How to do a spending audit of the last ninety days

A spending audit is one sitting, about two hours, with ninety days of transactions from every account you spend from. It produces three numbers, the monthly total, the share of it that is fixed, and the three variable categories that are largest, and one list, the charges you would not choose again. Ninety days is long enough to average out a trip or a birthday and short enough to finish in an evening. The audit is not a budget; it is the page a budget is built from, and a household that does one every year knows what it spends in a way that a household with a budget it never reads does not.

Why ninety days, and why every account

One month is a sample of one: it holds a warehouse club run or it does not, a car repair or not, a five-weekend month or a four. Three months averages those out without reaching back into a season that no longer applies. A year is more accurate and takes a weekend, which is why it does not get done.

Every account matters because spending is split across them by convenience, not by kind. Groceries land on one card, the subscriptions on another, the rent from checking, the delivery apps from a third. An audit of one account is an audit of one habit.

Gather and clean the transactions

1. Export or list ninety days of transactions from every account: every checking account, every card, every payment app that spends from a balance.
2. Remove the transfers between your own accounts, and the card payments, since the card's purchases are already in the list. Each of those would otherwise count a dollar twice; see How to stop credit card payments and transfers from double-counting.
3. Net the refunds against their purchases, so a returned item is not spending.
4. Set the income aside in its own line. The audit is of spending; the income is the number it is compared with at the end.

Sort into a dozen categories

Use no more than twelve, by what was bought rather than where: housing, utilities and phone, groceries, dining and takeout, transport, insurance, debt payments, subscriptions, shopping, health, personal, and everything else. The point is the totals, so a purchase that could go two ways goes one way consistently and nobody agonizes. A warehouse club run that is mostly food is groceries; the sorting is fixed in an evening, not perfected. See How to categorize transactions so the totals mean something for the rules that keep the sorting stable.

A worked audit

The three numbers: the monthly total is $4,220, against take-home income of $4,400, so the household keeps about $180 a month. The fixed share is $2,422, or 57%. The top three variable categories are groceries, dining, and shopping, which together are $1,240 a month, more than two-thirds of the variable spending.

The list of charges you would not choose again

While sorting, mark every charge that fails the question "would I sign up for this again today at this price?" The list is short and specific: a subscription unused since spring, a delivery app fee that has become a habit, a membership renewed by default, an insurance rider nobody remembers adding.

Forty-six dollars a month is $552 a year, found in the same evening, and it is the audit's first return before any budget exists.

What the page is for

The page has the monthly total, the fixed share, the top three, and the list, and each has a use. The total against income says whether the household is ahead or behind. The fixed share says how much of the month is decided before it starts and where a phone call saves more than a habit; see Fixed versus variable expenses. The top three say where a rule about frequency would move the total. The list is acted on tonight. And the twelve monthly figures are the first draft of a budget, rounded up, for a household that wants one; see How to set budget amounts when you have no idea what you spend.

Common mistakes

• Auditing one account. The subscriptions are on the card you did not export.
• Leaving the card payments in. Every card purchase then counts twice, and the total is wrong by the whole statement.
• Thirty categories. The evening becomes a weekend and the totals are too small to mean anything.
• Auditing one month. The warehouse run or the repair makes it wrong in a direction you cannot know.
• Stopping at the total. The fixed share and the top three are where the decisions are.
• Not acting on the list the same night. The cancellations are the audit's only immediate return, and they take ten minutes.

Common questions

How do I audit my spending? Gather ninety days of transactions from every account, remove the transfers and card payments, sort what remains into a dozen categories, and divide each by three. Read off the monthly total, the fixed share, and the three largest variable categories, and write down every charge you would not choose again. Two hours, once a year, or once before any budget.

How far back should a spending audit go? Ninety days. One month is too noisy and a year takes too long to finish; three months averages the lumps and fits in an evening. A household with a strong season, a summer of travel or a winter of heating, can do two audits a year.

What should I do with the results? Cancel the list tonight, note the fixed share for the calls that lower it, put a frequency rule on the largest variable category, and, if a budget is wanted, use the twelve monthly figures rounded up as the first amounts.

Should the audit include income? Set income aside in one line and compare it with the total at the end. The audit measures spending, and income is what the total is judged against; mixing them into the categories hides both.

How often should I repeat it? Once a year, in the same month, or whenever income or the household changes. A budget that is read weekly makes the audit shorter each time, because the transactions are already sorted.

How Zypper handles this

Zypper does the gathering and the sorting as transactions arrive. Every connected account's transactions land in one list, categorized automatically with your edits winning over the automatic choice, and transfers between your own accounts are linked as one movement so a card payment never counts as spending. The cash flow page is the audit's table: pick the last quarter, group by category to see what the money went to or by merchant to see who it went to, and each row opens into its own chart and the transactions behind it. The transactions page filters by amount, merchant, category, and date range for the list of charges to question, and a transaction rule applies a category or a tag to the same merchant from then on. See Cash flow, Managing and reviewing transactions, and Transaction rules for the details, or get started with Zypper to read your last ninety days tonight.