I’m writing this at 8:45pm on New Year’s Eve. Fireworks are being set off around the neighborhood and Kitty PoP is a tad freaked out. Mr PoP is still at work because that’s what can happen when you work in sales. He’s trying right up until the very last minute to bring business in before the fiscal year closes. (What a great employee, right?) But considering all the grocery stores and coffee shops are closed and Mr PoP’s got more than enough gas in the tank to get home I’m calling the PoP financial books closed for 2013.
How Did It Turn Out?
In short, household spending was higher than we aimed for. Luckily we know the reasons it was high (some excusable, some not so much), so have a plan of attack for 2014. Spending and income on the investment properties was about where we thought it would since we assumed there was a good chance the AC would need to be replaced in 2013.
Let’s look at the details, though…
PoP Household Spending
Money Spent: $59,228. To me, this is a fail since we set out to spend $50K. However, big expenses that kicked that up (some of which other people back out of spending) included:
- $2,500 in garage expenses so far. This was a late addition to the budget, and we didn’t sacrifice by cutting back anywhere else, so it’s not really a shocker that we’re over.
- $6,757 to pay off the car loan in full. This pulled forward about $4K+ interest in future spending into 2013. Some people might not count this debt payoff as spending. I do.
- ~$6,000 in principle paydown on our mortgage. Some people don’t count mortgage principle paydown as spending. I do.
I’d like to highlight a few failures (these were big in size), and a few successes (these were smaller in size – hence the overall failure…) and what we’re looking forward to in 2014.
Failure #1 – Transportation
I want to gag when I see how much we spent on cars this year. $14,410. Yes, almost half of that was paying off the car loan balance. But that still leaves $7K+ in “ongoing” car expenses.
- $4.1K in gas
- $1.3K in car insurance
- $1.6K to replace all tires on both cars
Looking forward to 2014 – I really hope the Q1 Car Challenge is a success. (Anyone else want to join in on the challenge with us?) If it is, this could be the biggest, easiest win for getting 2014 spending under $50K.
Failure #2 – Food
We spent just shy of $8K on food for the two of us this year, an average of $664/month. I wouldn’t mind it if higher food spending were correlated with greater health and well-being. But it’s become pretty clear over the last 6 months that it’s actually much more of an inverse correlation. The worse we eat, the worse we feel. The worse we feel, the worse we eat. It’s a dreadful cycle and I want to spend the next year developing habits to reset it on a pretty permanent basis.
Looking forward to 2014 – Knowing that Mr PoP still really likes eating out, I’d like to get us to the point where we’re eating really well with a grocery budget of $350 and a restaurant budget of $250 for a total of $600/month on food.
Failure #3 – Home Spending
The main reason this is a failure was the late addition of garage spending which shot home maintenance from the $2K that we typically budget to $4,449. While it’s technically a failure, I’m not going to stress about this, though.
Looking forward to 2014 – Hitting the $2K home maintenance budget should be do-able, and I’m also hoping that a switch to Ting could knock $100/month off our cell phone costs.
Success #1 – Travel Spending
When I was putting together our March Income Statement, I realized that we had already spent $1,300+ on travel in just the first 3 months of the year. We were on track for way more than the $2K in travel we had spent the year before. Right then we decided that we’d adjust the travel budget for the rest of the year to come in at $3K. Happily, this was a success as we ended the year at $3,044 and even have the hotel for my February marathon pre-paid as well as our AirBnB stay for the Berkshire Hathaway annual meeting that both fall in 2014.
Looking forward to 2014 – We hope to keep the $3K budget, but with some strategic use of mileage bonuses from credit cards, stretch it even further.
Success #2 – Pet Care
Kitty PoP has proven himself once again to be an entertainment value. Food + litter + yearly vet visit came in almost exactly at $241, or ~$20/month. But his little hotel stay with us did end up costing about $116. Altogether he was at $357 for the year. Still < $1/day for all the joy and love he brings us.
Looking forward to 2014 – As long as Kitty PoP remains healthy – and watching his weight is one way I hope to keep him that way for as long as possible! – these numbers look like they’re about where we’ll fall again. We don’t expect he’ll come vacation with us this year, so instead of hotel costs we’ll assume it might cost about that to have someone look after him while we’re away.
Success #3 – Gas
I’m counting gas as a win even though transportation costs were overall very high. Pre-biking to work our gas spending was $382/month. After starting biking to work it was $325/month. Both are significant improvements over the $477/month average spend on gas in 2012. (And no, that’s not a typo.)
Looking forward to 2014 – If we can keep the gas at $325/month or less I’ll consider it a win! If we do get rid of the Jeep, this will be much easier as that is about a $60 tank to fill rather than a $35 tank. Not to mention the $35 tank seems to take us much further, too…
PoP Investment Properties Income & Spending
Mostly as expected. We had full occupancy on the duplex, though we did give a renter half-price rent for a month when we were hoping she’d find a new roommate and stay. She didn’t, but we raised the rent and it worked out better in the end.
- Cash In: $17,725.
- Cash Out: $10,164 – This is the expenses on both investment properties, so all the expenses for the empty lot (which generates NO income) are counted here as well…
- Deductible Interest Payments: $2,562
- Net Proceeds: $4,999
Looking Forward to 2014: Since the debt is paid off, there shouldn’t be any interest payments next year. However, there’s a good probability that we’ll be redoing the roof on the duplex in 2014.
And by “we”, I mean… actually not either one of us. This marks a change for us. Mr PoP and his brother did the roof on our house in 2010 (and the roof on his parents’ duplex in 2008). However, it was easier to justify Mr PoP taking a week off work when he was making minimum wage than now when his (lumpy but high) pay is largely dependent on him being in the office and making sales. It just means the roof will cost us more than just supplies (and unofficially slipping his brother some cash).
This means that next year will probably show a similar Net Proceeds, but the years following should bounce up to ~$10K/year when this last big expense is taken care of.
As we move on into 2014, we’ve got our budget set and have high hopes that we’ll accomplish that $50K spending goal.
How did your spending end up for 2013? What are you looking to focus on spending-wise in the new year?