2020: The year in (financial) review

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Well, this has been a hellacious year for most, if not all, of us.

Beyond the obvious worry of physical health, many people have taken at least some form of financial hit from the pandemic, but a small portion of the population has had the extreme luck to be untouched money-wise. Except perhaps in the positive sense, as those of us with stock portfolios/retirement investments and/or houses have seen our net worth jump quite a bit.

So it’s with a mix of pride and guilt that I report that this was my best financial year ever — even with my takeout-consumption problem.

Of course, the lack of available activities during the pandemic helped keep my spending down. If you can’t go out for drinks with friends or don’t have dates to Uber to, you save a lot of money.

But regardless of the reason, the fact remains that savings/retirement accounts’ balances went up.

But let’s see what my money looked like this year.

Actual spending

While we in the personal finance biz are obsessed with saving rates, obviously looking at spending is important too.

So I thought it’d be interesting to look at my spending this year. Which, by the way, was a tremendous PITA, since I don’t use budget tracking software. (I have too many weird categories that the software wouldn’t know what to do with.)

But I managed to cobble together the data, and I even dusted off my Excel skills (read: looked it up online) to make a purty pie chart.

To be clear, the percentages above are based on the total spending, not total income. The pie chart above is for all the funds that didn’t go to retirement accounts, savings accounts or taxes.

But in case you’re curious, the above spending was 44% of my pre-tax income/55.6% of my post-tax income. Non-mortgage spending was 28.9% of pre-tax income/36.4% of post-tax.

What the categories include

Beauty: For part of the year, this included haircuts/colors and waxes. The rest of the year was at-home hair dye and any makeup items I bought.

Healthcare: Beyond the obvious doctor/medication copays and insurance premiums, this category also includes massages.

Business Expenses: Most of this was the cost of my tax prep plus some miscellaneous fees. Technically, I should’ve put my Internet here because my business pays for it, but it felt weird to not include it in Utilities. So if you want to be a stickler than 3.6% of spending is Business Expenses and Utilities only accounted for 4.3% of my spending.

Personal Care: Anything you’d buy at the drugstore, other than makeup and hair dye. So usually things like body lotion, facial moisturizers, toothbrushes, toothpaste, toilet paper, tampons/pads, etc.

Going Out: Hey, remember when we did stuff and went places? That was fun. Sigh. Anyway, this category includes going out for drinks with friends, some drinks/food bought on dates and rideshares to dates and parties.

Home Maintenance/Repairs: Not just home repairs (mainly electrician and plumber), but also my HVAC service plans and bi-monthly Orkin visits.

Pet: I was mercifully free of vet bills this year. So it was just the cost of Josie’s litter, food and Banfield plan. Also a laser pointer she was thoroughly unimpressed with after two minutes.

Groceries: Beyond grocery runs and candy bought at drugstores/Dollar Tree, this category includes the discounted Target gift cards I bought to pay for my protein bars.

Car Expenses: This is just auto repairs, car insurance and gas.

Entertainment: This ended up just being my Netflix and Hulu charges. It would’ve been an even smaller number, but I prepaid for a year of Hulu to get a deal.

Donations: Both charitable and political donations. It doesn’t look too bad as a percentage of my spending, but it was too low as a percentage of my income — especially since $900 of the donations were from the stimulus. Hopefully, I’ll do better in 2021.

The big spend

Obviously, my mortgage was the biggest chunk of my spending. I’m lucky to have a low mortgage (just under $600 in 2020, and $644 in 2021), so I could put a lot of money toward extra payments.

As a result, I paid more in extra principal payments than I did in base payments this year. In fact, my mortgage went from $55,639.91 to $42,979.96 this year, meaning I paid down $12,659.95 in principal this year. Woot!

Overall money distribution

So that was my spending. But how did I do overall for saving?

It’s worth noting — because, again, it was a PITA to track down it all down –that when I say income I’m not just talking about the easy stuff like my main job and blog income. I mean that I accounted for literally every penny that came my way this year:

• Main job
• 2019 work bonus (deposited in January)
• Blog income
• The stimulus check*
• State/federal tax refunds
• Bank interest
• Credit card rewards
• Payments from the cash back shopping sites Mr. Rebates and Rakuten
• A $40ish refund from a doctor’s office.

*I’m very glad people got the stimulus, but a small, petty part of me is annoyed that I got it because a) I didn’t need it the way others did and b) since I donated $900 and used $300 at local businesses, my saving rate took a bit of a hit. Sigh.

Bye-bye, money!

So that’s And so, without further ado, here’s how my income got distributed:

As a note, my taxes look so high because, besides state and federal taxes, my business means I have to pay both halves of FICA for the salary I pay myself as an employee.

I should also point out that this was just what I paid to the IRS this year. If my tax refunds this year are similar to last year’s, my net taxes paid will be around 18.5%. But for now, we’re looking at where my income went this year, so 20.8% it is.

Another note: The sinking funds and savings account percentages are net. For example, I put in $150 a month to the car insurance fund, but I paid out $1,586. So I only counted the $214 difference as saved. Similarly, I actually put $4,700 into savings over the course of the year; but $3,400 went back out for repairs.

