The Twenty-Something Series: How a year of tracking my spending helped me get comfortable with money

I've been budgeting and tracking my spending for the last year, and in this post, I talk about the habits I've changed and how it's helped me get comfortable with money

Money is a weird subject. There's a certain 'taboo' around it so much of the time, and maybe that stems from a lot of us not having a firm grip on our finances. I know I didn't. But I've spent the past year meticulously budgeting and tracking every penny I spent - and in this post, I'm going to talk about how much of a difference that's made for me.

As you might have seen last year, I shared this post, talking about how I'd tried to budget for a month; since then, I've also written about how that was going six months on, and what tracking my spending did to change my habits.

But if you haven't read those blog posts, here's the background:

I was terrible at budgeting. 

I mean, I always had a rough idea of what my outgoings were, and could say to some degree of certainty that I didn't live beyond my means.

But I didn't really know what I was spending every month, if I was able to save consistently, where my money was going. (How much did I actually spend a month on buying lunch at work? That 'little treat' of a new t-shirt, was it actually a weekly occurrence instead of a rare treat?)

My friends were all in very similar positions. I'm very open with my friends about money (we ask each other about salaries whenever someone gets a new job, share how much we spend on rent or mortgages and council tax bills...) and budgeting is something we all struggled with, at least to some degree. Some of my friends might have shared accounts with their partners for bills, or others would have savings goals, but none of us could say with complete certainty where all our money went.

It's just how it is, I thought. This is the way of the world. (And it's not like you see money being talked about that much online, right? At least, not on any 'real', day-to-day level.)

I've tried different ways of tracking my spending and budgeting before, but last year, I finally found a way that worked for me and I used this template to build my budget.

For the first couple of weeks, it was tough.

Not just because, you know, I suddenly had to remember to do this new thing and add my latest purchase to a spreadsheet. It was also having to be so brutally honest with myself about what I was spending money on and how much I had left at the end of the month. I was terrified of what it might reveal.

And quite honestly, it drove me to be more conscious of everything I was spending money on. 

For instance, once I set a grocery budget, I'd stand in the supermarkets mulling over which sauce was the best value for money. (A luxury I don't necessarily get to enjoy now people seem to be panic-buying Dolmio sauce even a month into lockdown, but... hey, it is what it is.)

I would devour articles on The Financial Diet, and scrutinise the page in Cosmo every month where someone broke down what they spent money on each month and how much they earned, feeling like this was all some weird gap in my knowledge that I needed to fill, a topic to educate myself on.

The longer I've spent tracking my finances closely and sticking to a budget, and the more I've read around that, the calmer it's made me. And I can tell you - it's totally worth it.

Why now?

A fair question (that I even asked myself) is, why start now? It had been okay so far, my friends were all okay without strict budgets and knowing every penny they spent, so what was the big deal?

Well, I had a couple of motivations for starting to be more mindful of my money.

The first: I'd love to buy a house. (I did actually make an offer on one just before lockdown, so... that's currently on hold, and continues to feel like a beautiful pipe dream.) But having a better understanding of my financial habits meant I could understand what mortgage I could reasonably afford, what would put me on a tight budget, and what would be truly realistic. (This was something I needed to do over a longer term, so I could understand what an 'average' month was like for me.)

And, being self-employed, I have to file a tax return every year, for any book-related income and expenses. Every year I go through my bank statements and hand them over to my accountant and every year I think, Next year, I'll do better, and I'll get on top of this quicker, and it won't be such a chore.

(I remain very hopeful that this year, thanks to the budgeting, my tax return will be a much less stressful process, but... we'll see.)

At first, I was mostly just tracking my spending

I was relieved to see that I wasn't actually spending that much more than I thought I did - but now that I track everything, I can see what a difference it's made, even if nothing has been a major change.

While I set budgets (eg. for utilities, groceries, socialising) I was only really tracking my outgoing spend at first. Those first three months, I really just needed to understand what a usual month looked like for me, and where my money typically went. After that, once my budgets were set, I'd readjust them on a monthly basis if I knew I'd have to fork out for the car's MOT and service, or particularly when Christmas was coming up; but for the most part, they've stayed fairly consistent.

