Summit Meeting Prep

Jan 4, 2013 by

Nixon Brezhnev summit

Re-enactment of the conclusion of one of our Summit Meetings.

If you’ve been following Money Counselor for a while, you may have read my report on 2012’s Summit Meeting between my wife and I. If not, you’re wondering what’s this Summit Meeting I’m babbling about.

Near the start of each year, my wife and I convene what I’ve dubbed our Summit Meeting. In brief, we review the past year’s spending, earning, and saving, the status of our nest egg, and my wife likes to rationalize explain the difference between her annual predictions and what actually happened. We also agree on—or at least get on the table our two bargaining positions—major spending for the upcoming year, things like costly trips and home projects.

Summits help re-anchor us to goals, and we deal in one day with what could be a year’s worth of disagreement on the inescapable trade-offs among spending, saving, and investing priorities. That can be a lot of contention jammed into one day, so we try to keep it light, and we’ve made adult beverages a critical ingredient of Summits.

Summit Meeting Preparation

Actual vs. Budget Variance Reports

One product of our Summit is an earning and spending budget for the upcoming year. We track both during the year (yes, we enter nearly every expenditure into our personal finance software—invaluable info in helping us stay on track to reach financial goals!). In preparation for each year’s Summit, I generate actual versus budget variance reports on the past year’s earning and spending. This is going to be more work for me this year because after being dissed by Intuit, I switched from Quicken to iBank in 2012. Inexplicably, iBank doesn’t produce yearly actual vs. budget variance reports—what should be the core report of any personal finance software—so I’ll have to export data to Excel and produce my own. But I hold grudges and I’m stubborn, so I’ll never go back to Quicken.

Nest Egg Summary

I do another Excel report that slices and dices our savings. The report has rows for each account—Kurt’s Traditional IRA, Ms. Money Counselor’s Roth IRA, HSAs, etc.—and columns to help us get a grip on portfolio allocation—Bonds, U.S. Equity, International Equity, Cash, etc. All of these are sub-totalled and totalled every which way possible and I calculate percentages so we can see at a glance the portions our savings that are, for example, about to go down the fiscal cliff tubes or are at risk in the world’s largest casino, aka Wall Street.

Plan for the Year

The third bit of Summit preparation I do is a quick list of possible major expenditures for the upcoming year. These would include big trips, home renovations, major appliances, a tank of gasoline, and so on—anything costing over say $500 or thereabouts. This “wish list” is always pared down during the Summit, according to our priorities and the year’s saving goals.

Review of the Summit Meeting File

My wife takes voluminous notes on each year’s Summit, and a good part of her enjoyment of the annual ritual is a review of history. She’ll read through the file for 2012’s Summit at least, and probably for earlier years too. This helps both of us be reminded of my many failings. 🙂

Do You Have an Annual Plan?

Everybody’s different, but for us, the Summit Meeting tradition has been invaluable, and I’d recommend for everyone some sort of regular review and planning process.

Does your family have a process similar to our Summit Meeting? How do you set goals and evaluate progress?

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