First of all to be honest I do not know exactly how I spend my money.
There are some amazing people who know down to the last cent how much toothpaste they buy a year, I am not one of them. I have tried so many options of keeping track- either apps, writing everything down physically or keeping the receipts, but I always give up within a week. Mostly the things that throw me off are the really seldom happening larger costs which skew the monthly budget and then my motivation diminishes. Or I forget to do it and then if feels pointless to start again. For example this week I bought pet food- it cost me 77€! It will last me for about a year but I had to buy it now as I was almost out. And it feels really expensive although it actually costs me just about 6,50 a month if I buy these larger containers, compared to buying smaller ones several times a year, which would be a lot more, but still, it IS expensive for me.
I do try to keep track of my weekly expenses I will explain how at the end of this post, and although I do not budget in the traditional sense - this method really works for me.
My salary is 1100€ netto, we have usually no bonuses, over my years with the current employer, I have gotten the year-end bonus once. So this 1100€ is what I really work with every month.
But the bigger monthly costs first:
By the way, I will round things, so if my internet is 19,99€ I will write 20€ for my sanity-sake :)
So let's start with the costs I have to pay. My rent is 210€, I also pay utilities (gas, water, electricity, heating, maintenance etc) to the owner, in our cold climate they wary a lot, the lowest is in the summer with about 90€ and winter comes up to 190€ due to the heating. So the average is 140€.
I am paying off my student loan, so 70€ a month goes for this, less than a year to go!
My internet cost is 20, mobile is 8, I have no TV, Netflix etc.
I try to invest at least 250 a month, usually more, let's say 300€. As the info is online in the excel my actual average over the past 12 months was 515 a month. This was because last year for 6 months I had extra tasks and had a higher salary and also I did invest some money I had saved up previously, this is not realistic now as I am back to the lower wages, so I try to do 300€ a month or more than 25% of my income. So my savings rate 27% which is quite good I think?
So quick math tells me I am left with 352, or slightly over 10 € a day for groceries, toiletries, home goods, transport, clothes etc. Let's be honest this is not much. This is why paying 77€ for pet food really makes a difference in my monthly budget as I really calculate around this 10€ a day and this costs more than weeks living money... Same with needing new shoes, winter jacket etc, these things really throw off my budget. But I manage. Many people live with a lot less- for many people in Estonia this 350 is their whole salary and they need to pay rent etc from it. I honestly can't understand how they do it, but they are my heroes!
As I said in winter the home costs are up and also some produce is more expensive, so in summer I add a bit to my savings to take from when the heating bill is really high. At the same time, I am not really frugal. I could cook more, but really most days at work I eat out and therefore spend more than half my daily allowance for lunch (working in Tallinn city center most daily lunch offers are between 5€-7€). I work long hours so cooking and bringing food to work would be good but a) I am not a good cook, and b) getting home half past seven (mostly working 10-11h days) means I am so tired I just can't be bothered... Yes, civil servants are lazy and never do anything...
But how do I keep track of my living expenses if I do not know where I spend my money?
For me, the main issue is that if I pay by card I seem to lose track of how much I spend. At the same time in many instances, it is easier to pay with a card. So what do I do? In a way, I use heavily modified envelope system.
So all the other things I mentioned before I pay online, they are the things I need to pay and then I won't think of them anymore. Most of them are automated. So what is left is everyday living expenses.
At the beginning of every week, I withdraw enough money to have weeks worth of cash in my wallet (so 70€ for me). I do not count coins, sometimes I have gathered extra 10€ there, sometimes it is almost empty, but this is kind of extra... So beginning of the week I have 70€ paper money. Every time I pay cash this goes down. Every time I pay by card I take the relevant amount rounding it to closest 5 or 10 etc (as 5€ note is the smallest paper note) and place it to a separate slot in my wallet. This way I can see every day how I am doing and this has been the easiest way to also visualize card payments. So I calculate by week, if I do bigger grocery shopping sometimes I use 2-3 days money in a day, but then I have also a lot of food to eat for several days. By the end of the week on Sunday or Monday morning I look how much I have in this extra slot (where I put money when I paid by card) and withdraw enough to have 70 again, and a new week begins. Sometimes I have spent less, and still, I have cash in the main compartment- this is just saving of that week, but it will not carry over as extra for next week. I will give an example:
So let's say by the end of the week I still have 5€ in the main compartment and 25€ in the "I paid by card" compartment - so I have 30€ in my wallet. So I withdraw 40€ and put all this 70€ again to the main compartment and all begins again.
As long as I stay within this 70€ / week I do not set myself any other limitations.
As you perhaps noticed I actually allow myself to spend a bit less than I have (even if there are 31 days in a given month it is just 310€ I can spend), and as sometimes I spend less in a week, so a small amount gathers to my account. But sometimes some extra things are needed, expensive things, like the aforementioned pet food or new winter boots... this is when I really think hard, decide if I really need these things or just want them. And if I really need them I will buy it and I pay by card from this small stockpile of extra money I have gathered there over the weeks and months. For these purchases, I won't move money to the separate compartment as these large purchases are outside the normal weekly budget.
I hope this explanation has made sense and might be useful for some. This is really the best system I have found, and it really works for me.
Do you budget? How? Any tips for me?
