After our expensive year in 2016, we set ourselves a goal to reduce our spending by 10% in 2017. We want to do this because it has a double effect. Firstly, it frees up more money to invest for our future. Secondly, if we can live on less, then it brings that future much closer. In 2016, we spent $80,000. To generate that using passive income and the 4% rule, we would need $2,000,000 invested!
Happy New Year!
December is the party month and the holiday month and the spending-on-gifts month. Surprisingly, this didn’t lead to as big a blow-out as I was expecting. This is partially because we managed to pay some of our car bills early so they wouldn’t fall into this month. December is also the month in which we find out whether we managed to reach our 2017 goal, so without further ado…
Daily Spending Rate
WE DID IT! See the red line? It’s below the green line! Those lines make me so happy!
Of course, as with all statistics, this doesn’t necessarily tell the whole story. Remember way, way back at the beginning of the year, the actual goal was:
Now based on these parameters, we not only met our goal, we absolutely killed it. We reduced our spending by 19.7%, nearly double what we were aiming for. But see that line about “excluding a planned holiday to Japan”? While Japan didn’t eventuate, New Zealand did. I’m so pleased to report that even including our holiday, we STILL BEAT OUR GOAL. That’s right, we managed to reduce our spending by 11.8%, meeting our stretch goal.
This gives us a lot to think about, and of course there’ll be an upcoming post on what our 2018 goal might be. At the time of writing this, we’re still trying to absorb our success. I really thought we’d be down to the wire.
As I reflected after one year of blogging, I want to be more transparent in reporting our numbers. This is the first step – everything we budgeted and everything we spent via our top-level YNAB categories.
I’m not too concerned about this spending. Food and multiple Christmas parties are a huge feature of our December, so I expected this result. What has surprised me is that we are still green on the eating out category! I managed to decline 5 of the 9 Christmas parties on my agenda, leaving me with two “home” parties that we contributed food to, and two parties at restaurants. Mr. ETT attended the same, except we each went to our own respective work parties individually. I have absolutely no regrets at declining the other invitations I had received. Not only did it save us money, quite frankly, the downtime was precious to me.
Groceries Need and Groceries Want were both over budget, but we did some entertaining, catering, and contributing. If there is one time of the year I don’t begrudge overspending on junk food, this is it. Although, my body is now begging me to return to at least a small measure of decent eating!
Over, but not as much as I thought it would be. Mr. ETT received a lot of alcohol as gifts this year, so 2018 should be a lot less costly for us in this category. Also, I’ve decided not to drink alcohol in 2018.
Another month where our Eating Out spending correlated with how we want to be spending the money – on eating experiences together. Back in November Strong Money Australia asked “Does Mr ETT know you have the pie chart which highlights ‘his’ spending? lol that seems like a recipe for an argument“. I concede that it’s passive-aggressive on my part, but he assures me he reads every post! We have talked about it IRL, but by posting the graph, it’s easier to digest than me always pointing out how much it all adds up. Also, compared to the graphs at the beginning of the year, it’s a huge improvement.
Of course we maintain our independence and we have experiences separate from each other, so we are never going to have 100% in “both” spending, but as long as the largest percentage is on experiences together, that matches our values.
Gifts and Giving $764.81 Each
I confess, when I looked at how much we spent on gifts and I realised how much I had to donate to charity, I felt hesitant. What was this going to do to our daily spending rate? Could that final donation be the thing that stopped us from reaching our goal? Then, mum voice came out: “Well, toughen up, princess. Firstly, you made a commitment, so your daily spending rate be damned. Secondly, no, it’s not donating to charity that stuffed up your daily spending rate – it’s all the junk and other unnecessary choices you’ve made throughout the year that contributed.”
*Hangs head in silent shame, donates an amazing amount to WIRES and feels great!
After the WIRES donation, I realised there was a gift I’d forgotten to account for, so we pulled another charity out of our box, and donated $25 to Barnardos Australia. There are still 3 charities waiting to be drawn from 2017, because Mr. ETT ended up going on some charity rides and participating in Movember, while I did Dry July. We’ll sit down and pick another 4 charities each to place back in for 2018.
I lost 10% of December to migraines. OK, it’s only 3 days, but that’s three whole days where I was completely unable to function. Most disappointingly, I was to have attended Sleepmakeswaves at the Oxford Art Factory with friends, and I couldn’t go. It’s so frustrating, because that one was a shocker, lasted 2 full days, and came out of nowhere. Go to bed fine, wake up with a migraine. Not only is it incredibly painful and horrible to feel nauseous at the same time, it costs money! Medication, price of the concert, lost time where all plans have to be put aside and caught up with later.
I had a second migraine on my last day at work, so instead of being able to finalise everything properly and leave my desk orderly for when I return, I had to catch a train home with a ziplock bag in case I vomited. Thankfully I made it home, but it’s an awful, awful experience. I will acknowledge my colleagues here, more than one of which offered to drive me home.
We (including my doctor) thought that my migraines are related to seasonal allergies, but I have them under control. In 2018 I need to begin recording when I get them to try and identify other possible causes.
Mr. ETT received his yearly pay rise of 3% or inflation rate, whichever is higher. This year it was the 3%, of which we will put the entirety into investments. His work also pays out all leave loading as a lump sum, so that was a nice bonus as well. I absorbed that into budgeting for the future.
Well, it’s that time of year. I will re-assess my goals for 2018, but it might take a while. Aside from exercise, I’m still not sure what I want to achieve!
We’ll pick this back up in 2018.
Grow Fresh Herbs
Look, they’ve got pretty flowers! I think that we can all agree I am no longer a black thumb. I can grow plants if I put my mind to it and actually learn how to look after them. Unless something extraordinary occurs, this will probably be the last update. I was able to use my thyme in a dish I cooked for the family for Christmas, which was exciting to me. I’m putting this down as a delicious win.
This is another goal I don’t think I need to continue to report on. I have had no issues in sticking to this, and I’ll be expanding the circle of friends that I catch up with in 2018. If you have friends you haven’t spoken to in quite some time, I highly recommend setting this as a goal. It’s so much fun that once you begin, it’s easily sustained. Now I just need to find the same level of sustainability for my exercise!
I use, and totally love, YNAB to track my spends and budget. Mr. ETT doesn’t exactly love it, but he does use it – super important when more than one person spends money. YNAB offers a 34 day free trial period. If you try YNAB and love it as much as I do, then by signing up through this link, both of us will get a free month in our subscriptions!
Thanks for all of your support on these posts throughout the year. It really helps to have accountability, encouragement and the sensible advice that you offer. I’m not sure yet what format these posts will take in 2018, but I will continue reporting in some manner.