Just look at the data
"Just look at the data" is one of those lessons that is timeless, revealing, and unbiased. I recently did a quick budgeting exercise to get a better handle on my expenses. Mentally, I had a number in my head of what I "thought" I spent in a month. The real number was 30% higher. Reactions included:
-
Mildly surprised: Spiky or "one-off" expenses are hard to internalize as regular expenses. They are regular in amount but vary in purpose; e.g., one month it's an insurance premium, in another month it's some furniture, in the third month it's a new pair of AirPods, and in the fourth it's a weekend vacation.
-
Reflected: Wow, looking at the number has made me think about it more than I would have on a regular day.
-
Planned: I don't believe it is possible to cut my expenses by a large percentage (say, 50%) without significant lifestyle compromises. But I can avoid lifestyle creep by putting better habits in place. An interesting suggestion from Gemini: Designate a day of the week as "shopping day." You are not allowed to purchase anything outside of "shopping day" except groceries or emergencies.
Where else will you "just look at the data"?