For almost 10 years now, we have been keeping track of all our expenses. We started with a single Excel spreadsheet but in 2001 we switched to an Access database. Later I added an Excel front end to it so I could get some nice charts, and this year I wrote a new front end in .NET for easier data entry.
Geeky? Yes. (We’re talking about an accountant and a programmer here, after all.) But also useful and interesting. Which probably just proves the point about geekiness.
This chart shows our total spending on absolutely everything. You can see when I graduated and we moved to London in 2001… our costs more than doubled. More interestingly, though, we seem to have found a steady state since around 2002. Our salaries go up and down (mostly up, luckily) but the annual total expenses have been surprisingly stable.
We group all the individual items into around 25 categories. The tall dark red bars in the middle are for rent and utilities (insurance, electricity, heating). This category accounted for around a quarter of the total in Stockholm, and for around half in London. London is expensive.
The turquoise bars near the top are for travel. This is almost exclusively made up of holidays and flights, not local transportation. This category also grew a lot after we moved, because we could now afford holidays, and also because of our trips back home, of course. It would be noticeably larger if bicycles weren’t our main mode of transportation.
The cream-coloured one-off chunk in 2002 is our wedding, and the pale purple at the bottom of 2006 and 2007 is a category titled “baby”. The dull pinkish red at the bottom of all previous years is entertainment – movies, exhibitions, concerts etc. The baby category has almost pushed the entertainment category out of existence, both in this chart and in real life.
I find this data useful because it helps me think about what we would and could do if our income suddenly dropped – if one of us had to leave our current job, for example. We could cut our expenses by 15-20% by not travelling. We could instantly cut another 7-8% by not buying music, movies, or books and by cutting out entertainment. Move to a smaller and cheaper apartment, and we’d be close to a zero monthly balance again.
It also helps me put things into perspective. Some categories are so tiny that you cannot even see them in this chart. This tells me that I can completely stop worrying about how much I spend on them, because no matter how I splurge, that spending will be dwarfed by the real black holes. Furniture? Bought so rarely that it adds up to a minimal amount. Snacks? Costs nothing, so ignore the cost and buy the juiciest-looking cake.