February Challenge: A Month of Expense Tracking
by Cody on 2023-03-03 filed under experiments
I'm making 2023 my year of experiments. I'll pick some worthwhile habit to try to build each month, I'll try hard to do it every day, then I'll evalute how it works right here. For January, I chose meditation. For February, I chose expense tracking. If I do this consistently for a month straight, will I A) save money; B) learn to love personal finance? Spoiler alert: A) yes; B) not at all, no! Read on for the gory details.
Why a Month of Expense Tracking?
A long time ago, I gave up on the day-to-day management of family spending. Why? Unfortunately, it's not because I am a secret billionaire. Instead, with kids and work and house and whatnot, I ran out of time for helpful, inessential life tasks like this one. I don't grow my own vegetables, I don't get my hair cut regularly, and I don't pay much attention to personal finance.
The other, maybe bigger, reason is that I found this to be a charged topic that just wasn't worth the friction. Should I interrupt my wife, who has a busy life of her own, during a rare moment of downtime to jointly investigate the extra $10 Amazon charge from last month? No, I should not. As a result, I do a sanity check of monthly expenses but don't investigate too thoroughly as long as they are reasonable. (I realize I'm fortunate to be in that situation.)
Why Now?
I know we are wasting money. There's a little robot who lives in my head and repeats SUBOPTIMAL SUBOPTIMAL SUBOPTIMAL whenever I think of this. In a house of 5 people in a high cost-of-living city, the savings could be big. Spending also just accrues and compounds over time as habits develop and various subscriptions lock-in. If I could build better guardrails around our spending that help avoid a lot of unnecessary drama, maybe I could alter our financial trajectory. The only thing standing between me and a family chateau in the French countryside could be better personal finance habits!
The Experiment
I remind you, this is the Internet, where we're highly scientific and tell the truth at all times. Let's treat this like a proper experiment.
This month's hypothesis:
How Does It Work?
One of the big problems with reviewing expenses that it involves lots of different credentials. This gets inconvenient (or, worse, convenient but insecure) when multiple people are involved. It's hard to separate expensible work charges or 1 time exceptions from recurring family expenses. Different credit cards roll over at different times, so it's easy to get fooled by the outstanding balance. I knew I wanted a single solution that addressed all of these.
I chose Simplifi as my all-in-one expense reporting tool. It's Wirecutter's recommended option, and when I compared the UX against a few competitors, I found the learning curve gentler. I chose the annual plan, so you know I mean business.
The setup was easy. I integrated our credit card accounts and checking accounts. I set some general monthly budgets. I took a quick pass through the transactions. I set up email alerts for significant transactions. I invited my wife to the family account. Bam, we had a single place to review all of this, some freedom where needed, and basic monitors in case things got wild. This was very simple and took me like an hour. Now all I had to do was look at this stuff regularly.
What Happened?
Once I automated expense reporting, did I save real money? Yes! I combed through the transactions over the past 90 days to find everything that was recurring. I found 5+ monthly charges that just didn't make any sense. For example, we'd been paying for a gym membership and hadn't gone once since the dawn of COVID! Canceling these saved us $2k per year. It's not chateau money, but perhaps a good start on the chateau's porta potty. Every financial empire starts somewhere.
Once I automated expense reporting, did I find the process less annoying and review the data daily? No, and no. I did review the email alerts when they came in and found those to be generally useful. I would also open the app once or twice a week to see what was going on. But that was an act of grim determination. I had no energy or enthusiasm to take on this extra task. I never once thought, "You know what take random Wednesday up a notch? A quick perusal through all my credit card transactions." I am glad I have the visibility, but I very rarely use it.
Keep It or Kick It?
This is an easy question. I never managed to build the habit of regularly reviewing my expenses in the first place. I will keep the automated reporting and email alerts via Simplifi, and I will kick this delusional idea to review expenses daily.
Here's a more interesting question: why didn't I build that habit of daily expense management? I committed to doing it here, publicly, in front of literally tens of visitors / search engine bots. I saw real financial results early on. Why didn't that motivate me to keep it up? I think I was ultimately never excited or interested in this. When you're an adult with a lot of responsibility, sometimes the last thing you want is 1 more responsibility. For the month of March, I am going to chose something very different that energizes me.
What's Next?
For March, I am going to try to write code every day. I just don't do this much at work or at home at this point, but I really used to love this. I don't know what I'll code or when, but I hope I seize this opportunity to sharpen my technical skills and have some fun. Follow my progress here, and see you next month!