Spending Cash Review of 2012

My family for a while now has used the concept of spending cash.  It’s basically a monthly allowance for adults to spend on what ever we want (with the exception of we fully expect to buy the odd jug of milk or fruit for the house out of it).   Yet I’ve been curious on where exactly does that money go in a given year?  I had never actually tracked it before.

So for 2012 I tracked just about every penny of spending cash I used.  The yearly budget is for $2400 per adult per year or $200/month.  While my total was a little out  at $2350, it does show where all those little decisions added up to.  The missing $50 was likely just saved and moved into 2013.  I tend to shift my spending around a bit.

I produced the following image of where that money went (click to make bigger) came from the app I used called Toshl Finance.

Spendingcash2012What I found interesting about this exercise was the fact I apparently like to spend money on food.  Almost 40% of my spending came from food related items (snacks, lunches out, fast food suppers).  This isn’t surprising since a majority of my socialization happens around food.  So I would do a lunch out with a friend or have a snack while visiting with co-workers during a coffee break.

Meanwhile my vices in life (booze, movies and electronics) make up 30% of my spending.  To be honest I was a bit surprised that booze out ranked movies.  I would have guessed it was the other way around, but perhaps that indicates how good I’ve gotten at keeping my movie habit costs down (thank you public library).  Or perhaps I bought more beer than I thought when finishing the backyard patio last summer? 😉

Overall I have to say I’m content with where the money went, it generally reflected my wants and a few needs.  I also managed to keep the spending on ‘stuff’ relatively low.  Perhaps the only thing I would question was how happy was I with all the money going to booze?  Would I prefer the money to go elsewhere?  After all that booze money doesn’t include what I spent on wine kits.

Any questions?  Or how does this compare to your own spending cash?

14 thoughts on “Spending Cash Review of 2012”

  1. I don’t spend cash, so this would be new to me…

    Although I don’t spend cash, I spend my money on whatever I want. I just prefer using cards so I can keep track of receipts (in case I lose them for instance).

  2. I avoid spending cash for exactly this reason. It just vanishes without accountability. Plus it doesn’t offer you the rewards & protection of using a credit card.

    If you had used a 2% cashback credit card on these purchases (for both adults) you could have almost $100 more at the end of the year than by spending the amount as cash. I guess if you have no discipline to control credit card spending then the $100 reward might not offset the increased spending, though.

  3. That’s the beauty of numbers; they don’t lie (just like when I walk into my MD’s office all coooolll, then the blood pressure reading reveals I’m seriously stressed about the visit). Have you thought further about the VICES category? Are those activities a way of relaxing, of socializing, of avoiding something? If so, are there cheaper/healthier ways to relate?
    Just my thoughts. If I’m wrong, bygones.

  4. Patrick – Executioner’s math is correct. 2 adults x $47 = $94 or almost $100.

    I rarely spend cash either. Maybe $50/month including a $30 lunch card for the kid once every month or two for the once a week hamburger day and daily milk. Just little things under about $5 that I feel dumb pulling out the CC for. Despite that, I only got $257.50 in cash rewards last year and all my spending apart from mortgage and utilities goes through the CC. That’s 2% on groceries and .5%-1% on other. Hmm. I wonder how they know what you bought at Walmart?
    I use cash only while traveling. Partly from fears of CC cloning (happened to me once) and partly to keep a rein on myself.

  5. I’d be more interested in a visualization relative not to total spending, but as a percentage of total after-tax income if you’re up for it =)

  6. I am glad I lack the computer skills to create this sort of graphic. I wasted a lot of money on junk food and fast food last year.

    This year I have set a weekly budget for unhealthy food and I am sticking to it but I am also attempting to charge all my purchases and seeing Mcdonalds on my credit card statement helps to keep me on that track. My cash does seem to disappear and I have no idea what happens to it.

  7. Interesting point that some people never (or rarely) use cash. We prefer it because it gives a quick visual in your wallet of what you have spent this month. Also the $100 cash back is nothing in the grand total, so I don’t mind giving it up.

    I personally don’t like using CC for everything, since I don’t track our spending on the CC that closely. My wife likes the idea of a specific limit, so cash was an easy way to start. We have just kept it up.

    @Greg – Why? By the way, an off the top estimate for the household for income this year is $100k (gross). Net I don’t save in my brain, so I would have to look it up.

  8. I rarely use my CC. If I exclude my must-use-cash activities and exclude gasoline purchases (because I’d have to pay 5% more to use the plastic versus cash), I’d be down to about…..$2,350 per year which, at 2% cash back is $4 per month, not worth the effort to use and keep track of all my CC purchases as well as paying a monthly CC bill (I get CC bills about 4 times per year). I’ll stay with cash for nearly all of my everyday purchases.

  9. I collect cash from my business and most of it gets deposited to my personal account as it can be over $2000 a month. Some goes to expenses that are cash only or petty cash I keep on hand. I have a mix of CC spending and cash which makes it harder to track. Sadly, I have gotten away from tracking like I did earlier last year and notice the impact on my finances. I need to tighten up again.

  10. @Fil: is that unusual to move cash from your business to your personal? Shouldn’t you be using cheques, payroll etc so it’s track able to govt, revenue Canada ?

    I’m thinking your accountant would have a heart attack

  11. Its a franchise so its tracked by the franchisor and deducted from my weekly deposits. It’s done as cash payment to me from the business so I don’t have to worry if I get audited, as in its not under the table. My accountant is more anal than I am am he says the way we are doing it would easily pass muster.

    I could deposit it into my business account but the cost to do that is ridiculous.

  12. “Why?” – it also captures the additional data point of personal values on spending vs. earning which I like to combine with expenses for some more in-depth thought =)

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