Happy new year to everyone. After a relaxing Chrismas holiday, it is time to give a few thoughts on the new year 2021. Hopefully it will be better than 2020, although my year wasn´t that badly impacted by COVID. All in all finland has been doing pretty well with the virus, and family has been pretty safe. Less social hassle has actually given a bit more time for the family stuff.
Now that I have full year of expenses tracked, I should see what I can do to reduce them. Overall I think the big picture will look about the same as previous years. salary will not increase by much, and the minor raise to salary will be offset by higher taxation, Thank you socialist government
DW continues to be on scholarship, so I will have to carry the majority of household expenses. Hopefully she will get the phd done in 2021 and gets a "real" job.
I deposited 11500 to savings and brokerage accounts. This is about 29 % direct savings rate.
I deposited about 12000 to mutual account with wife to cover shared expenses. This is housing, one rental apartment, housing fees, daycare, electricity etc. About half of this is loan repayments, so some savings to there as well.
Food bill is pretty high. 477 €/month on average. This includes most of our family´s food, so it is not bad for 3 persons, but DW also does some grocery shopping. It would be possible to nib about 100 € away just by thinking about eating habits.
Beer budget need to go down significantly. It is bad for my health and finances. The beginning of the year will be sober almost by necessity, because it will be the busiest time of the year at work. But even after that I need to reduce alcohol to be able to achieve my health goals. I don´t think I spent too much on restaurants and family dinners outside of home, and this might change a bit next summer when vaccinations start to take effect and restrictions will loosen.
Health expenses were the largest ever because of one surgery paid out of pocket. This will reduce even though I might start spending on preventive stuff.
Credit card spending needs to go away. 2020 I had 2 stupid watch purchases and I needed to get some new working clothes. My current working environment is pretty casual, but I need reasonably formal clothing for meeting with bankers and auditors. I haven´t gotten much new dress shirts in 3-5 years so my favorites started to fray. Some online shopping is best to do with a credit card, but I will always pay the balance within one month.
Shopping and sport should be a bit less next year. I try to reduce shopping but I will buy some new sporting equipment. I am not yet sure what, but I think my main goal is to increase exercise so if some spending is required, then I will use money rather than stay on the sofa. Kid will need new sporting equipment almost yearly because he is growing. I want to teach him downhill skiing and skating (already bought ski boots and helmet and looking for some used skis).
My tracked expenses were about 17700 for the year. If I can chip away 1000 for health, 1000 for beer, 500 for CC and 500 for shopping, I should realistically look at 14700 expense level. This is doable by all means. There will always be surprises, so let´s see. If I will aim at 1000 €/month level, then this could be done even with surprises. Travel will be costing more, since 2020 was pretty much staying at home.
Side project survived first full year of business in COVID environment, and I am pretty happy about that. 2021 we will need to finish the basic stuff about the project and start to build some added value and fun on top of the core. I will most likely get all of my invested capital out as dividents so the payback period was less than one year
![Smile :)](./images/smilies/icon_e_smile.gif)
When we get the wagon rolling properly, I can reasonably expect to get something like 5k out of it per year as dividends. This would mean a big increase on my direct savings rate. I can not reasonably stretch to another side hussle in 2021 so I will be working on this one, and try to maximize this.
I have been thinking about actual goals for 2021. And it is hard. I need to reduce some of the time sinks in my life before I can proceed on goal setting.
What I would like to do:
1. Physical fitness
2. Outdoorsy life
3. Learning both at work and off work
4. Studying investments and working on a investment portfolio strategy
5. Family time
6. Hobbies with kid
7. Fishing
8. Small business building (side project)
9. Build stronger relationship with DW
10. Read (Currently I am reading the investment book I bought this summer and Acemogly´s why nations fail. Next will be Harari´s 21 lessons for the 21st century. Reading is slow because of lack of concentration so I would need to slow my brains and clean up extra hassle from my life to actually enjoy reading. this is work in progress with better habits)
11. Maybe I need an actual hobby and time for myself?
Actually I would need to focus on just one of those wants to make a meaningful impact on progress towards goals. Now if I want to do 10 things, I can´t expect much to happen in any single one. If I can guess what is going to happen, I will dabble with all of them all year and wonder where all the time went one year from now
This is where the web of goals comes in, I guess? I can see combining 1,2,5,6 and 7 by going on a fishing trip with the whole family next summer.
Also 3 and 4 can be combined if I choose to study wealth management. 1 and 2 can be combined by getting a decent mountain bike and start exploring local trails. 1 and 6 combine with coaching soccer to kid.
What I want to do less in 2021 is sit at the cough and mindlessly scroll through my phone.