2009 Spending: How’d We Do?

Posted on | March 22, 2010 | 3 Comments

One of the services that I love from my credit card company is the annual spending report I receive. I typically use my credit card for all purchases, so this allows me to dissect last year’s spending, categorize it, micro-categorize it, go into my filing cabinet to find the glossy folder entitled “finances” and compare it with last year’s spending (or if I am feeling particularly like having fun, compare it with my financial report card four or five years ago), and then make a pie chart out of it. I have to admit, the financial geek in me gets so excited when end-of-year calculation time rolls around.

Without further ado, here is how our spending looks from 2009:

 

2009 Spending

2009 was a very crazy year for our finances, at least in comparison to the other 26 financial years of my life. First of all, Paul and I combined our finances in the third quarter of the year, so his salary and mine have been added together. Then we got engaged and began to plan a wedding, and after that we purchased a home. Talk about hitting on some of the most exciting, and most expensive points in life! We still managed to put 29% of our income into both long and short-term savings accounts—IRAs, savings, emergency fund, mutual fund—which I am pretty proud of (although a lot of the short-term savings was spent for the large expenditures listed above).

When comparing this anomalous year to 2008, I see both similarities and differences. In my 2008 spending analysis I predicted that I would see decreased spending in the following areas for 2009: rent, travel, and groceries. And I did succeed at this; 2009 Rent: 12%, Travel: 2%, and Groceries: 2%. However, this new chart reflects Paul’s income as well. This means that overall our spending increased in these areas, but because there are now two incomes instead of one, it was a lower percentage of our overall income.

2008 spending

As in 2008, areas where I could afford to spend a bit more are clothing (1%) and entertainment (0%–we definitely spent some money on entertainment, but it was just such a small number compared with our overall income that it came out as zero with rounding). These numbers have been low for the last two years, and so what I started to wonder about is, would spending more in these categories increase my happiness?

In Vicki Robin and Joe Dominguez’s Your Money or Your Life, one point that they go over is that money is earned through expending your life energy. Looking at your paycheck this way, you have to ask yourself “is purchasing X going to give me fulfillment, satisfaction, and value in proportion to my life energy spent?” Another important question is, “is this expenditure of life energy in alignment with my values and life purpose?” Wow—those questions certainly put purchasing a new J.Jill shirt into perspective, especially when you consider that it will cost me approximately 1.5 hours of life energy (or time sitting in my cubicle instead of lying in the sun) to purchase that shirt.

What about entertainment? Well, this is certainly an area that I value more than clothing, as it ultimately enhances my happiness and life. In fact, I just purchased season tickets to the Houston Opera. I have never been to the opera before, but have always wanted to go, and Paul enjoys operas. Okay, I must admit that the tickets were packaged in an outrageously great deal—6 operas for two people for $180—but still, I was proud of myself for purposefully purchasing something that will definitely bring both Paul and I a lot of satisfaction this upcoming fall.

Thinking more deeply about the life energy expenditure, something else comes to mind that Paul and I could definitely focus more of our money on: traveling. We are both avid travelers—in fact we met and fell in love in Japan—and so this category is something that is worth a lot of value to us.

Based off of this analysis, and reading from Your Money or Your Life, I have decided that one of my goals for 2010 will be to save more of our precious life energy (or money)—breaching the 30% savings threshold would be great. Another goal is to invest more money outside of our IRAs, which means we first must finish paying off our debts outside of our mortgage, and to fully fund our emergency account. And finally, we would like to earmark more of our money towards travel and experiences that we value.

Have you looked at your spending from last year? What areas are you spending money in that you don’t value at all, and are there ways that you could change that for 2010? Are there areas that you do value, but that you don’t spend that much money in?

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Comments

3 Responses to “2009 Spending: How’d We Do?”

  1. Budgeting in the Fun Stuff
    March 22nd, 2010 @ 10:21 am

    We cut back on fast food and restaurants this year in order to have more money for savings and hobbies. So far, we’ve cut our overall food expenses from $600 a month to less than $400 a month consistently.

    We enjoy the rest of the stuff we spend money on, so we’ll probably stay about the same in those areas. We also like vacation traveling, but we already put $250 a month aside for that…so far, so good.

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  2. BluSky
    March 22nd, 2010 @ 11:52 am

    Processed food is what I wasted a bunch of money on last year and every year basically that brings me little, if any, enjoyment.

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  3. Aurora
    March 22nd, 2010 @ 1:05 pm

    A non-frugal confession: we do not track our spending! Not really my style, I guess, just seems like too many details for me personally. As long as I’m comfortable with what we have in savings, how much we are saving for retirement, and that we generally are thoughtful about our purchases, that’s good enough for me. The only thing I can say that once in a while surprises me about our spending when I look over my credit card statement is the amount we’ll sometimes spend on going out to eat/drink either just us or with friends, however I don’t feel that its excessive and I wouldn’t want to cut back on it because it definitely brings us happiness!

    [Reply]

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