Looking back on the year, what could we have done better?

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?

More about...Planning, Budgeting

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Mrs. Frugalwoods
Mrs. Frugalwoods
5 years ago

Groceries are so tough. I think it’s largely because each item is usually pretty cheap and, it’s something we have to buy on a weekly basis. I also fall into the trap of thinking certain foods are “necessities.” Like dried fruit, which is so good but so expensive…

We haven’t looked at our year in review yet but I’m guessing that when we do, groceries will also be a culprit. You’re so right about the importance of analyzing spending–it’s impossible to truly control your finances if you don’t know where your money is going.

Tina in NJ
Tina in NJ
5 years ago

I tend to buy things (craft magazines) instead of actually doing what they’re talking about (make the crafts). As a result, my house is a disaster and the only things that get finished are the ones that have a deadline and are then given away.

Sherry
Sherry
5 years ago

My end-of-year exercise has been preparing for refinancing my mortgage from a 30-yr at 5.75% down to a 15-yr at 3.25% and while this will save me an enormous amount of money over the life of the loan, it’s a higher payment that I’ve had to steel myself for. I tend to have kind of a death-grip on my budget and literally write down every expenditure in my ancient DayTimer so there haven’t been any big surprises; but when I added up the 40-lb bags of Large Breed Adult, the boxes of litter and 16 lb bags of cat food,… Read more »

Katherine
Katherine
5 years ago
Reply to  Sherry

I’m like you – I spend a small fortune on high quality dog and cat food (and litter). I used to get the food at a boutique pet store (the only one that carried the brand) but then they told me they were going to stop carrying that brand and in the large bag but that I could special order it. I was worried, so I looked on Amazon to see if I could get it there. I could – and $20 cheaper! I love that specialty store and love the people there, so I hate to impact their bottom… Read more »

Holly
Holly
5 years ago
Reply to  Sherry

I bet those pets are worth it! =)

Sherry
Sherry
5 years ago
Reply to  Holly

They definitely are. What helped me narrow this down this past year was to keep an inventory list and note whenever I opened a new bag of either cat or dog food or a box of litter. Pretty soon a pattern emerged and I just started putting a stash of cash in my purse a la Dave Ramsey’s envelope system each time I got paid. A separate envelope at home gets some apart from food and litter to cover average veterinary expenses plus a bit extra.

Laura
Laura
5 years ago

Holly, thanks for an excellent post. I do need to sit with the 2014 budget records and crunch numbers and brainstorm, but I already know our two big changes for 2015 are to bring in extra income (mostly through finding new OT assignments at work, which are fortunately not too hard for me to pick up) and to curb my bad tendency to eat out. We’re hoping to refinance our house later in the year when DS turns 18 and thus legal age to be added onto the deed; I also know one of our debts will be paid in… Read more »

Holly
Holly
5 years ago
Reply to  Laura

I think you’re right about grocery prices. They have been creeping up in my area, albeit slowly. The other factor that is coming into play is that my kids are just eating more now. They are 3 and 5, and they eat A LOT more now than they did just a year ago. It’s been gradual but I can definitely see a difference. We’re going through a box of cereal every other day around here!

Linda Vergon
5 years ago
Reply to  Holly

Hi Laura and Holly,

The other way I see my grocery bills increase is I have to buy two cartons of ice cream, for example, to get the same quantity I used to buy before. The price may be the same, but you don’t get as much! Argggh!

Linda

sarah
sarah
5 years ago

I’ve been thinking about my 2014 finances too – successes and failures. I hate to see you stressing so much about spending on food. Food is one of the only things that we actually need, and it can bring joy, and be a social experience… what % of your total income is this over-budget grocery stuff? Did it hold you back from achieving a goal? I guess I just feel like it’s one thing if you find yourself spending some really outlandish amount at the grocery store but getting so down about how much it costs to just eat and… Read more »

Holly
Holly
5 years ago
Reply to  sarah

Thanks for the comment, but don’t feel bad for me! Life is good over here. I just like to keep on top of my spending and confront the reality of it, good or bad. We used to spend a lot more on food and it was really out of control. It has gotten a lot better since then. Still, I don’t want to go back to those days at all! =)

Scooze
Scooze
5 years ago
Reply to  Holly

If you consistently have trouble with the food category and rarely make it within your $600 monthly budget, why not raise that line item? Perhaps it’s not realistic. My partner and I spend that (including booze) every month and there are only two of us. Unless you’re in dire straights and must stretch every dollar, add $100 and let it go. 😉

Holly
Holly
5 years ago
Reply to  Scooze

Maybe, but I like to push the limits! =) And honestly, the only reason we get close is because I track it so closely.

