office materials on the table

In light of rising inflation, I’ve decided to start tracking our family expenses more closely. By tracking month by month, hopefully I’ll be able to determine how much inflation is affecting our monthly expenses.

I recently wrote in a previous post about budgeting as one of the 6 steps to building wealth. I have our family budget in place, but I felt that expense tracking could be strengthened so I’m placing a bit more emphasis in this activity.

Methodology

I realised that it’s not an easy task to compile past expenses. I’m also not diligent enough to log every single expense on a budgeting or finances tracking app. So, I decided that I shall leverage on transaction tracking tools offered by banking apps.

Since most of our expenses are logged on either DBS or Standard Chartered (SCB), I’ve aggregated, cleaned and filtered the info from DBS NAV planner and SCB money manager. Thankfully, most of the heavy lifting is done by these apps. Transactions are aggregated by category, though still not 100% accurate.

Some minor work I had to do include reclassifying certain transaction categories and excluding bank transfers (left pocket to right pocket stuff).

DBS NAV planner offers more flexibility in reclassifying transactions and offers the option of excluding transactions from being included into income/expenses. SCB money manager however doesn’t, but seems to do a better job of classifying transactions correctly.

Lastly, I had to aggregate the info between these 2 banks by category. After all that the manual work, I’ve ended up with the breakdown of expenses below.

Breakdown of expenses

Total family expenses for June 2022 was $12,204 ($ quoted in SGD). That’s pretty high and way above our budgeted $6K. We had to pay premiums on a few of our insurance plans this month, as well as booked our flights and accommodation for our upcoming trip to Perth in October.

Excluding insurance and travel expenses, June expenses would have been $5,324. According to our budget though, our total annual premiums divided by 12 is around $1K/mth and travel expenses is supposed be $6K/year or $500/mth thereabouts. So theoretically, expenses for the month would be ~$6.8K which is above budget.

That said, we might be spending more on travel the next 2 years partly because of revenge travel post-pandemic but more so because we want to travel during off-peak while we can before my older girl goes to primary school.

Insights

I guess the percentage spend in chart above is less meaningful just looking at one month. Hopefully as months go by, I can start to see some interesting trends and get some insights into our expenses. Also, I don’t expect insurance and travel expenses to be as high in July.

Besides the oversized expenses in travel and insurance in June, the rest of the expenses don’t seem particularly concerning. I haven’t done any further drilling down yet, but I’d probably keep a closer eye on dining and shopping categories for any fat that can be trimmed down over the next few months.

The aim of this exercise for me is not to minimise expenses but to trim the fat and avoid unnecessary expenses. If we can keep our expenses under control, that would help to increase our savings rate and get us faster along the path to financial independence.

If you have any tips on tracking expenses, please share them with me.

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2 thoughts on “Family Expenses in June 2022”

  1. I like your blog. It’s very clean and professional! Coincidentally i started tracking my monthly expenses as well, but mainly its because i stopped working. Budget burst, failed stress test.

    1. Thanks for the compliment! Yeah I can imagine without a regular salary tracking expenses becomes super important. Hope this month u can stay within budget.

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