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End of Year Review and Yearly Planning

 Hello fellow frugal peeps, and welcome to the end of the year! It has been another doozy of a year in 2021, and also a fun one.

Like many people do toward the end of the year we are at a moment of reflection as we look back at the good things, and the opportunities to improve. When it comes to financial planning we use the month of December as a way to review the year and plan for the coming year and reevaluate how we are doing on our long-term plans.

To do a long-term plan, one needs to have goals. The goals that we have are 1) retire early (shocker), 2) have some fun (interesting?), and 3) enjoy life, 4) financial independence (FI). For our long-term goal of retirement, we do investments mostly, we track our monthly investment installments as a percentage of our income to see the trends over time. This year we did pretty well, with a mean monthly investment of 32% of our income. Our investments did really well, we mostly stick with index funds. I know it's not as sexy as crypto, but it's a hell of a lot more stable ;). 

We also had a lot of big life events happen this year. We built a house, got a new job, and purchased a vehicle. All big things, but we did it in a frugal way, mostly. We built a house with a builder that had a lock-in price so they couldn't increase the cost of lumber, we sold our old house for way over the asking price and put that right into our new house and overall lowered our amount owed to the bank. For the new job, we increased our income, yay, and continued to live in the same exact expense style that we were living at. We purchased a car, that was one thing that we didn't do well with, regarding the frugal way. We took a loan so we could get a better vehicle. There is some regret, but the interest rate is so low it didn't really make much sense to remove money from a hot investment market right now. We had the cash, but I'd rather make the interest on it than pay in cash if that makes sense. So hey, about 1/2 frugal on that car purchase.

This year we laid out our budget strategy for the year in order to align with our big goals. We just used a good ol' spreadsheet for that. We use ynab.com for our budgeting needs, highly recommended, they didn't pay me to say that. It has a great "goals" feature that lets you create a bucket with a goal so you know how much to allocate to it each month. Great for long and short-term plans. If you don't do budgeting at a monthly or yearly level, I highly recommend, and so does the book "Millionaire Next Door" which was a recent library borrow. Great read and sound advice, a bit dated, but still good.

What do you all use for yearly financial planning?

Anyone else excited for tax season? Me neither, lol.


happy holidays y'all.


Mr. Frugal Rock

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