Milton Friedman said that we base our consumption on our expectations of future income, rather than what’s currently in our checking account. If work has gone well for years, we start assuming it’s the norm. Then our consumption rises to that level. Duesenberry’s ratchet effect says that consumption is easy to increase but hard to decrease. Your story kind of breaks that rule, though. You cut your consumption by 20% in only a month! So maybe discipline was never the issue, after all.
You tracked all of your spending for years. Taxis, cat food, you name it. That gives you an accurate picture of where every last cent went. But it can’t tell you which part was optional. Your average spending over the past few months is simply a record of your past habits. Those habits are tied to your income. They grow as your income grows. So any forecast made on an app that doesn’t take this into account will be off as soon as your income changes.
You should create a budget based off of your lean month. Take this new, lower spending number and treat it as your real baseline. Anything you make above it should go towards debt, savings, or another boring but important thing. Only after you’ve covered those should you put money towards frivolous purchases. This keeps you from spending all of your raise.
There are actually many apps these days (depending on where you live) where you can enter your income and outgoings in order to monitor spending, some will even plug straight into your bank account to minimize the manual element. The reality is that beyond a basic budget most people don't really want to know or trace where every cent is spent, because it can actually sap a bit of joy out of life. It's definitely worthwhile reviewing your spending every few months however, because it's so easy to go overboard or start to let wasteful habits creep in. Your first paragraph is interesting and true, a bit like gambling we can start to lie to ourselves to justify what would previously have been considered luxuries becoming regular consumption if our income rises, which can make it hard to trim them out later. Necessity will usually break all habits though and force a dire look at spending that we might not otherwise take.
