Every year, I like to go over what happened over the last 12 months and see if the things that I have done/am doing are helping further me down the path to my long term goals of saving more money and living a more sustainable life. I’ve been doing this for a while (since 07) but have been putting them on this site since 2010. (to read previous years, here’s 2010, 2011 and 2012). Looking back, I’ve come quite a long way from that first update in 2010. I had 50k+ in consumer debt at the time, with hardly any savings. I’ve worked hard since then and my finances have taken quite the turn, as you’ll see below.
If you’ve never done a review of your year but are curious, I’d encourage you to do so. It can really help take the guessing out of where you’re going and help identify priorities. I like to start out by listing my priorities, then looking over my assets, debts and spending. Places where my spending doesnt match my stated priorities are problem areas that I need to work on for the next 12 months. For instance, one of my priorities is travel, and sometimes I end up spending more on dining out over 12 months than I do on traveling. Obviously that means that while I tell myself that travel is a priority, I get lost in the day to day temptations of dining out and dont have as much cash as I’d like for travel. So, if you’re looking to do a review yourself and dont know where to start, shoot me an email and I’ll help you out – keep in mind they dont have to be anything complicated. With these processes, it’s more important that you start them than what they look like. Of course, they will evolve over the years and that’s to be expected, but you cant compare where you are to where you were if you dont know exactly where you were.
This year started off great, with a successful elk hunt (after many tries) in January. I really enjoy hunting, as it gives me a chance to get outside and see some great country. I am not always successful, but when I am I get pretty cheap, very high quality grass fed, free range, organic meat. Even though my wife is a vegetarian, it’s a nice way to lower our food bill throughout the year. In February, I was able to take a little down time with my dad and go to key west. Below is Ft Jefferson, Probably the worst fort in the whole country.
We went on a fishing trip and even caught a few mackrel, but unfortunately I left the bag of fish at the airport on the way to
fort meyers dunk city. In march was more downtime for me, mainly to catch up watching basketball and the NCAA Tournament while my wife took a break and headed to the Carolinas with family. Work continued on the house up to this point, but by march we were almost fully finished with the main parts of the upstairs (bathroom, bedroom and kitchen). Work on the house continued through april (and still continues to this day), and there wasnt much that we did (aside from make our 12th mortgage payment). In may, H and I both ran a half marathon, which was a great time but had brutal 1k+ feet of vertical ascent over the last mile or so. I also had a good time planning and attending a bachelor party for a good friend in vegas. June brought summer into town full on, and my wife worked hard on the house while off work, and I trained for the death race in my spare time. I worked to secure media mentions, and made sure that I was physically and mentally prepared for what I was about to go through.
I didnt finish the race, and I’m still kind of annoyed by that fact, so I decided to sign up again for 2014. Above is me and a few other racers (and a support crew guy) at around 8am, 24 hours into the race.
In the second half of the year, my wife and I spent our first anniversary camping around alaska. We were able to make most of the trip cheap, but ended up spending a bit more than anticipated over the last 2 days of the trip, crimping our budget.
Above is me on the glacier bay tour boat, at our destination (What I think is the Johns Hopkins Glacier)
However, higher than normal spending in july led to the lowest spending month that we have had since we bought our house – which is a good sign for the future. It was heartening to know that we could get so low and neither of us felt like we were missing out on anything during that august. September was another big month for us, as we found out that my wife was pregnant, and later confirmed (after many jokes by me) that we were having twins. After spending over a year trying, and most of 2013 trying hard and going through a lot of testing, it stuck. Naturally, both of us were (and still are) very excited. October brought the financial bloggers conference, which I was able to attend and ended up winning a plutus award for the “best green/sustainability” finance blog. Also in october, we told our friends and families that we were expecting, which was oddly nerve-wracking but mostly exciting. In november we hosted thanksgiving, and december we will be traveling and trying to relax and prepare for the new year.
On the personal side, this year was good for H and I, and we are excited to tackle the challenge of raising 2 kids together next year. I am looking forward to it.
H and I started to focus on the financial side after we wound down the house work. Last year, because of all the house repairs that we did, our income was only 2% larger than our expenses. Obviously, a lot of that extra spending went to the house, but it left us in a rather precarious position that neither of us wanted to be in. We were able to limit the losses early on, then once projects got finished the amount of money we were spending on the house started to get limited by gift cards, then went to zero in october, november and december. It’s crazy how much my finances have changed since 2010.
