Broker Check

Get Real About Your Expenses

| July 08, 2019

Let’s Get Real About Your Expenses. 

I’ve entered my fair share of data into our planning software during my time at GV. I’ve gotta say, I am so envious of people who spend $400 on food every month. And then another $200 on “dining out/entertainment”. For three years, I’ve been looking at what I spend and then looking at what couples and families say they spend, shaming myself.

 However, during these same meetings, couples say “Yeah, that’s what we spend” but then Bob and I have a shortfall on what their income is and what their expenses show. The software calculates they should be saving $5,000, $10,000, $20,000 per year and the couple says, “We don’t have that at the end of every year!”

 I’m calling BULL. Let’s do the math…just on groceries and dining out.

 $600/month per couple – 30 days in a month – 90 meals x 2 people (3 meals per day, each) = $3.33 per meal a day

 Is this for real? No way. Unless you are eating beans and rice or ramens and not going to Starbucks once, you are lying to yourselves.

 Bailey and I moved into a new house and so we have all new expenses. After the January/February/March SPENDING EXTRAVAGANZA we took a small breather in April. This week, he’s been putting together our new expenses and we are going to set a budget for ourselves. We miss our fat savings account.

 My grocery confession for you is as follows: $1,150 in April at Publix. This is no lie.

 Let’s do the math –

$1,150 for two – 30 days in April – 90 meals x 2 people (3 meals per day, each) = $6.38 per meal a day

 More realistic, right? Ok. Also…we are eaters. I meal prep on Sunday so we won’t order out. We eat pretty healthy and there are more than likely some bottles of wine in that $1,150. I take breakfast and lunch every day and Bailey takes lunch most days, so we are eating our groceries.

 My theory is that people are NOT REAL ABOUT EATING, SHOPPING AND DINING OUT. I don’t know anyone that can walk out of Target and not have spent over $100. I haven’t seen a Target line item in a budget, ever. Amazon is expanding their delivery services and buying up distribution centers for a reason and I don’t see people lining out their Amazon purchases. Oh, you only spent $200 shopping last month? *side eye*

 Do me a favor – go through your spending and do a real analysis. The point isn’t to make you feel bad – the point is to get a real, honest picture of what you are spending. Then you can decide if you want to keep going that way or if you want to make some changes. Here’s how:

  •  Download the last three months of your bank statement and/or credit card statements. Most companies will download to excel
  • Start labeling by category (Groceries, home improvement, shopping, fuel, etc)
    • Amazon, Walmart and Target can be all over the place – I suggest you categorize them together. It’s too hard to sort. I bet it’s eye-opening. Plus, you know what you walk out of there with and you know you don’t NEED all of it.
  • Sort by category and add it up
  • Total your categories at the bottom
  • Review your actual spending – and then do the math per day, month and year
  • Analysis:
    • Where does it go?
    • What is it for?
    • Is there money left over you can throw into savings?
    • Are there some changes you can make?
    • Does Publix and Jeff Bezos own you like they own Bailey and me?

There may be a couple of changes you can make or 20. You also may decide you are living your best life right now and don’t want to deal with this. All options ok - at least you know the truth.

If you want to save, set a goal. If you don’t have a $1,000 emergency fund, make that your first goal. Have a fixed amount of money transferred into savings every paycheck. And then anything left over at the end of the month, put it away in savings.

Let’s see what happens by December. We can check back in and talk about ideas of what to do with it.