Tracking Expenses from Year to Year. Where’s Our Money?
Tracking expenses is the difference between barely making it and becoming wealthy. As you may know, the TNFG household reviews our expenses monthly. It’s a great opportunity to make cash flow changes on the fly and accounts for the bulk of our wealth velocity.
Unexpected expenses will happen. I repeat negative financial incidents will happen. Know that they are coming. We were recently hit with an electrical grid issue for $7,000 in 2023. Back in 2022, we ran into an AC replacement cost of nearly $8,000 in 2022. What we found over the last three years of marriage, is that micro negligible expenses sink financial ships. The unexpected is just par for the course.
In contrast, being financially prepared is a lifesaver.
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Do you know how much you are spending?
If not, double-check. Most households are spending as much as $61,000 per year.
On average, most households are overspending roughly $7,500. Even $500 invested monthly ($6,000 per year) over 40 years is worth $1.6 million. Considering that most American savings are less than $100,000, it pays to be mindful of your dollars.
According to Slickdeals.net survey, credit cards could be a culprit. Americans’ total credit card balance is $986 billion in the first quarter of 2023, according to the latest consumer debt data from the Federal Reserve Bank of New York.
The median credit card interest rate is up more than 24%.
In order to get ahead of your spending, you have to slow down as much as possible to reduce your monthly fees. Additionally, keeping tabs periodically can help mitigate weaknesses like Amazon Prime and overzealous charitable giving.
Going out in the DMV seems to cost us as much as $200 per outing. If we did it biweekly, it would cost us $5,200 per year. We leaned into ways to have a great time without breaking the Tipflation piggy bank.
Tracking Your Household Expenses Is Crucial
If you want to break the paycheck-to-stress habit, keep track. This works on so many levels.
While it may seem that tracking monthly may be too much, it cuts down anxiety and stress considerably. Additionally, it helps us ensure that we can absorb unexpected financial leaks.
Budgeting is still an important part of your financial strategy. Align your budget with your true values, so that you aren’t conflicting with your goals every year. There are a bunch of apps that can help. Many of which are free. Check out Nerdwallets.com’s 11 Best Personal Expense Tracker Apps.
We highly recommend free stuff like Mint.com and the Empower app (formally known as Personal Capital). See how our expenses are compared below, and most importantly start tracking your expenses. Travel for us is a priority, so it’s always higher than most households.
That’s the cool part about all of this, you get to choose where your money finds more value. Also, don’t forget to invest for your future. It matters most.
Here's Our 6-month Recap for 2023 compared with Total Annual Expenses for 2022:
| Total 2022 | 1st Half of 2023 | Percentage Of Prior Year’s Expenses | Notes (If Any) | |
| THE BIG THREE EXPENSES | ||||
| 2x Housing Costs (Interest, Insurance, Tax, HOA) | $35,996 | $12,454 | 35% | +$10k Renovations Pending |
| Auto & Transportation | $3,874 | $3,694 | 95% | New Car Payment $900/month |
| Groceries and Dining | $9,064 | $5,489 | 61% | Inflation Costs |
| OTHER EXPENSES | ||||
| Health & Fitness: Medical and Dental | $3,466 | $8,141 | 235% | Medical and Dental |
| Bills and Utilities | $2,731 | $3,698 | 135% | New Cell Phone |
| Personal Care | $583 | $59 | 10% | |
| Pet Care and Related Services | $4,071 | $1,030 | 25% | Higher Cost for 2022 |
| Education and Certifications | $205 | $0 | - | PSLF Forgiveness Kicking in September 2023 |
| WANTS | ||||
| Entertainment | $2,673 | $1,194 | 45% | Varies |
| Travel: Domestic and International | $25,248 | $10,630 | 42% | +$7.5k Additional Cost for the Second Half of 2023 |
| MISCELLANEOUS | ||||
| Shopping *Mainly Amazon.com | $6,797 | $3,089 | 45% | |
| Gifts and Charitable Contributions | $4,763 | $464 | 10% | |
| Fees and Service Charges | -$1,272 | $0.66 | - | |
| Business Services (Net) | -$28,501 | -$5,949 | 21% | |
| Taxes: Federal, State, and Local | $9,578 | $6,650 | 69% | Higher than Avg. 2022 to Consultations |
| TOTAL SPENDING | $82,410 | $50,643 | 61% |
At this rate, we will likely spend a total of $100,000. Of which, 60 percent for Housing, Transportation, and Food. Our travel could cap at $20,000.
In contrast to our after-tax income, we will slide to around $30,000 for cash flow maneuvers. See our other mid-year recap for even more details.
For anyone who wanted to know what our investment portfolio looks like in nearly real-time, we have a google excel sheet called TNFG Holdings (Quarterly).
We started with zero investments back in 2013. With any luck, we will close out the year with a total of $625,000 with the goal of getting to $1M by year-end 2025.
For now, the best thing to do is to hope for less unexpected expenses. And then we got robbed over night. There is no financial rest on this road to wealth.
We are this close to a million-dollar net worth! Ten years is a long time to stay focused on a goal. With all that said, remember this quote from USA's Suits TV show, "Whoever is trying to bring you down is already below you."
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