2022 Annual Expense Review
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? 2022 was a challenging year, with high inflation making it hard to keep spending under control. But overall our annual spending increased 5.5%, which I consider an achievement in a year with inflation in the high single digits.
Our largest spending categories were housing and related items (37%) and various forms of childcare/preschool/summer camp (31%). We significantly cut our share of spending on food (7%), in part from being back in the office more often (free food and events). We also spent less on household items (largely purchased on Amazon).
Some key lessons from this year:
Kids - Kids are not cheap, with direct kid-related expenses accounting for almost one-third of our budget. Including food and medical expenses, it was closer to 40%. It’s hard to think of ways to economize on these expenses, but we are considering switching to a less expensive summer camp next year. And fortunately, with our younger child starting public school next year, costs should decrease.
Home Maintenance - Owning a home is not cheap either! Despite decreasing year-over-year, home expenses remain our fourth-largest spending category. Just when we think we’ve found and fixed all our house issues, another one pops up. Here’s hoping we have better luck this year.
Other notes:
While our Amazon spending decreased, it still accounted for over 8% of our budget as we continued to buy most of our household items there. Some Tips for Saving Money on Amazon here.
Food continued to decrease as a share of expenses, down from 9% last year to 7% this year. I credit a significant decrease in DoorDash and other food ordering, which has become really overpriced. We’re cooking more and going out (very occasionally, once a month or so) when we want a nice evening with a restaurant meal.
Finally, at the end of this post, I’ve included pie charts showing our 2022, 2021, 2020 and 2019 spending (courtesy of 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:
Jeff Beck, Legendary Guitarist, Dies at 78 - one of the all time greats. If you don’t know anything about Jeff Beck, a great place to start is Cause We’ve Ended As Lovers.
Also:
Growing Antisemitism in the US Is Seeping Into the Workplace
‘Yellowstone’ Show Has Suburbanites Dressing Like Cattle Ranchers
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.
2022 Spending
2021 Spending
2020 Spending
2019 Spending