She Strengthens

Understanding Your Expenses: A Personal Finance Breakdown

When it comes to managing our finances, understanding where our money goes is crucial. As a single person living in the United States, I’ve often wondered what the average cost of living is and how to allocate my expenses wisely. The answer, however, is not straightforward. With varying costs of living across the country, it’s challenging to determine how to reasonably portion out our monthly budgets.

The Importance of Tracking Expenses

One way to gain insight into our spending habits is by using budgeting apps. I personally use Monefy, which allows me to export my data into a spreadsheet for easy analysis. By reviewing my expenses on a quarterly basis, I can identify trends and make informed decisions about my spending.

Breaking Down My Expenses

For the months of January through March, here’s how my expenses broke down:

Housing: 40%
My rent and bills account for the largest chunk of my expenses, which is reasonable considering I share a one-bedroom-plus-study apartment with a roommate in Houston. The relatively low cost of living in Houston means I’m able to save on housing costs compared to other urban areas.

Food: 8%
I’m working on reducing food waste, which is beneficial for both my wallet and the environment. By planning my meals and grocery shopping accordingly, I’m able to keep my food expenses in check.

Eating Out: 6%
While I enjoy dining out with friends, I’ve learned to suggest dessert instead of a full meal to save money. Cooking meals together with friends is also a cost-effective and enjoyable way to socialize.

Transportation: 3%
Living in close proximity to my workplace, gym, and grocery store means I don’t need a car. Instead, I use a 150-cc bike/scooter, which is not only cheaper but also eco-friendly.

Clothing: 3%
I’ve shifted my priorities from shopping to living with fewer material goods. Before making a purchase, I ask myself if I really need the item and how often I’ll wear it.

Entertainment: 8%
My entertainment expenses include movie tickets, event covers, and concert tickets. I don’t use subscription services like Netflix or Hulu, but I do split Amazon Prime with friends.

Travel: 21%
As someone who’s bitten by the travel bug, travel expenses make up a significant portion of my budget. To keep costs down, I look for budget airfare deals and stay with friends when possible.

Personal: 11%
This category includes miscellaneous expenses such as gym fees, healthcare purchases, wedding gifts, and charitable contributions.

The Value of Tracking Expenses

Reviewing my expenses regularly shows me where I’ve been liberal or frugal, forcing me to re-evaluate my priorities. While my expenses may not fit perfectly with prescribed budget breakdowns, tracking my spending helps me plan my budget and make regular savings a priority.