In the last post I reviewed all of our income for the previous year and discovered some fun surprises. For instance, I expected our new full-time jobs to be the bulk of all our income for the year. And while it was the largest chunk of income, it amounted to a smaller percentage than I anticipated. I was surprised to see that 35% of our income came from other sources! Hopefully that can continue into the next year.
As we make the shift into expenses for this post, let me give a quick preview by saying there are some surprises here too. In fact, the biggest surprise to me was that we spent WAY more than I ever expected! It was an expensive year! But what can you expect? I bought a vehicle this year, bought an engagement ring, moved to another city and state, bought a duplex property, had to furnish an apartment, buy lots of tools, and more. It all adds up.
It was an expensive year!
In total, it appears we spent $130,624 for the year. Whoa… Ridiculous, right? That’s what I thought! We only made an income of $76,916 for the year. So that would put us at an immediate $53,708 deficit. This is not the kind of financial start I would want in our first year. There has to be an explanation here. Well thankfully, there is. Take look at the following chart to get started:
You can see the BIGGEST expense we had were car and property purchases. Of the $130,624 in total expenses for the year, this alone represented 35.9% of it all, or just above one third. That’s huge, considering there were only two things purchased here the entire year: one car and one duplex property. The next largest were All Other Expenses at $36,739, Investments at $32,871, Taxes at $12,612, and Loan Principal Paydown at $1,520 I’m showing this because I’ve personally found it very helpful to see a top-level picture of…
Note From Author
The full “2005 Expense Review Part 1” post has been back-dated to 01/04/2006. But it was originally published to the Financial Independence Champion (FIChampion.com) Blog on 06/26/2016.
Why Back-Date Posts?
I mentioned in my first post how this blog will be a little different than any other ones you may follow. I still plan to talk about personal finance, rental property, travel, and the pursuit of financial independence. But to give all these topics the right context and the full picture, I need to start at the beginning. I need to fill in the details of life from 2005 until now. I want you to see the successes, the struggles, and all the milestones we passed along the way. Therefore most of the “new” content will be back-dated to their appropriate dates in 2005, 2006, and beyond — until we’re caught up!