Back in 2010, I had 7 different debts, and all of them were consumer debts. Student loans, credit cards and a car. Now, I havent paid interest to a bank for a credit card for years, own my truck (and H’s car) and have 6500 left in student loans – a far cry from the ~$55,000 that I owed back in 2010. This year, H and I decided that we should switch credit cards (we’ve been using the same points earning card for ~2 years). We looked at what else was out there and eventually switched to a new credit card with a different bank. Now, after we have switched credit cards, we are still earning points, just in a different program. I really like credit card points because we pay off the cards every month.
Of course paying off debt was hard. It took a lot of work and working 2 jobs for 18 months, but I can say from (almost) the other side that it was 100% worth it. Now, we are focused on building up various savings accounts and saving for retirement. Here’s where we stand at the end of the year:
Windows: Like planned, we took out a 0% note to replace almost all of the windows in our house. We got the 0% rate for 12 months, and paid the loan off in about 5 months. At this rate, I’m kind of kicking myself for not just doing the last 14 of the windows in the house. Total paid off in 2013: $7,300
Truck: I bought this truck in 2009 when the world was ending. Thankfully, it didnt, and I was able to get a .9% financing rate on a more reliable car than I had (something I desperately needed because I was driving 150 miles/day). After focusing on the credit cards, I made a point to pay off this note early. The balance of this note was $4,380 in january, and was zeroed out at the end of april. Total paid off in 2013: $4,380
Student Loan: This one is really starting to annoy me, and I’m happy to report that we can FINALLY begin to focus on this note. I had the payments at $600/mo earlier this year, but I bumped that back down because we elected to get new windows (far better ROI). This note started at $9,336 in january of this year and unfortunately doesnt go down nearly as fast as I’d like. I’m tired of this loan. Even though I’ve only been out of school for 4 years, it needs to go. I’m pushing for the end of the first quarter, meaning we’d have to pay a whopping $2,180 per month to meet that goal. That could be a bit out of reach, but by the end of the second quarter this should be gone. I’d like it to be gone before the babies get here, which is slated for May 1. Right now, this is at $6,539, and will take a few 1k+ months to slay. Total paid off in 2013: $2,797 (would have paid the extra to get to 3k had I known I would be that close).
House: This is our mortgage. We live in a 3 bedroom, 2 bath house in an older neighborhood near our downtown. We bought near bottom in the market, and got a rate in the 3% range. As mentioned earlier, we have a 15 year note, and are making payments monthly. As of now, we have not paid any extra on the note. The balance as of january 1 was $119,073. Total paid off in 2013: $5,974
Since we focused on our savings quite a bit over the last 12 months, our overall savings have increased 3x, spread throughout our various accounts. We now have enough for about a 4 months of living if one of us were to lose our jobs (unlikely, but possible), and are planning on building these accounts while polishing off the last of our non mortgage debt (putting us at baby step 6 – 3 years later).
Financially, this was a pretty good year for us – we stopped the bleeding with the house, and started spending way less and saving way more. In real terms, our net worth went up 40.22%, which is a pretty awesome jump, but not unheard of when your net worth is small like ours. Hopefully, there will be many more years like this going forward, though I’m not sure that will be the case as we could see about a 50% income drop in the next 12 months if H decides she wants to stay home with our children (we will be making a decision by the new year).
This is one area where I try to focus on all the time, and end up not getting really anywhere. I’ve been trying to figure out a solid eating plan and decided on one in september. It went well for about 3 weeks, then totally fell apart and I’ve been trying to climb back on the wagon (and subsequently fall off) ever since. I’ve also been meaning to write a post about my failings (and why I think I’ve failed and what I plan to do differently going forward) but have been to embarrassed to admit it to you all (and myself). I guess now it’s time for the rubber to meet the road and time to fess up in a small amount of detail, and start writing the larger (more detailed) post and stop being a wimp.
I’ve never really cared about what I eat – food goes in, food comes out. I’ve always been fairly thin (I didnt break the 100lb marker until junior year in HS). Unfortunately now that I’m getting older, I cant really go to chipotle or qudoba and eat two burritos in 1 sitting (and yes, I’ve done it). Since I realized this, I’ve been trying to put myself on an eating plan. First I tried eating fewer calories and more meals a day (about 5) and that went OK but was a pretty big pain in the ass. I’d always have to remember to have a snack or two prepared to take with me to work, and after a while that just got too cumbersome. It took up too much time, and I wasnt really seeing any results after about 2 months and as I mentioned earlier I thought it was a hassle, so I stopped and decided to look elsewhere.