Jeff
Jeff
5 years ago
Reply to  Scooze

I agree, my original food budget turned out to be unrealistic for the two of us. I fought it for a few months but after one overrun after another and looking at the receipts it became clear that the true budget had to be higher.

Dianecy
Dianecy
5 years ago

When I read the headline, I honestly thought it was from the GRS editors. Oh joy, they’re asking for our input. Nah, wasn’t that at all.

Perhaps Holly could have said “What could I have done better?” While I have sympathy for Holly’s travails and congratulate her on her success to date, I really thought this was going to go in a different direction. Alas, no.

Beth
Beth
5 years ago
Reply to  Dianecy

I wonder if she used “we” because she was thinking of her family and not just herself? One of my pet peeves is when PF bloggers say “I, I, I” as if their spouse isn’t contributing too.

Rail
Rail
5 years ago

My new year is opening with a increase to 10% in my 401k(should have done this years ago :/ ) and actually spending a little savings on home improvement. Am also hitting 45 in a month so am going to spend a day reflecting on my middle age(crazy?), my next 15 years(can take full retirement at 60) and getting my health back on track. That and the day to day of raising the daughter and keeping the financial ship sound. P.S. Garden catalogs are here and improving the garden is always ongoing!
Cheers and Happy New Year to all GSRs’!

Rail
Rail
5 years ago
Reply to  Rail

I meant GRSs’. Hit send at same time I saw the fumble finger. Wish we could still edit.
Cheers!

Cookster
Cookster
5 years ago

I spend way too much money on eating out. We (my friends) decided to rotate our lunches to each other’s homes. Sandwiches and fruit etc. cost so much less and we do not need the fries and greasy food we get out. I also have been shopping around for dog food. There’s nothing wrong with Purina which I buy on sale in bulk. My dog is 9, very healthy, and has been eating that her whole life. The biggest expense with her is the vet bill once a year for her shots, license, etc. I also am learning to do… Read more »

MarLeigh
MarLeigh
5 years ago

This year I finally contributed to our SEP-IRAs. Couldn’t max them out but it’s a big step from not contributing anything. I really need to organize our business records so much better. It’s not even complicated as we have really just one big client throughout the year and small side jobs here and there but I guess I’m so lazy that I can’t get motivated to be more organized. I still love to do stuff on pen and paper and spreadsheets. That won’t change but I just need to sit down and do it already instead of waiting for the… Read more »

Art
Art
5 years ago

I do a year-end Net Worth report, looking for a 2% minimum increase. I then do an expense review using a Quicken report.
Groceries so far remains within budget but the real area of concern for me is the communications category including cable, cell phones, internet. The cable is almost certain to go right after the superbowl.

Tonya@Budget and the Beach
[email protected] and the Beach
5 years ago

I need to make some serious changes to my grocery budget as well. You’d think that what I spend I’d weight like 500 pounds. It’s seriously crazy for one person. Anyway, that’s one of my big goals for next year.

Amy
Amy
5 years ago

Enjoyed the article. Thank you.

I find it important to always be reflecting and trying to improve. I think I get better everyday or atleast I try.

Good year for us. Payed off the mortgage in December. I won’t know how to feel come January and no payment to make. Hasn’t quite set in yet. 40 & mortgage free! Yay 🎉

Hope 2015 is even better.

Rail
Rail
5 years ago
Reply to  Amy

You lucky dog Amy! No mortgage, way to go!

Rebecca
Rebecca
5 years ago

We were never able to stick to our grocery budget until we switched to cash for groceries. It was easy to go over and just swipe the debit card. After a few weeks of having to put items back at the register because we went over and we were on track.

Marie
Marie
5 years ago

I have noticed during my spending tracking that the way the credit card companies categorize things is often deceptive, and can even change from month to month. If I pick up a hoagie from the gas station on the way home, it’s still categorized as a fuel purchase. Only my own record keeping can truly track things the way I want.

ki1418
ki1418
5 years ago

Nice! I never review the past year. Thanks for your help!

Suzanne
Suzanne
5 years ago

I was just reviewing my budget from 2014 and spent $1,000 over budget in the grocery category. i think it’s in part because we are shopping at BJ’s more, and when buying toilet paper and such I’m not breaking that out of the grocery category. (I try to remember to itemize my Target receipts too but most end up in the misc category). I do my best to bring lunch, and I need to up my game in the meal planning department. We have 9-month-old twins so there are many more expenses to go along with them, both expected and… Read more »

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