2021 Annual Expense Review, And Some Fun Videos
Welcome to Saving Money with Andrew!
Another year, another annual expense review.
Each year around this time, my wife and I review all of our spending for the year. How do we do it? We use the methods in this post.
Why should you do it? Reviewing annual spending gives you more insight as to where your money is going and, most importantly, helps you identify “leaks” in your spending. These might include forgotten recurring subscriptions you can cancel, opportunities to request new promotional rates on things like cable service, or even something as simple as putting a credit card on autopay to avoid late charges.
What did we learn? 2021 was a year of major changes for us, including a new home and a new car. Even after adjusting for some one-time expenses, our annual spending increased by 15% this year. Our largest spending categories were housing and related items (almost 40%), various forms of childcare/preschool/summer camp (20%), Amazon (12%), and Food (9%).
The key reasons our spending increased:
Home Maintenance - We’re very happy to have become homeowners, but home maintenance is really expensive and was responsible for one-third of our increased spending this year.
Kids - Summer camp and child care really add up. Kid-specific spending accounted for more than 20% of our budget, and probably another 20% of the other categories. Kids are not cheap!
Inflation - Higher prices increased our spending across the board. By most measures, prices have increased more than 6% on average this year.
Other notes:
Amazon continues to account for a growing portion of our spending, rising to 12.4% this year as we’ve started ordering more groceries from Amazon Fresh, whose prices and service are increasingly competitive with other options. Tips for Saving Money on Amazon here.
Travel decreased substantially. Other than a brief summer trip, we didn’t go anywhere. We are sitting on a lot of vouchers from repeatedly cancelled flights this year.
Any immediate benefits of doing the expense review? In addition to being more aware of our spending and ways to economize in the future, we noticed almost $50/month in recurring subscriptions that we no longer need and have cancelled for next year. It’s easy to forget about these.
Finally, at the end of this post, I’ve included pie charts showing our 2021, 2020 and 2019 spending (courtesy of the awesome and free Google Sheets). I encourage you to do an annual spending review—you might be surprised at what you find!
And now…Andrew’s pick(s) of the week:
Two fun videos this week:
The best 90 second explainer of health insurance I’ve ever seen. Great to share with young adults in your life who are about to have their own health insurance for the first time:
What happens when you bring home a grocery store lobster as a pet? Unexpectedly riveting:
I hope this has been helpful. If you liked it, please share it on social media! Also, please send me your feedback, requests, and success stories.
2021 Spending
2020 Spending
2019 Spending