Budgeting: How 2013 was for us, financially speaking

So, it’s that time of the year, when we take some time to study our expenses tracking software / apps and the budgets for the entire year, to see how we did when it comes to managing our money.

Keeping a monthly budget allows us to plan better for the next month and also understand what money mistakes we make on a daily basis, while the expense tracking, even if really tiresome and annoying sometimes, gives us a great insight on how our cash flow looks each and every month. Based on these details we can make tweaks in how we spend our money, save more and pay off debt on a faster track.

So, today we’ll take that look over the financial details to see what cost us the most in the past year. I keep separate details for my savings accounts, so what I wanted to see now was exactly where our money went on 2013. The results are interesting to say the least.

• 3K for travel – we had an almost 3 weeks vacation in Croatia this year and 2 day trips to Vienna and a nearby Serbian city. We actually saved 1K in Croatia, because we decided to cook most our meals, so our travel costs were 2K for the entire year. I can’t think of any way to improve here, our holiday there usually costs this and it’s not too much we can tweak.
• 1.8K for the upcoming child – we got some wonderful items from our friends, but also had to purchase a lot of things ourselves, plus pay for them to be shipped from the US here. The main improvement in this is that we won’t need to buy again most of this stuff, so our ‘baby bills’ will probably be smaller after she’s born.
• 1.6K the groceries bills – the bad part is that my husband also spent at least 1K himself for the family, the good part is that a little of this money was items for the baby we bought from the hypermarket. I could probably keep a separate category for household stuff (detergents and the likes) and the items bought for the baby. For the next year I’d like us to be better prepared when going shopping, using a list and not going with too much money.
• 1.5K in company taxes – these include our ’employee’ taxes, since we’re both hired in our firm, the sad news is that husband has paid at least this much himself.
• 1.3K in health costs – this is outrageous, considering we’re both insured in the State system and should receive FREE treatment. We won’t count the upcoming birth which will set us at last 2.5K back. The state hospitals provide such a bad service (not to mention being in a huge risk of getting an infection and having to deal with a lot of crap), that I decided to care for my health in the private system. Which is not allowed to use our state insurances, since otherwise the entire state system would crash (no one would go to their hospitals, if they can receive way better treatment in the private sector). Improvements? Just don’t get sick, because there’s little chance for us to actually receive a decent service if we go and opt for the state health providers.
• 1.2K electronics – or maybe I should use the singular form here. My laptop died in March, so I had to purchase a new one immediately to be able to work on my business. That’s it. Improvements? I don’t see anything we can do, we’re already cutting back A LOT when it comes to the gadgets we use.
• 1.5K car costs – this means gas, insurance, small repairs (very small, fortunately). Husband has also spent around 500 bucks at least himself. I don’t see too many improvements here, we’re having a cheap insurance, don’t use up too much gas anyway and the car is still in stellar condition, so it shouldn’t cost too much to maintain it.
• $700 in web hosting – I have a reseller account and a VPS for my site network and also for some of my hosting clients. I would love to ‘recover’ more of this money, but have decided to not pursue hosting as a side business. If you don’t have hundreds/thousands of dollars in revenue each month and a support team, you can’t provide the best service and it’s also a lot of wasted time. When everything works great, you are getting the money from the clients, but if something breaks, you’re wasting a lot of time, which, at $12/year, means you’re losing money.
• $700 entertainment – this is a year’s worth of eating out and the wedding costs. We rarely go out, so the occasional latte and maybe a pizza appears here. Most of the budget was spent on our ‘non-wedding‘.
• $270 clothing – this is what I spent this year on clothes for myself. Main items: a pair of Superstar shoes (70 bucks), 2 pairs of maternity pants (I’d have used my regular jeans forever, but can’t fit in them anymore) which were both around $60 and few small items (2 training pants to wear at hom etc). There’s clearly nothing to improve here, I’m really not over-spending in this area.

These were the main things we spent money on this past year, plus 150 bucks in bank commissions which drive me bonkers, every time I think about the money. This is the reason I closed down 2 personal accounts and rediscovered the passion for paying in cash. If it comes to me losing money for each transaction (it’s what happens here), I’d rather pay cash and that’s it.

When we first took a look at the total amount of money I spent this year (husband is not yet into budgeting and I’m not tracking his earnings/expenses), I kinda felt dizzy at first. But having it all tracked down helped us both realize we’re not wasting money on crap, but many of these expenses are something we can’t really avoid.

What do I learn from this year’s budgeting?

1. That budgeting / expense tracking is a great way to understand where your money is going and never have to think ‘who the h… stole my money‘?
2. We still need to work on carrying a list when going to the hypermarket – I think we can still improve on that and still not have to cut down too much of our spending (we’re both foodies and love good ingredients for our homemade meals). The good part is that, by having the food cooked at home most of the time, we’re not spending on eating out (so it balances a little)
3. We do seem to live a frugal life in some aspects, but we do spend money when it comes to something we really care about. We are well prepared for the baby and decided to get good quality stuff for her, our travel budget this year will probably get close to 2.5K again (we’ll do our best to still not over-spend), the health costs will probably be bigger on 2014, since I’ll give birth and it’s pretty expensive (and paid off our pockets).

We are both pleased about how we managed to solve all our problems this year. There were some health issues I didn’t plan for (the pregnancy was planned ;)), the laptop should have worked at least 3 more years (based on how I like to use them till they drop) and the expenses for the baby were clearly serious. Not to mention my husband’s side of the business didn’t pick up for almost 10 months, but the taxes kept on coming, so we lived off one income – one income and a half for quite a lot.

Even with all these setbacks we still managed to save money, we did have a wonderful vacation (which resulted in us being three), didn’t get into any debt, paid all the bills and had a great time. Financially, 2013 was a good year for us and we hope to do well on the next one.