actually do this in detail. 

So if you haven’t been doing it yet, I highly recommend it.  Go to one of the free expense tracking software websites like Mint, link your cards/bank accounts and then categorize as you see fit.  It might be a little work up front, but once you set it up, you’re good to go. 

Happy expense tracking during 2020 and may we hit all of our spending goal restraints! 

-Q-FI 

P.S.  Do you track your expenses in detail?  Did you find out anything that surprised you this year?