I’ve heard that if your doing something big and you don’t know from where to start the best thing that you should do is to look at where you are now and what you have achieved in the past.
Since this website will be about our family’s personal finances I would like to have a quick look at what we had in last year, or Y2016.
Let’s start with income. I would say even more important part of your personal finances then expenses. Yes, its all about controlling you expenses, but humans have one big issue – need, and you cannot ignore them. Also it is much easier to save 1/2 of your money if you suddenly earn x2 more, then just simply cutting your spending by 1/2. No? So our Y2016 total income has almost reached 20 kEUR or 2,7 kEUR more then year before.
- Main trigger of this change was that my wife has finished her studies last year and started full time job, while in Y2015 she has a part time job while studying. So her wage income has increased from 2 kEUR to 4,2 kEUR Δ+110%.
- Still the majority of our family income is generated from my wage 14,6 kEUR or 73% of our total family income which in did not changed for the pas few years.
- In addition I receive some small income from Military or from my weekends at Home guard. I don’t recall this as an income, as I would be going there even without get paid, but since they do I don’ mind 🙂
- Also there is some income from tax refunds as we have some refunds for first mortgage loan interest.
- Most important – Dividend income. I did invested some during past 2 years and managed to generate prity nice dividend income, which grew from 159 EUR to 348 EUR in the past year of Δ+119%. But it have made only 2% of our family income pie.
Average monthly income has increased from 1,4 kEUR to almost 1,7 kEUR Δ+15%.
Next we go to our expenses section. Sadly along with income expenses has grown as well. But good news theirs growth (+1,9 kEUR) was a bit slower then income (+2,7 kEUR). It is a natural thing, you ear more, you spend more 🙂 So in total we spent 17,7 kEUR last year, or +12% more then year before 15,8 kEUR.
- Major part of expenses again was dedicated to Home expenses, which makes out of mortgage payment of 275 EUR/mo and utilities cost ~157 EUR/mo totaling it to 432 EUR/mo + 770 EUR home repair/improvident. In total we spend 6 kEUR last year or 34% of our total expenses. More repairs are coming this year. Increase is mainly related to moving x2 bigger flat, which increased our utility bill.
- Next there was food 4,7 kEUR. These cost are increasing each year. We noted that prices have increased notably in past few years, so did our expenses from 3 kEUR back in Y2013 to almost 4kEUR last year. Food makes 27% of our spending. If comparing to last year growth was not that rapid +6%.
- Then there is transportation cost 1,7 kEUR. If not repair works to the car it would be even lower. Cost were even higher in the past as we traveled to my wife hometown a lot. Also I have tried to go to work on foot last year. This have worked to half a year, then I changed job to other location. But still transportation bill is not that high as i’m going to work on a bus. Car is quite expensive thing. Also decline in gas price should be noted. So we spend ~1/10 on transportation. Quite reasonable amount I say.
- Another line that has increased a lot was Hollidays. We spent almost the double last year 1,1 kEUR compared to just 0,6 kEUR year before. But this is logical. Year before we had very very cheap holidays with some extreme stuff like spending fist night at the beach 🙂 This year we went to Spain, which is more costly in general. Either way 1 kEUR for two person holiday is not something bid.
- And the last line – other cost. This line has increased from 3,2 kEUR to 4,2 kEUR. and makes quite a lot – 24% of our cost. Which includes stuff like clothes ~0,6 kEUR, weekend, ect.
Average increased from 1,3 kEUR to almost 1,3 kEUR Δ+12%. Still bit less then average wage increase by +15%.
And then we move on to last and probably most important section – savings. Its the amount that is left after we deduct expenses from income. It is notable that situation has improved during the pas few years. As Y2014 saw negative result -1,1 kEUR due to our wedding and partial coverage of mortgage loan due to change of apartment, with large saving year before at Y2013 +2,1 kEUR readying for these two events. Y2015 saw saving of 8% of our total income totaling to +1,4 kEUR, then in Y2016 the result was slightly better +2,3 kEUR and 11% saving rate. Saving rate will be one of our most important goals. Not to be to strict we will not set 50% saving rate as it is really unrealistic in stead we set more realistic and reachable 15% goal. So first Y2017 goal is:
Goal #1: Save 15% of income.
To wrap it up I would say that year was quire good for us. Hope that Y2017 will be even better 🙂