The road to financial independence always comes down to two factors: income and expenses. One side of the equation is how much money I earn every month and the other is how much I spend.
Although I am a firm believer that I am the creator of my reality, the truth is that increasing one’s income takes time and a lot of effort. There is only a limited amount of promotions. There is only a limited amount of opportunities in a given company/field. The competition is tough. I might get the yearly bonus but my efforts might as well go unnoticed.
And this is the employee’s world. Being a business owner or a freelancer is even tougher.
We don’t have so much control over our income. And the most annoying thing – it takes an awful lot of time!
What we really have control over is our expenses. My goal is having my basic expenses covered. I first have to know what that amount is. Here is how typically a financial month looks like for me:
Home & Utilities
- Rent: €468 (includes electricity, water, internet, heating)
- Hosting & Domain: €5
Food & Drinks
- Groceries: €220
- Lunch: €0-50
- Eating out: €0-25
- Snacking: €0-30
- Drinks: €0-16
- Kickboxing: €70
Health & Personal care
- Dental insurance: €8
- Medical supplies: €15
- Waxing: €36
- Haircut: €45 (every 3 months)
- Cosmetics: €30
I don’t include taxes and health insurance here. They are automatically deducted from my salary. This is the money I spend after I get my paycheck. It depends on the month but on average I need €1000 a month to cover my basic expenses.
Additionally, I spend every month on:
- Books: €0-42
- Audible: €9,9
- Courses, coaching: €0-500
Gifts & Donations
- Gifts: €0-150 (birthdays, Christmas, etc.)
- Donation: €25 (to Room to Read – because the world change starts with educated children)
- Spa: €0-50
- Entertainment: €0-30
- Vacation: €0-2000 (flight tickets, accommodation, etc)
- Massage: €0-45
- Joy: €0-50 (something just for the pure joy of it: bubble baths, aromatic candles, flowers, etc.)
Clothing & Footwear
- Clothing: €0-60
- Shoes: €0-120
The additional expenses can be anything from €200 to €1000.
My expenses from the last 3 months
Sept: €1,872 – I splurged quite a bit; I bought tickets back home for Christmas; I had personal coaching; I went on a two days masterclass;
Oct: €1,015 – very good month, no additional expenses;
Nov: €1,783 – very good month for basic expenses; I bought flight tickets to South Africa;
Before I started diligently noting down my expenses and having a monthly overview I always wondered where all my money goes. This is the first and most important step – find out where all your money goes!
The second step is to reduce your spending – find out here how I cut my expenses in half!
Nancy Lutz says
I think we use the same tool for keeping track of expenses. I bought the Pro Version a few years back and never regret it. It helped me a lot to see where the money goes.
Thanks for sharing!
Hi Nancy, I will cover the Toshl app in a separate post. I enjoy how easy and fun it is – no matter if it’s the free or the pro version. Plus Toshl has the cutest monsters ! 😛
Nancy Lutz says
I love those cute monsters so much. They are actually motivating. 😀