The Frugal Momster Looks Back at Our 2016 Expenses
I’ve already started working on our taxes for 2016. I know, I know, I’m am over-achiever.
Usually, I have our taxes completed by mid-February, because I like to know as early as possible how much we’ll owe in April or if we’ll be getting a small amount back sooner.
My goal each year is to break-even or as close to as possible, though we have always owed additional to the state. We’ll know in a few weeks how successful we were for 2016.
If you are getting back a big refund each year, they are using your money for an entire year before you get it back – for free. I’d rather keep that money to save, pay off debt, or invest. If you like getting a big refund here are some good uses for it.
Using Tax Software
This year, I purchased Turbo Tax software through Costco, as they had the best price I’ve seen thus far. We have to opt for the pricier Home and Business version each year since I own an LLC. I miss the old telefile forms from yesteryear that were free!
Usually, Vanguard offers a TT discount, but last year they offered only a small discount and this year it appears they’ve ended the discount altogether. Costco had the best price and within 15 minutes on the phone with Turbo Tax I was up and running with a software download since my Mac does not have a disk drive.
I choose to do my own taxes as I’ve done them for over 20 years myself, with my Dad helping me in the teenage years when I first started out. Even as our financial situations have changed, I’ve spent each year learning about taxes to feel comfortable handling them. I basically do my taxes year-round in order to keep records straight and organized for filing times.
Regular Expense Reports Help
In doing my monthly expense reports, I’ve become even more aware of how we spend our money and finding new ways to organize our accounts and files. Despite living a frugal existence and following a zero-based budget to guide our choices, I’m still learning new ways we can effect change in our household and our finances.
I decided to look back on the year of 2016 as a whole to explore where we did well, where we went wrong, and where we need to cut back. I put together a detailed chart of our expenses, but in order not to bore you I decided to summarize the year and see how we fared overall.
Our 2016 Expense Review
Our household operates on a zero-based budget as mentioned many times before. Every dollar that comes in has a job to do, either to pay a bill, a debt, for food or to be saved. This guides our choices and helps us to spend less than we earn each year to help us reach our financial goals.
Between us, there are 3 organizations in our financial setup. The House, Chris, and I. The House runs all and is our master, much like a Casino. It removes any financial awkward conversations of mine vs. yours and puts it all on the “House.”
When one of us “owes the House” it’s not a personal situation, but a financial one. It laughingly creates a new meaning for, “It’s on the house!” in our lives. We have “House” cards and a variety of other “House” accounts.
This leaves Chris and I both free to run our own personal finances separately, those of which are from our side incomes, businesses, and/or hobbies. So, we have some free money to use outside of our main goals.
Looking back at 2016, I was surprised to see how much we have spent, on what, and where we could consider cutting back in 2017.
Our Total Expenses for 2016
Our total expenditures, not including the mortgage, for 2016 was $33,350.07.
This total also does not include the money that was saved and used to pay for our newer Toyota Rav4.
That’s about $8,000 more than we have planned in our $25,000 budget.
As I dug deeper through our money software, I found more ways we’ll be cutting the difference on that additional $8k we’ve gone over.
Last year we paid over $4,000 for courses for Chris’ advanced education that will not occur this year. In addition, we spent quite a bit to renovate our office, buy a new couch, outdoor lights, and for compost and gardening projects. Plus, there were purchases that weren’t always necessary like a robot vacuum (but really Robot Rosie is such a huge help!), and well, Ruby cost us a whopping $164.49 for the year. Dogs, they can kill a budget…
Going into 2017
What was amazing about taking a fresh hard look at our expenses for last year was that I developed a bunch of new ways of tracking our expenses and financial goals in the coming year.
Reworked Expense Categories
I’ve recreated categories in our money software to keep better tabs on items we purchase and reimburse our household with our own personal savings, as well as reorganized catch-all categories like “household” or “projects” into more directed categories to match our budget. In addition, I’ve utilized the “budget” options in our money software to keep better tabs on staying within those limits in our annual budget.
Retooled the Budget
I also retooled our budget spreadsheet slightly, which normally doesn’t occur until August for our new fiscal year. I added in line items for things like gifts I normally left off, created a gift-giving budget sheet, and added a few more line-items including Ruby, healthcare, and our yearly $0 mobile cell phone plans which normally are paid for with random income.
Look into My Crystal Ball
Right now, the markets, our country, and the world are a bit uneasy. I feel that there is a winter ahead based on the understanding of the US Economy when viewed from a four seasons perspective. I’m still squirreling away our nuts and am hopeful we’ll stay employed for the foreseeable future even though it looks a bit hairy for our professions. I love what I do, so I hope to be able to continue helping others in the way that I do!
In the end, I believe there will be tax breaks, but also closed loopholes that may impact us in the next decade. No matter who’s in charge, these things have been discussed in financial blogs or papers for years.
One I’ve paid more attention to is no longer being able to write off our mortgage interest. I have always planned to pay off the mortgage as early as possible, but hope to reach that point before this deduction is no longer on the table. As long as we’re employed for the next several years, we will work hard to make it happen.