Earlier this week, I ran a report on all of my 2019 spending to date, divided by category. While I’m sure I’ll have a few more expenses before the year ends, I was still able to get a fairly accurate picture of where my money has gone this year—and whether I allocated my money in accordance with my values.
For example: I like to think of myself as a person who supports creative artists and arts organisations, but when I added up all of the money I put towards charitable giving, Patreon subscriptions, and tickets to local arts events and performances, it only totalled $US1,371.18 ($2,003). That’s slightly more than the $US1,092.56 ($1,596) I spent on clothing, which suggests that I value giving back roughly the same as buying new clothes.
When you run your own numbers, you’ll probably uncover a few surprises of your own. Maybe you spent a lot more on dining out than you realised, for example, or maybe you spent considerably less on restaurants, takeouts, and work lunches than you thought—which means you might not have to spend next year worrying about every single latte you purchase.
In my case, I was concerned that I was spending too much money on ride shares—until my spending summary revealed that I only spent $US488.26 ($713) on personal (non-business) transportation, which includes Lyft, Uber, taxis, and bus passes. I’m absolutely fine with that number, and it’s still much less expensive than purchasing a car.
This type of year-end analysis not only shows you where your money has gone, but also helps you decide where you might like your money to go in the future. I’d like to spend a little more on giving back in 2020, and I’d also like to spend more on holidays. I could probably spend less on toiletries and household goods, which tends to be the category that prompts the most impulse buys (I have more soaps and shampoos and conditioners and face washes than any one person needs, let me tell you).
When you start putting together your 2020 budget, use your 2019 spending summary to help you answer the following questions:
Are you happy with the amount of money you spent in each category? Does your spending match your values?
Do you think you overspent in any category, or bought a bunch of stuff you didn’t actually need/use?
Do you think you underspent in any category, or avoided making purchases you needed/wanted?
Do you want to deliberately spend more or less in certain categories next year?
If you want to spend more, where will the money come from? Will you pull from another category? Increase your earnings? Decrease the amount of money you put into savings?
If you want to spend less, what will you do with the money you’re not planning to spend? Put it towards another category? Put it into savings?
Does your budget include enough wiggle room for unexpected expenses? Have you created sinking funds for expenses like car repairs and holiday gifts? Are you setting aside enough cash for emergency savings, retirement, debt repayment, down payments, and other long-term financial goals?
Yes, I know that any spending plan you create in January is likely to be completely upended by the end of February—but it’s still worth taking the time to ask yourself these questions and create a budget that makes space for both your personal values and for “real life.”
Because the next time you walk by a coffee shop or open an email from your favourite clothing retailer or pause in front of a handcrafted soap display, you’ll be able to remind yourself that you do in fact want to spend money on this stuff—or that you’d rather put your money towards something you value more.