I honestly cannot believe that this year is already coming to an end, and I still have so much to do to prepare. At my house, end-of-year responsibilities include assessing our retirement situation, getting our business books caught up for tax purposes, and going over our expenses to see if there is anything we could change and do better next year.
I've been working on that final part for a few weeks now, and I uncovered some interesting revelations — mostly due to the fact that I started tracking our annual spending on Personal Capital. Among the most interesting things I found out:
- Our grocery spending flowed over into our miscellaneous spending category nine out of 11 months.
- We spent far more on travel than I realized, mainly due to the fact that we budget for each trip individually. Each trip was cheap, but the total expense was hard to swallow.
- We spent $1,200 that I cannot account for this year — mostly at big box retailers.
Looking back … what could we have done better?
Regrettably, our grocery spending has been a problem as long as I can remember. And to be honest, that is one of the reasons we track it so closely. It is just so easy to blow through the $600 we set aside if we aren't careful. We spend it on plenty of ingredients that make hearty meals, but we also splurge on snacks and specialty foods as well. It's so easy just to throw that extra block of extra sharp cheddar in the cart, you know?
For 2015, my plan is to check in with our grocery spending at least once a week like I used to do just to see whether we are on track. I have found that the only way to stay on top of it is to track it closely and relentlessly.
And the $1,200 I spent on randoms? I plan to keep an eye on that too. My guess is that those dollars weren't spent on frivolous purchases but on things like dog food, printer ink, and gifts. At least I can hope.
Fortunately, we did do plenty of good things this year to make up for the bad. I just maxed out my SEP IRA and ROTH IRA, for example, and we put over $5,000 into our Health Savings Account (HSA). I also put nearly $4,000 into our two kids' college funds — and I am extremely proud of that.
So it wasn't all bad news for us in 2014. It was mostly good with a touch of so-so. Still, I actually enjoy evaluating myself in this way, good or bad. Here's why:
The benefits of looking back
It is easy to move forward without looking back, but there are plenty of reasons to take stock of where you've been. Here are a few:
- We cannot change what we don't acknowledge — It is easy to let something like unrestrained grocery spending go on for years if you are not aware of it. On the other hand, when you see just how bad you are doing at managing things, it is much harder to allow it to continue. That is what we found in our lives, at least. And that is why I believe that, in order to change, we need to be willing to acknowledge our weaknesses. (My weakness is food.)
- We need to take a look at the big picture — Another excellent reason to look back is to gain a clear view of the big picture when it comes to our finances. Ask yourself, “How much did I save for retirement this year?” and “Will that help us achieve our goals?” What we do today affects us now, but the moves we make over the long term are important too.
- Looking back helps us formulate new goals — Looking back on 2014 might show you where your weak spots are, but it could motivate you to do better in 2015 as well. For us, 2015 is all about tightening up our spending and staying the course. But for others, looking back might entail creating new goals such as maxing out retirement, starting a vacation fund, or saving for college.
Looking back … but moving forward
I try not to dwell on the past, but I do try to learn from it. And that is why it's important for me and my husband to breathe in our successes and failures each year and see things for what they really are — not just how we want them to be. We all know how quickly time goes by, and that it goes by that much faster the older we get. I find that it is harder to appreciate where we have been if we don't look back. And worse, if we don't look back, we will never confront our own issues and problems. My issue is my love of pricey groceries. What's yours?
How do you take stock of your financial year? What changes are you making for 2015?
Author: Holly Johnson
Holly Johnson is a credit card expert, award-winning writer, and mother of two who is obsessed with frugality, budgeting, and travel. In addition to serving as contributing editor for The Simple Dollar and writing for publications such as Bankrate, U.S. News and World Report Travel, and Travel Pulse, Johnson owns Club Thrifty and is the co-author of Zero Down Your Debt: Reclaim Your Income and Build a Life You’ll Love.