I wanted to use the amounts put into the accounts this year — ya know, the money I saved? — but that skewed percentages. With that method, the dollar amounts get counted twice: once as savings and once as spending. So I had to go with net amounts. Which I guess is technically more accurate. But… grumble grumble.

Finally, I’m not sure how common the term “sinking fund” is these days. So if anyone doesn’t recognize it, “sinking fund” just means accounts where you are saving up for future expenses. I have a slew of them with Ally:

• Washer/dryer fund
• Car fund
• Vacation fund
• B’s fund*
• New iPhone
• Yearly termite protection
• New HVAC unit
• Car insurance
• Pet bills fund

*A relative recently came out as transgender female, so I’m saving $50 a month until she decides she’s ready for surgery. It’ll be a drop in the bucket, unfortunately, but it’s a start.

Saving rates

Okay, finally the part many of you really tuned in for: my saving rates.

Two notes:

• I didn’t include B’s fund (since I’m not saving it for me) or one short-term (less than one year) goal. It’s only a 0.2% difference, so not a huge deal. But I’m trying to be as accurate as possible here.

• Since people differ on how to calculate a saving rate and I’m indecisive, I choose to use aaaalllll the versions. It used to be three (pre-tax, post-tax and post-tax plus mortgage), but if I’m being that thorough, might as well throw in pre-tax plus mortgage, right? #moneynerd

So here ya go:

2020 saving rates:

Pre-tax	35.7%
Pre-tax plus additional principal	44.2%
Post-tax	44.8%
Post-tax plus additional principal	55.5%

In the end, my aim is for that last rate to be 50%, which means I more than hit my goal. Hooray!

Compared to 2019

I thought I’d had a pretty good year last year, but a) I made some computing errors (oops) and b) even if I hadn’t, this year blew 2019 out of the water.

It helped that I earned $3,230.93 more at my main job this year than I did in 2019. And I paid around $1,150 less in home repairs. So let’s call it $3,600 more to potentially save than last year.

Even so, this year I paid about $1,500 more to my mortgage, saved about $7,950 more into the various savings accounts/sinking funds and put away just under $6,800 more into retirement.

I had to do some tinkering with last year’s numbers to make sure I was comparing apples to apples. So last year’s (corrected) rates vs this year’s are:

Rate	2019	2020
Pre-tax	19.5%	35.7%
Pre-tax plus additional principal	26.8%	44.2%
Post-tax	24.9%	44.8%
Post-tax plus additional principal	34.2%	55.5%

I cannot believe the strides I’ve made this year. I just hope I can keep it up next year.

Net worth

I know some people track this religiously. Me, not so much. I think this is partially because my house need some work (and Zillow is overly optimistic anyway) so it’s hard to know what my house would really sell for.

And also because I make dumb mistakes like the one I made on Twitter where I announced that my portfolio had gone up $75,000 and that I’m worth around $395,000 with the house.

Spoiler: It did not, and I am not. I have no idea how I messed up those calculations so egregiously except that I was watching TV at the same time and thus clearly not paying attention.

But in the spirit of being thorough, I went ahead and figured my net worth for you fine folks.

In January, my retirement portfolio was worth $75,050.46. As of December 21st, it was $119,328.76. Total gain: $44,276.76.

My house… Again, that’s hard to say. Zillow is too optimistic, so I looked at Redfin’s numbers, which were $208,000 to $230,000. So let’s be conservative and call it $210,000. That would mean I have $167,000 of equity in the house.

I don’t count cars in net worth because they depreciate. But if you care about such things, apparently it’s worth about $7,100.

But for my purposes, I’m sticking to just my retirement funds, house equity and savings accounts, which brings me to a net worth of just over $335,250.

Um… wow.

I with I had something more profound to say, but nope, just “wow.”

As always, remember…

If your numbers are lower than mine, please remember that it’s nearly impossible to compare two people’s finances. There are always different situations and expenses. And I for one have a lot of financial advantages that keep my saving rates up.

First, the biggie: I have a high income. I make well over twice the U.S. annual median income. And it only makes sense that when there’s more money coming in, there’s more money that can be saved.

Second, I have the aforementioned low mortgage. It’s about $400 to $500 less than the national average, and definitely less than what most people pay for rent (even taking repairs into account).

Third, I have no kids and am no longer married to a spender (who had expensive medical conditions to boot).

Fourth, my mortgage is my only debt. The car is paid off, and my student loans were taken care of ages ago.

Fifth, I’m relatively healthy. While I do have multiple medications I take (I have Bipolar II Disorder and chronic fatigue), my monthly medical expenses are rarely more than $200 (plus my insurance premium).

So yeah, there are a lot of factors keeping my life costs low. At least, when we’re in a situation where we’re not allowed to go on dates or to parties. If I’d been able to keep dating/going to parties/going out with friends, I’d say my spending would’ve been $2,000-3,000 higher. Because life is short — even when there isn’t a pandemic at play.

I know some people had a bad financial year, but for anyone who feels comfortable sharing, I’d love to hear how your 2020 finances went.