My wife and I are just starting out. We are both 26 and 2017 was the first full year of us being married with full time jobs. We are average in terms of our financial literacy and have been using r/personalfinance to structure our financial habits. We decided on going with a simple budget and tracking scheme for 2017 to keep us on point with saving, but without bogging us down with tedious tracking of every penny. Here is a quick run down of how we did this year.
Goals: * Pay off as much student loan debt as feesible * Save 40% rule (which includes money going to student loans) * Keep emergency fund of at least 10k
Other r/personalfinance steps we followed: * Invest in retirement plans (403b, and simple IRA) to employer match * Pay off high interest debt (6.2% student loan) * Emergency fund of at least 3 months expenses
2017 total income: Combined after taxes + tax return = ~$90,000
Monthly budget breakdown: $3500 x 12 months = $39,500 (44%) * Rent: $1400 * Utilities: $150 * Food: $600 * Gas: $400 * Dog: $500 * Discres/irregular expense: ~$500 * We planned excess wiggle room in each budget aspect which allowed more wiggle room for discresionary/irregular spending without having to worry.
Things went smoothly until march/april where car trouble led to an unexpected/unplanned expense of needing a new car = $17,000 (19%). We were able to pay this off within 3-4 months due to emergency fund being in place plus convenient timing of tax return bump.
Overall net worth (excluding money in investments) went from $-20,895 (January) to $-1,214 (December) = $19,681 in total savings (22%)
In summary: our spending breakdown of $90,000: * Budget: $39,500 (44%) * Savings: $19,681 (22%) * New car: $17,000 (19%) * Other expense/discresionary spending: $13,819(15%)
Now for what we’ve taken away from all this:
Good things: * Due to following good advice (thanks r/personalfinance) and keeping a solid emergency fund, having to buy an unplanned new car (bought pre-owned low mileage) was very manageable and much less stressful than it could have been. * Including paying off a new car (which was unexpected) to the overall savings in net worth it came out to 41% overall. So we’re counting that as reaching 40% savings goal. * Almost in the positives for net worth! At least until we buy a home… * On average (exluding a couple months that went heywire because of the car) we put away about 36% of our monthly income to savings/loans.
Things to improve upon: * Seeing that extra 15% spent on irregular expenses/discrestionary spending is a little concerning, especially since some money is set aside in the budget for this spending. It was definitely noticable month to month that we would spend more than we originally alloted in the budget, but honestly didn’t stress too much about it. We just tried to keep a general sense of not overspending, but still allowed ourselves to enjoy experiences. Overall, within this 15% is where we can improve our savings for the future. * We need to do a better job tracking some irregular expenses (i.e. doctor appointments, professional memberships, etc.) so that we can break down that 15% a little better and know how much was purely discresionary.
Thanks again for all the great advice –See you all in 2018!
Submitted December 28, 2017 at 09:21AM by 2017Financethrowaway http://ift.tt/2CjjWa2
