Episode Summary:
In this week’s episode, we share a mid-year expense review for both of our families. And for a special treat, we invite our spouses to join us as we share and review our 6-months of expense tracking. We start by reminding everyone why we track our expenses and specifically how we each track our expenses. Then, finally, we talk through what we’re feeling good about, what we’d like to continue to improve upon, and what we can learn from seeing each other’s expenses.
Episode Notes:
We share why and how we track our expenses, what it cost our families to live for six months, what’s working well, and what we want to improve.
Why we track our expenses:
- It’s incredibly helpful to know how much it costs your family to live for a year and even know how much that fluctuates year to year. You need to know this number for most retirement calculations and any planning around your financial life.
- The most successful way to improve your spending is to track it, review it, and thoughtfully discuss it with your spouse. If you need advice on talking to your spouse about money, stay tuned for next week’s episode.
- Also, check out episode 15 on expense tracking and our expense tracking template on ETSY if you need a template to get started.
How we track our family’s expenses:
- Mike and Britta manually track their expenses by keeping receipts and logging them into an excel sheet.
- Maggie and Greg used to log things manually in excel, but now they leverage Mint to track all expenses. They track expenses in Mint, categorize them, and then download and summarize them in excel every 3-6 months.
- Like with most things, it’s most important that you do this, and we care less about how you do it. Some people prefer apps such as YNAB (you need a budget), though we prefer free approaches vs. paying for an app.
Before we review things in detail, some additional context:
- This does not include any income; it’s just our expenses.
- Maggie and Greg have separate accounts, but they still 100% handle our finances together. They track things together, review things together, and plan everything together. We did an episode discussing separate vs. combined finances, but even separate finances don’t fully mean separate if you have strong transparency and communication.
- None of our expenses include rental property or podcast expenses, as those are considered business expenses against our LLCs.
- We have both paid off our mortgages. And we did it through having a lower cost of living and expenses.
- For privacy reasons, Maggie and Greg have not included child support in their numbers, but this is an additional expense, and they do track it. It’s also not a controllable expense, so they don’t spend too much energy discussing it.
Mid-year review of our families spending levels:
- We each share our total expenses and top categories of spend.
- We each share the top things we feel good about.
- We each share the top things we feel we could do better with.
Top 3 takeaways:
- There’s significant value in tracking and reviewing your expenses with your spouse and maybe even your kids if they are old enough.
- There’s value in comparing your expenses with another family. It created some interesting dialogue and learnings.
- This is still personal finance. We spend very similar levels in total, but on very different priorities and things.
Show references: