Yearly Spend Revealed

Money comes in , Money goes out

Every year at Traveling Wallet we spend, spend, spend, Spend!

But its not all bad. If you try, every year can be better. For us last year was an interesting year and the first full year we had in which we didn’t need to spend a single dime on loan or debt repayment.

Not one dime.

Still…

We did spend a lot of money and this post is all about analyzing where it all went.

The things you can discover when you look

I though I was all done having surprises about my money but it turns out there is always another stone left unturned that you can explore. You see, I track our net worth and even share it occasionally, but writing this post prompted me to look for the first time at our yearly spending through time.  Of course I had some idea of what we spent. I mean you have to, to figure out your retirement dollar number and date, but it was still an eye opening experience.

After ironing out our totals for last year I got curious about what the numbers were for the years before. So I started to do some math and realized I hadn’t really added up my totals for my previous years. Let alone placed all the numbers side by side.

So I set out to do a 5 year snap shot. But then, I got stuck.

Why 3 and not 5

My graph and table only go back 3 years because that is what made sense for my family.  To be honest I wanted to do a 5 year track back because,……. I don’t know, 5 sounds better. But 2013 is actually the best year to start looking at my families spending because 2012 was when I married. Before that, we split costs and kept our own individual accounts so comparing that information into all this wouldn’t make sense.  After joining in matrimony and joining our family spending account, 2013 was the first year we funded everything together. So its the best place for my family to start.

But before we get into the numbers how about some context for anyone who is new here.

We are a family of 4 living in beautiful sunny California. We don’t live in one of those rural California towns, nope,  we live in the well known Orange County. ( You all saw that show right?) We have the palm trees, the ocean, and the high cost of living to go along with all the splendor. In fact we lived a stone’s throw away from Disneyland for a bit. So of course you know these numbers are going to be pretty bad.

California Cost of Living

So here it is, the table below shows what the Roamer clan spent last year and the years before.
Yearly Spending, California

What do you think?

Was it as bad as you were expecting?

If I had to answer I would say NO!, Last year our family of 4 spent $46,830.67

That is less then the median household income.

Which means that the average american could survive on our spending.

That’s pretty amazing.

From the table above the line that most surprised me was the last labeled Total w/o debt repayment.  Our cost of living without the burden of debt was actually very consistent and that is news to me. It ranged from approximately 41K- 48K.

But I want to paint a few more pictures.

The Power of a Chart

Now that table was pretty neat. You get to see each line item and even get some more details. But, the cool thing about graphs is that depending on which type you use it highlights different things.

So I have gone ahead and used the above data to create 3 charts.

The Pie Chart

Pie chart are cool because they give you a chance to see percentages very easily , the only problem is they don’t clearly illustrate totals so looking at them side by side can be confusing.

3 year spending
These pie charts are only showing spend which means things can get a little confusing. While our rent did increase 2015 its not as bad as it looks.

For example our rent pie piece really draws attention to itself. It looks really bad. It might make you ask, How did your let your rent increase from 18% – 38%? The truth is we didn’t, its like this, if you read the Frugalwoods you’ve noticed how high their housing costs are. Their housing literally takes up about 66% of their spending on most months.  But that 66% is because their overall spending is so low. That is what happened for us last year. 2013-2014 we were spending so much with our debt repayment that our rent was only a small portion of what we spent. As our spending dropped the dollars we spent on rent became a bigger piece of the pie.

In 2013 and 2014 our debt took up over a third of our spending. But in 2015 our expenses didn’t inflate to fill the void. Nope the pie shrunk and the extra money went to savings.

So pie charts are a great way to asses items in relationship to other items in the pie. But since it doesn’t take into consideration overall totals its not the best tool for comparing costs from one year to the next.

Which is why I also explored

The Bar Chart

Analyzing data through different lenses share different views. The chart below really helps illustrate separate categorical changes through time.

3 year bar chart
Wow our debt bars are sure higher then all our others

For me the bar charts help me understand the dollar  cost. But what I really like is being able to look at any category and know. Hey our housing cost have increased from previous years but look our gas costs and food costs have dropped.

But to make any chart and any analysis you need data. Budgets are great but what you really need to know is what were your numbers at the end of the month.

Actuals not hypotheticals.

So, do you track your spending?

The Stack Chart

Lastly the best big picture chart I found is below.

3 year spending
So easy to see changes happening

This one just seems to give you the main points of the story.

For example the above graph really highlights to me how much our debt repayment was increasing our yearly spending.  (Do I sound like a broken record mentioning the burden of debt on our finances? Well look at it!!! It just can’t be glossed over)

Now what you do have to realize though is, that wasn’t how much our required debt repayment was costing us. No. If we chose to pay the minimum amount the line would be more consistent like our cost of living (blue) and a lot less then $30,000 dollars a year.

So much money spent on debt!

But you can see the improvement. You can see the costs dropping. You can almost feel the extra dollars falling from the sky.

I’m smiling. It’s a wonderful thing.

Its a graph I would encourage people to try specially if you are more of a visual communicator. If you have debt, use the graph to make some projections. If you want to know how much you would spend yearly with no debt. All you have to do is put zeros next you your account. You’ll see your overall yearly spending plummet. It’s a tangible goal to reach for.

So if your feeling inspired to compile your own set of visually appealing spending charts remember one thing.

You need Data!

Happy chart making.

How much money did your family spend in 2015? Do you even know? If not why haven’t you found out?

 

The Roamer traveling wallet

 

3 thoughts on “Yearly Spend Revealed”

  1. I did a pretty general analysis of overall spending, though I couldn’t tell you right now what the numbers were. Significantly higher than I’d like — especially for two people living in a very low-cost area.

    But we have fun things like lots of home repairs (though a very low mortgage, so it probably still evens out in our favor compared to your rent) and a lot of medical expenses. I’d say we easily spent $15,000 last year. Probably more. And of course, we rely on some type of convenience food at all times. Usually stuff like cereal and frozen meals. Sometimes actual restaurants/fast food/pizza. That’s a big chunk of our budget, but it’s one that we’ve been unable to deal with no matter what we try.

    Here’s hoping that this year we keep costs down a little more (not including the $25,000 dental implants — but that’s already been saved, so it’s not coming out of this year’s money).

    1. Yes I can see how medical expenses could really add up. It’s good that you did some calculations it always helps center us from our perceptions.

      How is the year going so far? My family just got hit hard with cold season. Headaches and runny noses for everyone.

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