2023 Finances in Review
A peek under the hood
Happy New Year Fam. Hope you all had a fun and safe night. We continued the almost decade long tradition of going to 6pm fireworks and being in bed before the ball dropped.
Since F’er spent sometime this last week looking over the 2023 financials, it felt like a good topic to share. Here is the <1hr worth of work done to track financial progress in 2023.
I don’t particularly enjoy writing about personal info. But one of the top requests I get is to see what I do with my own finances. So as I was taking a review of my 2023 financials (something we should all do to help keep us on track), I figured its a good enough time as any to put an example down.
It can be helpful to see a tangible example of what other people are doing to help you plan your own finances. So this post will go over how F’er did during the year. This will be high level but cover all the important aspects of finances:
Budget - where did the money go?
Debt paydown
Asset growth
Net worth update
How the investment portfolio went
Side incomes and how much they added
Crypto allocation
For this post I will normalize a lot of the numbers to nice round numbers for simplicity (and for privacy sake). But the precents are what matter so that will be the focus.
F’er is staring down 40, so the average net worth of 40 year olds ~$725k and the Median is ~$138k. Lets split the difference and normalize starting net worth to $500k.
The following is the process I use to measure financials year-over-year. Most of the year I do minimal tracking because:
It is a waste of time to constantly be making minor tweaks in a spreadsheet. Budgetooors and froogal gooroos want weekly or monthly updates, but once you start getting a modest amount of wealth changes in market prices are much larger than your contributions so even if you are doing the right things, you may see your numbers dip just from investments being down a hair.
I have automated my financials - by taking contributions to retirement and investment accounts off the top of each paycheck, using multiple direct deposit accounts to segregate my income into the approproriate accounts, and living below my means, it makes for no need to budget. You literally just need to make sure your discretionary checking account is above the buffer you set and you know you are within your budget.
Quarterly I’ll update my outstanding loan balances solely because it is cathartic to see them go down even though the interest on it is all sub 3%.
I really really really don’t want to spend more of my life in spreadsheets outside the W2 - it is much better to use the limited free time to make more money than track and skimp.
[Note - if you haven’t automated your financials by now, you are tying 1 arm behind your back. Stop and take the 20 mins to set up a system now before reading on.]
Budgeting 101: Simple Set-up to Streamline Your Budgeting
I like to have fun with the budget maximalists. If you are unaware, there is a huge swath of the personal finance world and twitter that lives and breathes for budgets. (Unfortunately, they are typically being lead by gooroos selling elaborate looking spreadsheets for $40 a pop…more on why that is ridiculous later in the post.)
But, the end of the year is a good time to do a bit of work and see how you are progressing in your goals. So below are the metrics I use which take a couple minutes to measure.