Although you need it to buy ingredients, most food blogs don’t mention money. It’s understandable. For many, money can be an uncomfortable topic. It’s also so boooring.
So let’s talk about it!
If there was ever a year to stress out about money, it was 2020. Hoo boy. Some weren’t at all affected financially by the pandemic (some even got richer), but many of us saw our once-stable incomes flutter away like a feather in a breeze. A strong, blustery, hurricane-like breeze.
While I can’t tell you how to make money, I can give you some advice on how to better hold onto what you already have.
If you’re not sure how much you’re spending or feel like figuring it out is the last thing you want to do in life, I promise doing so will make you feel more in control and, ultimately, spend less.
Why I Started Keeping Track of My Spending
Full disclosure: I have never been great with money.
I’ll spare you the details of my childhood, but let’s just say that money was a source of stress, not security. I learned that avoiding the topic of money helped me avoid stress. So I avoided it for a long time.
I have a feeling I’m not alone in this.
For most of my adult life, lacking a deep understanding of money coincided with (or more likely caused) mounting credit card debt. I paid at least the minimum I owed each month, but it never made much of a dent. This is because I wasn’t fully aware of how much the interest was, how much I was spending vs. making, and how much I needed to pay each month in order to get out of debt.
Back in July 2015, I began keeping track of my expenses. I had just moved to a new city and, as a freelance photographer with an inconsistent income, I wanted to know how much money I needed each month in order to survive.
As I always do when I want to get organized, I started a spreadsheet. This spreadsheet, which is still going strong after five and a half years, has changed my life.
How Has It Changed My Life?
Well, since you asked…
- I spend less money than I used to on things I don’t need or want
- I consume less, own less, and have less clutter
- I know exactly how much I’m spending and on what
- At the end of the year, I know the average amount I spent each month
- There’s less work at tax time
- I feel a sense of control I’ve never had before
- I am finally debt-free
There is expense tracking software for this, but I prefer doing this myself using a method I can control completely and change however and whenever I want.
Plus, I have to admit… I kind of love spreadsheets.
The Expenses Spreadsheet
If you’ve never used spreadsheets before, don’t be scared. They’re pretty simple. They can be more complicated depending how you use them, but for expense purposes, all you need to do is type some words, numbers, and a few easy formulas – all of which is much easier than doing the math by hand or, worse, guessing.
I use Microsoft Excel for Mac so the examples in this post will be from that software. You can use Google Sheets, Mac Numbers, or any other program you want.
I will assume that everyone reading this has a basic understanding of how spreadsheets work, but I will err on the side of over-explaining.
OPEN A NEW SHEET
Definitely don’t skip this step.
CREATE COLUMN HEADINGS
I recommend typing the date at the top of the first column, the vendor in the next column, and your spending categories in the columns to the right. For example:
These spending categories are just an example; I’ve only listed six to keep it simple. You can include whatever you want to keep track of (other examples: Health Care, Electronics, Clothing, Donations, Pet Care, Tuition, Home Office).
My own categories aren’t necessarily for tax purposes (not all of them, anyway) or for any reason other than I simply like to have a clear understanding of where my money is going.
This is a personal choice, but I like to split Grocery and Restaurants into two separate categories. Since food is so much more expensive at restaurants, my goal has always been to keep that category’s costs as low as possible. Or at least be aware of how much I’m spending there.
ENTER THE AMOUNTS SPENT
I recommend sitting down to do this at least once a week.
The idea is to record the amount on each receipt, or for each vendor, so you can easily add up your spending categories at the end of the month.
I use my credit or debit card for just about every purchase I make. Having a digital record of my expenses makes it easy to know what I’ve spent. If you use cash, you just have to be diligent about getting a receipt or writing it down before you forget.
At the end of the month, the spreadsheet might look something like this:
This is a shortened version of what an actual monthly spending block would probably look like for an average person. I definitely go to the grocery store more than twice a month (and I only buy food for one person).
ADD UP EACH SPENDING CATEGORY
Now for the fun part: formulas!
If you need it, here’s an overview of how formulas work in Excel. But no need to spend hours studying this topic – the ones in this spreadsheet are simple.
