How to track your day to day spending

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meadow

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Fully agree with Gordon and Cervelo on using a spreadsheet to track spending behavior to assist in planning.

I first starting doing this 15 years ago when I bought a house and was genuinely not sure if I would have enough to live on after the mortgage was paid.

At that time, I had an ATM card and used cash for pretty all my spending . This made it very difficult to track where my money was going.
I switched to a debit card and was then able to log into my account online and download all my bank transactions to an excel sheet.
Once a month I would take this list of transactions and categorize them as below :

ATM - cash withdrawals, I try to keep this to an absolute minimum
Car - Petrol, tolls, servicing , repairs, insurance, tax
House - Repairs, insurance, renovation, furniture, any spending in woodies, homebase, etc
Groceries - Lidl, Aldi, Tesco, Supervalu,
Bills - Gas, Electricity, LPT, Phone, TV Licence, Broadband, etc
Mortgage -
Clothes -
Kids - Sports club memberships, Toys, Kids Clothes, School costs etc
Childcare - childcare costs
Pharmacy - Boots etc
Holidays - Flights, Accommodation, etc
Medical - GP , Dentist, A&E, Physio
Consumer Services - Restaurants, weekends away, weddings, gifts, Takeouts, Concerts, Cinema, pub, taxis, Netflix, etc
Consumer Goods - Cameras. Phones, Books, pretty much anything I buy on Amazon or other online sites.


Its very easy to categorize all my bank transactions transactions into above categories based on the name of where the purchase was made and takes about 30 mins a month.

I know the average spend on each of the above categories for the last 15 years and our total average monthly spend each year.
This is great for planning as I head towards retirement myself. I know which categories will decrease and can estimate by how much.
I can estimate what our minimum spend is likely to be be (Groceries, Bills, Medical, Car, House) and where we can try to cut back if needs be (Consumer Services, Consumer Goods, Holiday) . So I have a reasonable idea what our monthly income (and hence our pension pots) will need to be for retirement rather than focusing on percentages of final salary. Until you actually put it all into a spreadsheet it is really difficult to know how much you spend. Our actual spend always seems to be more that we would expect., Its all the small things here and there as well as the infrequent larger purchases that really add up.
 
If someone doesn't want to go into this detail, could they try a different approach.

1) Look at your net income - very easy to find from bank statement.
2) Do a monthly account
Opening balance €3,000
+Income : €4,000
-Closing balance: €2,500
= Expenditure this month: €4,500

Big items or once off items :
Mortgage repayment: €1,000
Holiday flight: €1,500

Balance on recurring items: €2,000

You probably need to do this anyway, to make sure that the figures from the first one balance.
 
I'm old school :), started tracking spending before I knew how to use a spreadsheet or home computers were common! I have spending diaries going back to 1984 plus many household bills going back to when i moved into my house in 1991, only the other day I was looking at old gas bills, I could track my spending on gas from 1991 to date if I was of a mind to.

I usually mainly cash other than big or online purchses, it was always easy just keep receipts and fire them into the drawer to be updated once a week or so, although more noticeably now to cut back on paper waste I presume you sometimes don't get a receipt. I do have a debit card but only used it a few times during initial lockdown when some places were not taking cash like Woodies.
 
There's a management expression along the lines of "what gets measured gets managed". In my experience that's as true for your personal life, as it is your professional one.

For those who do track, and indeed anyone else who's interested, this is what we'll spend (a young family of 4) as a % of our disposable income this year.

  1. Mortgage (including overpayments & insurance) ~30%
  2. Childcare ~25%
  3. Food (from the essentials through to discretionary items) ~20%
  4. Other shopping & gifts ~5%
  5. Home (utilities, appliances, insurance etc) ~5%
  6. Cars (servicing, repairs, tax, insurance, tyres etc... except depreciation) ~ 5%
  7. Other (cash, entertainment, health) ~10%
 
Like others above I've been tracking my spending for many years, it started back in the late eighties early nineties when I noticed that I was permanently overdrawn in my bank account and coincidently at around the same time as my father dropped the nominal ledger in my lap and said "it's time you learnt how the real money is made" and since then I've been hooked on numbers and keeping records of all my spending, it started with the spreadsheets that the accountants used to leave behind when in doing the accounts but from the mid noughties is where I discovered excel and formulated a spreadsheet to meet my needs.

At present I have 26 columns, all the utilities have a separate heading rather than been grouped together, for me it's easier to see year on year the increases or decreases. some things like the cars get two headings, one for petrol and the other for all other car expenses, medical is another that recently got split into two, one for visits to doctors and consultants and medical costs not covered by insurance and the other for prescriptions and other small chemist purchases. there's a heading for our social life which covers everything we do outside the house like going for meals or the cinema and then there is a separate heading for takeaways. You wont get it right the first time but as time goes by you'll perfect the columns to suit your needs

As most of you know I'm an early retiree and having properly tracked my spending for about ten years before I made the leap I knew finically (and still do) that all the bases were covered and was very confident that going forward that once spending is kept with in certain limits there shouldn't be any major surprises on the horizon, mentally though for the first few years was a bit of a head **** as I adjusted to my new norm

One thing I would advise and something that I didn't do in the early years is if your using Excel or some equivalent is to make a note/ comment on every entry especially some of the more unusual purchases that you make while you might remember what it is today or tomorrow trying to remember what that was a year or two later can be quite annoying
 
I put a budget in place to ensure that the main bills come out of a separate account and that I always have enough in that account to ensure no issues with direct debits.
However, I am not tracking actual spends very well.. I know I can certainly improve on this area. I do use revolut for most day to day purchases so can see how much I'm spending on groceries etc, but I'm not really tracking it that closely.
I'm just about to move house (having sold and hopefully about to close soon on our next home) so feel that now is a good time to try track spending in a more detailed way.

Anyone any additional pointers? I would say I'm good with managing money regarding not being a huge spender but I really want to step that all up a notch now . Thanks
 
dubdub123 said:
I put a budget in place to ensure that the main bills come out of a separate account and that I always have enough in that account to ensure no issues with direct debits.
However, I am not tracking actual spends very well.. I know I can certainly improve on this area. I do use revolut for most day to day purchases so can see how much I'm spending on groceries etc, but I'm not really tracking it that closely.
I'm just about to move house (having sold and hopefully about to close soon on our next home) so feel that now is a good time to try track spending in a more detailed way.

Anyone any additional pointers? I would say I'm good with managing money regarding not being a huge spender but I really want to step that all up a notch now . Thanks
Click to expand...
When tracking your spend on excel, at a minimum, add a column for (i) Account Source (bank current, bank savings, cash, revolut, CU etc..), and (ii) Expense category (food, car, fuel, mortgage etc.). Then, create a pivot table and all your spending can be summarised in one uniform format. I also added columns such as Year, Month, Week #, Day and Vendor Name which allowed me analyse spend even further and see patterns of behaviour.

Each December, make a budget for the following year, and then on a monthly basis compare actual to budget. At first, they'll likely be far apart but after a few attempts, the two should closely align, which will give greater accuracy when forecasting a few years down the line.
 
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