Reflections on 2017

Friday January 12, 2018 – Columbus, Indiana

Looking back to last year, I can easily it was one of the best years as far as accomplishments, even though there were many goals that I set were not met. Think about that, I am proud even when the goals I set were not met, how can that be. My number 1 goal for 2017 was to buy a house, I tried to do it and was unable to do; the reason was that I did not know what was needed to fulfill it and I was not ready to do it. Goal Number 2 was to get a promotion and I did accomplish that; here is the kicker, this is not what I’m most proud of in 2017. My greatest accomplishment in 2017 was not even a goal at the beginning of the year, it was not even a goal by October 2017. Getting a deep understanding of my finances is my greatest accomplishment of 2017.

Looking at my records, I’ve had an Excel Budget since 2007 when I changed jobs and Debora stopped working, and almost every year we’ve set up a family budget. I thought that was enough, to know if our planned expenses would be covered by our income, yet we had good months and bad months. Questions about what we could afford was gut check that would lead us to hitting our spending breaks way ahead of the next paycheck. I felt that I was failing, if only we would stick to the theoretical budget we would be fine, a fleeting hope that never materialized.

Coming back from our summer vacation where our expenses were so far off our budget I turned my concern into action. I opened the 2017 Budget and added a column called expenses, then another with the difference. I pointed my browser to my checking account and started adding the values into each of the budget’s categories. Two months after, I had added my savings accounts and started tracking movements across accounts and had a tab for each paycheck, then a workbook for each month. In November I had tabs for each credit card, loan, and savings account; this changed my life.  I am so proud, happy, elated about these new revelations; I know exactly why I could not buy a house in 2017 and I’m happy I didn’t.

I am looking forward to a good 2018, I’m actually looking forward to better understand my financial situation and do something about it. The greatest consequence of wrangling the financial beast is that I feel I can wrangle other beasts in my life. I want to understand my health, my time management, my work habits, my exercise patterns, etc. I recognize a formula that works: define, measure, analyze, improve, control; straight out of the Six Sigma playbook. I’m so happy to start 2018 and looking forward to the new challenges.

 

Photo by NeONBRAND on Unsplash

6 Replies to “Reflections on 2017”

  1. We went just a bit further, creating a field for our take-home cash and then dividing that into categories for:
    – Financial Freedom Fund
    – Dream Fund (i.e., Long Term Savings)
    – Necessities (i.e., primarily fixed expenses like mortgage, bills, etc.)
    – Discretionary (our spending money allowance)

    Then I chopped up our discretionary fund up into a daily budget which is auto-transferred to a debit card that we use for everyday purchases.

      1. We originally went for an allocation of:
        15% – Financial Freedom Fund
        15% – Dream Fund
        40% – Necessities
        30% – Discretionary

        We stuck with it for quite a while but it eventually felt a bit too restrictive as we wanted to put kids into gymnastics, etc. so we shifted to:
        11%
        12%
        41%
        36%

        This puts more into Discretionary each day which gives us a little more wiggle room but it now bears all costs for groceries (which were originally covered under Necessities). This’ll probably be a bit more sustainable for us in the long run.

        We’ll see it goes in the long run but so far it’s been a good change.

  2. That’s awesome man. Great job on getting a handle on your finances. We have used YNAB (You Need A Budget) for about 7 years now, and it’s made all the difference. Assigning each dollar we have and make a “job,” and being able to create as many budget categories as we need.

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