You can enter these formulas at the beginning of the month to see how much you’re spending as the month progresses, which I like to do. Or, if you’d prefer, you can do this at the end of the month.
Start by adding up the first category. Click the cell under the column and type =SUM(
I find the quickest way to add is to highlight the column by clicking the top cell in the column and dragging it down to the bottom cell. It’s okay that not every cell has a number in it. Just highlight the entire column, then type a closed parenthesis.
(An alternative to highlighting is to type the name of the top cell, followed by a colon, followed by the name of the bottom cell, all enclosed in parentheses.)
Hit return to see the column’s total.
One great thing about spreadsheets is that you don’t have to repeat this step for each column. Simply copy the cell with the total (e.g. $143.63) and paste it into each cell under the other categories. You are not copying the number in the cell. You are copying the formula. The program should know to add up the column above the pasted cell.
Optional: add a black line above the bottom row by navigating to Borders in the toolbar.
After copying and pasting the SUM formula below each column, it would look like this:
ADD UP YOUR TOTAL MONTHLY SPENDING
To add up how much money you spent in a month, simply use the SUM formula on the row of category totals. I like to place this cell somewhere under the last column.
Drag your mouse over the entire row and type a closed parenthesis.
Hit return.
I do this for each month. Throughout the year, I use an addition formula to add up each month’s total so I have my total amount spent until that point.
You can also use a division formula (the total amount spent in the year divided by 12) to see your average monthly spending for the year.
Tracking Your Income
I find it helpful to keep track of my income on the same sheet as my expenses.
Here’s an example of some made-up income I might receive in an imaginary month. Each amount is in a row corresponding to the closest date I received the money.
Add the income column using the SUM formula. I like to put this cell next to the total monthly spending cell, separated by a thin column filled in with some color. Obviously, you can design your sheet however you want, but I like how this looks.
Having expenses and income on the same sheet means I can clearly see how much of a difference there is between my expenses and income. If things are going well – such as in this made-up, imaginary, fake month example – I made more than I spent. That’s the goal, anyway. Does it always happen? Oh, no. No, it does not.
Organize your spreadsheet however you want. I like to keep one year on one tab, with multiple tabs on the same spreadsheet.
Why Tracking Your Spending Is Worth Doing
Keeping track of my expenses has been one of the best things I’ve done for myself.
I’ve found that simply having knowledge of how much I’m spending has not only saved me money, it’s helped me make better decisions.
This doesn’t mean I don’t buy anything. But if I have the urge to purchase something I might not exactly need, I consider what the amount will look like on my sheet. Will I think it was worth it? Sometimes I do. Other times, I realize I can live without it.
The first month I did this – my first month in L.A. (where I lived for a year and a half before moving back to New York) – I spent about $250 on groceries and $250 at restaurants. In one month. Seeing these numbers blew me away. Granted, I’d had a few “Welcome to L.A.” meals with friends (remember dining out with friends?) that I wouldn’t have had in a typical month. Still, I couldn’t believe I’d spent the same amount on a few restaurant meals than I had on my monthly groceries.
Since then, I’ve kept my restaurant spending to a minimum and saved what is likely a large sum of money by cooking almost all of my meals at home.
It’s fun to look back on past years and see how your habits have changed: how much you spent on clothing in one year vs. another, your average monthly spending the year you worked full-time vs. the year you freelanced, or how much you’re still spending on subscriptions you might not want anymore.
Another interesting takeaway is seeing how much you spend on food depending on the season: I tend to spend more on groceries in the summer when I’m buying a lot of frozen and fresh fruit as opposed to the winter when I’m making lots of beans, rice, and pasta.
I’ve also – perhaps not surprisingly – spent slightly more on food since starting a food blog.
For anyone wondering if this is a lot of work, it’s not. Honestly, once you have the spreadsheet in place, it doesn’t take long to enter in some numbers every week or even all at once at the end of the month. For me, the time spent doing it is worth the outcome.
Having a solid knowledge of your spending habits can only help in the long run.
If you’re in doubt, try this for one month and see how it goes. If tracking for one month is all you need to have a sense of what you’re spending, that can work, too.
Good luck. Let me know if you have any questions in the comments.
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