Money Conversations: Our Plan for 2012

by mzumtaylor on January 9, 2012

It’s the new year, and we’ve got all of 2012 stretching out before us like a promise. I don’t know about you, but I find beginnings incredibly exciting!

To help get a handle on where we stand and what we want to accomplish in the new year, Ben and I sat down this weekend to go over how we did in 2011 (financially) and talk about 2012.

To get started, I used the template laid out in adaptu.com’s “Money and Marriage: Goal Setting for 2012” blog post.

We chose the time (Saturday afternoon), a comfortable place (our couch), set some ground rules (no longer than 45 minutes), and ran the numbers.

Running the Numbers

The week before our scheduled financial review and planning session, I created a spreadsheet on which I recorded for each of our accounts:

  1. Where we started the year
  2. Where we ended the year
  3. Any notable changes throughout the year

I also created a graph of the fluctuations in our joint checking account for all of 2011 and organized everything into assets, liabilities, and equity so we could have a sense of our net worth (still rather negative, unfortunately, but we’re working on that).

How 2011 looked
We did pretty well in 2011, meeting most of our goals, which is great. I would have liked to save a little more, but I think that’s everyone’s wish at the end of each year. We saved some, didn’t accumulate more debt, and paid of our last credit card with a balance. Score!

Planning 2012 – Considering Atypical Needs and Wants
Then we talked about what our financial goals were for 2012. What big ticket items were coming up, if we were anticipating any influxes of income other than our jobs, how much we wanted to save (in general), and what things we knew we were going to be spending on each month.

The rough breakdown (with a little overlap):

  • Big Ticket Spending Items
    • Trip to Hot Springs in March
    • Travel to Michigan in May
    • Going back to school in August
    • Travel to Michigan for Thanksgiving
  • Other Spending
    • Our anniversary
    • Our birthdays
    • Our garden (I’m so excited to make this work!)
  • Saving
    • Saving for School
    • Saving for Birthdays
    • Saving for Christmas
  • Paying off Debt
    • Finish paying off the Subaru

We talked about how much we’d like to be able to spend or save for each of the above items, and now that we’ve had that discussion, I can sit down with our budget and figure out what’s realistic. When I get a better sense of the numbers, I’ll update our Financial Planning Calendar for 2012.

What we didn’t talk about

The only thing we didn’t really talk about was where we could cut back. I tend to be more frugal than Ben and don’t really like spending money, even on things we need. Because of this, every month when I balance our budget, I look at ways we could save money in the next month. Ben doesn’t really care to know about our finances in this much detail. He’s perfectly happy to have me do the math and then let him know how much extra we can (or can’t) spend in any given month.

Knowing his tendency to zone out when I start going into detail about this way to save vs. that way to save, we usually just skip that conversation at our annual meeting. If there’s every a situation where a potential change will significantly impact our “standard of living,” we sit down and talk about how we’d like to approach it, but those conversations are (fortunately), few and far between.

Having Fun

I always enjoy sitting down with Ben and talking about our finances and where we’re heading in the coming year. He doesn’t enjoy it nearly as much as I do (except that we get to spend time together), but he appreciates that it’s an important conversation to have, to make sure everyone’s on the same page and in agreement about “The Plan.” image

And, after we were done, we went out for a nice dinner to reward ourselves, which was definitely fun.

How about you? Do you sit down with your significant other and talk about your financial situation every year? How about ever? Why or why not?

{ 2 comments… read them below or add one }

image shanendoah@the dog ate my wallet January 9, 2012 at 2:10 pm

I always envy people who can schedule a sit down time for a talk about money. That’s just not our style. I email him numbers and graphs every so often so that he can look at them on his own time and come up with any questions he may have, but otherise, since he lost his job in 2009, we’ve been pretty much in constant conversation about our finances

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image mzumtaylor January 9, 2012 at 2:32 pm

Sitting down and talking about our finances is actually something we’ve only made a commitment to doing these last two years. Before that we were running so close to the wire that there was no point in sitting down and talking about what our goals were for the next year because we could only afford to do what we had been doing: getting by.

Also, too, sitting down and talking about it in one fell swoop isn’t the important thing. The important thing is talking about it at all. In your situation, I can understand that “the state of the finances” is always a topic of conversation (I got laid off for a while in 2009, too, so I feel some of your pain), but there are people who never talk about it, no matter how bad it gets, and that’s the thing I’m trying to avoid by encouraging people to “sit down and have a conversation.”

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