Step 8: Categorize your expenses

Step 8 of our 100 steps mission to financial independence: Categorize your Expenses
Step 8: Categorize your Expenses

By now you have (hopefully!) been tracking your expenses for a while so you should have a reasonably good idea of your spending. Ideally you would have at least 1 month’s worth of data to look at, if you have more than a month that’s even better. In the next few steps we will be looking at your expenses in detail to get a better idea of where your money is going, how much you spend on various categories and most importantly, whether this spending pattern is aligned with the way you WANT your money to be spent.

The first action step will be identifying the different areas that you are spending your money on by categorizing various expenses into groups, which will allow us to analyze in which areas of your life there is a potential to save more (or less) money. Continue reading