Getting Ready For 2025
The last chilly days of 2024 are ticking away, and that means it’s almost time for Mr. Sense and me to have our big annual planning meeting, where we nail down our financial goals for the coming year and build new features into our spreadsheet to track every dollar. Though we always get excited for the big money meeting itself (truly– we break out the fancy snacks and everything), the planning process has already begun. We have an almost complete picture of how the past year went; we can see where we spent more or less than anticipated. I plan to release more details after the final annual numbers are in, but since this has been on my mind so much lately, I wanted to share a preview of the main takeaways.
A few huge wins stick out: we made major inroads in cutting our spending without sacrificing anything we regret. It’s looking like we’ll manage to spend much less than we did in 2023, allowing us to save and give more money than in any prior year of our marriage. This is our third year of rigorous tracking, and even when we didn’t hit some of our past spending goals, our meticulous spreadsheets allowed us to analyze missed opportunities. We set some ambitious goals for 2024, and I’m feeling confident we can hit them!
Frugality is one of those practice-makes-perfect disciplines, and I’m especially happy with how much more accurate and realistic we’ve become about our numbers. In 2023, we overspent our plan in most categories (groceries, dining, kids, miscellaneous, entertainment) and only came in under budget in a couple (home improvement, transportation). While we remembered to factor in irregular costs in the “bills” category (personal property tax, insurance payments), we miscalculated realistic costs for vacations, Christmas gifts, and kids’ education and activities.
We didn’t really want to complicate our spreadsheet by adding tons of new categories, but we reshuffled somewhat, deleting a couple categories and adding two new ones for 2024, vacations and gifts, which we then estimated annual costs for. This made a real psychological difference. Instead of figuring out part way through the year that we forgot to include enough funds for school expenses or Christmas, shrugging and paying for them anyway because obviously we aren’t canceling those things, we already had those things planned and separate from the “kids” and “miscellaneous” sections of the budget.
If you’ve ever tried counting calories to lose weight and then allowed things to implode after one heavy meal convinced you the whole day/week was shot, you can see why sticking important but forgotten costs in a category called “miscellaneous” is not going to work. The whole point of having a goal is to try to hit it– once it’s not going to happen, it’s tough to get back on track.
So, I’m pleased that we figured out some weak spots in our 2023 plan and fixed them for 2024. But that’s not to say things went exactly according to plan. Our foster parenting journey took some unexpected twists and turns, impacting us emotionally as well as financially. I got more into running, dragging Mr. Sense with me, and then we discovered that running is not exactly a frugal hobby. We undershot how much we would spend on gifts for friends and family members, again. Multiple pipe and water tank related crises wreaked havoc on our basement.
But some other surprises broke our way. After another driver totaled the car Kid Sense was driving (she was fine!), we decided to downsize to one smaller hybrid vehicle and make it work as a one car household for a while. This ended up saving us lots in gas and insurance costs. Since I didn’t buy a single bicycle this year (and I think I can hold out past the end of the year, hopefully well beyond!), our transportation category was much lower than expected. Also, Kid Sense qualified for college financial aid beyond what we anticipated, on top of a scholarship she worked so hard for throughout high school.
With just a handful of weeks to go before the new year, we’re on track to hit our most ambitious spending, saving, and giving goals yet. So now the question becomes, what should we attempt in 2025?
There are big changes on the horizon for our family. We don’t really know what’s going to happen, only that God is in control. As we develop our goals for the coming year, we want to balance the aggressive nature of attempting to FIRE in just over six years with some new flexibility. We don’t know what our family will look like by the time we’re financially independent, or even what it could look like in six months.
But God knows. As we try to thoughtfully plan for the coming year, “We know that all things work together for good for those who love God, who are called according to his purpose” (Romans 8:28).
