You Flew Pretty Good – 2019 in review

Happy new year everyone!  Seeing as we’ve come to end of another year I thought I would do what every other blogger is doing and talk about how the last 365 days went!

With apologies to Sonia Dada there were good times and bad times and something in between, but at the end of it our finances were the best that they’ve ever been, so all up I’d say that it was a pretty good year.

Read on for the details!

Actual spending vs budget

I’ve talked before about how our budget is based on what we’ve actually spent previously.  As I said back then, this way it’s based on reality rather than whatever numbers I could think of at the time of doing up a budget.

As a result of this, spending tends to track reasonably closely to our budget.  This was the case for the first half of the year as I talked about here, and remained fairly true for the second half as well.

Any of our fixed cost bills came in exactly as expected, because whenever the costs change I just update our budget to reflect this.  So changes to expenses like our various insurances (car, home, health, life) or rates are what they are essentially.  Obviously we shop around for the best deal, but once we’ve got that, well the cost is the cost.

Other costs can vary quite a bit though, and we spent both more and less than expected on various categories. 

Overspending

Our car came off it’s fixed service period so now we have to pay a higher cost for the servicing, and we also had to get new tires so the car cost us a lot more this year than it had done previously.  I’m assuming that as the car gets older costs will continue to be higher so I’ve updated our budget to reflect this.

We had a big one off cost for a medical operation I had (don’t worry, it was a one off and I’m in excellent health!) that bumped up our spending there. 

My wife’s phone broke so we had to get her a new one which cost a couple hundred bucks, and we also donated a bit more than we had previously.  Basically my rule with donations is to give $50 whenever any of my friends put something up on FB etc, their kids tend to get $25.  So I guess there were a few more people raising money for good causes this year, which is great news!

Underspending

On the underspending side, we spent less than budgeted for on entertainment like going to concerts, sporting events etc.  This is due to a few different things like having small kids who can’t go to this sort of stuff, living in a regional city so most stuff requires a journey to and from the big smoke which makes it a hassle, and just general laziness. 

I’m still hopeful that we will actually spend our budget on this at some stage because this is what I am aiming for with FIRE, to be able to go to these sort of events on a regular basis.  The good news is we have bought some tickets for the T20 world cup next year so we have something already lined up at least!

We spent a bit less on house maintenance than budgeted for, as I said in my last budget update this is mostly due to it being less than 2 years old so nothing much breaks and if it does then it’s under warranty anyway.

In our half yearly update I talked about our spending on Food and Groceries being lower than expected and not being sure why.  This actually accelerated for the second half of the year where we spent even less than we had done in the first half.  I have no idea why it is as our kids are eating more not less, and presumably we adults are eating roughly the same.

My wife hasn’t changed her grocery shopping strategy where basically most shopping gets done at Aldi but shopping the specials in bulk at Coles/Woolies.  We do get FlyBuys points and my wife is fairly aggressive in making the most of the bonus offers like spend $50 a week for 4 weeks and get $50 off with the points then being spent on more groceries, but she’s been doing that for ages already so I really don’t have an explanation for the lower spending at all.  In light of this reduced spending though I’ve adjusted the budget for next year to reflect the lower than expected cost, but kept it slightly higher as I expect our food bill to go back up as the kids keep growing. 

Relatedly, a great tip which I learned today is that if you are a member of RACV or a bunch of other automobile clubs you can buy Woolworths gift cards for a 5% discount.  Because we don’t spend much there anyway it doesn’t make a huge difference for us but hopefully this will help others!

Our spending on eating out was a bit below budget as well.  This is another area that I’d like to spend more money on, but I also want to optimise.  A fair chunk of this tends to be either me buying snacks to satisfy my sweet tooth, or buying cheap fast food from KFC and the like.  I would prefer that a) I was eating less sweet stuff, b) we spent less on cheap fast food and c) my wife and I spent more on nice experiences  rather than going to the same 3 restaurants any time we have a date night.  Something to work on!

We also spent a fair bit less on utility bills, presumably this is in part due to my wife continuing to shop around and in part just being more efficient with our usage.  I’ve reduced the amount in our budget to reflect the lower spending, we’ll see how it goes.

The last two areas with lower spending were running stuff and subscriptions.  My employer has a program where I get a fixed amount of money to buy health and wellbeing type stuff, and I tend to spend this on running shoes.  I’ve actually built up a little bit of a stockpile so I’m not sure what I’ll spend the money on this year! 

I also cancelled a couple of subscriptions (The Economist and Xbox Gold) that I just didn’t have time to use.  In both cases I’ve reduced the spending amount in our budget spreadsheet to reflect this.

Spending summary

All up over the course of the year we spent about 2%, more than we had expected.  This was due to some one off costs like my operation, a new computer and some furniture for the house, excluding those we came in about 2% under budget. 

So pretty close to being right in line, which is what you’d expect given our budgeted spending is based on our previous spending. 

Goals reviewed and targeted

I talked at the start of the year about my new years financial resolution being to hit a net savings rate of 52.5% excluding superannuation guarantee contributions.  Given our spending was about 2% over the expected amount we instead managed just over 50%.  Which is near enough as far as I’m concerned, particularly given the overspending was on one offs or items that hopefully won’t be repeated for a while.

Next year we will likely be spending a fair bit less on travel as my wife will likely kill me if we attempt any more long distance overseas trips with young kids, and we can just put the money not spent into savings instead.  We still want to do some travel domestically or to nearby places though so it’s not as though the spending will be zero.

As a result we should probably save a bit over that 52.5% target next year, and probably the year after.  This is obviously dependent on there being no major unexpected expenses that aren’t covered by insurances, so we’ll see how we go!

How was your 2019?  Were you over or under budget?  What goals have you set for next year?