I hate resolutions as much as anyone.
But one thing I do like is reviewing (to understand where I’m at and what I’ve accomplished) and optimizing (to kick more butt in the future).
So I thought it would be prudent to put a cap on my 2012 finances, set some goals for 2013, and then ask you to do the same and share.
2012 was a big outlier year for us, in terms of expenses.
My wife began pursuing a nursing career change, started school in the fall of 2011 and graduated in December of 2012. The bulk of the tuition costs came this past year (about $10k in total). The low tuition was due in part to an hour long commute, which resulted in about $250 per month in fuel expenses.
Additionally, our one-and-only old car died (a 2000 Pontiac Grand Am with 182k miles), and we decided to purchase a new one due to her heavy driving and inflated used car prices. I highlighted how I was able to get 24% off of MSRP before trade-in (and pay cash for it), but it was still a huge expense for us.
But there was a Lot of Good as Well
On the bright side, my income was at an all time high (I’d love to share, but it’d probably get me in trouble since I’m not self-employed). We kept non-education and car purchase expenses to just about $22,000 (including the $500 deductible and about $3,000 on fuel), which allowed us to keep our personal savings rate at very high levels (despite the education and car expenses). A few key monthly expense highlights included:
- measuring the electricity power consumption of everything in my household and ending up saving 22% on electricity with the changes ($5/mo.)
- getting rid of my Comcast modem fee by purchasing my own modem and router, while simultaneously negotiating a lower bill (about $40/mo. in savings)
- I started using credit cards that got me 6% cash back on groceries and 5% cash back on gas (about $50/month back in our pocket)
- my wife was able to defer student loans from her first college stint ($120/month savings)
Another highlight was in the area of health insurance. I took an educated risk and made the switch from a PPO to an HDHP plan (paired with an HSA). There were some bumps along the way, but overall, I saved $1,038 out of pocket and had leftover HSA contributions of $1,094 from my employer. I also ended up making a maximum HSA contribution last year and intend to do the same this year in order to build up the health insurance coffers for future years.
How did I do Against my 2012 Goals?
My three goals for 2012 were:
- Have Less of my Savings in Cash
- Optimize my HSA and HDHP
- Be Ready if I Need a New Car
Success on #2 and I guess on #3 (I would prefer if it hadn’t died, but at least I was ready for it).
I was not very successful on #1, and I attribute that to not putting a number on that goal.
What About 2013?
This coming year should provide much less excitement than last… in a good way.
No further education expenses. No major car expenses. And significantly lower fuel expenses. I have my fingers crossed that nothing major pops up, but I know as well as you do that life happens.
My wife will be taking her licensing exam in January and hopes are that a job will soon follow. This would result in new income and a potential banner year in that department.
It’ll be even more important than ever for me to effectively allocate my savings to start generating more income. So that will be my main focus. I’m going to put a target of 90% of my savings in to securities that aren’t cash/cd/checking/money market.
A second financial focus may revolve around the car. Hopefully my wife gets a job locally, which would mean our need to drive would nosedive. This may push me to sell the car in exchange for an older one that would be cheaper to insure. Do I financially need to do this? No. But it’s something I’m going to seriously look at.
Now, it’s your turn.
What About You?
I’m sick of blabbing about myself. It’s your turn to show some pride, humility, and excitement about things to come, so we can all share, congratulate, brainstorm, and discuss.
- What are your biggest financial successes in 2012?
- Did you set out to achieve them or did they just happen?
- What are your biggest financial goals/resolutions/focus areas for 2013?
- What personal goals are you most excited about?