Budget Review for the Second Half of 2023

Happy New Year! It’s been a while since I’ve written on this blog. But, 2023 is done and I wouldn’t miss a budget review for anything.

It’s been a busy (and expensive) end to the year. We got married, attended several other weddings, and continued to work on repairing and updating our house.

Here’s the goals that I set for myself in July:

  1. Control spending as much as possible during this period of high expenses to prevent another budget blowout.
  2. Make sure to max out my Roth IRA before the end of the year.
  3. Ratchet my 401k contributions back up now that I have rebuilt my emergency fund, in preparation for maxing it out next year.

I’m glad to say that I hit my savings goals, my Roth IRA is maxed for the year and a couple paychecks ago I increased my 401k contributions to a level that will allow me to max it out in 2024.

My budget, however, was another matter:

A budget blowout, and an income extravaganza? Our wedding really threw off my budget in a way that I couldn’t predict. I was estimating it would cost us each about $3k net out of pocket, but we ended up making far more than we spent back in gifts.

Clearly, home ownership is expensive, and while buying a fixer upper allowed us to save a lot on the purchase price and monthly mortgage, I’ve been paying an average of $565 per month for hardware supplies, tools, and other maintenance in addition to the mortgage PITI.

In the alcohol and bars category, I spent about $1400 building a custom kegerator so I can carbonate my homebrewed beer and make my own seltzer. I’ve (halfway jokingly) calculated that it will pay for itself if I can drink about 400 gallons of seltzer water.

I also had to get new tires for my car, but beyond that it’s clear there’s just some general overspending across the board in many categories. I’m confident that I can mark off this average spending of $6k per month as the highest period of expenses for many years to come. But, the theme of 2024 will be taking a more conscious look at each and every purchase as to where it falls between the wants versus needs.

Budget Update, Net Changes, and Future Goals

I took this new data and updated my permanent budget with it. In the net change column, red indicates an increase in monthly spending in that category, whereas green indicates a decrease in monthly spending in that category.

Here’s the rationale for every value change explained in sequential order:

  1. I apparently underestimated how much more expensive it is to heat a whole house compared to an apartment, so my mortgage/utilities category has been revised up $50 per month.
  2. I also underestimated how much we would be spending on home improvements, so this category has been revised up $200 per month. I expect this to drop sharply in a couple years or so when we’ve finished most major projects.
  3. The wedding planning category is no longer needed and will be deleted.
  4. I expect to earn about $100 more per month due to a cost of living adjustment for my salary.

All in all, my budget is decreasing by an estimated $250 per month. It will be really great to get back on track spending-wise with this target in mind.

Savings Check-up

Let’s take a look at my total cash inflows to savings and investment accounts over the past 6 months:

An all-time high for savings, by about $180! So despite the wedding expenses, all remained well in the land of building wealth.

Net Worth Check-up

June 30, 2023 Net Worth: $355,832

December 31, 2023 Net Worth: $410,711

6 Month Change: $54,879

Onward and upward thanks to my savings and a rising stock market. The momentum is obvious, and I occasionally need to remind myself to just stick to the plan and that only fine-tuning is needed.

Thoughts? Questions? Leave a comment below!