They always say you should know where every penny of your money is going, what you are spending it on, how much are you saving and are you living within your means. “They”, of course, being those financial pundits that presently know more about where to put money than I do. We’ll see how long that lasts!
For the first time in my entire existence, I now have a pretty picture of what I am doing with my money. At first, I thought it wasn’t a pretty picture, no Van Gogh for me! Nevertheless, after careful inspection, I realized I was within parameters for my income level. The perfectionist in me finally conceded a point, I had done something right and it was with my finances.
I could not be happier! Finding joy in something that used to bring me extreme amounts of anxiety is a breakthrough. Believe me, when I was married, had a mortgage and car payments I was anxiety ridden about how I was going to pay for everything – I was living the paycheck to paycheck dream, err, nightmare. It really did keep me up nights, and I vowed I did not want to have heart palpitations about my finances anymore. Once I was divorced, I made a pact with myself that I would rewrite my life and so far, it’s been going fairly well.
For all of 2013, I was on a steady upswing in my net worth. It’s still a paltry number but I went from a net worth of over -$40K when I started all this in 2010, to a positive $13,383 in December 2013. I couldn’t “officially” start tracking net worth until September 2013 as it took me some time to figure out all the numbers and get my investments input into Quicken. I am ecstatic that I’m finally in positive territory! As of January 28, 2014 my net worth stands at $14,929.00
Where is the money going?
A note on the spending numbers: budget tracking in Quicken didn’t officially start until March 2013. I was between using Mint.com and Quicken; unfortunately, the numbers did not translate over into Quicken
The biggest area of spending is no surprise, the car! Car payments were 11.87% of my spending or $6549.90. If we look at my car as a whole with insurance, gas and service, it cost me a total of $12,193.28 or 22.10%. That is why they’re called money pits!
The next largest expense is no surprise either… clothing! I spent 14.60% or $8054.96 on Clothing.
Grocery expenses were $2952.90 or were 5.35% of my income for the year.
Maggie the cat cost me $1612.23 for the year between Vet bills and Pet food, toys and supplies. The vet bill came in at $888, which is high because of Maggie’s health issues the past year. Luckily, we’ve figured out what’s wrong and I am working to correct it. Poor Mags is an anxiety ridden, stressed out fur ball presently. I’ve taken measures to keep her calm and shield her from the nasty neighbourhood cats that sit on the front porch and tease her.
Thanks to my generous family, Rent was only 2.9% of my spending or $1599.99.
Ironically, I thought my Bills and Utilities would be higher but interestingly they were quite low:
Mobile Phone 1.90% or $1046.44
Television 1.76% or $973.62
Home Phone/Internet 1.64% or $906.72
We all like to bitch about how much TV and internet costs when in the grand scheme of things they are rather minute compared to what we spend on cars, housing and other vices like fashion.
What Were My Finance/banking charges?
Everyone wants to know these numbers I’m sure! I’ve done quite well in keeping costs low in relation to my banking:
Finance charges on line of credit $1060.44 or 1.92%
Banking fees $275.01 or 0.50%
ATM fee $6.00 or 0.01%
It would be nice to eliminate these altogether but the way my banking is setup is easiest for me right now and allows me the flexibility I need.
Interested to see all the monthly numbers for 2013? Take a look here.
Where Can I Change My Habits?
As I looked over the list, I realized there was no real drama in any of my spending aside from my fashion tendencies. In all reality, or a perfect world, I should not be spending more than 5% of my net income on clothing which would be somewhere in the ballpark of $2700. Like I said…in a perfect world….LOL!
I managed to spend 38.93% or $21,481.73 on items that Quicken categorized as “Other”. After further checking, that $21K was divided amongst 53 different little areas. Each area was 2.65% of my spending or less, three of the areas were in relation to car expenses alone, which I’ve added to the number above.
I do not know how I did it but Restaurants came in at $1131.99 or 2.05% of spending. How awesome is that? On the other hand, possibly I have no life…
Putting Together a Plan to Change Habits
Remembering to track everything and always keep Quicken up to date is of utmost importance. I will be happy once 2014 gets into the financial software, as I’ll be able to do a year over year comparison of my spending.
Getting better at tracking my budget and net worth are important for 2014.
Working to ensure I don’t exceed my income every month is a necessity! For 2013, of the ten months I was able to track correctly, only five of them I did not exceed my income. Most of the excess spending came in the form of small emergencies: cat getting sick ($888), I needed a root canal ($2676) and the decision to spend money on career coaching ($2100).
Most of my goals I set out for 2014 will put me on the right path to financial independence and debt freedom by August 2014. I want 2014 to be a stellar year compared to 2013. Sure, I had successes but I know I can do better!