Understand your spending
Knowing where your money goes changes everything. Most people spend more than they think. Use our free budgeting tool to see your full spending picture.
Awareness is the foundation of any financial plan. Once you start paying attention to where your money goes, your financial situation tends to feel clearer — and often lighter.
Before changing anything, it helps to understand what’s already happening and what realistically should be dedicated to spending from your total margin.
Keep an eye on your spending
Tracking your spending isn’t about restricting every purchase. It’s about understanding how your money flows, so you can make informed decisions rather than reacting at the end of the month.
Most people are surprised when they see their full spending picture laid out. Not because they’ve made irresponsible choices, but because many expenses happen automatically and blend into daily life.
You can build this awareness in different ways:
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Your banking app. Most banks let you categorise your spending online, for instance into "groceries" or "leisure". You can often set budgets and pots within your savings too. | A budget spreadsheet. This gives you a clear overview of your income, expenses and what's left over to save or invest. | Budget and expense tracking apps. These give you a visual breakdown of your spending, send you reminders and automatically summarise where your money is going. |
Why we often underestimate our spending
If you’ve ever estimated your monthly expenses and later discovered the total was higher than expected, you’re not alone. There are behavioural reasons for this.
Planning fallacy
The planning fallacy describes our tendency to underestimate how much time, money or effort something will require, even when we’ve experienced it before. We tend to imagine our “ideal” future behaviour, rather than our typical behaviour. For example, forgetting how often small purchases occur.
🍽️ | 🤞 | ➕ | ⚠️ |
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David estimates he’ll spend around €100 on eating out next month because he plans to “cut back.” | Despite making trying to eat out less, at the end of the month, his total spend amounts to €180. | A few lunches, a birthday dinner and some takeaway on busy evenings added up. | Where David went wrong: he planned based on intention, not on his usual behaviour. |
Mental accounting
Mental accounting refers to the way we mentally label money and treat it differently depending on its source or purpose. For example, being strict with rent payments but relaxed about subscription costs, or seeing small daily purchases as insignificant because they don’t feel like one large expense.
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Sophie carefully tracks her rent and groceries, but rarely checks her subscriptions. | Each one feels small on its own, so she doesn’t pay them much attention. | While they seem small individually, they do add up to a significant monthly cost. |
Spot your spending patterns
Recognising these patterns is the first step toward changing your relationship to spending — and towards consistently setting money aside for your goals. Complete the task below to get started!
Understand your spending
In this assignment, you’ll compare what you think you spend with what you actually spend. We’ve designed a free and easy-to-use spreadsheet, the Financial Reality Check, to help you do this.
- See if your estimated spending matches reality
- Get to know your own spending patterns
- Spot which patterns you can adjust
Your Financial Reality Check
Click on the link below to download the spreadsheet and get started. You can choose to open it in Google Sheets, Excel or Numbers. In the ‘Start here’ tab, you’ll find instructions on how to use the sheet.
Note: The English versions of this spreadsheet is geared towards people living and working in the Netherlands. Please get in touch if you’re interested in another version!
Download Reality Check