Reviewing Our 2019 Spending

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Now that 2020 is underway, I thought it would be good to take a look back at our spending from the previous year. The best way to improve is to identify where you’re at and where you want to be.

A few of my 2020 goals also involve areas of our finances, including maxing out all our retirement accounts and achieving a 50% savings rate. Many people go into the new year wanting to “spend less and save more.” It’s a nice thought, but harder to put into practice unless you create a system. Personally, I found that we started to make significant progress once we tracked our expenses.

Once you start tracking your expenses you become aware of where your money is going each month. You see the areas you spend too much on and need to cut back. You also see the areas you’d like to be able to put more money towards. This awareness has a significant impact on both your spending patterns and your mindset towards money.

Money is a tool that we can use to help bring more freedom and options in our lives. By cutting back on the areas that aren’t bringing value, we have more to put towards our passions and to invest for the future.

I wanted to use this post to shed some light on what our spending looks like, in hopes it can be encouraging to others on their financial journeys. It also keeps me accountable and helps us track our progress to make sure we’re on the right path to our long-term goals.

Tracking Expenses and Monthly Budgeting

We use Mint.com for our monthly budget, which made compiling these numbers straight forward. It’s no exaggeration to say that tracking our spending through Mint has been life changing for us. I spend a few minutes each day to ensure all our expenses are categorized properly and making sure we’re aware of where our money is being spent.

You can also check out last year’s post for our 2018 spending. Note that these charts only depict our spending, not our savings or investment contributions.

2019 Spending

Here’s how the percentages breakdown:

• Home 44% (+4%) – (includes rent, renter’s insurance, water, trash/sewage)
• Auto & Transport 8% (-10%) – (car payment, gas, car insurance, maintenance/repairs)
• Shopping 6% (+2%) – (this covers home supplies, clothing)
• Pets 5% (+1%) – (pet supplies, veterinary visits, dog-sitting)
• Bills & Utilities 2% (-1%) – (electric bill, cell phone, Internet)
• Food & Dining 7% (+1%) – (groceries and restaurants)
• Giving 11% (+1%) – (church tithing and other charitable giving)
• Travel 12% (+7%) – (includes airline tickets, accommodations, sights, food)
• Misc/Other 6% (+1%) (entertainment, health, laundry, other smaller expenses that don’t fit in other categories)

A few thoughts on our 2019 spending:

While I’m only divulging the percentages and not the actual dollar amounts, there’s still a lot to unpack here.

Overall, our spending went down by about 6.5% and the biggest driver of this was that we no longer had any debt payments! In 2018, we finished paying off our student loans, and crushed our car loan to reach full debt freedom! You can see in the percentages that our Auto & Transport spending plummeted by 10% because we were no longer were making car payments and putting extra towards the loan.

Rent obviously continues to be the biggest expense category by far. The average American spends about 67% of their budget on the “Big 3” expenses of Housing, Transportation, and Food. We came in at 59%, with almost half our spending going to rent. Someday we’ll look to move to a cheaper area which would bring this expenses down significantly. For now it’s the price we pay living in such a high-cost of living area.

Our travel spending went up this year because we took a big two-week trip to Europe – visiting Spain, France, and Italy. We also visited Colorado and Las Vegas during the year. These trips were filled with tremendous memories and we’re looking forward to doing more traveling this year. We utilize travel rewards to keep this area of the budget reasonable.

I anticipate that our 2020 expenses will remain similar to 2019. There may be a slight uptick due to some healthcare expenses, but everything else should stay fairly steady. Fortunately, we’ve been able to create a gap between our combined incomes and expenses. By keeping our lifestyle the same level each year we’re able to invest for the future. We’ve been seeing incredible progress these past few years, and we’ll continue to do so throughout 2020!

As always, thanks for following along and feel free to reach out with any comments or questions!

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