Several months in, I could look back and review it all on a wider scale. I could see what the average was for each category, and be critical of myself. I could start to see where I could shrink budgets - I mean really, could I spend a little less on groceries each month? (I could, as it turned out.)

Then, I began to add savings goals

Over Christmas, when I did this review of the last few months of my spending, I also realised what it was missing: the ability to see how much I hadn't spent. Sure, I could compare each month to my salary, but that wasn't quite the same.

So I made a couple of adjustments to my spreadsheet, adding in lines for salary from the day job (and, since I'd been tracking expenses for anything to do with me being a self-employed author, I added a line for any author income, too), and I added some lines for savings. I even made it one of my goals for the year!

Now, I can see down to the penny how much of my salary is left over each month after whatever I've spent - and I make it a point to put that exact amount in savings. (It's... weirdly exciting? In a way that makes me think, oh, shit, maybe I am finally a grown-up.)

A new monthly habit

I do my best to maintain and update my budgeting spreadsheet once a week or so (though admittedly, in lockdown right now, I'm spending so infrequently that I just update it whenever I've made an impulse buy on Amazon, or have been to the shops for more food). 

But at the start of every month, I sit down, save a copy of that month's spreadsheet, and conduct a little review. This takes maybe ten minutes, and it's become weirdly therapeutic.

Do I have any birthdays this month to factor into the budget, or any nights out planned? (Oh, to have a night out again...) Some of my bills are half-yearly or yearly - do I have any of those due this month?

The newer addition of setting myself a 'savings goal' each month also means that I have to take time at the start of each month to look at how much my budget comes to and understand immediately how much I might be able to save that month - and if that's not looking quite as 'healthy' as I'd like it to, I can easily see why. Or, maybe, if it's a little more than I expected and there's something I've really been wanting to get, I can consider treating myself.

While it hasn't been a huge shift, it has helped me to be better with money

Specifically: all those 'little treats'. I'll just treat myself to lunch at work today, I'll go buy a nice coffee from Costa on my break, that's a cute skirt, I'll get this round of drinks and the next one, why not, it was just pay day! 

It's not like I made this massive shift and suddenly stopped spending money on things I really wanted, but I was more conscious about it. If I was still thinking about that skirt a week or two later, then sure, I'd get it! But if I forgot about it as soon as I left the shop - well, it's just as well I didn't buy it. If I was going to buy lunch at work, I'd stop and think, 'Have I already done that this week? Okay, time for a packed lunch.' 

Actually, to be a totally boring adult here for a second: it also helped me re-negotiate my gas and electric bills last time I moved. 'Actually,' I said on the phone, when I was setting up my account and told how much they wanted me to pay each month, 'that's double what I've been spending in similar flats, so no.' (And, dear readers, I'm happy to say I was right. It's meant I haven't overpaid each month and then had to claim back a credit check from the company every so often. Boring and grown-up, but weirdly satisfying.)


Like I said - I went into this with a vague idea of what I spent, and knowing I spent within my salary each month, so it's not like I suddenly realised I was spending £300 on shoes a month, and £70 on trips to the cinema, or something. 

But over the last year, I've seen those small shifts add up to a big difference: namely, me feeling more comfortable with my money. 

I don't need to scroll back through my credit card statement and cringe, or think, 'Wait, what?' anymore, because I know exactly where that number's come from, and that I've budgeted for it.

I have friends who joke about being scared to open their banking app to check what's in their account - and I tell them, 'Start tracking your spending.' Sure, it might not make a huge difference to the number on screen when you check your current account, but it will at least stop that crushing fear. It's a weight off you didn't realise you were carrying. You've been making your peace with your bank account one receipt at a time.

Are your finances something that scare you, or have you got a few budgeting hacks of your own you want to share? Let me know in the comments, or over on Twitter where you can find me @Reekles.

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