With 2014 in the books, I’m in a retrospective mood. I’ll start reviewing the year just past today by looking at my spending.
Twenty years from now, it might be difficult for me to remember that 2014 even happened when compared with the years preceding it. I didn’t finish grad school, didn’t lose my job spectacularly, didn’t end up in the emergency room, didn’t go to war, didn’t win an election.
Instead, I’m working for the same company, having received a modest promotion, and living in the same apartment in which I started the year. That second thing is more of an event than it seems on the surface; I’ve now lived in the same place for two full years — something I haven’t done since leaving my childhood home in 1998.
Rather, 2014 was a great reminder of just how important the journey is. This past year, I strengthened existing relationships, rekindled old friendships, and — just to balance things out — burnt a couple bridges. I got back into writing fiction and did some long overdue maintenance work on my mind and body, finding saplings of success with each.
I can truly say that 2014 was both the best of times and the blurst of times.
Now let’s talk spending.
Total effective tax rate: 32%
There wasn’t a whole lot I could do to avoid taxes this year. Of course, I contributed to a 401(k) before tax, contributed to a health savings account, and even gave to charity, but none of it had much of an impact since I’ve been phased out of many tax credits and deductions, and don’t yet get those associated with being married or having kids.
From my gross income, the American people — by way of the government — took 32%, broken down as follows:
I’ve got nothing much to say here as none of that looks out of the ordinary.
After-tax spending by category
Once those taxes were taken out, here’s how I spent my disposable income, broken down into three categories I call basic needs, wants, and savings and loan repayment:
These ratios look solid. Obviously, I would like to put more toward savings, but as it stands, 60 percent feels very respectable.
Here’s that category I called Basic needs, broken down a bit further:
Of course, the definition of a Basic need can be subjective, but I think this gets close.
My New York City rent, at 18 percent, makes up the majority of this category. Even though I split a small apartment with two roommates in one of the outer boroughs, this is more than I want it to be. However, I’m sure that I’d spend more than two percent of my disposable income on transit if I lived in a place where I needed to buy a car, insure and maintain it, and fill it with gas, so I don’t feel too bad.
As for transit, that includes about two cab rides a month. I live in a very subway-friendly area, but if I’m running late to an appointment in Queens or the less subway-friendly (to me) neighborhoods of Brooklyn like Williamsburg, then I can pretty easily convince myself to take a cab instead. Taking fewer cabs is something to strive for.
In the food section you’ll find booze, even though it probably doesn’t belong in the needs section. Still, it’s much easier to include money spent at bars as part of restaurant spending. Consumables pretty much includes anything bought at a grocery store, such as toilet paper.
Finally, my total spending on utilities was way down in 2014, now that my cell phone bill is just $18 per month compared to $90 per month in 2013.
Here are the things that made up my wants section:
I work pretty hard at saving money on travel (See here, here, and here, for example), but it still makes up a big chunk of my spending, thanks to living across the country from the place I call home, and going to lots of weddings all over the country and all over the world. That said, a lot of the money I spent on what I call travel went to trips around the northeastern United States, including New Jersey, Connecticut, Pennsylvania, and Delaware, which means much of this is just a factor of living in New York and not owning a car.
In the electronics and home goods category, I needed a new flat sheet for my bed and was pleasantly surprised by the inexpensive option I found. I also needed to replace an aging tablet that I was using as a laptop, and was also pleasantly surprised by this Asus I picked up for $180.
Otherwise, the rest of this chart looks about right.
Savings and loan repayment
The category I called Savings and loan repayment was composed of the following:
It’s pretty nuts to think that I’m sending almost one-third of my take-home pay to student loans, but I guess that shows how serious I am about paying those things off. In fact, I wouldn’t mind seeing my retirement contributions go down just a bit — while still enough to take advantage of my employer match, of course — so that I could send an even bigger percentage toward paying down my loans. There are lots of good goals to strive for in 2015 and I’ll include them all in a later post.
So, how did everyone else do with keeping spending in check this past year?