What gets measured gets managed.
It isn’t surprising that I apply a bit of what I do professionally into my personal finances – analytics. In order to understand my spending habits, I decided to track my monthly expenses to derive some insights so that it can be managed!
Background and setup
- In July 2018, when I first started my new role, I was trying out various budgeting apps to see which would the simplest to track my expenses
- I eventually settled on Next, and tracked my spending over the next few months
Here are the results:
Some insights from the graph
Like most people, I spend most of my money on food and drinks (including bubble tea!), averaging $678 monthly. Most of it comes from dinner with friends and coffee. Hopefully it continues trending down.
If you see some spikes in the gifts section, they are usually one-off special expenses I made to splurge on various wants. In October I upgraded my phone to an XS Max and in December I kinda bought a brand new TV and a PS4.
Thank god in March I managed to cut back significantly on my spending thanks to reservist! Even though I spent a bit of money on my dad’s birthday gift the overall expense impact is still manageable.
Based on this very simple tracker, my average monthly expenses are around $1k (without mortgage and other loan repayments). A $240k asset portfolio yielding 5% annually would give me the ability to be cash neutral every month – so the immediate step is to accumulate towards that goal within the next few years.