Ramit Sethi advocates only tracking about four categories of spending and is critical of couples who do more fine-grained tracking. For the last few years I have been tracking 15 top level spending categories and 27 more detailed spending categories. So, what do I get out of this. I think the following:
- I can track which items have grown fast and maybe we should cut back on. This has resulted in saving money on car insurance, health insurance, and mortgage interest.
- Some things that I think we are spending a lot on, and should cut back on are actually not that big. For example, our current spending on restaurants is AUD 3k per year or 1.7%. My spending on bus, Uber, taxis etc. is AUD 4.5k per year or 2.5%, which is less than half our spending on transport. These are two of my three areas of "luxury" or personal spending. The other is spending money on subscriptions online etc So, being able to see these numbers makes me feel more comfortable about my spending in these areas.
- Perhaps some things seem small and we can consider raising them, like our spending on charity at only 0.4%.
- Well, yes it's neat to see what we are spending money on and comparing to other people :)
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