2012 A-Wrap Up

I'm a sit back and look kind of guy.  I don't always like to be the first person in the pool but I'm also not usually the last.  I'm the guy who probably goes third or fourth... okay maybe fifth.  I don't want to miss an opportunity but I also know lots of people who dive in head first with no thought and end up with broken finances in the money sense or, literally, broken bones in the real sense.  If they had just taken three seconds of thought and about how to jump into the pool (perhaps feet first?  what about entering slowly then jumping in the second time?) perhaps they wouldn't be over their head financially, emotionally, or even physically.

A lot of the blogs I peruse have done 2012 wrap ups.  I've sat back and see no danger in it so I'll go too.

I track my expenses manually.  Unfortunately Japan doesn't have a service like Mint.com as most transactions still take place using cash.  Every purchase I make is recorded via an Excel worksheet of my own design.  Okay, I might have copied this Youtube video to build the initial credit/debit tables.  The rest, however,  is all me.  I have learned a lot about Excel and about my spending habits.  Because this is all a manual deal however it's not completely accurate.  I had some trouble with how to account for my credit card purchases at first, and getting all the correct categories to separate my spending into took time as well.  Sometimes I just drank too much and couldn't remember where that missing 500 yen went!  In the end I think I've built a system that really works for me and was about 90% accurate last year.  It is completely customizable and the data is mine all mine!  I can sort it, copy it, delete it, account for it, and store it in any way that I see fit.  Frankly I don't know that I could use a system like Mint.com even if I moved back to the states.  There is nothing wrong with it, I just have gotten used to a certain level of control.

Anyone for pie?  Chart that is!

It's not the prettiest thing but it is what it is.  If your not a visual learner here is the straight dope in sterilized Excel format.

Rent	$  6,875.47	23.18%
Eating Out	$  4,913.44	16.56%
Air Travel	$  2,972.79	10.02%
Groceries	$  2,112.20	7.12%
Bike	$  2,086.62	7.03%
Bills	$  1,892.50	6.38%
Transportation	$  1,649.95	5.56%
House	$  1,540.00	5.19%
Medical	$  1,475.03	4.97%
Entertainment	$  1,053.04	3.55%
Present	$     475.64	1.60%
Alcohol	$     472.45	1.59%
Misc	$     434.34	1.46%
Car	$     278.81	0.94%
Mail	$     230.23	0.78%
Gas	$     225.87	0.76%
Travel	$     209.81	0.71%
Clothing	$     166.66	0.56%
Lodging	$     145.33	0.49%
Gadgets	$     109.07	0.37%
Grooming	$     104.37	0.35%
Electronics	$      71.39	0.24%
Videogames	$      65.71	0.22%
Fee	$      47.73	0.16%
Tuition	$      25.06	0.08%
Missing	$      20.53	0.07%
School Supplies	$        6.58	0.02%
Kitchen stuff	$        5.26	0.02%

All percents are shown as a portion of total expenses, not a percent of total after tax income.  Let's dig in!

RENT - Like most people Rent probably makes up the biggest part of your pie.  There is not a whole lot that I feel I can do about this at this point.  In fact I think we hit the jackpot as our location is:  within biking distance to EVERYTHING, twenty minutes away from a major international airport, a five minute walk to the closest train station, in the neighborhood of almost all our friends, and the list goes on.  I don't see this number going down next year.  In fact my rent as a portion of my expenses will probably go up!  If I can reduce other expenses but my rent stays constant math takes over and it's position as a proportion of expenses will go up.  Possible savings:  0.00

EATING OUT - Next was eating out.  This includes restaurants, drinking, vending machines, etc.  Any food that I didn't buy at the grocery store and prepare at home.  Costco hotdogs and pizza included.  I always knew that this number was going to be high since I started keeping track of my expenses.  I'm a social person and I really do enjoy a good drink with friends.  As much as I can I try to eat before I go out to soften the damage to my wallet.  This is an expense that I would like to see decreased in 2013.  If I could reduce this category by even $500.00 to $1000.00 I would be really happy!  Possible savings:  $500~$1000

AIR TRAVEL - What can I say?  Airline tickets are expensive.  BUT this year my GF and I have decided to travel locally and explore more of Japan.  This is great I think!  The GF does have a wedding to attend and I have been given a get out of jail free card in that respect.  I do know the bride and the groom and would love to attend so who knows I just might jump on a plane over the Pacific yet.  But it would be a short trip (3-4 days max) which helps to cut down on other expenses like gas, insurance, eating out, etc.  I've been pushing for us to take more bicycle based trips and we already have two in the works!  I'd like to see this expense cut in half for 2013.  Possible savings:  $1500

