Where the money goes: how to find the three categories that eat it all

The money does not disappear. It goes to three or four places

When someone says “I do not understand where it all goes”, they usually mean there were no big purchases, and yet there is no money. And it is true: there were no big purchases. There were forty medium ones, and about five of them repeated ten times each. A list of forty lines does not show that — it shows forty lines.

So the first thing to do is stop looking at the list and look at shares instead. What percentage of the month’s spending went on groceries? On cafés? On taxis? Usually three categories make up sixty to seventy per cent of everything. Those are the places the money “disappears” into, and they are what is worth thinking about — not the forty lines.

Everything below is about how to find those three categories and what to do with them. For that you need records for at least one full month: from a bank statement, from an app, from a notebook — it does not matter where from.

What to look at first

1. 1Add up all the month’s spending and work out each category’s share of that total. Not the amount — the share. “Groceries: twelve thousand” says nothing; “groceries: thirty-five per cent” says it at once.
2. 2Pick out the three largest categories. They are not necessarily the ones you expected. Very often the third turns out, unexpectedly, to be something like “food delivery” or “taxis” — things that look trivial one at a time and together add up to more than a year of clothes.
3. 3Compare with the previous month. Not with the plan, not with a “norm”, but with last month: what grew? A category that has been quietly growing for three months in a row is the answer to where the difference goes.
4. 4Look separately at “Other”. If it holds more than ten per cent, another real category is hiding in there that you simply have not named. Split that one.

A coffee for eighty-five, and the honest arithmetic of small things

There is a popular idea that all evil lies in small daily spending: takeaway coffee, a pastry, a taxi instead of the bus. Let us count honestly. A coffee at eighty-five hryvnia on working days is twenty-two times a month, that is about one thousand nine hundred hryvnia. Over a year — twenty-two thousand. That is not a trifle, it is a category, and it is worth seeing.

But saving on it makes sense only after you have looked at the big categories. If eating out takes eight thousand and coffee two, giving up coffee changes the picture by a few per cent, while changing the lunch habit changes it by a third. The order is always the same: first the three largest categories, then everything else.

And one more thing: you do not have to give up coffee to “learn to save”. You have to know that it costs twenty-two thousand a year, and decide whether that is worth it. Often the answer is yes — and then it is a conscious expense, not a hole.

Money that leaves without you

Subscriptions, automatic payments, the monthly fee for photo storage, the insurance renewal — all of it leaves the card without your involvement, in small amounts and on different days. That is exactly why these expenses are invisible: you make no decision, so you do not notice. In many families they add up to one or two thousand a month, and half of them have not been used for a long time.

Finding them is not hard: take a statement for three months and look for identical amounts repeating on roughly the same days. Each such pair is a recurring payment. Write them all out in one list with amounts and dates — and you will see what “I bought nothing this month” really costs.

These expenses are worth counting apart from the rest — as the part of the month that is already taken before you have decided anything at all. Then it becomes clear how much money you really have free, and it is often less than it seems.

Three questions for every large category

• Can I influence this? Rent — no, at least not this month. Groceries — yes, within limits. Cafés, taxis, delivery, entertainment — completely. Categories you cannot influence need to be known, but thinking about them is pointless; the time is better spent on the ones where there is a choice.
• What happens if I cut it by ten per cent? Not by half — by exactly ten. Ten per cent of the largest category is usually more than half of the smallest, and it is barely felt. Find where those ten per cent could come from — and that is already a decision.
• Was this a decision or a habit? Food delivery three times a week is not because you decided so, but because it turned out that way. Habits change not by prohibition but by replacement: not “no more ordering”, but “twice instead of three times, and a ready meal in the fridge for the third”.

Compare with your income, not with the neighbours

Absolute figures say little until you compare them with income. Twelve thousand on groceries — is that a lot or a little? For a family with an income of forty thousand it is thirty per cent, and that is a lot. For an income of a hundred and twenty it is ten, and that is normal. So every large category is worth seeing as a share of income, not as an amount.

There are rough guidelines, and they are rough: housing including utilities — up to a third of income, food at home and out — up to a quarter, transport — up to a tenth. If some category is noticeably higher, that is not a verdict but the place to look at first. If all three are within bounds and there is still no money left — the problem is in “Other” or in those same automatic payments.

And do not compare with other people. Other people’s spending is other people’s circumstances, other people’s rent and other people’s children. The only comparison that makes sense is with yourself last month.

Example: three categories instead of forty lines

Dmytro spends about thirty thousand a month and was sure that most of it went on groceries. When he worked out the shares, it came out differently: groceries — twenty-five per cent, eating out including delivery — twenty-two, taxis — eleven. Together — almost sixty per cent, and two of the three categories he had not considered a problem, because each individual delivery cost “only three hundred hryvnia”.

Comparing with the previous month showed that delivery had grown by a third — after he changed jobs and started getting home later. That was not a decision but a circumstance. In “Other” he found four subscriptions worth eight hundred hryvnia, two of which he had not used since spring.

The decision for the next month was a single one: delivery no more than twice a week, and on the third evening a ready meal from the shop, bought in advance. A month later the category had shrunk by two and a half thousand, the subscriptions he cancelled along the way, and groceries he did not touch at all. He did not save on coffee either.

One decision a month is enough

The most common mistake after the first honest look at spending is trying to fix everything at once: cancel the subscriptions, stop taking taxis, cook at home and buy no clothes. That lasts two weeks. One decision a month lasts for years, and over a year that is twelve changes — enough for any budget.

So at the end of every month write down one sentence: what you are changing next month and in which category. “Delivery — no more than twice a week.” “Cancel the second music subscription.” “Taxis only after eleven at night.” And next month look at whether it worked — that is the whole of the tracking the expenses were recorded for.

In FinLad the statistics show exactly those shares: what percentage of the month went on each category and how that compares with the previous month — so that the three largest are visible at once, without a calculator. Recurring payments the app finds on its own, from the repeating history, and shows apart from the rest of the spending; that part is in the Plus plan, the statistics themselves are free.