My Spending Behaviour

Expensive shot glasses

One of the things I've learned by reading several books and blogs on financial independence is that I need to keep track of my spending. When you make a monthly detailed list of all your spending you will become more aware and in control of your spending behaviour and your money. In the pursuit of financial freedom it is imperative to know what you're spending you hard earned cash on.

By using a detailed list you will know exactly how you spend your money. Irregularities and unnecessary spending will become immediately apparent which enables you to make valuable changes. By knowing your spending behaviour in detail you can eradicate bad spending habits and you can get a clear picture on how much you need each month, which in turn enables you to calculate your 'number'. The amount of money you eventually need to become financially independent.

How much you spend on things like the rent/mortgage, groceries, bills, insurance, gifts or eating out will become more visually clear when you have a detailed list of your spending. And even though I'm fully aware of how important it is to have such a list I never really took the time to make one. I did always know how much money roughly came in and how much I spent each month, but not in any detail and I certainly didn't keep any records of my monthly spending which would have enabled me to calculate an average or see a trend. By far, most of my spending (~98%) is done by using my bank debit card, so if I wanted to know how much I spent last month I just had to check my bank statements online. But it didn't give me a very detailed overview so I never really knew what things cost. This was probably due to me being busy and a bit lax. I knew I had low living expenses and a high income, so maybe keeping detailed lists of my spending didn't feel all that important since the difference between income and expenses was so large.

So, I recently started making detailed spreadsheets of my monthly spending. This was not easy, because some bills (like the phone bill and car/motorcycle insurance) are paid quarterly. And some bills are even yearly, but I started making the lists anyway. Including columns for indicating whether it is a monthly, quarterly or yearly payment. I also think that over the next couple of months these lists will become more and more detailed. Until now, I always thought I spent about €1500~€2000 a month on 'normal'  expenses. By ' normal' I mean expenses that do not include things like a new washing machine or airplane tickets for tropical vacations.

After I made about 3 monthly lists I already noticed that actually I spend a whole lot more than €1500 a month. It was more like €3000~€4000 a month. After reviewing the list I noticed that my spending on groceries had gone up quite a bit. Without realizing I was probably buying more luxury items as I did in the past, so now I can be more careful next time I need to do shopping. Another thing I noticed is that I clearly spend a lot more on gifts for myself. A book here, a CD there and new set of clothing is always nice, but it is clear to me now that I went a little overboard on this. So, from now on I will try to keep myself from buying stuff unless I really want or need it. I just need be a bit more conscious about my spending. The more money I safe the more I can invest and the sooner I will reach financial freedom.

So far, I'm still on track, but I think by being more aware of my spending I can now move into second gear and speed up the process.

This article was all about my spending behaviour and how I'm trying to improve my consciousness about money, but I'm currently investigating so called 'side hustle' opportunities to create more streams of income. At the moment I'm reading a book that partially covers this issue, but the book is written by an American for Americans living in the US. In The Netherlands we have a different tax system and different rules, so I need to get some information on the possibilities of side hustles before I actually start some. Perhaps (hopefully), I can tell you more about side hustles in my next article. We'll see. Thanks for reading!

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