Income vs. Expenses Showdown- 2012 Against 2011 2

Mazy Road

Okay, it’s time for the tale of the tape. To hold myself accountable and chart my frugality and savings progress I track my income and expenses monthly and have done so since the beginning of 2011. I do this with the assistance of Mint, which is a wonderful free resource able to consolidate accounts and track spending in one place. I purchase 99% of items with credit cards to take advantage of the rewards programs (paid off in full monthly, of course!)

This process has made me much more conscious of spending and has encouraged me to “game” against myself and create mini-goals to improve certain areas, and provides me with the data to make future decisions towards my goals. I strongly recommend those seeking to grasp better control of their finances, especially in the beginning phases of their financial journey, to utilize this process.


Item 2011 2012 $ Difference % Change
Net Income          49,822          54,321                 4,499                   9%
401k Contribution          12,946          16,529                 3,583               28%
TOTAL INCOME          62,768          70,850                 8,082                13%

I earned two raises during the year and also worked around 80 extra hours overtime near the end of the year to contribute to my 13% yearly boost in income. I’m very pleased as this is the biggest yearly bump I’ve had thus far in my career.


Item 2011 2012 $ Difference % Change
Housing             6,026            4,584               (1,442) -24%
Groceries            2,781            2,487                  (294) -11%
Restaurants & Bars            2,668            2,379                  (289) -11%
Entertainment                730            1,031                     301 41%
Shopping/Clothes                376                144                  (232) -62%
Transportation            3,865            9,831                 5,966 154%
Cell Phone                900                840                     (60) -7%
Gifts            1,103            1,270                     167 15%
Travel                869                599                  (270) -31%
Gym & Fitness                654                456                  (198) -30%
Drugstore & Dr.                626                346                  (280) -45%
Other                102                   –                    (102) -100%
TOTAL SPENDING          20,700          23,967                 3,267 16%
         20,700          17,251               (3,449) -17%

 My total spending was up $3,267 this year. However, this figure includes over $6,700 spent to purchase a used vehicle (details forthcoming in future post). Deducting the purchase price of the vehicle results in a 17% yearly reduction in spending! The great news is that my spending still presents large slabs of fat I aim to trim going forward. I began 2012 with three targeted spending categories to focus on decreasing including:

  • Housing- I moved into a new location part way through 2012 which helped me lower my monthly expenses significantly.
  • Groceries- I credit Costco for helping me lessen the grocery expenditures. Relying on Costco for dietary staples allowed this spending cut despite the big yearly jump in inflation at the grocery stores.
  • Restaurants & Bars- I acheived a smaller than desired spending cut in this area. This figure is exaggerated by the fact that I almost always grab the check when going out with my girlfriend, and the fact that I’m living in a big city for the first time which presents all types of exotic and delicious cuisine within a few mile radius.


Item 2011 2012 $ Difference % Change
Savings          42,068          53,599               11,531               27%
Savings Rate 67% 76%    

 It’s not how much you make, but rather what you save! That’s why my focus is to continue growing my income while minimizing expenses to expand my net worth. Overall, 2012 was a banner year as I managed to increase the gap between my earnings and expenses by $11,531 for a total gap of $53,599 to be plowed into investments embracing the power of compounding interest. This far exceeds the $42,068 I managed to save in 2011 and bumps my savings rate from 67% to 75%!

Mr. Money Mustache illustrates how savings rates correspond to financial independence beautifully in his post:

Using his figures, a continuous 75% savings rate will grant financial independence in seven years! That’s a hugely encouraging figure and I’m aiming to bump my savings rate up again in 2013 on my march to financial independence.

Image courtesy of Evgeni Dinev/


2 thoughts on “Income vs. Expenses Showdown- 2012 Against 2011

  1. Reply Chad Feb 15, 2013 5:52 pm

    Great job on hitting over 75% savings rate for 2012. Like you, I’m working on trimming the fat each month from the budget. At this rate, you’ll be at FI before you know it.

  2. Reply Net Worth Snowballa Feb 16, 2013 1:20 am

    Thanks for your encouragement Chad. Good luck trimming your budgetary fat!

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