2007 in Review
Last year started out nice and slow and ramped up to an almost unimaginable pace. There are so many things that I was going to work towards that got pushed aside by minor emergencies and new obligations striving for my attention. Before I get started planning for 2008, I wanted to see just how we finished out the year. After some major procrastination, I finally closed out our November and December budgets and the picture ain’t pretty - more on that in a bit. First, lets look at our 2007 goals:
- Goal: Increase Savings for Home Purchase to $20,000 by July 2007. Meeting this goal was my biggest financial-ego boost for the year. We dropped about $8,000 - $9,000 on all the costs with buying and closing on the house and we still had another $10,000 sitting in savings after the fact. This was a major stretch for us and I’m proud that we made it happen.
- Goal: Reduce Credit Card Debt to $10,000 by December 2007. We’re about $5,000 short of this goal for the year. $2,000 of this total is my fault since I replaced my laptop when it died on credit instead of pulling from savings. Also, we’ve taken a 6-9 month break on beating back debt as we do what we can to keep our heads above water.
- Goal: Buy a house in July 2007 Success! We are the proud home owners of an old (137 years) farm house with just an acre of property. It was less house and land than we wanted at a pricer higher than we really wanted to pay. Despite those things, it is working out and we managed to stay within a reasonable commuting distance for the partner. The majority of the houses we were considering were much further out and now, having lived with the commute, we are very appreciative of the house we have.
- Goal: Increase retirement investments to 15% of income by December 2007. I’m a little embarrassed to say that I’m not sure where we are at with this goal. I think that the partner is still contributing only 6% of his income to retirement. I expanded my home business to be my only income source but did not put anything into an individual retirement account. This is something we need to get a handle on for 2008.
- Goal: Increase Passive Income to $200/month. We’ve managed to accumulate about $50-$75/month in passive income. I don’t see this increasing anytime soon.
Overall, I think we did a pretty good job in 2007. The last 6 months have been a serious stretch as we started to resonate with those crying “house poor” from time to time. But, even though our budget has been hit pretty hard with the new housing costs, we’re still well fed and clothed and not standing on a corner with a tin cup in hand.
Here are some numbers on our total spending for 2007:
- Credit Card Debt: $4,951 or 9.3% of spending
- Student Loan Debt: $3,805 or 5.7% of spending
- Utilities: $3,829 or 7.1% of spending
- Housing: $20,803 or 38.8% of spending
- Groceries: $4,098 or 7.7% of spending
- Eating Out: $2,933 or 5.5% of spending
- Transportation*: $6,401 or 11.9% of spending
*Transportation includes gasoline (about 8% of total spending), insurance, repairs, and fees.
The above numbers only reflect spending from our personal account. Items that are automatically deducted from income, such as retirement and health insurance, are not included.
Reviewing last years goals’ progress and our annual spending (especially the percentages) prepares accurate and reasonable numbers for spending and savings for 2008. As I emerge from several months of serious financial neglect, I have a lot of work ahead of me to get us back on track to be in a position to pursue goals of any type. As I mentioned, November and December were ugly months, fiscally speaking. I chose to continue spending without considering the impact it would have on our budget, and didn’t follow through with the partner to mange his spending as well. As it turns out, we closed out the year $3,000 short - which is almost an entire month’s worth of bills and spending. I’m frantically working to correct this and get our numbers in order for 2008.