Back on Track: 2017 Finances

Last year was an expensive year. I haven't added it up but I am positive we spent more money in 2016 than any previous year, and probably by like...a lot. I finished school, we moved, I spent a zillion dollars on Ironman things, we now live in the 5th most expensive city in the US (seriously you wouldn't believe how much money we spend in groceries)...it was really like the perfect storm of financial crappiness.

I know this is such a cliche, New-Years-Resolutiony thing to say, but I really want to work on our finances this year. I actually keep pretty meticulous spreadsheets of all of our income and expenses, and every month I make a budget, but we (okay fine it's mostly me) aren't the best at actually sticking to that budget. We don't live beyond our means - we were both raised to believe that some horrible, unspeakable punishment will fall on us if we accrue any credit card debt and therefore neither of us has ever had any - but we aren't frugal either. I know we aren't going to become super frugal overnight and that's not even what I want, I just want to make it more of a priority to save money, budget for expenses we know are coming up, and make more thoughtful purchases.



Have $30,000 in savings at the end of 2017.
I was going to put this at the end since this is really the big, overarching financial goal of the year, but then I thought...isn't that the reason it should be right at the beginning of the list? 

We have struggled for several years now over how much money we should have in savings. We paid off our shared car a couple years ago, own a home and have no debt other than our mortgage, and have a couple months' worth of necessities saved up, so we just haven't felt the need in recent years to put a number on the amount we'd like to have saved up. We do put whatever money we have leftover at the end of the month into savings, but if I'm being honest, that number has been zero more times over the last year than I would like to admit. 

This year was hugely expensive: during the first half of the year I was still in school (we paid for my engineering degree in cash so that's where the majority of the money we would have saved the last 3 years went) and we moved to the city (rent = cha-ching), and in the summer the renter we had in our condo moved out, so for the second half of this year we not only paid for our expensive apartment in the city, but also received $0 to supplement the mortgage payment for our currently empty condo. Add in moving expenses, some new furniture for our new apartment, a higher cost of living in the city, Ironman expenses (I don't even want to tally up how much that cost but - and it is seriously painful and somewhat embarrassing to admit this - I spent over $4000 on new bikes alone (cringing over the fact that I just wrote that and wondering I should start pressing the delete key...?)), and yeah, it's been an expensive year. I already knew that, but when I looked at our savings account and saw that even though we put over $15k into it this year, but we ended up with $1500 less in that account than we had this time last year...that was a huge wake-up call.

So like I said, we have never come to a good conclusion on how much money we would like to have in savings, or even what what we're saving for, but I looked at how much money we spend on certain things, and then I thought about how much money we should reasonably be spending on those things, and I subtracted that as well as the things we have to pay for (like our rent and mortgage) from our income, and I came up with a monthly savings goal that will definitely force us to be smarter about saving, but at the same time is a reasonable amount. And then I looked at the trips we want to take this year and subtracted that out from our savings, and I ended up with a projection that, if we really try our hardest to stick to this plan, will give us over $30,000 in our savings account this time next year. I honestly don't know if that's a lot of money or not a lot at all, but considering our savings trajectory has taken a nose dive over the last couple of years, it's a marked improvement. 

Put any and all rent income into savings.
We have had 7 months without a rent payment from our condo and, honestly, considering how much money we spend on our two places alone, I'm pretty happy with how we're doing financially. Since it's been 7 months I've taken the rental income out of my budget spreadsheet, and we've been managing fine without it.

We are *hopefullyknockonwoodpleasegodplease* on the verge of having a couple move into our condo, so we are expecting that we'll start getting rent money again in the next month or two. Over the last year we've really stopped depending on that money to cover our condo expenses. Since we're used to living without it, I want don't want to account for it in our checking account and just put it straight into savings. Doing so would increase our projected savings to $40k-$50k by the end of next year, so that's some serious motivation!

Budget for travel.
We used to take a big trip every year or two but never really planned it out that far in advanced and just took out whatever we needed from savings when it was time to book it. We also tend to take smaller trips several times throughout the year and just pay for those as we go. That's still our approach, but this year I wanted to make more of an effort to anticipate our trips and the amount of money we'll be spending on them. We haven't been on a big trip since summer 2015, and we thought about taking a last-minute trip last year but it just didn't make sense to spend the money, so we didn't. I don't want to get into that situation again because I really need a vacation, so this year I've made it a point to plan out our spending on trips big and small. We've actually already paid for our big trip this year - we're going to Belize in July! - so we're already off to a much better start than last year. 