GROCERIES - $2,112/12 is $176 a month.  That is only what I spend but my GF and I do a pretty good job of subsidizing each other.  Things bought at Costco are split 50/50 and most of the grocery shopping is shared.  If this went up to about $200 a month but eating out at restaurants etc decreased by 20% I'd by super duper happy.  Possible savings:  -$180

BIKE - As for the bike there is nothing to worry about here.  Most of the items in this category were one time sunk costs anyway.  I've got the bike, handlebar bag, lights, pump, travel bag, etc.  Things like tires, tubes, cable wires, break pads, and chain lube are cheap.  I've mentioned I still have a few items left to pick up like a rack and panniers but if this category fell by 75% (to about $500) I wouldn't be surprised. Possible savings $1500

BILLS - Here is another expense that is targeted for obliteration.  My bills are surprisingly cheap.  They are split with my GF and internet, electricity, gas, and water cost me about $80 a months if not less.  To be honest it's the cell phone that really killed me this last year.  But that's been taken care of.  I've switched to prepaid which should save me almost $700-$800 a year.  Let's go for an easy 50% reduction if not more.  Possible savings:  $900

TRANSPORTATION - Most of my transportation costs last year was for train passes.  As I've written about several times this is now getting paid to me as I have a bicycle that spits money from it's tires.  Other transportation costs are for bullet train tickets to visit friends in other parts of Japan.  Maybe I'm being brazen but I think reducing this by 50% is completely conceivable.  Possible savings:  $1000

HOUSE - This will stay where it is.  I will continue to try and help out my family with this house.  Perhaps one day it will pay me back.  Possible savings:  $0.00

MEDICAL  - Like transportation I think this could be reduced to almost nothing.  I had some huge dental bills last year that hit me hard.  I never had regular dental visits growing up and didn't always brush my teeth regularly.  As I've gotten older I've had to start paying for this.  I now brush two to three times a day and floss once.  In addition I try to have regular dental visits every three months.  With three or four dental visits a year and each coming in at around $20 this is a major category for saving cash.  Possible savings:  $1400

ENTERTAINMENT - Coming in at around only $1000 a month entertainment includes all things movie, baseball, ice skating, museum, tourist, and sumo wrestling related.  Entertainment is a funny one because it seems very low (about $80 a month) but it bleeds into other places quickly.  Going to a baseball game?  Well now we need beers and food.  That's going into the "eating out" area.  Want to watch sumo?  Well it's a bit too far too ride so the transportation costs go up.  I really enjoy seeing movies and checking out Japanese cultural events.  After all if I move back to the USA I can't watch the Yokohama Baystars (our local baseball team) lose every game (it's still a lot of fun), nor could I visit the Cup Noodle Museum.  I like these experiences and that's what I'd rather spend my money on.  I'm going to try to be smarter about my Entertainment choices this year but that will be concerning the things surrounding it.  Possible savings:  0.00

OTHER - I'm throwing anything under $1000 into Other.  Presents come up here as I usually print a Christmas album for my family every year which costs around $250.  I could probably do it for cheaper but I like iPhoto and it's a personalized gift that I think my family really appreciates.  I usually order nine of them and ship this all to one location and then have them sent out to individual family members from there.  It is much cheaper to do this than to have Apple send them out individually as they like to make money on shipping.  Alcohol came in around $500 last year.  This will probably reduce itself naturally as I'm just drinking less at home and in general.  At 31 my body is telling me I'm not 21 even if I like to pretend I am.  Car and gas should be zero this year as I won't be driving even a single mile (that is the plan anyway).  All of those other little slices of pie are basically categories I started but abondoned.  Possible savings:  $500.00~$600.00

So totaling up all of those savings bring us to a grand total of:  $7020~$7720!  I have the potential to reduce my yearly spending by almost one third.  I'm not anywhere near MMM style badassity, but the great thing is is I don't have to be to reach my goals.  And just imagine in 10 years that's more than $70,000!  Even with reducing my expenses by $7,000 a year I would still be living a pretty awesome life!  A lot of it is preventative maintenance (floss, clean my bike chain once a month, say "No" sometimes) and very easily achievable I think.

Bring it on 2013!  I'm ready for ya!