Stats Canada published a very interesting report last week, Survey of Household Spending, 2015, which on first read sounds obvious.
Canadian households spent an average of $60,516 on goods and services in 2015, up 2.5% from $59,057 in 2014.
If we remember inflation in 2015 ran at a slim 1.6%, which means that Canadians spending increased 0.9% (after adjusting for inflation).
Of this spending the breakdown of what we bought is fascinating as well:
- Food 14.3%
- Shelter 28.9%
- Transportation 19.4%
- Household operations, furnishings and equipment 10.9%
- Clothing and Accessories 5.6%
- Miscellaneous (?) 2.8%
- Education & Reading Materials 3.0%
- Alcohol, tobacco and games of chance 2.5%
- Recreation 6.6%
- Health and Personal Care 6.0%
Your Household Spending
Why is this of interest to you, and your personal finance plans? Do these numbers reflect your spending? Are you an average Canadian ? You donâ€™t know? I think you should. If you cannot compare how much you spend to these numbers, you are not in control of your finances.
The other thing is, that if you donâ€™t have these numbers at hand, go with the assumption that you are close to these numbers. If you make that assumption, you can:
- Start tracking your spending from this point (so you can figure out where you spend money)
- Use these numbers to try to lower your overall spending
Some areas where you might try to lower your spending are hard to change (Shelter is the big one, it is very hard to lower your rent or mortgage (you can, but it is hard)).
Finding Savings in Data
In my opinion these areas scream out as being areas where you could start trimming spending:
- Transportation, if you have a car, could you use public transit ? Can you afford your car? Insurance on your car?
- Clothing and Accessories, this is an area where there are countless great web sites (e.g. Squawkfox) that can help you control your clothing spending.
- Food , no I am not saying buy cheap food, but maybe going out for dinner is essential ?
- Alcohol and games of chance, seriously? If you smoke, stop, and games of chance are not going to get it done either.
Those are a simple overview, I am sure if you looked closely and started tracking things, youâ€™d find many more places to save money.
More Data is a Good Thing
Collect the data, however you like, but with more information comes a better understanding of where you are spending your money.