Budget for running and triathlon expenses.
Like I said, I have no idea how much I spent on running and triathlon/Ironman stuff last year, but I know it was a lot. I'm too scared to know the exact number. I registered for races whenever I felt like it (including a 2017 Ironman), I bought shoes whenever I wanted new ones, I bought whatever clothes I felt like I needed, I bought two bikes (to be fair, the road bike was my graduation gift to myself using my signing bonus from my job, and the other one was more impulsive but not completely since I'd been planning to upgrade my tri bike eventually), and I got some new gadgets (also with a bonus from work, but still). It was a lot and I definitely don't intend on buying all of those things next year, but I do have a list of races a mile long and I am still going to need shoes throughout the year and I'm still going to need 

Donate monthly.
Ben and I have talked about donating money to charity but we have never done it regularly. We definitely have enough disposable income to put some of it toward causes that are important to us, and this year I want to make it a point to start doing just that. Right now we are thinking about either working together to come up with an organization to donate to each month, or taking turns and altnerating months.

Get back to a more minimalish purchasing approach.
For a while I was really good about making conscious, thoughtful purchases, only bringing in things we needed, replacing things we didn't, and recognizing the things we really didn't need, but over the last year I have gotten way too cozy with my Amazon Prime account and the "Buy It Now" button. We've ended up with more than just the necessities, which we really don't have room for in our 700 square foot apartment. I hate the physical and mental clutter of knowing that we've brought a lot of sutff into our home and want to be a lot better about that in the coming year. Most of the time, buying the stuff I think we need doesn't make me feel any better, and a lot of times just makes me feel worse and kind of claustrophobic.

This year is the first full year since 2012 that we've had two incomes and no school to pay for, which makes me really hopeful that with some smart decision-making, these goals are totally within reach!


Linking up with Nadine and Amy!

13 comments :

  1. First, loving the design update. So pretty! I'm a total personal finance nerd (I don't know why I love it because I hate money so much, but there you go) so I love posts like this.

    It's cliche, but the "pay yourself first" cliche is so for a reason. Leaving savings as an "after expenses" type of thing is a good idea when income is low or it's a tight month or something, but it's so easy to see that money as spendable rather than earmarked unless it actually is earmarked for (or better yet, deposited to) savings. Great first goal.

    Good luck getting a renter in there! That's an awesome way to get that money painlessly into savings without feeling the pinch on your personal spending money.

    I just read the travel paragraph and yelled out to David "Tracy and Ben are going to Belize in July!" in a pained, wounded voice because I want to go there SO badly and have been talking to him about it for months. Of course, no plans immediately to go because that whole "I need a job" thing, but I will be living vicariously through your trip.

    For the past couple years, I've donated to charity monthly, and it has really been a rewarding expeirence. I donate somewhere different every month, usually in accordance with personal motivators (i.e. grandmother died of Alzheimers in August, so each August I donate to Alz Assoc. in her name) so I can spread it around to causes I care about. It isn't usually much, just what I can afford, but I figure there's always someone who can make better use of $10 or $20 than I can. This is an awesome goal!

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  2. i always allocate 20% of my pay into savings and that gets divvied up into other accounts - vacation, savings, house fund etc. another amount goes into my investments. these other accounts are high interest savings and are out of sight, out of mind from my checking account so it builds and i don't see it...then when i check it, bam! there's a lot of money in there and it's always amazing to see that amount.

    finances and money management are so important to maintain; it's something I'm teaching my daughter already (she has 3 money jars - savings, donation, play).

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  3. Finances are a huge goal for me too this year. Since we just bought our house I feel like we've been spending like crazy! Then Christmas came. It's been a spending frenzy over here and I'm almost sick just thinking about it. I really need to get better at tracking everything with a spreadsheet. I did it when I was single, but John deals with most of the finances for us now, so I just don't think to do it. Thanks for the motivation!

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  4. Good for you! I'm trying to be more mindful of spending this year, although I don't have any concrete goals. It's hard because the end of the year is always a terrible time for spending/saving, so even if I made progress during the rest of the year I always end it feeling like a failure.

