With the start of a new year, it’s time to look back to see how we spent our money.
I love doing this each year. But the reason I love it has shifted over the years.
In past years, I loved this annual review, mostly because I wanted to see how much I reduced my spending from the previous year.
But times have changed, and I have changed. And the purpose of our annual review is now about looking at how well we spent our money based on the values and goals we set for the year instead of how little we spent.
This process of looking back at our spending/saving for the year is a way for us to remind ourselves of the financial journey we chose, to check in with our progress, and to make any necessary adjustments for the upcoming year.
Let’s take a look at the 2020 spending of the Cash for Tacos household.
Before we get into how much we spent this year, I want to take the time to give you a little background on us and go over what our goals were for 2020.
The Cash for Tacos household is a dual income, no kids (DINK) household. We are not married and our finances are physically separate. But even with separate finances, we work together to meet our joint and individual financial goals.
You can read more about how we handle our finances here: Separate but Shared.
As far as our 2020 goals are concerned, I will say that we don’t set a lot of strict goals. Our money strategy is to balance saving up for an earlier than usual departure from full-time work and enjoying our lives now. So we set goals that will help us do just that.
At the beginning of the year, we put together our yearly budget that includes our spending and savings goals. We then track how we are going against that plan throughout the year through our budget app, YNAB.
Here are the high-level goals that we had within the 2020 yearly budget:
1. Build Up Retirement Savings
While we don’t have a definitive date that we want to leave full-time work, we do know that we want to keep working to balance saving and spending to make sure that an early retirement is an option.
At the beginning of the year, we determined how much we wanted to save in each of our retirement accounts for the year. We then set up the automatic payments to those accounts and basically forget about them.
Our goals were as follows:
|Savings Vehicle||Mr Taco||Ms Taco|
|Employer 401k Contributions||$2,168||$3,786|
|Health Savings Account||$3,550|
2. Save Up For a Campervan
While we didn’t think we would actually purchase a small “weekend warrior” campervan in 2020, we planned on continuing to save $800 a month towards the purchase.
And after running the numbers in July, and finding an exceptionally good deal on a van, we decided we had the means to make the purchase a lot earlier than expected.
Purchasing a campervan was a lifestyle decision. We made the intentional choice to save less money for retirement, home improvements, and additional mortgage payments so that we could go on adventures more easily on the weekends.
A campervan has been a dream of ours, and we are so excited for all of the adventures that await.
3. Spending Well (and Letting Go of the Guilt)
This one wasn’t a goal we planned for at the beginning of 2020. And it’s actually not really a goal as much as it is a shift in mindset.
I used to be extremely focused on spending as little as possible. And if that meant buying a book on Amazon because it was less expensive than the local book store, then that is what I did.
One thing I’m grateful for in 2020 is how it has reshaped how I think about spending money.
2020 reminded me of how lucky we are to be in a position where we can choose where we spend our money. We can choose the more expensive local bookstore if we want to support them and help keep them in business.
So in 2020, we decided to focus on spending well and within our community as much as possible.
I want to start by saying how grateful we are that our finances haven’t changed much in 2020. Both of our incomes have remained steady throughout the pandemic.
We feel incredibly lucky that we are able to continuously work towards our financial goals during these times where so many others are struggling.
Overall, we spent about $10,000 more than we did in 2019. And most of that increase is attributed to buying a new van and converting it into a campervan.
Housing – $13,366
Our housing costs include:
- Homeowners/renters insurance
- Home maintenance
- Property taxes
- Household goods (toilet paper, cleaning supplies, etc)
Bills and Utilities – $4,564
- Cell Phone (Prepaid Verizon plan)
- Subscriptions (Amazon, Netflix, Spotify, YNAB, etc)
Food and Dining – $9,698
This is a category where I always think we can cut back, but we love the experience of going out to eat.
We love trying new restaurants and the experience of dining out. In 2020, our dining out spending didn’t change much, despite the pandemic.
Instead of dining out, we simply switched to ordering take-out on the nights we typically would go out to eat like, on our weekly Tuesday date night.
- Dining Out
Fun Money – $4,075
This is a catch-all category for all of our spending money.
- Spending money (records, journals, books, etc)
- Hobbies (Cash for Tacos)
Adventures – $12,306
This category was formerly known as “Vacations”. We changed it this year to include our weekend adventures with the campervan, some of which are planned only a few hours in advance of leaving.