After a few months, I decided that I’d give the paleo diet a try. Since this was around the time we found out my wife was pregnant, I decided to make the switch and try paleo and stop drinking for a while to help cover up my wife’s non drinking. (Those who are about my age and female will constantly be accused of being pregnant if they turn down a glass of wine – it’s annoying). It went really well for the first 2 months or so, then I hit a few things that crunched me for time and I kind of caved in. It also was getting to be bothersome preparing 2 different meals because of different eating habits between me & my wife.
So in short, the eating plan has not been going all that great, but more to come on that later (including changes made).
Getting to the gym, however doesnt seem to be a problem with me. I’ve been able to consistently head over to the gym at least 3x per week, and have now incorporated 3 days of weight lifting, 3 days of cardio (HIIT training) and a day off. That’s been going pretty good for the last month or so and I dont anticipate many major changes in this area for next year.
This area H and I didnt really work hard in in 2013, as we were focused on improvements on the house. Thankfully, that didnt mean that things didnt get done and that we didnt decrease our resource usage over the course of the year.
Unfortunately with the move, we lost our compost bin and I have not made time to make another one (I’m also having placement issues with H, so those need to be resolved as well). Despite the loss of a compost bin, we were still successful in the “outside” arena of sustainability, and I was able to build a pretty nice garden over the summer. I planted mostly tomatoes and peppers, but a few eggplants and other odds and ends as well. Our harvest was pretty good, and I learned a lot so that hopefully yields increase for next year. Since the garden went so well, H is letting me expand it by a few square feet for next year, so I’m looking forward to that. One of our favorite things to do in the late summer was pick some tomatoes and basil for the garden and whip up a nice margherita pizza for friday night. Unfortunately, that was about it for our efforts outside this year. Next year, I’d like to get the cold frame set up and the garden expanded, as well as a compost heap.
Inside the house though, we are working hard to reduce our energy and gas usage. We got an energy audit done by the local utility, and they told us what areas to focus in to increase our efficiency. Not suprisingly, the house needed insulation (and bad) so we had r60 sprayed into the attic, and r13 sprayed into the walls. That cost us about $1,300 after all the utility rebates, and has already started to have an effect. We had 8 days in a row where the temp never got above 0 degrees recently, and our bill was under $150 – something we never managed in the colder months of last winter (which didnt have nearly as long of a cold snap). The insulation has been very effective, and our heat is no longer escaping out our attic. Great win for saving money and lowering your resource use!
We also got some new windows. Since there were 20+ windows in the upstairs of our house, we were not able to replace them all but we did get most of them. We even took out a 1 year, 0% interest loan for them, breaking my hope of no new debt just to get the house a bit more efficient. We have since paid the note off, and now will be saving to replace the last of the windows upstairs, as well as the ones downstairs. Like the insulation, those new windows helped quite a bit keeping our energy costs low last month, and will help well into the future.
In addition to the insulation, we have been upgrading our lights from the old incandescent to LED every time a new light is put in or when an old light burns out. It’s kind of lame going to buy a light fixture for the hallway and have the light bulb cost almost 2x what the fixture does, but with such a low operating cost and long life, I dont mind paying the extra cash. Our goal for the house is to lower our fixed costs as much as possible wherever possible, and even though the light bulbs seem insignificant every little bit helps. Our energy usage has gone down since we moved into the house and most of it is because of upgrades that we have made. At some point (probably pretty soon) we are going to get the energy use so low that we will have to stop and focus on another area where we can invest our money to save money and go green, but we are not quite there yet. Of course, sustainability isnt just what we are buying that uses energy – it’s also our daily habits and the products that we use (or do not use).
I still am walking to work every day which is nice and saves quite a bit of money on gas and ensures that I get at least a bit of exercise no matter how bad the weather is. Unfortunately, this habit does not really carry over into my errand running, as I usually drive to the grocery store, the hardware store and other places that I visit semi frequently. This is something that I’d like to change in 2014, and am looking at getting (or making) a bike trailer so that I’ll be able to ride my bike to and from these places and carry whatever I’ve purchased home, which is the main reason that I drive to those places anyway. I also would like to start biking to the gym in the mornings when the weather cooperates, but that only seemed to happen in the summer. I use the excuse that I’m kind of pressed for time at that hour, but usually I’m just being a big baby. Even though I do a lot to try and lower my impact and be more sustainable, there’s always more things for me to do – the best part about them is that they usually all save money!