    Running is an expensive hobby, and it's part of the reason I started on my "minimal marathoner" journey. It feels ridiculous to spend so much on what is supposed to be the simplest and cheapest sport. I'm also trying to spend less in general, but other than eating out too often I'm not a terrible spender, so I'm making my goal to be better at eating and hoping that will do double duty in also cleaning up my spending :)

    Good luck finding renters! Fingers crossed!

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    1. It's so easy to get swept up in the latest and greatest in running gear (and triathlon is SO much worse!) but you're right that it's kind of ridiculous to spend so much on what should really be a minimalistic hobby. Part of the reason I don't need to spend so much money this year is because I did spend so much last year. Two sides of the same coin, perhaps, but now I have all the clothes and gadgets I could want and aside from shoes (which are obviously a necessity) and race fees (which obviously are not, but running is my main hobby and races make me so happy).

      Groceries are so expensive here that it's pretty much just as expensive, and sometimes even more, to make dinner at home than it is to get food out. I've definitely struggled with how much our total food budget has increased since we moved to DC!

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  5. First of all...Thanks so much for linking up with us!! It sounds like you have a great handle on what you need to do to get to where you want to be financially and trust me, that is a huge accomplishment. Many people have no idea where to start and it gets stuck on the back burner. I too am a huge offender of pushing the "buy it now" button more often than I care to admit. Working on that. You got this!!

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  6. I love that you're working on your finances this year, that's so awesome and responsible of you! I love that you have a plan to keep you on track. Intensional spending and only getting things of necessity and things we really love is something for us to focus on for sure. I'm guilty of putting savings last on my priority list. I wish you all the best with this goal!

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  7. Love the new look around here :) Your financial goals all sound like really good ones! That savings one is a BIG one but all the more reason for it to be the first on you focus on. Good luck with them!

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  8. Great, great, great ideas!
    I think everyone can benefit by thinking smarter about money and how they spend, regardless of their financial situation. Your post definitely makes me feel motivated to start myself. Think I might have to add this to my priorities for the year! :)

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  9. Um, $30K is HUGE! Good luck getting there. I think seeing that number in savings would be a great motivator for me. I am also trying to be more minimal with my purchasing. Wondering where I'm going to store something has helped a little so I need to keep that momentum in 2017!

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  10. I love your new layout/design! This was such a great post to read-- and gave me so much inspiration and ideas for how to break down different budgets/spending instead of just keeping it all in one place. One of our big goals is to actually track and be more mindful of our grocery/food budget and figure out how to spend less and/or make what we're buying last longer. It sounds like you have everything set in place to save up to the 30k you want to get to by the end of the year! I'm sure it will be such a relief when you have someone moved into your condo.

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  11. Well $30,000 sounds like a lot to me! :) I think that's great to just overall be more mindful of your spending, and money in savings can never be a bad thing. That's SO awesome you paid for your degree in cash so you don't have that debt to worry about!

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  12. i am nosy and would love to know how much you spend on groceries. i feel like we spend a ridiculous amount for the 2 of us somewhere like KY but i don't know how to make it go down lol.

    i think your goal of $30k in savings is amazing, but i totally know what you mean - if you don't put a number on it and make an effort to work towards that goal, it's very easy to go months without adding anything. we had a minimum for so long that all of a sudden i was like, wait - our income has doubled she we set this minimum, so our minimum should be higher.. you know? it's a lot less than your amount - not saying that in a mean way, but you said you didn't know if it was a big number or whatever, so to me, it is. but. we live in Louisville which is, I imagine, significantly cheaper than DC.

    i really hope you get that couple moving in to your condo, and how awesome that you don't really *need* that money to pay your mortgage! that will be a lovely boost to your savings :)

    This is going to sound really bad but - KC isn't big on donating to charities, except sometimes he is, like he's a huge softie when it's something personal to him or like a little kid comes up to him or whatever, whereas i'm more willing to seek out the things i want to donate to. i have 2 monthly donations set up with 2 different organisations, not a lot, like $20 a month each. i've been thinking about adding another, or having a separate monthly thing that i can donate how i please. we were volunteering for a pet shelter for a few months and i'd also like to do something like that again, though it's dangerous being around kittens that need a home!

    Belize!!! how exciting! I am awful about saving for travel. we have one savings account and everything gets lumped together. it's not a big deal when it's a big trip because i make a spreadsheet and plan, but little trips hit harder because i didn't plan for them properly.

    anywho! sorry for the novel. best of luck for all of these!

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