- Weekend adventures
- Cost of converting a cargo van into a campervan (Thanks Voyager Campervans)
- Cost of furnishing the campervan (bedding, kitchen, roof rack, etc)
We expect this expense to go down in 2021 since we won’t have to spend the money again to convert and furnish the van.
Transportation – $21,842
In 2020, this category was much more than we would typically spend in a year.
In 2020, we bought a new car with the money we had been saving in a sinking fund. So all of that money we had been saving, finally left our accounts and was recorded as an expense.
Yes, our new car is a campervan, but it is also the car that I will be driving to work once Mr. Taco goes back to working in the office.
Expenses in the category include:
- Car Insurance
- Registration fees
- Purchase of Van
- Car Maintenance
- Bike/Bike Maintenance
- Ride Sharing
- Mass Transit fees
Gifts and Donations – $3,667
This is a category that I hope to actually increase in 2021. In the middle of 2020, I increased the amount of money I allotted to donations in my monthly budget, and plan to continue to do so in 2021.
I have loved putting extra money in my “giving” bucket each month. It’s been great being able to freely donate money when an opportunity arises instead of saying “no” because I don’t know where the money will come from in my budget.
In the past, I had the tendency to hold onto my money tightly making it difficult to give back freely.
Intentionally budgeting for donations has allowed me to loosen my grip a bit. This has been such a great mindset shift for me that I wrote an entire post about making giving an easy part of your budget if you have the means.
Misc – $2540
This category includes:
- Pet care
- Halloween decorations
- A computer purchase
Personal Care – $3,749
Our personal care category includes:
- Hair cuts
- Gym Membership / Yoga Classes
Medical – $5,542
Our medical costs were a little bit higher in 2020 and I expect them to continue to be at this level for the next few years.
In 2020, I committed to saying “yes” to the doctor and planned in the 2020 budget to hit my insurance deductible. I’ve been experiencing nagging back pain. And I was determined to figure out what was wrong and committed to spending money to do so.
Turns out I’m just old. 😊
But now I have the knowledge and tools to works through the discomfort, so definitely worth the expense.
I expect that both Mr. Taco and I will hit our deductible in the next few years, so we will continue to plan for the additional medical expense.
This category includes:
- Insurance premiums (what’s deducted from our paycheck)
- Insurance co-pays
- Over-the-counter medication (allergies, pain, etc)
2020 Long-term Saving
We changed things up a bit in 2020.
In the past, I had contributed the maximum allowed to my employer 401k. But this year, I decided to only contribute enough to get the match offered by my employer.
I did this because of the high fees on my employer’s plan and the fact that I don’t have a choice as to how my money is invested. My employer has a financial firm invest the money on behalf of all the 401k plan participants.
So this year, I decided to pay more income taxes and put money into a taxable investment account that I control.
Mr. Taco’s 401k plan has decent investment choices, so he continues to contribute the maximum amount to his account.
Overall, we saved according to the yearly budget we put together at the beginning of the year. All in all, we are happy (and grateful) for what we were able to save and put towards our long-term life goals.
Our 2021 goal and money values are going to stay relatively the same in 2021.
1. Build Up Retirement Savings
We are going to stay on the same path as 2020. The only change I see is increasing my HSA contributions as the contribution limit increased by $50 in 2021.
|Saving Vehicle||Mr Taco||Ms Taco|
|401k Contributions||$19,500||4% of salary|
|Health Savings Account||$3,600|
2. Save for House Projects
Now that we have our dream campervan, we plan to put money into our house. We have some major expenses, like a new garage, that we want to tackle.
Our goal in the next five or so years is to get all of the major repairs and updates on the 120-year-old house completed. The thought is that once we get the house to a place where it will only need general maintenance and updating, we can then start to consider straying from full-time work.
3. Spend Well
This one is hard to measure, so I hesitate to put it down as a goal. But we want it to be a theme in our finances, so I’m including it.
This “goal” includes being intentional with where and how our money is spent.
Yes, buying from Amazon is the easy thing to do, but can we find the same thing locally? Yes, dining out in our neighborhood is familiar and easy, but could we venture to another part of the city and spread the wealth a bit.
Part of having this as a “goal” is to help us to continue to go through this thought process when we spend money.
We got this (and so do you)
Overall, we are happy with how our spending aligned with our values in 2020.
Yes, we spent more than usual, and that is ok. We met our established savings goals while intentionally splurging on a campervan.
For us, it’s about finding a balance that allows us to continue working towards being less reliant on full-time employment while supporting and doing the things we love now.
So go on. Figure out what you want your money journey to look like.
Create a plan and execute it.