Summit Meeting 2014 Preparation

Jan 6, 2014 by

Nixon Brezhnev summit

Re-enactment of the conclusion of one of our Summits.

Long-time Money Counselor readers know that Ms. Money Counselor and I convene near the beginning of each calendar year what I’ve dubbed our Summit Meeting. From my perspective, our Summit has two broad aims:

  1. Reviewing how we did over the year just completed compared to our plans and goals from last year’s Summit, and
  2. Agreeing to a budget, Big Plans, and goals for the upcoming year.

I don’t want to speak for Ms. Money Counselor, but her principal aim for the Summit meeting seems to me to be to “connect.” She is a female, after all. 🙂

Preparing for Our Summit Meeting

To get us both ready for each Summit Meeting I tidy up and print an Actual vs. Budget income and spending report for the prior year. Through the course of the year we record our expenses and income in iBank, and since we create a line item budget after each Summit, we can easily see how we did versus that, now year-old, budget.

I know some of you—to be honest, I’d guess nearly all of you—don’t believe in budgeting. Or maybe you, in theory, believe in budgeting, but you don’t do it anyway because it’s too much trouble or whatever. Having a budget and, infinitely more importantly, reviewing our actual earning and spending compared to our budget has been crucial in helping us make the financial progress we’ve made.

We’ve been doing a budget our entire 17-year marriage and have yet to exchange gunfire. I recommend it, though I know the tedium is a challenge for many. It’s tedious for me too, but the results make it worthwhile—a bit like eating a scrupulously healthy diet.

I also prepare and print a detailed net worth statement that includes an accounting of our asset allocation separated into Retirement and Non-Retirement savings categories and also in total. But I haven’t done this yet for year-end 2013, and I’m using as an excuse that not all of the needed year-end statements have yet been published. That excuse likely will expire today so I’ll have to get cracking or I’ll feel the sting of Ms. Money Counselor’s hefty calculator winged at me from across the room.

2013 Actuals vs. Budget

I have done the 2013 Actual vs. Budget income and expenses report, and Ms. Money Counselor is going through it with a fine-toothed comb. Overall in 2013 we spent more than we budgeted, though we did underspend in several key categories. Here’s our total for 2013 and a few select categories to give you an idea of what we’re looking at:

2013 Actual vs. budget

* These represent a mix of Canadian and U.S. dollars—probably 90% CDN$ for 2013 as a whole. I don’t worry too much about mixing things up because a) the exchange rate was nearly 1:1 for much of the year, and b) I’m not bright enough to figure how to record things otherwise without a lot of highly tedious exchange rate tracking and dollar converting. Ick.

For each spending line item, we look briefly at the underlying detail—especially if we spent more than budget—to understand what happened. Have our costs permanently ratcheted up? Did a one-time expense slam the year’s budget for a category? Should we make any changes in how we live to better control a particular expense? For example, perhaps I should stop using hot water or electricity? 🙂

I think spending $40k in a year is pretty darn good for people in our situation (owning a car, a home, wireless phones, and living on an island)! The $40,000 does not include income taxes, just stuff and services we buy. I suspect $40,000 per year is less than a big majority of our peers spend, though I don’t like to use what others are doing with their money as a measure of our success or failure. The only measurement that matters is our progress toward the goals we set for ourselves.

Summit Meeting Date

I don’t know what day the Summit Meeting will happen—probably on the weekend. Sometimes it spans a couple of days, not because of the time it takes but because I need a time out! I’ll report on the results here, assuming I survive.

How About You?

Do you do a formal review of your prior year and set a budget and goals and make plans for the coming year? If not, why not?

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