Can You Use Any Money Today?

So I think I’m developing a blog style: I’m not the musical one of the family, but there does always seem to be a good song to match what’s on my mind.

So another New Year’s Resolution: financial fitness.  Honestly, it’s embarrassing: Chris earns GREAT money, and while my income has been uneven over the years, I’ve managed to earn a bit myself.  So why I am constantly left wondering where does it all go?

Part of the problem is that we got into the terrible habit of credit carding too much stuff during my best earning days; we’re still paying down that mistake.

Part of the problem is that we automate some savings into accounts we never see or touch, so it feels like we have less than we do.  That is a “problem” I don’t mind.

Part of the problem is that we have too many vices: theater (which I haven’t blogged about yet but will), good food, excellent food, good wine, excellent wine, travel, books, DVDs, music, gadgets…

So I sat down yesterday to figure out where exactly all our money is going.  To do that, I tracked our actual spending in our checking account for all of 2011, broken down into 13 categories:

  • Cash withdrawals.  I figured this wouldn’t be too much, because we never have cash.  Ha!  Was I wrong…
  • Housing expenses.  Our housing expenses are very, very simple: rent and renter’s insurance.
  • Utilities.  The usual: electricity, gas, internet, phone.  (I’ve never had a water bill my whole life: the upside to living in the Great Lakes region my whole life, I suppose.)
  • Food.  This was further broken down into subcategories to track grocery and restaurant spending.
  • Pet.  We don’t have kids, but we do have a cat and while she’s SO MUCH CHEAPER than a kid, she does still cost something.  (But she gives back so much more!  [kinda sarcastic…  but she is really sweet.])
  • Transportation.  Another simple category, since we don’t have a car and Chris’ job pays for his monthly public transportation pass.  Just my transportation costs and our occasional Zipcar use.
  • Clothing.  I figured this wouldn’t be much, since I feel like I never buy clothes anymore, but was I in for a surprise…  I also tracked our dry cleaning bills in this category.
  • Insurance.  In addition to Chris’ awesome health insurance, we have life and disability insurance policies.  I suppose I could have tacked our renter’s insurance in this category, but it doesn’t really matter.
  • Entertainment.  This was a hodge-podge.  Theater, travel, and subscriptions (I subscribe to Audible, he subscribes to eMusic, we subscribe to Netflix and TiVo and a few magazines) made up the bulk of this category.  Again, I suppose I could have put dining out here, but it didn’t really matter to me so long as I kept track of it somewhere.
  • Debt.  So not fun.  We have some student loan debt but we still have credit card debt.  My priority this year: to wipe out as much as possible.
  • Savings/Investments.  This is a more happy category, although how we’re saving and investing is making me pause because, based on some research, some of these investments are pure suckage.  This exercise was a great reminder to re-evaluate our investment portfolios.
  • Charities.  This was a pathetic category.  Another resolution is to give more in 2012.
  • “Other.”  If I couldn’t quickly categorize an expense, it got thrown here.

Based on this breakdown, my first impressions of our spending:

  • I was glad to see our grocery spending was greater than our restaurant spending.
  • Still, I was not glad to see just how much we were spending on eating out, especially on eating crap.
  • We (meaning probably “I”) spent way too much at Amazon.  I’m sure I got great deals, but still…!  I’d like to redirect a lot of that money to local shops and debt reduction this year.
  • We spend an incredible amount on travel: looks like almost 10% of our net income.  Part of the problem is that we own two timeshares (ugh, don’t get me started on timeshares… that’s another blog post).  If we didn’t have credit card debt, I wouldn’t care.  But we do, so I do.
  • Our electricity bill could stand to go down: I’ll give that some thought in the coming weeks as well.
  • We hit coffee shops A LOT!
  • Since Chris does most of the wine shopping, I’ll admit I was quite shocked by the amount we spent on wine last year.  Even Chris underestimated how much we spent by 33%.
  • The “other” category (which included Amazon purchases, since I couldn’t quickly determine what they were) wasn’t as bad as I feared it would become, but does require closer analysis.

So I got a lot of food for thought from this exercise.  The next step: I’m thinking we need to pull money from investments that are tanking anyway to eliminate, once and for all, the credit card debt.  Let’s see if I can get Chris on board with that idea…

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