Where did my money go?

What I Learned After Tracking Every Penny for half a year

For the past six months, I've meticulously tracked every expense, down to the smallest purchase.
I had done this in the past, but I was on my own. This time, I am managing a household budget for TWO .. ON A FIXED INCOME 🤯. If it was two of me? easy, But balancing two sets of 'needs' and 'wants'? It is a real challenge to say the least. Spending has become far less predictable than ever.

As the saying goes 'What gets measured gets managed', tracking is the first step toward better control.

What I hoped to achieve

• Understand the true cost of living: I aimed to get a complete and accurate picture of what my current lifestyle actually costs.

• Identify trends and optimization opportunities: Six months of tracked expenses would reveal spending patterns, leading to mindful spending, without compromising the quality of life

• Determine the baseline: This was perhaps the most important objective. To determine the minimum expenditure for a comfortable life. This baseline shows me how much is needed to build a proper safety net

Budgeting app of choice

After test-driving several other budgeting apps, I've realized Monefy is still my go-to. It's just so straightforward. It handles the essentials perfectly, without any unnecessary extras. The only catch is that the pre-set categories cannot be modified in the free version.

Before we dive in, a few disclaimers:

- I have spent a monthly average of what this tool says is equivalent to 2550 USD in the US, 1880 € in Germany, or 1730 GBP in UK.
- this doesn’t include my wife’s allowance, which represents about 20% more, when she honestly deserves the world. She doesn't know about this blog btw.
- nor the massive chunk of rent I pay upfront yearly, which is due again next July. And That is 30%
- And, for my own sanity, I didn’t include the financial black hole that was my honeymoon in Istanbul during peak inflation. That’s a story for another time, and a lesson I’m still paying for (literally).

Now, for the pie chart:

 House (26%): This was the biggest slice, and honestly, it makes sense. Moving into a new apartment meant repairs, and a few essential furniture pieces. I’m hoping this category will shrink significantly now that I’ve tackled the big stuff. Though, a new couch and an oven upgrade are definitely on the wish list.
 Food & Groceries (26%): Tied for first place! No surprises here. We all have to eat, right?
 Car (16%): Significant fuel consumption from my 90min commute, and the car's need for constant maintenance, make it a large expense. but hey, convenience comes at a premium, innit?
 Gifts (11%): This category surprised me. It includes gifts for my wife, friends, and family, especially nephews and nieces. I just don't like to show up empty-handed, so I always bring something when I visit mom, or my in-laws.
 Health (9%): Unfortunately, this category has been growing lately. A few health issues have taken a toll on our well-being, and my wallet.
 Eating Out (6%): This seems pretty reasonable. A few dinners out here and there.
 Bills & Communications (4%): I’ve combined bills and communication (phone, internet).
 Entertainment (2%): Some books, and a few trips to the cinema, the circus. Simple pleasures.
 Toiletries (1%): Just for me, as my wife handles her own purchases.
 Clothing (O%): I stocked up before my wedding. I haven’t spent a dime on clothes (if I exclude a couple Merino wool sweaters I bought in Istanbul).

Key takeaways

So, what did I learn from this experiment?
- That spending fluctuates but patterns emerge. One month, it's like: "Wow! All those medical bills!" the next, my car decides it needs a new… everything.
- That I'm not even living paycheck to paycheck. My expenses, plus 50% for rent and my wife's allowance, will put me in the red as they exceed my 9to5 salary. And then there's the debt from Istanbul trip.
- I believe the solution lies not in cutting expenses, but in increasing my earnings. Until that's achieved, however, rigorous control over my spending is absolutely essential.
- This analysis was just the beginning. My upcoming post will detail the concrete strategic plan I'm implementing to transform my current situation and pave the way for a financial success.