How I manage my expenses

7 min readDec 10, 2022

Introduction

In this article I want to share my experience of managing a budget. The most interesting part, I think, is a comparison between life in different countries, because some time ago I moved from Moscow to Madrid.

Keeping a detailed record of expenses I’ve started in March, 2021 and a logic behind it transformed several times already. Now, I’m happy (almost) how it looks like and how it helps me controlling expenses.

Tools to keep track of money

Before 2021 I made several attempts to keep track of money and nothing worked for me except spreadsheets (I use google spreadsheets to be specific). Apps where you record every spending require many steps in order to fill a single expense and you are quite limited by application functionality. Some of them look fancy, but I have never been able to cultivate the habit of writing down all my expenses with them.

Another thing that has to be mentioned here is that we are a family of two: my wife and I without kids. We’ve decided to maintain a joint budget in order to support each other in different crises, such as temporary unemployment, expensive training courses, etc. Hence, it’s also useful to have a shareable budgeting and google spreadsheets works perfectly.

Time periods

In 2021 we only have monthly expenses — every month we accumulated what we spent last month. It didn’t help too much to improve within a month and it didn’t capture weekly trends. Consequently, we moved to have daily statistics (only this way we could accumulate data to have monthly and weekly metrics). It doesn’t mean, that we have to fill the table every day, we agreed to fill in once a week, once every two weeks. It requires no more than 10–20 minutes.

We have 2 daily tables - for my wife and for me, where we add spends, others are generated with formulas for weeks and months metrics and one table for graphs.

Types

Probably, you’ve already noticed different colours for categories. These are our groups of categories or, simply, types.

In order to have a more high level and a clear picture of spendings, we’ve divided all categories into 4 types:

Fixed costs: Rent, Supermarkets, Mobile and Internet
Regular costs: Clothes, Transport, Household goods, Health and Education
Variable costs: Restaurants, Office lunches, Entertainment
Travel: Travel

The logic behind this is to separate costs, that are well predicted and are almost constant every month (Fixed costs) from costs, that can vary from month to month and which we can strongly influence (Variable costs and Travel).

This way, it forms a funnel and in order to improve our strategy we should focus on (one after another): Travel > Variable costs > Regular costs > Fixed costs.

Dashboards

The most important part is visualisation. We have data from March, 2021 with a gap in 4 months during a relocation period, but you can clearly see the difference before and after the relocation (May, 2022 — the red vertical dotted line).

In total we have 26 graphs. It seems a lot at first glance, but in reality it isn’t. I built some high-level metrics (that I don’t want to share, because it includes our incomes too), such as (the most important ones):

a simple monthly graph with incomes and outcomes to ensure, that income is above outcome
burn rate — a monthly graph with a ratio: outcome / income * 100%
savings — overall savings, that accumulates balance every month

Then, we have expense breakdown charts, that I mentioned earlier. Where it makes sense we built weekly graphs (we didn’t record weekly data before the relocation):

The ‘average’ is built as an average for the last 6 months.

For restaurants we have a trend, that I really like. It doesn’t mean, that we’ve stopped going out, but we’ve started valued it more.

“Travel” is enormous (I will tell you why later), but it’s hard to find a cheaper “Mobile and Internet” price in Madrid:

Dashboards by types

This separation by type provides a more abstract picture, where and how we spend our money. By design, we can’t really affect fixed costs:

Regular costs are something that has more variance, but it’s hard to change:

Variable costs are those costs, that we should target first and by design has the highest variance, together with the travel category:

Looking at the last 2 dashboards, it seems, that we can (almost easily) save about 500 euros every month.

Cost of living comparison

Finally, it’s time to compare a cost of living in Moscow and in Madrid.

Fixed costs. Now we spend exactly twice as much on renting an apartment (with all consumptions) in Madrid. it certainly does not mean that Moscow is cheaper. Moreover, in my opinion a price for a square meter is almost the same (if we are talking about relative proximity to the center). The reason of this increase is that we’ve decided to rent a bigger (and better) flat from the beginning. Usually you get an unfurnished apartment in Madrid (in Spain overall) and it’s much harder to change housing, thus people live in the same apartment much longer.

For me it was a surprise, but prices in supermarkets are just a little bit higher — on average, we continue keeping a budget for supermarkets under 100 euros per week. But you get a much higher quality of products and a wider range of choices. As an example, instead of 2–4 mediocre types of cheese we enjoy about 10 from all over Europe on a daily basis.

Regular costs. It’s pretty much the same (except the spike in August — it was a laptop, ha-ha).

Variable costs. “Restaurants” is a great example, why we’ve decided to work on our expenses in first place. We were spending about 250 euros every month without getting almost nothing in return. We went out not because we wanted, but because we were lazy to cook (also, there is a hypothesis, that you go out more when you are more nervous). Now, it’s a way to explore new food combinations in order to repeat this at home. As for prices in restaurants, they are pretty much the same — a pretty good dinner for two costs about 40 euros. Our goal right now is to reduce this expense item even more —below 80 euros looks achievable.

Travel. What I can say here - Paris is the reason why we have this huge amount of money spent on travelling. Paris is a very expensive city (see expenses for 5th and 7th months?). It costed us a fortune. Justifies only that it was our dream.

Summary

Overall, I’m glad that we were able to cultivate the habit of evaluating money and understanding how and where it goes and more importantly, we continue to support it.

I hope, this article can help you in some way: to organise your expenses (don’t waste your time googling for advices, how people do this, really, don’t. Start doing something, that is simple enough right now, specifically for you), or to compare live in Moscow and Madrid.