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Ever wish you could ask others how they spend their money? We’re going there. In our “Cash Confessions” series, LearnVest breaks down the numbers to show how real people spend their paychecks, and whether their habits are financially on track — or off the rails.
Today, LearnVest copywriter Lauryn Paiva shares what she learned about her everyday money habits when, for the first time, she tracked every dollar she spent for a whole month.
Let me preface this by saying I didn’t cut corners.
Throughout September, I meticulously tracked my every outgoing dollar. Yes, it took a long time. And yes, it was totally worth it.
I thought it’d be a useful experiment because while I’m good at sticking to a general spending limit (or at least knowing when to stop swiping my debit card), I’m not particularly aware of exactly where my money is going. After a month of writing down every single dollar spent, from rent to random midday coffees, I now have a better understanding of how I spend, where I’m doing well, and where I could be doing better. Here’s what one month looked like for me: the good, the bad and the truly appalling.
Covering the Basics, Plus Some Savings = $2,550
You might have heard this before, but living in New York City is brutal on your bank account. My rent, cell phone bill, student loan bill and utilities make up the bulk of my expenses. Woof. The good news? This total also includes the $210 I move into my emergency savings account every month.
Entertainment = $603.49
Entertainment is a vast and vague financial category. I broke it down into money spent on going out versus staying in (which, somehow, also costs money). More than half of this $600 was spent eating out or on drinks (many of which, regrettably, were not happy-hour deals). Notable highs and lows? Of the $348.90 I spent on meals out, a large chunk of that was money I wouldn’t typically spend. For instance, I took my parents out for a 30th anniversary dinner, which is obviously a one-off. I was also pretty pleased that I only spent $32 on takeout. The most shocking item was coffee — a whopping $56.40.
Let me be clear: I don’t think that lattes (or avocado toast) are ruining our financial lives, but this is a truly insane amount for someone who makes coffee every morning and gets free coffee at work. When am I drinking almost $60 worth of coffee? It’s a mystery, but a good example of how small purchases add up.
Shopping = $409.94
Disclaimer: I am a reformed impulse shopper. That said, I definitely went a little bit overboard this month and, yes, I do have a host of excuses to justify my spending. I like to shop when I’m visiting my family in Massachusetts because of their 0% sales tax on clothes. I bought a few fall pieces, and a new comforter and sheets on sale (the tax on things other than clothes is still cheaper than New York’s). I spent $78.06 on books (I won’t apologize for this), $50.95 at Duane Reade (a money black hole if there ever was one) and $16.28 on a random home accessory.
Subscriptions = $160.29
I never realized how much of my money is siphoned off automatically each month. This covers Netflix, Hulu, a monthly charitable donation, Spotify and Texture ($16.32 that gives me access to every magazine under the sun and pays for itself in two issues of The New Yorker). This month, I also opted for two Plated meal deliveries ($54 each), which supplemented what I spent at the grocery store. I don’t mind paying this, though. For me it’s worth every penny because it saves me time at the grocery store and money on food that might otherwise go to waste.
Personal Care = $200.93
Listen, being a girl is hard. And expensive. My vanity expenses this month included a haircut ($55); eyebrow threading ($17 every three weeks) and $91.50 in manicures and pedicures (who do I think I am?). I also spent $18 for wash-and-fold laundry service (time is money). When I saw this all tallied up, I was pretty floored — it’s definitely an area where I can learn to cut back.
Transportation = $96.43
Somehow, even though my monthly Metrocard ($121) is taken out of my paycheck pre-tax and I don’t own a car, I spent almost $100 on Vias, Lyfts and taxis in September. I can excuse one $44-plus ride to the airport, but the remainder? Nope. I’ll be watching my transpo spending from now on.
Total September Spend: $4,021.08
Over the course of spending that $4K in September, I learned that even if you’re “pretty good” at sticking to a budget and don’t need to track every spending category, doing this at least once helps you see exactly where your money is going so you can find ways to cut back if necessary.
Tracking your spending also helps you notice discrepancies. Because I cross-referenced my bank account with my receipts each day, I noticed a couple of (small) charges — like a cancellation fee for a Via ride I actually took. Taking a few minutes a day to go over your transactions could make you aware of things like a change in your paycheck or suspicious activity on your card.
Ultimately, though, what it did was help provide a good roadmap for future budgets. Now that I know where every single penny is going, I can refer back to this information to tweak any changes I want to make in my budget overall; there may be some tradeoffs I’ll want to make in the future as my money goals change. In fact, I’m definitely going to repeat the practice in October — now that I have more insight into how I spend, it’ll be interesting to see if I can reign in my problem areas.