My 2007 Personal Budget Analysis

by David Ning · 14 comments

Every year, I analyze my spending during the past year to spot irrational behavior and see where my money went. By doing this, I’m able to help myself find ways to save more in the future because I’m aware of where I like to splurge. I also use this opportunity to improve my personal budget for the next year by readjusting the categories to better track spending effectively.

I’m sure the benefits of analyzing spending are pretty obvious so let’s dive into the actual charts.

house expenseHousing expense is a necessity and its pretty stable so it is nothing exciting. Even though it’s steadily going up, it is still relatively cheap compared to other places that I am thinking about moving to.

food expenseFood expense is quite steady at roughly $150 – $200 a month. It is very interesting to note that the three big months (February, July and December) are all related to having a very nice dinner as follows:

  • February – Valentine’s Day
  • July – Fiancee’s Birthday
  • December – Christmas Dinner

I wonder if my fiancee will see this and ask me to spend less money on those three big dinners. 🙂

goods expenseGoods represent my slurge money on gifts for myself. As you can see, there are many months that I don’t buy anything at all. The biggest slurging month by far is July when I bought an iPhone. However, I don’t regret the purchase one bit since it helped me be much more responsive to my customers by letting me check my emails while I’m on the road. Overall, I’m quite happy with my spending habits in 2007 because I rarely bought anything the entire year.

entertainment expenseEntertainment expense was surprisingly sporadic and I spent the most money on entertainment in December. I drilled down further and golf expense was by far the number one entertainment expense. Normally, I would tell myself to spend less money if something dominates a category but if I don’t even golf anymore, I wouldn’t have any motivation to save money since I would have no entertainment whatsoever. Furthermore, this level of spending is acceptable so I will continue to watch this but not try to adjust at all.

misc expenseI definitely need to tweak this category since everything is falling under miscellaneous. Actually, there are basically three months with big spikes in money outflow and they are as follows:

  • April – Prepay 6 months car insurance
  • August – $4,000 deposit for wedding
  • October – Prepay 6 months car insurance

As you can see, these were big ticket items that could explain the big jump for the month. I expect my car insurance to drop significantly next year as I get married and as my speeding tickets are erased from DMV’s record (it’s finally been 3 years). I will have even higher wedding expenses next year but that is to be expected and I would consider that a special case.

total expenseOverall, I’m quite happy with my spending for the year. As you can see, I usually keep everything under $2,000 a month including rent which is half of the total amount. In the future, I expect the 3 highest spending months to be drastically lower as my wedding expense and my car insurance premiums will be reduced. This thesis hinges on the fact that I do not move though. If I move after I get married, then my total spending will go up at least a couple hundred dollars per month.

There are two changes that I intend to make:

  1. I’m changing housing expense to be called “necessary expense”. This means that my gas expense will be moved from miscellaneous to this category as will rent.
  2. I contemplated a bit but I also plan to put all car related expense in necessary expenses since I really can’t function in Southern California without a car.
  3. My entertainment expense includes outings where I treated my friends out to golf. I plan to separate this from entertainment. Starting in 2008, only expenses from my fiancee and I will be included here.
  4. The separated entertainment expense and also all gifts will be under a new section called Gifts. In 2008, I want to see how generous I am with gifts to others.
  5. 2007’s goods expense included goods for only myself. 2008 will also include Emma’s goods that I pay for. As we get married, expenses for her will be considered as my own so this will include all my gifts for her such as flowers, birthday presents etc.

What do you think? Do you have any suggestions on what I should look more into? Are you impressed with my spending habits or do you think it downright sucks? I’d love to hear from you so I can see if I can save more money in 2008.

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{ read the comments below or add one }

  • MoneyNing says:

    Michelle Dawn: Good luck.

  • Michelle Dawn says:

    Great. Thanks for the information. You know, I actually own this program. I just haven’t figured out how to make the most of it yet.

  • MoneyNing says:

    Michelle: Sure. I use Microsoft Excel 2007.

  • Michelle Dawn says:

    I love the graphs. I have all of the data I need to do something similar and a visual representation would really help me see more clearly. Do you mind sharing which program you are using to create the graphs?

  • MoneyNing says:

    Mike: Good luck if you do it.

    Money Blue Book: Thanks. I find that it helps me greatly and it doesn’t take that much time to make.

    Mark: Thanks. Hopefully people will see this and do it themselves.

    Greg: Many people definitely don’t do this but they should.

  • Greg "the marketing tools Guy" says:

    Impressive from the standpoint of being that disciplined to set-up and budget an then try to follow it. Many people don’t do this.

  • Mark Runta says:

    Excellent idea to review historical data using charts to see trends.

  • Wow…talk about breaking expenses down in detail by month. Nice charts
    -Raymond

  • Mike Huang says:

    WOW. You’re very organized and I should follow you 🙂

    -Mike

  • MoneyNing says:

    Emily: We will see who is the lucky one after we get married 🙂

    We sort of decided we will move but we haven’t paid deposit or anything like that so it’s still up in the air.

    rocketc: Hmm…. I will have to check again for this but thanks for the heads up. Hopefully it will decrease my car insurance significantly. I’m also thinking of lowering my insurance coverage and raising my deductable since the car is getting older.

    Mark: I understand about the golf expenses but I really like it. I’m sure mini-golf and golf fresbee is quite fun (I play mini-golf once in a while) but it is not the same as golf so we will see. I think as long as the golf expense is under control it would be okay.

  • Mark @ TheLocoMono says:

    Excellent job on your post. I liked the charts, very clean and crisp.

    As far as your budget goes, it looks like you have a good grasp on where you money is going.

    As for golf, I don’t play but may I suggest selling your golf clubs and giving up your membership dues in exchange for taking up minature golf (it is a challenging sport and there are tournaments that award money too) and you can still stay on the course by playing frisbee golf.

    Frisbee golf is highly entertaining. I took this up in Vail and was so much fun trying to par my way down the course (ON A MOUNTAIN.) There are plenty of courses that would allow frisbee golf on their fairways during low season. Don’t expect to spend more than $50 bucks for a few frisbee each year.

  • rocketc says:

    I think tickets stay on your record for 5 years. . . getting married will significantly reduce your insurance costs.

  • Emily says:

    One more thing to mention: Did you two decide to move or not? If that’s the case, then it will definetely increase your rent over 50%, is that right?

  • Emily says:

    Very interesting sharing. I am so happy to see that you still allocate budget for her birthday & sending flowers, even after you two got married. She is a lucky woman. : )

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